-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NCHIYnjDl5BvTzIEySlkEmNSVTDVFXYyaNbYcHVU6yNTtb2R860bwK6WlrUWOQZg BCE9ac6lTUvZYzJI4VGtyQ== 0000950127-99-000345.txt : 19991125 0000950127-99-000345.hdr.sgml : 19991125 ACCESSION NUMBER: 0000950127-99-000345 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19991124 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNITED PETROLEUM CORP CENTRAL INDEX KEY: 0000082925 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-AUTOMOTIVE REPAIR, SERVICES & PARKING [7500] IRS NUMBER: 133103494 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-57203 FILM NUMBER: 99764395 BUSINESS ADDRESS: STREET 1: 2620 MINERAL SPRING ROAD STREET 2: SUITE A CITY: KNOXVILLE STATE: TN ZIP: 37917 BUSINESS PHONE: 4236886204 MAIL ADDRESS: STREET 1: 2620 MINERAL SPRING ROAD STREET 2: SUITE A CITY: KNOXVILLE STATE: TN ZIP: 37917 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: BARED JOSE P CENTRAL INDEX KEY: 0001099775 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 5800 NW 74TH AVENUE CITY: MIAMI STATE: FL ZIP: 33166 BUSINESS PHONE: 3055923100 MAIL ADDRESS: STREET 1: 5800 N.W. 74TH AVENUE CITY: MIAMI STATE: FL ZIP: 33166 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 - -------------------------------------------------------------------------------- SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) UNITED PETROLEUM CORPORATION - -------------------------------------------------------------------------------- (Name of Issuer) Common Stock, par value $.01 per share - -------------------------------------------------------------------------------- (Title of Class of Securities) 911327 50 0 - -------------------------------------------------------------------------------- (CUSIP Number) Mr. Jose P. Bared - -------------------------------------------------------------------------------- 5800 N.W. 74th Avenue Miami, Florida 33166 (305) 592-3100 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) November 12, 1999 - -------------------------------------------------------------------------------- (Date of Event Which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-l(b)(3) or (4), check the following box | | (Continued on following pages) - -- -------------------------------------- -------------------------------------- CUSIP No. 911327 50 0 13D - -- -------------------------------------- -------------------------------------- - -------------------------------------------------------------------------------- 1 NAME OF REPORTING PERSON I.R.S. IDENTIFICATION NO. OF ABOVE PERSON JOSE P. BARED AND MIRIAM BARED, HIS WIFE, AS TENANTS BY THE ENTIRETY - -------------------------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)| | (b)| | - -------------------------------------------------------------------------------- 3 SEC USE ONLY - -------------------------------------------------------------------------------- 4 SOURCE OF FUNDS* BK - -------------------------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(D) OR 2(E) | | - -------------------------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION U.S. - -------------------------------------------------------------------------------- NUMBER OF SHARES 7 SOLE VOTING POWER 2,400,000 BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH: 8 SHARED VOTING POWER 0 9 SOLE DISPOSITIVE POWER 2,400,000 10 SHARED DISPOSITIVE POWER 0 - -------------------------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 2,400,000 - -------------------------------------------------------------------------------- 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* | | - -------------------------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 48% - -------------------------------------------------------------------------------- 14 TYPE OF REPORTING PERSON* IN - ---------- --------------------------------------------------------------------- * SEE INSTRUCTIONS 1. SECURITY AND ISSUER. This statement on Schedule 13D (this "Statement") relates to the common stock, par value $.01 per share (the "Common Stock"), of United Petroleum Corporation, a Delaware corporation, which has its principal executive offices at 5800 N.W. 74th Avenue, Miami, Florida 33166 (the "Issuer" or the "Company"). 2. IDENTITY AND BACKGROUND. (a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Act"), this Schedule 13D Statement is hereby filed by Jose P. Bared and Miriam Bared, his wife (each a "Reporting Person" and together the "Reporting Persons"). (b) The residence address of the Reporting Persons is 9025 Arvida Drive, Coral Gables, Florida 33156. (c) The present principal employment of Jose P. Bared is Chairman of the Board of Directors, Chief Executive Officer and President of the Issuer and of Farm Stores Grocery, Inc., a Delaware corporation, both having an address at 5800 N.W. 74th Avenue, Miami, Florida 33166. The principal business of the Issuer is the operation of walk-in convenience stores and gasoline stations in Florida and car wash, lube centers, convenience stores and gasoline stations in Tennessee and Georgia. The principal business of Farm Stores Grocery, Inc. is the operation of drive-thru specialty grocery stores in Florida. Miriam Bared is unemployed. (d) &(e) During the last five (5) years, no Reporting Person has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors) and no Reporting Person is a party to a civil proceeding of a judicial or administrative body of competent jurisdiction such that, as a result of such proceeding, any Reporting Person was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activity subject to, federal or state securities laws or finding any violation with respect to such laws. (f) The Reporting Persons are U.S. citizens. 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION. The following disclosure is qualified in its entirety by reference to (i) the Second Amended Plan of Reorganization of United Petroleum Corporation (the "Plan") dated July 23, 1999, (ii) the Order dated October 7, 1999 of the United States Bankruptcy Court for the District of Delaware confirming the Plan (the "Confirmation Order"), and (iii) the Agreement and Plan of Merger, dated September 29, 1999 among the Issuer, United Petroleum Group, Inc. ("UPG") and F.S. Convenience Stores, Inc. ("FSCI"), filed as Exhibits 99.1, 99.2, and 99.3 to this Schedule 13D. The Reporting Persons received 2,400,000 shares of Common Stock of the Issuer in connection with the merger (the "Merger") of FSCI with and into UPG, a wholly owned subsidiary of the Issuer. The Reporting Persons also received 70,000 shares of Class A 9% preferred stock of the Issuer in connection with the Merger. The Reporting Persons owned all of the issued and outstanding stock of FSCI immediately prior to the Merger. Prior to the Merger, the Issuer, UPG, FSCI, and related entities borrowed an aggregate of $23 million from Hamilton Bank, N.A., secured by their respective assets. FSCI borrowed $17 million of this loan amount and used these proceeds to purchase the interest of its former partner in the walk-in convenience store and gasoline station operations which they conducted in Florida, and to purchase from an affiliate of the same former partner its interest in the walk-in convenience stores without gasoline station operations and a 10% interest in the drive-thru specialty grocery business, both conducted in Florida with an affiliate of FSCI. As a result of the Merger, UPG and its wholly-owned subsidiaries acquired and operate FSCI's walk-in convenience store business, consisting of 90 walk-in convenience stores, 69 of which sell gasoline, and own a 10% interest in Farm Stores Grocery, Inc., which operates 109 drive-thru specialty grocery stores. 4. PURPOSE OF TRANSACTION. The Reporting Persons acquired the Common Stock for investment purposes only. The Reporting Persons intend to hold the Common Stock for investment purposes only. In connection with the Merger described in Item 3, the following occurred: (i) the Issuer reconstituted its Board of Directors to consist of Mr. Jose P. Bared, Mr. Carlos E. Bared (Mr. Jose P. Bared's son), Mr. Clark K. Hunt, Mr. Stuart J. Chasanoff, and Mr. L. Grant Peeples; (ii) All of the issued and outstanding securities of the Company, including all pre-Merger common stock, preferred stock, debentures, options, warrants, and other rights to acquire securities, were canceled. The Issuer issued a total of 5 million shares of Common Stock and a total of 140,000 shares of Class A 9% preferred stock to (i) existing holders of debt and equity securities of the Issuer, and (ii) the Reporting Persons; and (iii) The Issuer amended its Certificate of Incorporation to (i) authorize 10 million shares of Common Stock, and 300,000 shares of Class A 9% preferred stock; (ii) prohibit the issuance of non-voting equity securities by the Issuer (as required by the Bankruptcy Code); (iii) opt out of Section 203 of the Delaware General Corporation Law, and (iv) restrict, for a period of two years, purchases and sales of its stock by beneficial owners of 5% or more of the total fair market value of the Issuer's stock. Except as set forth in this Item 4, the Reporting Persons have no present plans or proposals that relate to or that would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D of the Act. 5. INTEREST IN SECURITIES OF THE ISSUER. (a) The aggregate number and percentage of shares of Common Stock beneficially owned by the Reporting Persons is 2,400,000 and 48.0%. (b) The Reporting Persons have the sole power to vote or to direct the vote and to dispose of or to direct the disposition of all 2,400,000 shares of Common Stock. (c) Not applicable (d) Not applicable (e) Not applicable 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER. In addition to the contracts and arrangements described above, the Reporting Persons, the Issuer, and Infinity Investors Limited, Fairway Capital Limited and Seacrest Capital Limited, all Nevis, West Indies corporations (the "Infinity Investors"), entered into a Stockholders Agreement dated as of November 12, 1999 (the "Stockholders Agreement"), pursuant to which the Reporting Persons, on the one hand, and the Infinity Investors, on the other hand, agreed to vote their shares in the Issuer so that the Board of Directors consists of two representatives selected by the Reporting Persons, two representatives selected by the Infinity Investors, and an independent director initially designated as L. Grant Peeples. The Stockholders Agreement also provides that the Board can be expanded, and the independent Director changed, by majority vote of the Issuer's stockholders at a duly called meeting of stockholders. The Stockeholders Agreement also contains certain provisions restricting disposition of the Issuer's common stock by the parties to the agreement for a period of two years, and providing for certain registration rights. 7. MATERIAL TO BE FILED AS EXHIBITS. Exhibit No. Exhibit 99.1 Second Amended Plan of Reorganization of United Petroleum Corporation dated July 23, 1999 99.2 Findings of Fact, Conclusions of Law and Order Confirming Amended Plan of Reorganization dated October 7, 1999 99.3 Agreement and Plan of Merger dated September 29, 1999 99.4 Loan Agreement dated November 9, 1999 among United Petroleum Corporation, United Petroleum Group, Inc., F.S. Convenience Stores, Inc., et al., as Borrowers, and Hamilton Bank, N.A., as Lender 99.5 Stockholders Agreement dated as of November 12, 1999 SIGNATURE After reasonable inquiry, I certify that to the best of my knowledge and belief the information set forth in this Statement is true, complete and correct. Date: November 23, 1999 /s/ Jose P. Bared ------------------------------- /s/ Miriam Bared ------------------------------- EX-99.1 2 PLAN OF REORGANIZATION IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ) ) Chapter 11 ) UNITED PETROLEUM CORPORATION, ) ) ) Case No. 99-88 (PJW) ) Debtor. ) ) - ----------------------------------------------------- SECOND AMENDED PLAN OF REORGANIZATION UNDER CHAPTER 11 OF THE BANKRUPTCY CODE FOR UNITED PETROLEUM CORPORATION Dated: July 23, 1999 Pursuant to section 1121(c) of the Bankruptcy Code, United Petroleum Corporation proposes this chapter 11 plan: ARTICLE I. DEFINITIONS AND INTERPRETATION 1.1. Definitions. The capitalized terms used herein shall have the respective meanings set forth below: (a) "Administrative Expense Claim" means a Claim incurred by the Debtor (or its Estate) on or after the Petition Date and before the Effective Date for a cost or expense of administration in the Chapter 11 Case entitled to priority under sections 503(b) and 507(a)(1) of the Bankruptcy Code. (b) "ADR" means the Alternative Dispute Resolution Procedure for Treatment of Securities Claims pursuant to the Plan as attached to the Plan as Appendix II. (c) "Affiliate" means, with respect to any Person, all Persons that would fall within the definition assigned to such term in section 101(2) of the Bankruptcy Code, if such Person was a debtor in a case under the Bankruptcy Code. (d) "Allowed," when used (i) with respect to any Claim, except for a Claim that is an Administrative Expense Claim or a Securities Claim, means such Claim (A) to the extent it is not a Contested Claim as of the Effective Date; (B) to the extent it may be set forth pursuant to any stipulation or agreement that has been approved by Final Order of the Bankruptcy Court; (C) to the extent it is a Contested Claim as of the Effective Date, proof of which was filed timely with the Bankruptcy Court, and (I) as to which no objection was filed by the Objection Deadline (as specified in Section 10.1 of the Plan), unless such Claim is to be determined in a forum other than the Bankruptcy Court, in which case such Claim shall not become Allowed until determined by Final Order of such other forum and allowed by Final Order of the Bankruptcy Court; or (II) as to which an objection was filed by the Objection Deadline, to the extent allowed by a Final Order; or (D) which otherwise becomes an Allowed Claim as provided in the Plan; (ii) with respect to any Securities Claim, means a Securities Claim to the extent (A) it has become "Allowed" pursuant to the ADR or (B) it may be set forth pursuant to any stipulation or agreement that has been approved by Final Order of the Bankruptcy Court; or (iii) with respect to an Administrative Expense Claim, means an Administrative Expense Claim, that has become "Allowed" pursuant to the procedures set forth in Article V of the Plan; or (iv) with respect to any Equity Interest, means an Equity Interest, proof of which was timely and properly filed or, if no proof of interest was filed, which has been or hereafter is listed by the Debtor on its Schedules as fixed in amount and not disputed or contingent, and, in either case, as to which no objection to the allowance thereof has been interposed on or before the Effective Date, or as to which any objection has been determined by a Final Order to the extent such objection is determined in favor of the holder of such Equity Interest. (e) "Ballot" means the form or forms that will be distributed along with the Disclosure Statement to holders of Allowed Claims and Equity Interests in classes that are Impaired under the Plan and entitled to vote, which the holders of Impaired Claims and Equity Interests may use to vote to accept or reject the Plan. (f) "Bankruptcy Code" means the Bankruptcy Reform Act of 1978, as amended, and codified at title 11 of the United States Code and as applicable to the Chapter 11 Case. (g) "Bankruptcy Court" means the Bankruptcy Court unit of the United States District Court for the District of Delaware, or such other court having jurisdiction over the Chapter 11 Case. (h) "Bankruptcy Rules" means the Federal Rules of Bankruptcy Procedure, as prescribed by the United States Supreme Court pursuant to section 2075 of title 28 of the United States Code and as applicable to the Chapter 11 Case. (i) "Bar Date" means March 30, 1999, the date set by the Bankruptcy Court as the last day for the filing of proofs of claim against the Debtor. (j) "Business Day" means any day on which commercial banks are open for business in both New York, New York and Knoxville, Tennessee. (k) "Calibur" means Calibur Systems, Inc., a Tennessee corporation, which is a wholly-owned subsidiary of UPC. (l) "Cash" means legal tender of the United States of America or cash equivalents. (m) "Calibur A Note" means that certain promissory note, dated August 5, 1998, made payable by Calibur, UPC and Jackson to Infinity in the original principal amount of $4,200,000, the payment of which is (i) guaranteed by UPC's President, Michael Thomas, and (ii) secured by a lien in and to assets of UPC, Calibur and Jackson that is pari passu with the liens that secure payment of the Calibur B Note. (n) "Calibur B Note" means that certain promissory note dated August 5, 1998, made payable by Calibur, UPC and Jackson to Infinity in the original principal amount of $2,800,000, the payment of which is secured by a lien in and to assets of UPC, Calibur and Jackson that is pari passu with the liens that secure payment of the Calibur A Note. (o) "Causes of Action" means all claims, rights, actions, causes of action, liabilities, obligations, suits, debts, remedies, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages or judgments, whether known or unknown and whether asserted or unasserted. (p) "Chapter 11 Case" means the Debtor's case under chapter 11 of the Bankruptcy Code pending before the Bankruptcy Court and styled In re United Petroleum Corporation, Case No. 99-88(PJW). (q) "Claim" means (i) any right to payment from the Debtor, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured; (ii) any right to an equitable remedy for breach of performance if such breach gives rise to a right of payment from the Debtor, whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured, or unsecured or (iii) any right under section 502(h) of the Bankruptcy Code. (r) "Collateral" means any Estate Asset subject to a Lien. (s) "Common Equity Interest" means any share or other instrument (including, without limitation, the Old UPC Common Stock) evidencing a common stock ownership interest in the Debtor, whether or not transferable or denominated "stock", or similar security, and any warrant or right, other than a right to convert, to purchase, sell, or subscribe to a common stock ownership interest in the Debtor. (t) "Confirmation Date" means the date on which the Clerk of the Bankruptcy Court enters the Confirmation Order on the docket with respect to the Chapter 11 Case. (u) "Confirmation Hearing" means the hearing held by the Bankruptcy Court, as it may be continued from time to time, on confirmation of the Plan. (v) "Confirmation Order" means the order of the Bankruptcy Court confirming the Plan. (w) "Contested," when used (i) with respect to a Claim, other than a Securities Claim, means a Claim (A) that is listed in the Schedules as disputed, contingent, or unliquidated, in whole or in part; (B) that is listed in the Schedules as undisputed, liquidated, and not contingent and as to which a proof of claim has been filed with the Bankruptcy Court, to the extent the proof of claim amount exceeds the scheduled amount; (C) that is not listed in the Schedules, but as to which a proof of claim has been filed with the Bankruptcy Court; or (D) as to which an objection has been filed before the Effective Date, provided, that a Claim that is Allowed by Final Order or pursuant to the Plan on or before the Effective Date shall not be a Contested Claim; and (ii) with respect to a Securities Claim, means such Claim to the extent it has not become an Allowed Claim pursuant to the ADR; provided, that a Claim that is Allowed by Final Order or pursuant to the Plan on or before the Effective Date shall not be a Contested Claim. (x) "Debentures" means, collectively, the following debentures, together with all amendments thereto, and all documents, instruments, and agreements executed and delivered in connection therewith: (i) The Debtor's six percent (6%) convertible debentures that matured on August 1, 1998; (ii) The Debtor's seven percent (7%) convertible debentures that mature on September 1, 1999; and (iii) The Debtors eighteen percent (18%) convertible debentures that matured on February 28, 1998. (y) "Debenture Claim" means a Claim arising under or relating in any way to the Debentures, including any Claim for accrued and unpaid interest. (z) "Debtor" or "UPC" means United Petroleum Corporation, a Delaware corporation, the debtor and debtor in possession in this Chapter 11 Case. (aa) "Deficiency Amount" means, with respect to a Secured Claim, the amount by which the Claim exceeds the sum of (i) any set-off rights of the holder of such Claim against the Debtor under Bankruptcy Code sections 506 and 553, plus (ii) the net proceeds realized by the holder of such Claim from the disposition of the Collateral securing such Claim or, if such Collateral is not liquidated to Cash, the value of the interest of the holder of the Claim in the Debtor's interest in such Collateral, as determined by the Bankruptcy Court under Bankruptcy Code section 506; provided, that if the holder of a Claim that is secured by a Lien on Collateral makes the election provided in Bankruptcy Code section 1111(b), there shall be no Deficiency Amount in respect of such Claim. (bb) "Disallowed," when used with respect to a Claim, means a Claim that has been disallowed by a Final Order of the Bankruptcy Court. (cc) "Disbursing Agent" means any Person designated by the Proponent to make distributions required under the Plan which may include, without limitation, UPC, any financial institution of recognized standing, or such other disbursing agent as may be approved by the Proponent. (dd) "Disbursing Agreement" means, with respect to any Disbursing Agent (other than UPC), the agreement referenced in Article XI of the Plan which shall govern the rights and obligations of the Disbursing Agent. The Disbursing Agreement will be in substantially the form thereof filed as a Plan Document, unless UPC serves as the Disbursing Agent, in which case, the Plan shall be the Disbursing Agreement. (ee) "Disclosure Statement" means the disclosure statement respecting the Plan, as approved by the Bankruptcy Court as containing adequate information in accordance with Section 1125 of the Bankruptcy Code, all exhibits and annexes thereto and any amendments or modifications thereof. (ff) "Distribution Date" means, (i) for any Claim that is an Allowed Claim on the Effective Date, as soon as practicable after the occurrence of the Effective Date; (ii) for any Claim that is neither a Disallowed Claim nor an Allowed Claim on the Effective Date, the first Business Day after such Claim becomes an Allowed Claim, or as soon as practicable thereafter; provided, that with respect to Securities Claims, the Distribution Date shall be determined by the UPC Trustee, consistent with the ADR and UPC Trust. (gg) "Distribution Record Date" means the record date fixed for voting on the Plan. (hh) "Effective Date" means (i) the first Business Day after the Confirmation Date upon which the transactions consummated by the Merger Agreement are consummated, or (ii) a Business Day selected by the Debtor after the first Business Day which is ten (10) days after the Confirmation Date on which (y) the Confirmation Order is not stayed and (z) all conditions to the entry of the Confirmation Order and the occurrence of the Effective Date have been satisfied or waived as provided in Article XIII of the Plan. (ii) "Equity Interest" means (a) the legal, equitable, contractual and other rights of any Person with respect to Old UPC Common Stock, Old UPC Preferred Stock, or any other equity security of the company and (b) the legal, equitable, contractual or other rights of any Person to acquire or receive any of the foregoing. (jj) "Estate" means the estate of the Debtor created by section 541 of the Bankruptcy Code upon the commencement of the Chapter 11 Case. (kk) "Estate Asset" means any property, right, or interest in property that is included in the Estate of the Debtor. (ll) "Estimated Claims Order" means any order of the Bankruptcy Court estimating any Claim or the aggregate amount of all Claims in any class created under the Plan to aid in the confirmation of the Plan, or the calculation of distributions under the Plan. (mm) "Fairway" means Fairway Capital Limited, a Nevis, West Indies corporation. (nn) "Farm Stores" means all of the ninety-two (92) walk-in convenience stores owned or leased by various entities in which the FSCI Shareholder has a partnership interest, and all inventory, fixtures, equipment, merchandise, accounts and general intangibles associated therewith, except as otherwise provided in the Merger Agreement. (oo) "Farm Stores Assets" shall mean all of the assets held by FSCI, as more fully described in the Merger Agreement, immediately preceding consummation of the Merger, including, but not limited to, partnership and other interests in the Farm Stores, the Farm Stores Real Estate, and the Farm Stores License. (pp) "Farm Stores License" means the royalty-free license to use the "Farm Stores" name and all related trademarks in connection with the operation of the Farm Stores Assets. The Farm Stores License shall be in substantially the form attached as an Exhibit to the Merger Agreement. (qq) "Farm Stores Real Estate" means the real property owned by various entities in which the FSCI Shareholder has a partnership interest and used in connection with nine (9) of the Farm Stores. (rr) "FSCI" means F.S. Convenience Stores, Inc., a Florida corporation. (ss) "FSCI Shareholder" means the holder or holders of 100% of the equity interest of FSCI. (tt) "FSG" means Farm Stores Grocery, Inc., a Florida corporation. (uu) "FSG Equity Interest" means a ten percent (10%) ownership interest in FSG. (vv) "Fee Application" means an application of a Professional Person under section 330 or 503 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Chapter 11 Case. (ww) "Fee Claim" means a Claim under section 330 or 503 of the Bankruptcy Code for allowance of compensation and reimbursement of expenses in the Chapter 11 Case. (xx) "Final Order" means (i) an order or judgment of the Bankruptcy Court or any other court or adjudicative body as to which the time to appeal, petition for certiorari, or move for reargument or rehearing has expired and as to which no appeal, petition for certiorari, or other proceedings for reargument or rehearing shall then be pending or, (ii) in the event that an appeal, writ of certiorari, reargument, or rehearing thereof has been sought, such order of the Bankruptcy Court or any other court or adjudicative body shall have been affirmed by the highest court to which such order was appealed, or certiorari has been denied, or from which reargument or rehearing was sought, and the time to take any further appeal, petition for certiorari or move for reargument or rehearing shall have expired; provided, that no order shall fail to be a Final Order solely because of the possibility that a motion pursuant to Rule 60 of the Federal Rules of Civil Procedure or Rule 7024 of the Bankruptcy Rules may be filed with respect to such order. (yy) "General Unsecured Claim" means any Claim that is not an Administrative Expense Claim, a Priority Tax Claim, a Priority Non-Tax Claim, the Infinity Secured Claim, a Secured Claim, a Debenture Claim or a UPC Securities Claim. (zz) "Infinity" means Infinity Investors Limited, a Nevis, West Indies corporation. (aaa) "Infinity Party" means Infinity, Fairway, and Seacrest, and each of their respective Affiliates, officers, directors, managers, stockholders, investors, agents, attorneys and representatives, including, without limitation, Clark K. Hunt. (bbb) "Infinity Secured Claim" means the Secured Claims of Infinity under the Calibur A Note and the Calibur B Note (and all related security agreements, instruments and documents). (ccc) "Infinity Securities Claim" means any Cause of Action against the Infinity Parties arising from or in connection with the sale, offer, exchange, conversion, or issuance of, or any transaction involving, the Common Equity Interests, including without limitation, the Causes of Action asserted in the Pisacreta/Tucci Action, but excluding derivative Causes of Action that are property of the Estate. (ddd) "Infinity Settlement Agreement" means the agreement dated as of the Effective Date among the Debtor, the Infinity Parties and The UPC Trust, providing for the settlement of all Causes of Action that have been, are, or may be asserted by or on behalf of any of the parties thereto against any of the parties thereto as set forth in Section 14.1 of the Plan. The Infinity Settlement Agreement shall be substantially in the form thereof filed as a Plan Document. (eee) "Jackson" means Jackson-United Petroleum Corporation, a Kentucky corporation, which is a wholly-owned subsidiary of UPC. (fff) "Lien" shall have the meaning assigned to it in section 101(37) of the Bankruptcy Code. (ggg) "Management Agreement" means the agreements to be entered into as of the Effective Date between the management of UPC and UPC Merger Sub and FSG regarding the management of FSG from and after the Effective Date. The Management Agreement shall be in substantially the form thereof filed as a Plan Document. (hhh) "Merger" means the combination of FSCI with and into UPC Merger Sub, with UPC Merger Sub being the surviving corporation, upon the terms and conditions set forth in the Merger Agreement. (iii) "Merger Agreement" means the agreement and plan of merger to be entered into by and among UPC, UPC Merger Sub and FSCI. The Merger Agreement shall be in substantially the form attached hereto as Appendix I. (jjj) "Merger Consideration" consideration means the consideration to be received by the FSCI Shareholders under the Merger Agreement, to wit, (i) $3 million Cash Payment delivered to the FSCI Shareholder; (ii) 2,400,000 shares of New UPC Common Stock delivered to the FSCI Shareholder, and, (iii) 70,000 shares New UPC Preferred Stock delivered to the FSCI Shareholder. (kkk) "Merger Financing" means the financing, as contemplated in the Merger Agreement, in the original principal amount of up to $23.0 million, secured by a Lien on the Farm Stores Assets, the proceeds of which shall be used, inter alia, to pay the Merger Consideration and to execute and perform the $17 million obligation under the Toni Option. Upon consummation of the Merger, the Merger Financing shall be an obligation of UPC Merger Sub. (lll) "New UPC Bylaws" means the Bylaws of United Petroleum Corporation, as amended and restated pursuant to the Plan. The New UPC Bylaws shall be in substantially the form thereof filed as a Plan Document. (mmm) "New UPC Charter" means the Certificate of Incorporation for United Petroleum Corporation, as amended and restated pursuant to the Plan. The New UPC Charter shall be in substantially the form thereof filed as a Plan Document. (nnn) "New UPC Common Stock" means the 10,000,000 shares of UPC common stock which shall be authorized for issuance under the New UPC Charter; 5,000,000 of which shares shall be issued and outstanding on the Effective Date pursuant the transactions to occur thereon under the Plan and the Merger Agreement. (ooo) "New UPC Preferred Stock" means the 300,000 shares of UPC Class A Preferred Stock which shall be authorized for issuance under the New UPC Charter; 70,000 of which shares shall be issued to Infinity on the Effective Date in full satisfaction of the obligations under the Calibur A Note and the Calibur B Note, and 70,000 of which shares shall be issued to the FSCI Shareholder in conjunction with the transactions contemplated in the Merger Agreement. (ppp) "Old UPC Common Stock" means the issued and outstanding shares of common stock of UPC immediately before the occurrence of the Effective Date; to wit 30,565,352 shares. (qqq) "Old UPC Preferred Stock" means the issued and outstanding shares of preferred stock of UPC immediately before the occurrence of the Effective Date; to wit 9,912 shares of Class A Preferred Stock of UPC and 1,833 shares of Class B Preferred Stock of UPC. (rrr) "Penalty Claims" means Claims and Causes of Action for noncompensatory, statutory, exemplary, or punitive damages, or penalties. (sss) "Person" means an individual, corporation, partnership, joint venture, trust, estate, unincorporated association, unincorporated organization, governmental entity, or political subdivision thereof, or any other entity. (ttt) "Petition Date" means January 14, 1999. (uuu) "Pisacreta/Tucci Action" means that certain lawsuit entitled Pisacreta v. Infinity Investors Limited et al., Civil Action No. 3:97-CV-226 in the United States District Court for the Eastern District of Tennessee, as amended to include the allegations originally asserted in the Tucci Action. (vvv) "Plan" means this chapter 11 plan, as it may be modified from time to time in compliance with the Bankruptcy Code and the Bankruptcy Rules. (www) "Plan Documents" means the documents that aid in effectuating the Plan as specifically identified as such herein, including but not limited to, the Merger Agreement, the Management Agreement and the Farm Stores License. (xxx) "Preferred Equity Interest" means any (1) shares or other instruments (including, without limitation, the Old UPC Preferred Stock) evidencing a preferred stock ownership interest in the Debtor, whether or not transferable or denominated "stock,"; (2) Cause of Action arising under or in any way relating to a share or shares of Old UPC Preferred Stock; or (3) unpaid dividends with respect to a share or shares of Old UPC Preferred Stock. (yyy) "Post-Confirmation Interest" means simple interest at the rate of 6.00% per annum or such other rate as the Bankruptcy Court may determine at the Confirmation Hearing is appropriate; such interest to accrue from the date of the entry of an order allowing a Claim until such Claim is paid. (zzz) "Priority Non-Tax Claim" means any Claim accorded priority in right of payment under section 507(a)(3), (4), (5), (6), or (7) of the Bankruptcy Code. (aaaa) "Priority Tax Claim" means a Claim of a governmental unit of the kind specified in section 507(a)(8) of the Bankruptcy Code. (bbbb) "Professional Person" means a Person retained or to be compensated pursuant to section 327, 328, 330, 503(b), or 1103 of the Bankruptcy Code. (cccc) "Proponent" means the Debtor. (dddd) "Pro Rata Share" means the proportion that the amount of an Allowed Claim or Equity Interest in a particular class of Claims or Equity Interests bears to the aggregate amount of all Claims or Equity Interests in such class, including Contested Claims and Equity Interests, but not including Disallowed Claims and Equity Interests, (i) as calculated by the Disbursing Agent, or the UPC Trustee, as applicable, on or before any Distribution Date; or (ii) as determined by the Bankruptcy Court in an Estimated Claims Order, if such an order is sought and obtained. (eeee) "Schedules" means the schedules of assets and liabilities and the statements of financial affairs filed by the Debtor as required by section 521 of the Bankruptcy Code and Bankruptcy Rule 1007, as such schedules and statements have been or may be supplemented or amended. (ffff) "Seacrest" means Seacrest Capital Limited, a Nevis, West Indies corporation. (gggg) "Secured Claim" means (i) a Claim secured by a Lien on any Estate Asset, which Lien is valid, perfected, and enforceable under applicable law and is not subject to avoidance under the Bankruptcy Code or other applicable non-bankruptcy law, and which is duly established in the Chapter 11 Case, but only to the extent of the value of the Collateral that secures payment of the Claim; (ii) a Claim that is subject to a valid right of setoff under section 553 of the Bankruptcy Code; and (iii) a Claim allowed under the Plan as a Secured Claim. (hhhh) "Securities Claim" means either a UPC Securities Claim or an Infinity Securities Claim. (iiii) "Securities Claims Resolution Facility" means the facility to be established or designated by the UPC Trustee for the purpose of liquidating Securities Claims as specified in the ADR. (jjjj) "Toni" means Toni Gas & Food Stores, Inc. (kkkk) "Toni Option" means that certain agreement between, among others, Toni and FSCI, under which, FSCI has the option of purchasing from Toni, for $17 million, all partnership and other interests which relate to the Farm Stores, and which are not already owned by FSCI or the FSCI Shareholder. (llll) "Thomas Guarantee" means the guarantee of the Calibur A Note by UPC's president, Michael Thomas. (mmmm) "UPC Merger Sub" means United Petroleum Subsidiary, Inc., a Delaware corporation and the wholly-owned subsidiary of UPC created for the purpose of consummating the Merger. (nnnn) "UPC Securities Claim" means any Cause of Action against the Debtor arising from or in connection with the sale, offer, exchange, conversion or issuance of, or any transaction involving, the Common Equity Interests, including without limitation, any Causes of Action asserted against the Debtor in the Pisacreta/Tucci Action. (oooo) "UPC Trust" means the trust to be established pursuant to Section 7.1 of the Plan and the UPC Trust Agreement. (pppp) "UPC Trust Agreement" means the trust agreement between the Debtor, Infinity and the UPC Trustee, dated as of the Effective Date. The UPC Trust Agreement shall be in substantially the form thereof filed as a Plan Document. (qqqq) "UPC Trustee" means the Person that is duly appointed and qualified to serve as the trustee of the UPC Trust pursuant to the terms and conditions of the Plan and the UPC Trust Agreement and as approved by the Bankruptcy Court. 1.2. Interpretation. Unless otherwise specified, all section, article, and exhibit references in the Plan are to the respective section in, article of, or exhibit to, the Plan, as the same may be amended, waived, or modified from time to time. The headings in the Plan are for convenience of reference only and shall not limit or otherwise affect the provisions of the Plan. Words denoting the singular number shall include the plural number and vice versa, and words denoting one gender shall include the other gender. The Disclosure Statement may be referred to for purposes of interpretation to the extent any term or provision of the Plan is determined by the Bankruptcy Court to be ambiguous. 1.3. Application of Definitions and Rules of Construction Contained in the Bankruptcy Code. Words and terms defined in section 101 of the Bankruptcy Code shall have the same meaning when used in the Plan, unless a different definition is given in the Plan. The rules of construction contained in section 102 of the Bankruptcy Code shall apply to the construction of the Plan. 1.4. Other Terms. The words "herein," "hereof," "hereto," "hereunder," and others of similar import refer to the Plan as a whole and not to any particular section, subsection, or clause contained in the Plan. A term used herein that is not defined herein shall have the meaning ascribed to that term, if any, in the Bankruptcy Code. 1.5. Appendices and Plan Documents. All Appendices to the Plan and the Plan Documents are incorporated into the Plan by this reference and are a part of the Plan as if set forth in full herein. ARTICLE II. CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS 2.1. Claims and Equity Interests Classified. For purposes of organization, voting, and all confirmation matters, except as otherwise provided herein, all Claims (except for Administrative Expense Claims, and Priority Tax Claims) and all Equity Interests shall be classified as set forth in this Article II of the Plan. 2.2. Administrative Expense Claims and Priority Tax Claims. As provided in section 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims and Priority Tax Claims shall not be classified for purposes of voting or receiving distributions under the Plan. Rather, all such Claims shall be treated separately as unclassified Claims on the terms set forth in Article V of the Plan. 2.3. Claims and Equity Interests. The Plan classifies the Claims against and Equity Interests in the Debtor as follows: (a) Class 1: Priority Non-Tax Claims (b) Class 2: Infinity Secured Claim (c) Class 3: Secured Claims (other than the Infinity Secured Claim) (d) Class 4: General Unsecured Claims (e) Class 5: Debenture Claims (f) Class 6: Preferred Equity Interests (g) Class 7: Common Equity Interests (h) Class 8: UPC Securities Claims 2.4. Separate Classification of Secured Claims. Although placed in one category for purposes of convenience, each Claim that is determined to be a Secured Claim shall be treated as though in a separate class (to be designated as Class 3A, Class 3B, Class 3C, etc.) for purposes of voting and receiving distributions under the Plan. ARTICLE III. IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS 3.1. Unimpaired Classes of Claims and Equity Interests. Class 1 -- Priority Non-Tax Claims, Class 3 -- Secured Claims (if any), and Class 4 -- General Unsecured Claims, are not impaired under the Plan. 3.2. Impaired Classes of Claims and Equity Interests. With the exception of the unimpaired classes specified in Section 3.1 of the Plan, all classes of Claims and Equity Interests are impaired under the Plan. 3.3. Impairment Controversies. If a controversy arises as to whether any Claim or Equity Interest, or any class of Claims or class of Equity Interests, is impaired under the Plan, the Bankruptcy Court shall, after notice and a hearing, determine such controversy. ARTICLE IV. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN 4.1. Treatment of Claims and Equity Interests. The classes of Claims against and Equity Interests in the Debtor shall be treated under the Plan as follows: (a) Class 1 -- Priority Non-Tax Claims. Each holder of an Allowed Priority Non-Tax Claim shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights of each holder of an Allowed Priority Non-Tax Claim in respect of such Claim shall be fully reinstated and retained as though the Chapter 11 Case had not been filed. (b) Class 2 -- Infinity Secured Claim. The Infinity Secured Claim shall be Allowed pursuant to the Plan and on the Effective Date the holder of the Infinity Secured Claim shall receive 70,000 shares of New UPC Preferred Stock in full satisfaction and release of the Infinity Secured Claim. (c) Class 3 -- Secured Claims (Other than the Infinity Secured Claim). Each holder of an Allowed Secured Claim shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable, and contractual rights of each holder of a Secured Claim in respect of such Claim shall be fully reinstated and retained as though the Chapter 11 Case had not been filed. Notwithstanding the foregoing, the Debtor and any holder of an Allowed Secured Claim may agree to any alternate treatment of such Secured Claim which treatment may include preservation of such holder's Lien; provided, that such treatment shall not provide a return to such holder having a present value as of the Effective Date in excess of the amount of such holder's Allowed Secured Claim. (d) Class 4 -- General Unsecured Claims. Each holder of an Allowed General Unsecured Claim shall be unimpaired under the Plan and, pursuant to section 1124 of the Bankruptcy Code, all of the legal, equitable and contractual rights of each holder of an Allowed General Unsecured Claim in respect of such Claim shall be fully reinstated and retained as though the Chapter 11 Case had not been filed. (e) Class 5 -- Debenture Claims. The Debenture Claims shall be Allowed pursuant to the Plan and on the Effective Date each holder of an Allowed Debenture Claim shall receive a Pro Rata Share of 1,750,000 shares (35%) of New UPC Common Stock in full satisfaction and release of the Debenture Claims. (f) Class 6 -- Preferred Equity Interests. The Preferred Equity Interests shall be Allowed pursuant to the Plan and on the Effective Date each holder of an Allowed Preferred Equity Interest shall receive a Pro Rata Share of 650,000 shares (13%) of New UPC Common Stock in full satisfaction and release of the Preferred Equity Interests. (g) Class 7 -- Common Equity Interests. All Common Equity Interests will be canceled, annulled and extinguished as of the Effective Date. In full satisfaction and release of the Common Equity Interests, each holder of an Allowed Common Equity Interests evidenced by Old UPC Common Stock as of the Distribution Record Date shall receive (i) a Pro Rata Share of 200,000 shares (4%) of New UPC Common Stock, and (ii) the right to receive a Pro Rata Share of one-half (1/2) of any of the assets initially contributed to the UPC Trust pursuant to Sections 7.2 and 7.3 of the Plan, which remain after all distributions have been made by the UPC Trust under the Plan in respect of Allowed Securities Claims. (h) Class 8 -- UPC Securities Claims. In full satisfaction and release of the UPC Securities Claims, the UPC Securities Claims shall have the right to be liquidated and allowed pursuant to the ADR, together with the Infinity Securities Claims, except that, under no circumstance will any Person other than the UPC Trust be liable to the holder of a UPC Securities Claim on account of such UPC Securities Claim. On the Distribution Date, each holder of an Allowed UPC Securities Claim shall receive a distribution from the UPC Trust as provided for by Article VII of the Plan, the UPC Trust Agreement and the ADR. ARTICLE V. PROVISIONS FOR TREATMENT OF UNCLASSIFIED CLAIMS UNDER THE PLAN 5.1. Treatment of Administrative Expense Claims. All Administrative Expense Claims shall be treated as follows: (a) Time for Filing Administrative Expense Claims. The holder of an Administrative Expense Claim, other than (i) a Fee Claim, (ii) a liability incurred and paid in the ordinary course of business by the Debtor, or (iii) an Administrative Expense Claim that has been allowed on or before the Effective Date, must file with the Bankruptcy Court and serve on the Debtor and its counsel, notice of such Administrative Expense Claim within twenty (20) days after service of notice of entry of the Confirmation Order. Such notice must include at a minimum (1) the name of the holder of the Claim, (2) the amount of the Claim, and (3) the basis of the Claim. Failure to file this notice timely and properly shall result in the Administrative Expense Claim being forever barred and discharged. (b) Time for Filing Fee Claims. Each Professional Person or other entity that holds or asserts an Administrative Expense Claim that is a Fee Claim incurred before the Effective Date shall be required to file with the Bankruptcy Court, and serve on all parties required to receive notice, a Fee Application within forty-five (45) days after the Effective Date. The failure to file timely the Fee Application shall result in the Fee Claim being forever barred and discharged. (c) Allowance of Administrative Expense Claims. An Administrative Expense Claim with respect to which notice has been properly filed pursuant to Section 5.1(a) of the Plan shall become an Allowed Administrative Expense Claim if no objection is filed within sixty (60) days after the deadline for filing and serving a notice of such Administrative Expense Claim specified in Section 5.1(a) hereof, or such later date as may be approved by the Bankruptcy Court on motion of the Debtor, without notice or a hearing. If an objection is filed within such sixty-day period (or any extension thereof), the Administrative Expense Claim shall become an Allowed Administrative Expense Claim only to the extent allowed by Final Order. An Administrative Expense Claim that is a Fee Claim, and with respect to which a Fee Application has been properly filed pursuant to Section 5.1(b) of the Plan, shall become an Allowed Administrative Expense Claim only to the extent allowed by Final Order. (d) Payment of Allowed Administrative Expense Claims. Each holder of an Allowed Administrative Expense Claim shall receive (i) the amount of such holder's Allowed Claim in one Cash payment on the Distribution Date, or (ii) such other treatment as may be agreed upon in writing by the Debtor and such holder; provided, that an Administrative Expense Claim representing a liability incurred in the ordinary course of business of the Debtor may be paid at the Debtor's election in the ordinary course of business by the Debtor. All Allowed Administrative Expense Claims shall be paid by, and shall be the sole responsibility of, UPC. 5.2. Treatment of Priority Tax Claims. Each holder of an Allowed Priority Tax Claim shall receive from UPC in full satisfaction of such holder's Allowed Priority Tax Claim, (i) the amount of such holder's Allowed Claim, with Post-Confirmation Interest thereon, in equal annual Cash payments on each anniversary of the Distribution Date, until the sixth anniversary of the date of assessment of such Claim (provided that the Debtor may prepay the balance of any such Allowed Priority Tax Claim at any time without penalty); (ii) a lesser amount in one Cash payment as may be agreed upon in writing by such holder; or (iii) such other treatment as may be agreed upon in writing by such holder. The Confirmation Order shall constitute and provide for an injunction by the Bankruptcy Court as of the Effective Date against any holder of a Priority Tax Claim from commencing or continuing any action or proceeding against any responsible person or officer or director of the Debtor that otherwise would be liable to such holder for payment of a Priority Tax Claim so long as UPC is not in default of its obligations with respect to such Claim under this Section 5.2 of the Plan. ARTICLE VI. ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR EQUITY INTERESTS 6.1. Classes Entitled to Vote. Each impaired class of Claims shall be entitled to vote separately to accept or reject the Plan. All unimpaired classes of Claims shall be deemed to have accepted the Plan. 6.2. Class Acceptance Requirement. A class of Claims shall have accepted the Plan if it is accepted by at least two-thirds (2/3) in amount and more than one-half (1/2) in number of the Allowed Claims in such class that have voted on the Plan. A class of Equity Interests shall have accepted the Plan if it is accepted by holders of at least two-thirds (2/3) of the Allowed Equity Interests in such class that have voted on the Plan. 6.3. Confirmation Without Acceptance by All Impaired Classes. If any impaired class of Claims or Equity Interests shall fail to accept the Plan in accordance with section 1129(a) of the Bankruptcy Code, the Plan shall constitute a request that the Bankruptcy Court confirm the Plan over such rejection in accordance with section 1129(b) of the Bankruptcy Code. ARTICLE VII. TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN LIABILITIES BY THE UPC TRUST 7.1. Creation of UPC Trust and Appointment of Trustee. (a) On the Effective Date, the UPC Trust will be created pursuant to the UPC Trust Agreement for the benefit of all holders of Securities Claims. The UPC Trust or the fund established for transfer to the UPC Trust may be a "designated settlement fund" or "qualified settlement fund" pursuant to section 468B of the Internal Revenue Code and related regulations. (b) The UPC Trust shall be administered by an independent trustee who shall be an individual designated by the Debtor, subject to approval of the Bankruptcy Court. The terms of the compensation to be payable to the UPC Trustee shall also be subject to approval of the Bankruptcy Court. (c) No person shall be eligible to be appointed as the UPC Trustee who, within the five (5) years preceding such appointment, had any business or professional affiliation with the Debtor or any holder of a Claim, or any attorney representing any of the foregoing. The appointment of the UPC Trustee and the terms of his/her compensation shall be subject to the approval of the Bankruptcy Court. 7.2. Transfers of Certain Property of the Debtor to the UPC Trust. (a) As of the Effective Date, the Debtor shall transfer and assign (or deliver, as applicable) to the UPC Trust in accordance with the UPC Trust Agreement, all Causes of Action of the Debtor for contribution and indemnity with respect to Securities Claims against any Person, excluding the Infinity Parties. (b) On or as soon as practicable after the Effective Date, the Debtor shall transfer to the UPC Trust all of its documents and records relating to the transactions and events that purportedly give rise to Securities Claims, except those documents necessary for the Debtor's continuing operations. As of the date of such transfer, the UPC Trust shall assume any and all obligations related to the storage of such documents and records. The Proponent shall retain a right of access to all documents and records transferred to the UPC Trust. 7.3. Transfers of Certain Property of the Infinity Parties to the UPC Claims Trust. The Infinity Parties shall transfer and assign (or deliver, as applicable) or cause to be transferred and assigned (or deliver, as applicable) to the UPC Trust in accordance with the UPC Trust Agreement, effective as of the Effective Date, the following: (a) 200,000 shares of New UPC Common Stock; (b) all Causes of Action of the Infinity Parties for contribution and indemnity with respect to Securities Claims against any Person, excluding the Debtor, its affiliates and their respective officers, directors, attorneys and representatives. 7.4. Distribution of Assets by the UPC Trust. The UPC Trustee shall make distributions from the assets in the UPC Trust to the holders of Allowed Securities Claims, in the full amount of such Allowed Securities Claims. Upon the termination of the channeling injunction in favor of the Infinity Parties pursuant to Section 16.2(d) of the Plan, holders of Securities Claims that have been timely asserted shall be permitted to assert such claims directly against the Infinity Parties. After the satisfaction of all Allowed Securities Claims, any assets remaining in the UPC Trust shall be allocated and distributed in accordance with the Infinity Settlement Agreement 50% to the Infinity Parties and 50% to the holders of Allowed Common Equity Interests. 7.5. Assumption of Certain Liabilities by the UPC Trust. (a) In consideration for the property transferred and the payments made to the UPC Trust pursuant to Sections 7.2 and 7.3 of the Plan, the UPC Trust shall assume all Securities Claims against the Debtor and the Infinity Parties. (b) As of the Effective Date, the UPC Trust shall (i) establish the Securities Claims Resolution Facility and assume responsibility for the liquidation of all Securities Claims as specified in the ADR, (ii) assume the defense of all Causes of Action against the Debtor and the Infinity Parties that constitute or may give rise to Securities Claims, (iii) assume the defense of all Causes of Action against any Person that may give rise to an indemnification liability against the Infinity Parties; and (iv) prosecute the Causes of Action of the Debtor and the Infinity Parties that have been transferred and assigned to the UPC Trust as the UPC Trustee shall determine is appropriate under the circumstances. Except as otherwise provided in the UPC Trust Agreement and the Infinity Settlement Agreement, the UPC Trust shall have all defenses, cross claims, Causes of Action, and rights to liens, offsets and recoupments that the Debtor and the Infinity Parties would have had against any Person under applicable non-bankruptcy law with respect to the Securities Claims. 7.6. Certain Property Held in Trust by the Debtor and the Infinity Parties. If for any reason after the Effective Date the Debtor and the Infinity Parties shall retain or receive any property that is owned by the Debtor or the Infinity Parties and which is to be transferred to the UPC Trust, then the Debtor and the Infinity Parties shall segregate and hold such property (and any proceeds thereof) in trust for the benefit of the UPC Trust, and shall take such actions with respect to such property at the expense and for the account of the UPC Trust as the UPC Trustee shall direct in writing. 7.7. Obligations of the UPC Trust with Regard to Claims Over. The rights and entitlement of the UPC Trust in respect of its prosecution of Causes of Action, rights, and claims are subject to the obligations and conditions set forth in subparagraphs (a) and (b) below. (a) When the UPC Trust asserts a Cause of Action, that was transferred or assigned to the UPC Trust by the Debtor or the Infinity Parties, the UPC Trust shall as soon as practicable deliver to the Person designated by each of the Debtor and Infinity to receive notice (the "Notice Party"), a copy of the complaint asserting such Cause of Action. Notwithstanding the injunctions provided pursuant to Section 16.12 of the Plan and the discharge provided pursuant to Section 16.11 and 16.13 of the Plan, if a party to such action asserts therein a counterclaim or cross claim (a "Claim Over") against the Debtor, Infinity or any other Person specified in the Infinity Settlement Agreement (a "Named Party"), the UPC Trust shall as soon as practicable deliver to the Notice Party a copy of the pleading asserting such Claim Over. (b) If the UPC Trust obtains a settlement with respect to or judgment against a party who has made a Claim Over in respect of such settlement or judgment, the UPC Trust shall: (i) in the event of any settlement, obtain, as part of such settlement, a release of each Named Party or a withdrawal with prejudice of any Claim Over against each Named Party; and (ii) in the event of any judgment rendered other than by reason of settlement: (A) in the event that the Claim Over is adjudicated, reduce, in satisfaction of such Claim Over, any such judgment obtained against the party asserting the Claim Over by the amount, if any, necessary to eliminate and satisfy such Claim Over without any further obligation of the relevant Named Party or Parties with respect to such Claim Over; provided, that (without limiting its obligations for indemnification) in no event shall reduction in respect of such Claim Over exceed the amount of the judgment obtained by the UPC Trust against the party asserting such Claim Over, or (B) indemnify and hold the Named Parties harmless in respect of such Claim Over if such Claim Over has not been adjudicated. (c) If a Claim Over has been asserted by any party against any Named Party, the UPC Trust shall fully indemnify and hold harmless the relevant Named Party from and against any and all liabilities, losses, penalties, damages, and all other reasonable costs and expenses or disbursements (including legal fees) incurred in connection with, or related to, the defense of the Claim Over. 7.8. Powers and Duties of the UPC Trustee. (a) Subject to the terms and provisions of the UPC Trust Agreement, as approved by the Bankruptcy Court, the UPC Trustee shall have the duty and authority to take all actions, including, but not limited to, the retention of professionals, deemed by the UPC Trustee to be necessary or appropriate (i) to implement the Plan, including without limitation, executing, entering into and implementing (A) the UPC Trust Agreement, (B) the Infinity Settlement Agreement, and (B) any other document, instrument or agreement necessary, or appropriate to implement the Plan, (ii) to assert, enforce, or settle the rights and claims of the UPC Trust under the Plan, the UPC Trust Agreement, any order of the Bankruptcy Court, any agreement, instrument, or document, and applicable law, (iii) to protect, maintain, liquidate to Cash, and maximize the value of the assets transferred to the UPC Trust, (iv) to liquidate and resolve the Securities Claims pursuant to the ADR, (v) to make distributions to the holders of Allowed Securities Claims pursuant to the Plan, and (vi) to prepare and make available to the Debtor, Infinity and holders of Claims and Equity Interests periodic reports regarding the results of the UPC Trust's operations. (b) Except as otherwise provided in this Section 7.8, the UPC Trustee, together with his/her officers, directors, employees, agents, and representatives, are hereby exculpated by all Persons, holders of Claims and Equity Interests, and parties in interest, from any and all Causes of Action, and other assertions of liability (including breach of fiduciary duty) arising out of the discharge of the powers and duties conferred upon the UPC Trustee by the UPC Trust Agreement, the Plan, any Final Order of the Bankruptcy Court entered pursuant to or in the furtherance of the Plan, or applicable law, except solely for actions or omissions arising out of the UPC Trustee's willful misconduct. No holder of a Claim or an Equity Interest, or representative thereof, shall have or pursue any claim or cause of action against the UPC Trustee or his/her officers, directors, employees, agents, and representatives for making payments in accordance with the Plan, or for liquidating assets to make payments under the Plan. ARTICLE VIII. MEANS FOR IMPLEMENTATION OF THE PLAN 8.1. Continued Corporate Existence. UPC shall continue to exist after the Effective Date as a separate corporate entity, with all corporate powers, in accordance with the laws of the State of Delaware and pursuant to the New UPC Charter and the New UPC Bylaws, which shall become effective upon the occurrence of the Effective Date. 8.2. The Merger . Pursuant to the terms and conditions set forth in the Merger Agreement, (a) FSCI will receive and disburse $17 Million from the Merger Financing to exercise and perform under the Toni Option, (b) UPC Merger Sub and FSCI shall merge on the Effective Date, with UPC Merger Sub being the surviving corporation, (c) the FSCI Shareholder shall receive the Merger Consideration such that the UPC Merger Sub will own 100% of the Farm Stores Assets and 10% of the equity in FSG. 8.3. Vesting of Assets. (a) Upon the occurrence of the Effective Date, title to the Estate Assets shall vest in UPC, free and clear of all Liens, Claims, Causes of Action, and interests, except as expressly provided in the Plan. On and after the occurrence of the Effective Date, UPC may operate its business and may use, acquire and dispose of its assets free of any restrictions of the Bankruptcy Code. (b) Upon the occurrence of the Effective Date, and pursuant to the Merger Agreement, title to the Farm Stores Assets shall vest in UPC Merger Sub, subject to a lien securing payment of the Merger Financing. On and after the occurrence of the Effective Date, UPC Merger Sub may operate its business and may use, acquire and dispose of its assets free of any restrictions of the Bankruptcy Code. 8.4. Management. Upon the occurrence of the Effective Date, the management, control, and operation of UPC shall become the general responsibility of the board of directors of UPC, as reconstituted pursuant to the Plan and Merger Agreement. Additionally, pursuant to the terms of the Management Agreement, UPC shall provide the management for FSG. Entry of the Confirmation Order shall ratify and approve all actions taken by the board of directors of UPC from the Petition Date through and until the Confirmation Date. 8.5. Reconstitution of UPC Board of Directors. The initial board of directors of UPC shall be composed of the individuals identified in the Disclosure Statement or as otherwise identified at or prior to the Confirmation Hearing, to hold such positions. 8.6. Officers. The officers of UPC immediately following the Effective Date, shall be those parties identified in the Disclosure Statement or otherwise identified prior to the conclusion of the Confirmation Hearing. 8.7. The New UPC Charter and Bylaws. Upon the occurrence of the Effective Date, UPC's charter and bylaws shall be amended and restated as specified herein. In addition to containing provisions that are currently contained in UPC's charter and bylaws, the New UPC Charter and the New UPC Bylaws shall provide for, among other things, a prohibition against the issuance of nonvoting equity securities as required by section 1123(a)(6) of the Bankruptcy Code. 8.8. Issuance of New UPC Common Stock. (a) All existing shares of Old UPC Common Stock and Old UPC Preferred Stock shall be deemed canceled, annulled, and extinguished as of the Effective Date. (b) On the Effective Date, UPC shall issue and distribute 5,000,000 shares of New UPC Common Stock as follows: (i) 2,400,000 shares will be issued to the FSCI Shareholder; (ii) 1,750,000 shall be issued to the holders of Allowed Debenture Claims; (iii) 650,000 shall be issued to the holders of Allowed Preferred Equity Interests; and (iv) 200,000 shall be issued to the holders of Allowed Common Equity Interests. (c) Each share of New UPC Common Stock shall have a par value of $0.01. The New UPC Common Stock shall have one vote per share on all matters. 8.9. Issuance of New UPC Preferred Stock. (a) On the Effective Date, UPC shall issue and distribute 140,000 shares of New UPC Preferred Stock as follows: (i) 70,000 shares shall be issued to the FSCI Shareholder; and (ii) 70,000 shares shall be issued to the holder of the Infinity Secured Claim. (b) The New UPC Preferred Stock shall be issued pursuant to a certificate of designation in substantially the form to be filed with the Bankruptcy Court as a Plan Document, pursuant to which each share of New UPC Preferred Stock shall (i) entitle the holder to receive cumulative quarterly dividends at the annual rate of approximately nine percent (9%), dividends payable in cash out of funds legally available for the payment thereof, or, at the election of the Board of Directors, New UPC Common Stock having an equivalent market value; (ii) have a preference of $100.00, plus accrued and unpaid dividends upon any voluntary or involuntary liquidation, dissolution, or winding up of the affairs of the Debtor; and (iii) provide that at any time or times dividends shall be in arrears and unpaid on an amount equal to eight (8) consecutive full quarterly dividend periods, then the number of directors constituting the board of directors, without further action, shall be increased by two (2) and the holders of shares of New UPC Preferred Stock shall have the exclusive right, voting separately as a class, to elect the directors to fill such newly-created directorships. 8.10. Cancellation of Instruments and Agreements. Upon the occurrence of the Effective Date, except as otherwise provided herein, all promissory notes, share certificates, instruments, indentures, or agreements evidencing, giving rise to, or governing any Claim or Equity Interest shall be deemed canceled and annulled without further act or action under any applicable agreement, law, regulation, order, or rule, and the obligations of the Debtor under such promissory notes, share certificates, instruments, indentures, or agreements shall be discharged. 8.11. Effectuating Documents. On or before ten (10) business days prior to the deadline for parties to vote to accept or reject the Plan, the Proponent shall file with the Bankruptcy Court substantially final forms of the agreements and other documents that have been identified herein as Plan Documents, which documents and agreements shall implement and be controlled by the Plan. Entry of the Confirmation Order shall authorize the officers of UPC to execute, enter into, and deliver all documents, instruments and agreements, including, but not limited to, the Plan Documents, and to take all actions necessary or appropriate to implement the Plan. To the extent the terms of any of the Plan Documents conflict with the terms of the Plan, the Plan shall control. 8.12. Treatment of Affiliate Claims. Except for valid intercompany payables and receivables between and among the Debtor, Jackson and Calibur, which shall be unaffected by the Chapter 11 Case, all rights, claims, Causes of Action, obligations, and liabilities between and among the Debtor and its Affiliates shall be waived, released, and discharged upon the occurrence of the Effective Date. 8.13. Retention of Causes of Action. Except as otherwise provided in the Plan, all Causes of Action assertable by the Debtor including, without limitation, those Causes of Action assertable pursuant to sections 542, 543, 544, 545, 547, 548, 549, 550, or 553 of the Bankruptcy Code, shall be retained by the Debtor and shall be vested in the Debtor upon the occurrence of the Effective Date. Any net recovery realized by the Debtor on account of such Causes of Action shall be property of the Debtor. 8.14. Indemnification. The entry of the Confirmation Order shall constitute a permanent injunction against the prosecution of all claims and Causes of Action of any Person against the officers, directors, employees and attorneys of the Debtor as of the Confirmation Date to the extent such claims or Causes of Action (a) are based in whole or in part on events occurring on or before the Confirmation Date, and (b) have been indemnified by the Debtor under its charter, its bylaws, applicable state law or any other agreement between the Debtor and such other parties, or any combination of the foregoing. 8.15. Employee Benefits. Except as may be otherwise provided in a motion filed with the Bankruptcy Court prior to entry of the Confirmation Order, all employment and severance practices, policies, and agreements, and all compensation and benefit agreements, plans, policies, and programs of the Debtor applicable to its directors, officers, or employees, including, without limitation, all savings plans, health care plans, severance benefit plans, incentive plans, employment agreements, workers' compensation programs, and life, disability, and other insurance plans, to the extent in full force and effect on the date of the commencement of the Confirmation Hearing, and excluding all Retiree Benefit Plans, are treated as executory contracts under the Plan, and the Plan constitutes and incorporates a motion to assume all such practices, policies, agreements, plans, and programs pursuant to section 365(a) of the Bankruptcy Code. The Confirmation Order shall represent and reflect an order of the Bankruptcy Court approving such assumptions as of the Effective Date; provided, that the confirmation and consummation of the Plan shall not constitute a change of control or triggering event under any employment agreement. 8.16. Appointment of the Disbursing Agent. Unless prior to the conclusion of the Confirmation Hearing the Debtor specifically identifies a Person to serve as the Disbursing Agent under the Plan, the Debtor shall serve as the Disbursing Agent. 8.17. Transactions on the Effective Date. On the Effective Date, unless otherwise provided by the Confirmation Order of the Bankruptcy Court, the following shall occur, shall be deemed to have occurred simultaneously, and shall constitute substantial consummation of the Plan: (a) the New UPC Charter and Bylaws shall become effective; (b) The Merger Agreement shall become effective and the transactions contemplated by the Merger Agreement shall be consummated; (c) all payments and other distributions to be made on, or as soon as practicable after, the Effective Date by the Debtor or the UPC Trust pursuant to Articles IV and V of the Plan shall be made or duly provided for; (d) the UPC Trustee shall be duly appointed and qualified to serve; (e) the Debtor, the UPC Trustee and Infinity shall enter into the Infinity Settlement Agreement and the transactions contemplated thereby shall be consummated; (f) the Debtor shall issue the shares of New UPC Common Stock and New UPC Preferred Stock to be issued under the Plan; and (g) the UPC Trustee, the Debtor, and Infinity shall enter into and execute the UPC Trust Agreement, the UPC Trust shall be established, and the property to be transferred to the UPC Trust pursuant to Sections 7.2 and 7.3 of the Plan shall automatically vest in the UPC Trust without further action on the part of the Debtor, Infinity or the UPC Trustee, with the execution, delivery and filing or recording as necessary of appropriate documents of conveyance and physical delivery of such property occurring as soon thereafter as practicable. 8.18. Sources of Cash for Plan Distributions. All Cash necessary for the Debtor to make payments and distributions to pursuant to the Plan shall be obtained from existing Cash balances, from funds made available pursuant to Merger Financing, and the operations of the Debtor and its subsidiaries, including UPC Merger Sub. All Cash necessary for the UPC Trust to make payments to the holders of Allowed Securities Claims shall be obtained from the assets contributed to the UPC Trust pursuant to the Plan, or the proceeds thereof. ARTICLE IX. PROVISIONS GOVERNING DISTRIBUTIONS 9.1. Date of Distributions. Any distributions and deliveries to be made under the Plan on account of an Allowed Claim shall be made on the Distribution Date with respect to such Allowed Claim, as otherwise provided for herein, or as may be ordered by the Bankruptcy Court. 9.2. Disbursing Agent/UPC Trustee. The Disbursing Agent shall make or direct all distributions required under this Plan, except for distributions to the holders of Allowed Securities Claims, which shall be made by the UPC Trustee. 9.3. Means of Cash Payment. Cash payments made pursuant to the Plan shall be in US funds, by check drawn on a domestic bank, or by wire transfer from a domestic bank, except that payments made to foreign trade creditors holding Allowed Claims or to foreign governmental units holding Allowed Priority Tax Claims shall be in such funds and by such means as are customary or as may be necessary in a particular foreign jurisdiction. 9.4. Delivery of Distributions. Subject to Bankruptcy Rule 9010, distributions and deliveries to holders of Allowed Claims shall be made at the address of each such holder (a) as set forth on the proofs of Claim filed by such holders, (b) as set forth in the Verification Form (as defined in the ADR), with respect to holders of Allowed Securities Claims, or (c) at the last known address of such holders if the Disbursing Agent, or the UPC Trustee (as applicable) have been notified of a change of address, except as otherwise provided in this Article IX of the Plan. If any holder's distribution is returned as undeliverable, no further distributions to such holder shall be made unless and until the Disbursing Agent (or the UPC Trustee, as applicable) receives notification of such holder's then current address, at which time any missed distributions shall be made to such holder without interest. Amounts in respect of undeliverable distributions shall be returned to the Disbursing Agent (or the UPC Trustee, as applicable) until such distributions are claimed. All claims for undeliverable distributions shall be made on or before the second anniversary of the Distribution Date. After such date all unclaimed property shall (a) in the case of distributions to holders of Administrative Expense Claims, Priority Tax Claims, Class 1 -- Priority Non-Tax Claims, the Class 2 -- Infinity Secured Claim, Class 3 -- Secured Claims, and Class 4 -- General Unsecured Claims, Class 5 -- Debenture Claims, Class 6 -- Preferred Equity Interests and Class 7 -- Common Equity Interests revert to UPC, and (b) in the case of Securities Claims, revert to the UPC Trust; and, in any case, the Claim or Equity Interest of any holder with respect to such property shall be discharged and forever barred. 9.5. Surrender of Notes, Instruments, and Securities. As a condition to receiving distributions provided for by the Plan, each holder of a promissory note, share certificate, or other instrument evidencing a Claim or Equity Interest shall surrender such promissory note, share certificate, or instrument to the Disbursing Agent (or, in the case of the holders of Securities Claims, to the UPC Trustee) within sixty (60) days of the Effective Date. All promissory notes, share certificates, and other instruments surrendered pursuant to the preceding sentence shall be marked "Compromised and Settled only as provided in Debtor's Plan of Reorganization." Unless waived by the Disbursing Agent (or the UPC Trustee in the case of the holders of Securities Claims), any person seeking the benefits of being a holder of an Allowed Claim or Equity Interest evidenced by a promissory note, share certificate, or other instrument, who fails to surrender such promissory note, share certificates, or other instrument must (a) establish the unavailability of such promissory note, share certificate, or other instrument to the reasonable satisfaction of the Disbursing Agent (or the UPC Trustee, in the case of the holders of Securities Claims), and (b) provide an indemnity bond in form and amount acceptable to the Disbursing Agent (or the UPC Trustee, in the case of the holders of Securities Claims) holding harmless the Debtor and the Disbursing Agent (or the UPC Trustee, in the case of the holders of Securities Claims) from any damages, liabilities, or costs incurred a result of treating such Person as a holder of an Allowed Claim or Equity Interest, as applicable. Thereafter, such Person shall be treated as the holder of an Allowed Claim or Equity Interest for all purpose under the Plan. Notwithstanding the foregoing, any holder of a promissory note, share certificate, or other instrument evidencing a Claim or Equity Interest that fails within one year of the Effective Date to surrender to the Debtor (or the UPC Trustee, as applicable) such note or other instrument, or alternatively, to satisfy the requirements of the second sentence of this Section 9.5 shall be deemed to have forfeited all rights, Claims against, and Equity Interests in, the Debtor and shall not be entitled to receive any distribution under the Plan. 9.6. Expenses Incurred On or After the Effective Date and Claims of the Disbursing Agent and the UPC Trustee. Except as otherwise ordered by the Bankruptcy Court, the amount of any expenses incurred by the Disbursing Agent or the UPC Trustee on or after the Effective Date (including, but not limited to, taxes) and any compensation and expenses (including any post-confirmation fees, costs, expenses, or taxes) to be paid to or by the Disbursing Agent or the UPC Trustee shall be borne by the Debtor and the UPC Trust, respectively. Professional fees and expenses incurred by the Disbursing Agent and the UPC Trustee after the Effective Date in connection with the effectuation of the Plan shall be paid by each in the ordinary course of business. 9.7. Time Bar to Cash Payments. Checks issued by the Disbursing Agent or the UPC Trustee in respect of Allowed Claims shall be null and void if not negotiated within ninety (90) days after the date of issuance thereof. Requests for reissuance of any check shall be made directly to the Disbursing Agent or the UPC Trustee, as applicable, by the holder of the Allowed Claim with respect to which such check originally was issued. Any claim in respect of such a voided check shall be made on or before the later of (a) the second anniversary of the Distribution Date or (b) ninety (90) days after the date of issuance of such check. After such date, all Claims in respect of void checks shall be discharged and forever barred. 9.8. Initial and Interim Distributions. Initial distributions and interim distributions, if any, under the Plan to the holders of Allowed Securities Claims shall be made on the Distribution Dates and be based on the UPC Trustee' calculation or estimate of the amount of Allowed Securities Claims, unless upon the timely request of a party in interest, the Bankruptcy Court determines that a different estimate is appropriate. Final distributions shall be based on the actual amount of Allowed Securities Claims. 9.9. Effect of Distributions on Account of Securities Claims. The making of a final distribution under the Plan on account of an Allowed Securities Claim shall effect, without the need to take any further action, the assignment of all right, title, claim, and interest in and to such Allowed Securities Claim to the UPC Trust. ARTICLE X. PROCEDURES FOR RESOLVING AND TREATING CONTESTED CLAIMS AND EQUITY INTERESTS 10.1. Objection Deadline. As soon as practicable, but in no event later than sixty (60) days after the Effective Date (subject to being extended by the Bankruptcy Court upon motion of the Debtor without notice or a hearing), objections to Claims (except Securities Claims) shall be filed with the Bankruptcy Court and served upon the holders of each of the Claims to which objections are made; provided, that no objection may be filed with respect to any Claim that is Allowed on or before the Effective Date pursuant to Section 1.1(d)(i)(A), (B) or (D) of the Plan. 10.2. Prosecution of Objections. After the date of entry of the Confirmation Order, only the Disbursing Agent shall have authority to file, litigate, settle, or withdraw objections to Claims (except for Securities Claims). All disputes regarding the existence amount and treatment of Securities Claims shall be resolved pursuant to ADR, except as otherwise provided in the Plan. 10.3. No Distributions Pending Allowance. Notwithstanding any other provision of the Plan, no payment or distribution shall be made with respect to any Claim or Equity Interest to the extent it is Contested unless and until such Contested Claim becomes an Allowed Claim or Equity Interest. 10.4. Distributions After Allowance. Payments and distributions to each holder of a Contested Claim or Equity Interest, to the extent that such Claim or Equity Interest ultimately becomes Allowed, shall be made in accordance with the provision of the Plan governing the class of Claims or Equity Interests to which the respective holder belongs. 10.5. Estimation of Claims. The Disbursing Agent (or the UPC Trustee, as applicable) may, at any time, request that the Bankruptcy Court estimate any Contested Claim or Equity Interest pursuant to section 502(c) of the Bankruptcy Code regardless of whether the Disbursing Agent (or the UPC Trustee, as applicable) has previously objected to such Claim or Equity Interest or whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court will retain jurisdiction to estimate any Claim or Equity Interest at any time during litigation concerning any objection to any Claim, including during the pendency of any appeal relating to any such objection. In the event that the Bankruptcy Court estimates any Contested Claim or Equity Interest, that estimated amount will constitute either the allowed amount of such Claim or Equity Interest or a maximum limitation on such Claim or Equity Interest, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum limitation on such Claim or Equity Interest, the Disbursing Agent (or the UPC Trustee, as applicable) may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim or Equity Interest. All of the objection, estimation, settlement, and resolution procedures set forth in the Plan are cumulative and not necessarily exclusive of one another. Claims or Equity Interests may be estimated and subsequently compromised, settled, withdrawn or resolved by any mechanism approved by the Bankruptcy Court. ARTICLE XI. POWERS AND DUTIES OF THE DISBURSING AGENT 11.1. Exculpation. Except as otherwise provided in this Section 11.1, the Disbursing Agent, together with its officers, directors, employees, agents, and representatives, are hereby exculpated by all Persons, holders of Claims and Equity Interests, and parties in interest, from any and all Causes of Action, and other assertions of liability (including breach of fiduciary duty) arising out of the discharge of the powers and duties conferred upon the Disbursing Agent by the Disbursement Agreement, the Plan, any Final Order of the Bankruptcy Court entered pursuant to or in the furtherance of the Plan, or applicable law, except solely for actions or omissions arising out of the Disbursing Agent's willful misconduct. No holder of a Claim or an Equity Interest, or representative thereof, shall have or pursue any claim or cause of action (i) against the Disbursing Agent or its officers, directors, employees, agents, and representatives for making payments in accordance with the Plan, or for liquidating assets to make payments under the Plan, or (ii) against any holder of a Claim or an Equity Interest for receiving or retaining payments or transfers of assets as provided for by the Plan. Nothing contained in this Section 11.1 shall preclude or impair any holder of an Allowed Claim or Equity Interest from bringing an action in the Bankruptcy Court against the Debtor to compel the making of distributions contemplated by the Plan on account of such Claim or Equity Interest. 11.2. Powers and Duties of the Disbursing Agent. Pursuant to the terms and provisions of the Disbursement Agreement and the Plan, the Disbursing Agent shall be empowered and directed to (a) take all steps and execute all instruments and documents necessary to make distributions to holders of Allowed Claims (except Securities Claims); (b) make distributions contemplated by the Plan; (c) comply with the Plan and the obligations thereunder; (d) employ, retain, or replace professionals to represent it with respect to its responsibilities; (e) object to Claims (except Securities Claims) as specified in Article X hereof, and prosecute such objections; (f) compromise and settle any issue or dispute regarding the amount, validity, priority, treatment, or Allowance of any Claim (except Securities Claims) without further notice or hearing, and without the need for an order of the Bankruptcy Court approving such compromise or settlement; (g) make annual and other periodic reports regarding the status of distributions under the Plan to the holders of Allowed Claims that are outstanding against the Debtor at this time; such reports to be made available upon request to the holders of any Contested Claim; and (h) exercise such other powers as may be vested in the Disbursing Agent pursuant to the Disbursement Agreement, order of the Bankruptcy Court, or the Plan. ARTICLE XII. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES 12.1. Assumed If Not Rejected. The Plan constitutes and incorporates a motion to reject all prepetition executory contracts, and all prepetition unexpired leases to which the Debtor is a party, except for an executory contract or lease that (a) has been assumed or rejected by Final Order of the Bankruptcy Court; or (b) is the subject of a motion to assume or reject that is pending before the Bankruptcy Court on the Effective Date. The Confirmation Order shall represent and reflect an order of the Bankruptcy Court approving such rejections and assumptions of executory contracts and leases as of the Effective Date. 12.2. Cure Payments. Any monetary amounts by which the contracts and leases to be assumed under the Plan are in default shall be satisfied (a) by delivery of one Cash payment on the Distribution Date in the amount of such default, or (b) as otherwise agreed by the parties or ordered by the Bankruptcy Court. 12.3. Bar to Rejection Damages. If the rejection of an executory contract or unexpired lease by the Debtor results in damages to the other party or parties to such contract or lease, a Claim for such damages, if not heretofore evidenced by a filed proof of Claim, shall be forever barred and shall not be enforceable against the Debtor, or its properties or agents, successors, or assigns, unless a proof of Claim is filed with the Bankruptcy Court and served upon counsel for the Debtor on or before thirty (30) days after service of notice of entry of the Confirmation Order. ARTICLE XIII. CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE DATE 13.1. Conditions Precedent to Confirmation. (a) It is a condition to confirmation of the Plan that the Clerk of the Bankruptcy Court shall have entered an order or orders on the docket in the Chapter 11 Case, which may be the Confirmation Order, approving the Plan Documents, authorizing the Debtor to execute, enter into, and deliver the Plan Documents and to execute, implement, and give effect to, the transactions contemplated thereby. (b) It is a condition to confirmation of the Plan that the Clerk of the Bankruptcy Court shall have entered an order or orders on the docket in the Chapter 11 Case, which may be the Confirmation Order, approving the Merger Agreement and authorizing the Debtor, UPC Merger Sub and FSCI to consummate the Merger. (c) It is a condition to confirmation of the Plan that the Clerk of the Bankruptcy Court shall have entered an order or orders on the docket in the Chapter 11 Case, which may be the Confirmation Order, approving the compromises and settlements described in Section 14.1 of the Plan. (d) It is a condition to confirmation of the Plan that the Clerk of the Bankruptcy Court shall have entered an order or orders on the docket in the Chapter 11 Case, which may be the Confirmation Order, issuing the injunctions described in Section 16.12 of the Plan. 13.2. Conditions Precedent to the Occurrence of the Effective Date. (a) It is a condition to the occurrence of the Effective Date that the Confirmation Order shall have been entered by the Clerk of the Bankruptcy Court on the docket in the Chapter 11 Case, be in full force and effect and be in form and substance satisfactory to Infinity and FSCI. (b) It is a condition to the occurrence of the Effective Date that (i) the Merger Financing shall have been obtained and (ii) FSCI shall have acquired and hold 100% ownership interest in and to the Farm Stores Assets. (c) It is a condition to the occurrence of the Effective Date that all necessary and material consents, authorizations and approvals shall have been given or waived for the transfers and transactions described in the Merger Agreement. (d) It is a condition to the occurrence of the Effective Date that all necessary and material consents, authorizations and approvals shall have been given or waived for the transfers of property and the payments described in Sections 7.2 and 7.3 of the Plan, as applicable. 13.3. Waiver of Conditions. The Proponent (with the consent of Infinity and FSCI) may waive any of the conditions set forth in Sections 13.1 and 13.2 of the Plan in a writing executed by each of them. ARTICLE XIV. COMPROMISE AND SETTLEMENT OF CERTAIN CAUSES OF ACTION 14.1. Compromise and Settlement Between and Among the Debtor, the UPC Trust and the Infinity Parties. The Plan constitutes a motion pursuant to Bankruptcy Rule 9019 for the entry of an order authorizing and approving the following compromise and settlement between and among the Debtor, the UPC Trust and the Infinity Parties: (a) For and in consideration of the undertakings and other agreements of the Infinity Parties under and in connection with the Plan and the Infinity Settlement Agreement, as of the Effective Date, the Debtor shall: (i) issue 70,000 shares of New UPC Preferred Stock to Infinity, or its designee, and (ii) release the Infinity Parties from any and all Causes of Action arising in whole or in part from conduct or events that occurred prior to the Effective Date (including, without limitation, derivative claims which the Debtor otherwise has legal power to assert, compromise or settle in connection with the Chapter 11 Case), except as otherwise provided in the Plan and the Infinity Settlement Agreement. (b) For and in consideration of the undertakings and agreements of UPC under and in connection with the Plan and the Infinity Settlement Agreement, as of the Effective Date, the Infinity Parties shall (i) waive and release all of their rights, interests and claims (including, without limitation, as to UPC, Calibur, Jackson and under the Thomas Guarantee) in and under the Calibur A Note and the Calibur B Note, (ii) contribute 200,000 shares of New UPC Common Stock to the UPC Trust as provided in Section 7.3 of the Plan, and (iii) release the Debtor, and its Affiliates, and their respective past and present directors, officers, employees, agents, sales representatives, and attorneys from any and all Causes of Action and Claims Over arising in whole or in part from conduct or events that occurred prior to the Effective Date, except as otherwise provided in the Plan and the Infinity Settlement Agreement. (c) As of the Effective Date, the Infinity Parties and the Debtor shall release the UPC Trust and the UPC Trustee from any and all Causes of Action arising in whole or in part from conduct or events that occurred prior to the Effective Date, except as otherwise provided in the Plan and the Infinity Settlement Agreement. ARTICLE XV. RETENTION OF JURISDICTION 15.1. Scope of Jurisdiction. Notwithstanding the entry of the Confirmation Order and the occurrence of the Effective Date, the Bankruptcy Court shall retain such jurisdiction over the Chapter 11 Case after the Effective Date as legally permissible, including, but not limited to, jurisdiction to: (a) Allow, disallow, determine, liquidate, classify, estimate or establish the priority or secured or unsecured status of any Claim, including the resolution of any request for payment of any Administrative Expense Claim and the resolution of any and all objections to the allowance or priority of Claims; (b) Grant or deny any applications for allowance and payment of any Fee Claim for periods ending on or before the Effective Date; (c) Resolve any matters related to the assumption, assumption and assignment or rejection of any executory contract or unexpired lease to which the Debtor is a party or with respect to which the Debtor may be liable and to hear, determine and, if necessary, liquidate, any Claims arising therefrom, including those matters related to the amendment after the Effective Date pursuant to Article XVI of the Plan to add any executory contracts or unexpired leases to Appendix II hereto; (d) Ensure that distributions to holders of Allowed Claims are accomplished pursuant to the provisions of the Plan, including ruling on any motion filed pursuant to Article XII; (e) Decide or resolve any motions, adversary proceedings, contested or litigated matters and any other matters and grant or deny any applications involving the Debtor that may be pending on or commenced after the Effective Date; (f) Enter such orders as may be necessary or appropriate to implement or consummate the provisions of the Plan, the Merger Agreement and all contracts, instruments, releases, indentures and other agreements or documents created in connection with the Plan or the Disclosure Statement, including without limitation the UPC Trust Agreement and the Infinity Settlement Agreement, including to correct any defect, cure any omission or reconcile any inconsistency, except as provided in Section 15.1(g) or elsewhere herein; (g) Resolve any cases, controversies, suits, or disputes that may arise in connection with the consummation, interpretation or enforcement of the Plan or the UPC Trust Agreement or any entity's obligations incurred in connection with the Plan or the UPC Trust Agreement, or any other agreements governing, instruments evidencing or documents relating to any of the foregoing, including the interpretation or enforcement of any rights, remedies or obligations under any of the foregoing; (h) Issue injunctions, enter and implement other orders or take such other actions as may be necessary or appropriate to restrain interference by any entity with Consummation or enforcement of the Plan, except as otherwise provided herein; (i) Enter and implement such orders as are necessary or appropriate if the Confirmation Order is for any reason modified, stayed, reversed, revoked or vacated; (j) Determine any other matters that may arise in connection with or relate to the Plan, the Disclosure Statement, the Confirmation Order or any contract, instrument, release, indenture or other agreement or document created in connection with the Plan or the Disclosure Statement, including without limitation the UPC Trust Agreement, except as provided in Section 15.1(g) or elsewhere herein; and (k) Enter a Final Decree as contemplated by Bankruptcy Rule 3022. ARTICLE XVI. MISCELLANEOUS PROVISIONS 16.1. Notice of Entry of Confirmation Order and Relevant Dates. Promptly upon entry of the Confirmation Order, the Debtor shall publish as directed by the Bankruptcy Court and serve on all known parties in interest, holders of Claims, and holders of Equity Interests, notice of the entry of the Confirmation Order and all relevant deadlines and dates under the Plan, including, but not limited to, the deadline for filing notice of Administrative Expense Claims (Section 5.1 hereof), and the deadline for filing rejection damage claims (Section 12.3 hereof). 16.2. Payment of Statutory Fees. All fees payable pursuant to section 1930 of title 28 of the United States Code, as determined if necessary by the Bankruptcy Court at the hearing pursuant to section 1128 of the Bankruptcy Code, shall be paid on or before the Effective Date. 16.3. No Interest or Attorneys' Fees. Except as expressly stated in the Plan, or as allowed by the Bankruptcy Court, no interest, penalty or late charge arising after the Petition Date, and no award or reimbursement of attorneys fees or related expenses or disbursements, shall be allowed on, or in connection with, any Claim. 16.4. Modification of the Plan. Modification of the Plan may be proposed in writing by the Proponent at any time before confirmation, provided that the Plan, as modified, meets the requirements of section 1122 and 1123 of the Bankruptcy Code, and the Debtor shall have complied with section 1125 of the Bankruptcy Code. The Proponent may modify the Plan (with the consent of Infinity and FSCI) at any time after confirmation and before substantial consummation, provided that the Plan, as modified, meets the requirements of sections 1122 and 1123 of the Bankruptcy Code and the Bankruptcy Court, after notice and a hearing, confirms the Plan as modified, under section 1129 of the Bankruptcy Code, and the circumstances warrant such modifications. A holder of a Claim that has accepted or rejected the Plan shall be deemed to have accepted or rejected, as the case may be, such plan as modified, unless, within the time fixed by the Bankruptcy Court, such holder changes its previous acceptance or rejection. 16.5. Revocation of Plan. The Proponent reserves the right to revoke and withdraw the Plan after the Confirmation Date and prior to the occurrence of the Effective Date (with the consent of Infinity and FSCI). If the Proponent revokes or withdraws the Plan, or if the Effective Date does not occur, then, the Plan and all settlements set forth in Article XIV of the Plan shall be deemed null and void and nothing contained herein shall be deemed to constitute a waiver or release of any Claims by or against the Proponent or any other person or to prejudice in any manner the rights of the Proponent or any person in any other further proceedings involving the Debtor. 16.6. Exemption From Transfer Taxes. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance, transfer, or exchange of notes or equity securities under the Plan, the creation of any mortgage, deed of trust, or other security interest, the making or assignment of any lease or sublease, or the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with, the Plan, including, without limitation, the Merger Agreements or any agreements of consolidation, deeds, bills of sale, or assignments executed in connection with any of the transactions contemplated under the Plan shall not be subject to any stamp, real estate, transfer, mortgage recording, or other similar tax. 16.7. Setoff Rights. In the event that the Debtor has a claim of any nature whatsoever against the holder of a Claim, the Debtor may, but is not required to, setoff against the Claim (and any payments or other distributions to be made in respect of such Claim hereunder) the Debtor's claim against the holder, unless any such claim is or will be released under the Plan, subject to the provisions of section 553 of the Bankruptcy Code. Neither the failure to set off nor the allowance of any Claim under the Plan shall constitute a waiver or release by the Debtor of any claim that the Debtor has against the holder of a Claim. 16.8. Subordination Rights. All Claims against and Equity Interests in the Debtor, based upon any claimed subordination rights against the Debtor or rights to avoid payments or transfers of property by the Debtor pursuant to any provision of the Bankruptcy Code or other applicable law, shall be deemed satisfied as to the Debtor by the distributions under the Plan to holders of Allowed Claims and Allowed Equity Interests having such subordination rights and any rights to avoid payments or transfers of property. As proposed in the Plan, the distributions to the various classes of Claims hereunder shall not be subject to levy, garnishment, attachment, or like legal process by any holder of a Claim or Equity Interest by reason of any claimed subordination rights or otherwise of the holder of a Claim or Equity Interest against the holder of another Claim or Equity Interest, except as otherwise provided herein. Distributions under the Plan shall be subject to and modified by any order pursuant to which a party in interest obtains a Final Order directing distributions other than as provided in the Plan, which distributions take into account the subordination rights of holders of Claims and Equity Interests between and among themselves. 16.9. Compliance with Tax Requirements. In connection with the Plan, the Debtor, and the Disbursing Agent, and the UPC Trustee shall comply with all withholding and reporting requirements imposed by federal, state, local, and foreign taxing authorities and all distributions hereunder shall be subject to such withholding and reporting requirements. Pursuant to section 1146(c) of the Bankruptcy Code, the issuance, transfer, or exchange of promissory notes, equity securities, or other instruments under the Plan, the creation of any mortgage, deed of trust, or other security interest, the making or assignment of any lease or sublease or the making or delivery of any deed or other instrument of transfer under, in furtherance of, or in connection with the Plan, including, without limitation, any merger agreements or agreements of consolidation, deeds, bills of sale, or assignments executed in connection with any of the transactions contemplated under the Plan shall not be subject to any stamp, real estate transfer, mortgage recording, or other similar tax. 16.10. Recognition of Guaranty Rights. The classification of and manner of satisfying all Claims under the Plan take into consideration (a) the existence of guaranties by the Debtor of obligations of other Persons, and (b) the fact that the Debtor may be a joint obligor with other Persons with respect to an obligation. All Claims against the Debtor based upon any such guaranties or joint obligations shall be discharged in the manner provided in the Plan; provided, that no creditor shall be entitled to receive more than one recovery with respect to any of its Allowed Claims. 16.11. Compliance With All Applicable Laws. If notified by any governmental authority that it is in violation of any applicable law, rule, regulation, or order of such governmental authority relating to its businesses, the Debtor, shall take whatever action as may be required to comply with such law, rule, regulation, or order; provided, that nothing contained herein shall require such compliance if the legality or applicability of any such requirement is being contested in good faith, and, if appropriate, an adequate reserve for such requirement has been set aside. 16.12. Discharge of Claims. Except as otherwise provided herein or in the Confirmation Order, the rights afforded in the Plan and the payments and distributions to be made hereunder shall discharge all existing debts and Claims of any kind, nature, or description whatsoever against the Debtor or the Estate Assets to the extent permitted by section 1141 of the Bankruptcy Code; upon the Effective Date, all existing Claims shall be, and shall be deemed to be discharged; and all holders of Claims shall be precluded from asserting against the Debtor, or any of the Estate Assets, any other or further Claim based upon any act or omission, transaction, or other activity of any kind or nature that occurred prior to the Effective Date, whether or not such holder filed a proof of Claim. 16.13. Injunctions. (a) On the Effective Date, all Persons who have been, are, or may be holders of Claims against or Equity Interests in the Debtor shall be enjoined from taking any of the following actions against or affecting the Debtor, its Estate, or its assets and property with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan and appeals, if any, from the Confirmation Order): (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind against the Debtor, its Estate, or its assets or property, or any direct or indirect successor in interest to the Debtor, or any assets or property of such transferee or successor (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice); (ii) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means whether directly or indirectly any judgment, award, decree or order against the Debtor, its Estate, or its assets or property, or any direct or indirect successor in interest to the Debtor, or any assets or property of such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any Lien against the Debtor, its Estate, or its respective assets or property, or any direct or indirect successor in interest to any of the Debtor, or any assets or property of such transferee or successor other than as contemplated by the Plan; (iv) asserting any setoff, right of subrogation or recoupment of any kind, directly or indirectly against any obligation due the Debtor, its Estate, or its respective assets or property, or any direct or indirect successor in interest to any of the Debtor, or any assets or property of such transferee or successor; and (v) proceeding in any manner in any place whatsoever that does not conform to or comply with the provisions of the Plan or the settlement set forth in Article XIV of the Plan to the extent such settlements have been approved by the Bankruptcy Court in connection with confirmation of the Plan. (b) Except as provided herein, as of the Effective Date, all Persons are permanently enjoined from commencing or continuing in any manner, any action or proceeding (including, without limitation, the Causes of Action asserted in the Pisacreta/Tucci Action), whether directly, derivatively, on account of or respecting any Claim, debt, right, Cause of Action or liability released or to be released pursuant to the Plan. (c) From and after the Effective Date, any Infinity Securities Claim shall channel and transfer to the UPC Trust, and all Persons who have been, are, or may be holders of any such Infinity Securities Claim shall be enjoined from taking any of the following actions against or affecting Infinity or its assets and property with respect to such Infinity Securities Claim (other than actions brought to enforce any rights or obligations under the Plan, the UPC Trust Agreement and the Infinity Settlement Agreement): (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind against any Infinity party or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice); (ii) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means whether directly or indirectly any judgment, award, decree or order against any Infinity Party or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any Lien against any Infinity Party or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor; (iv) asserting any set-off, right of subrogation or recoupment of any kind, directly or indirectly against any obligation due any Infinity Party, or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor; and (v) proceeding in any manner in any place whatsoever that does not conform to or comply with the provisions of the Plan, or the settlements set forth in Article XIV of the Plan, the UPC Trust Agreement or the Infinity Settlement Agreement. (d) The injunction provided by Section 16.12(c) shall terminate and be of no further force or effect if at any time or from time to time the UPC Trustee file with the Bankruptcy Court and serve upon the Infinity Parties a notice that the UPC Trust assets have been fully expended and that additional Allowed Securities Claims exists or that all Securities Claims have not yet been resolved and the Infinity Parties, within thirty (30) days after the filing of such notice, fail to make an additional contribution to the UPC Trust in an aggregate amount equivalent to (A) not less than $100,000 (provided that such amount must be at least enough to satisfy all outstanding Allowed Securities Claims in full and provide at least $25,000 to fund the expenses of the UPC Trust in liquidating any remaining Securities Claims) or (B) such lesser amount as may be agreed to by the UPC Trustee. 16.14. Discharge of the Debtor. Any consideration distributed under the Plan shall be in exchange for and in complete satisfaction, discharge, and release of all Claims of any nature whatsoever against the Debtor and any of its assets or properties; and, except as otherwise provided herein, upon the Effective Date, the Debtor shall be deemed discharged and released to the extent permitted by section 1141 of the Bankruptcy Code from any and all Claims, including but not limited to demands and liabilities that arose before the Effective Date, and all debts of the kind specified in section 502(g), 502(h), or 502(i) of the Bankruptcy Code, whether or not (a) a proof of Claim based upon such debt is filed or deemed filed under section 501 of the Bankruptcy Code; (b) a Claim based upon such debt is allowed under section 502 of the Bankruptcy Code; or (c) the holder of a Claim based upon such debt has accepted the Plan. Except as provided herein, the Confirmation Order shall be a judicial determination of discharge of all liabilities of the Debtor. As provided in section 524 of the Bankruptcy Code, such discharge shall void any judgment against the Debtor at any time obtained to the extent it relates to a Claim discharged, and operates as an injunction against the prosecution of any action against the Debtor, or its property, to the extent it relates to a Claim discharged. 16.15. Exculpation. Neither the Proponent, Infinity, FSCI, any of their respective Affiliates, nor any of their respective members, officers, directors, managers, employees, agents, or professionals shall have or incur any liability to any holder of a Claim or Equity Interest for any act, event, or omission in connection with, or arising out of, the preparation and dissemination of the Disclosure Statement, the solicitation of votes with respect to the Plan, the Chapter 11 Case, the confirmation of the Plan, the consummation of the Plan, or the administration of the Plan or the property to be distributed under the Plan, except for willful misconduct. 16.16. Binding Effect. The Plan shall be binding upon and inure to the benefit of the Debtor, Infinity, the holders of all Claims and Equity Interests, and their respective successors and assigns. 16.17. Notices. Whenever service is required in the Plan, such service shall be made upon the following parties so as to be received by 5:00 p.m. eastern time on or before the date required: The Debtor: Attn: President United Petroleum Corporation 2620 Mineral Springs Road, Suite A Knoxville, Tennessee 37917 Facsimile: (423) 688-3463 with a copy to: Laura Davis Jones, Esquire Young Conaway Stargatt & Taylor, LLP Rodney Square North, 11th Floor P.O. Box 391 Wilmington, Delaware 19899-0391 Facsimile: (305) 571-1254 David A. Wood, Esquire Wood, Exall & Bonnet, L.L.P. 12222 Merit Drive, Suite 880 Dallas, Texas 75251 Facsimile: (972) 991-9261 Infinity: Infinity Investors Limited 38 Hertford Street London, England WIY-7T6 Facsimile: with a copy to: Stuart J. Chasanoff, Esquire HW Finance LLC 1601 Elm Street, Suite 4000 Dallas, Texas 75201 Facsimile: (214)720-1667 Thomas E Lauria, Esquire White & Case First Union Financial Center 200 South Biscayne Boulevard Miami, FL 33131 Facsimile: (305) 358-5744 16.18. Governing Law. Unless a rule of law or procedure is supplied by federal law (including the Bankruptcy Code and Bankruptcy Rules) or the Delaware General Corporation Law, the laws of the State of Delaware shall govern the construction and implementation of the Plan and any agreements, documents, and instruments executed in connection with the Plan or the Chapter 11 Case, including the Plan Documents, except as may otherwise be provided in such agreements, documents, instruments, and Plan Documents. 16.19. Severability. SHOULD THE BANKRUPTCY COURT DETERMINE THAT ANY PROVISION OF THE PLAN IS UNENFORCEABLE EITHER ON ITS FACE OR AS APPLIED TO ANY CLAIM OR EQUITY INTEREST OR TRANSACTION, THE PROPONENT (WITH THE CONSENT OF INFINITY) MAY MODIFY THE PLAN IN ACCORDANCE WITH SECTION 16.5 OF THE PLAN SO THAT SUCH PROVISION SHALL NOT BE APPLICABLE TO THE HOLDER OF ANY CLAIM OR EQUITY INTEREST. SUCH A DETERMINATION OF UNENFORCEABILITY SHALL NOT (A) LIMIT OR AFFECT THE ENFORCEABILITY AND OPERATIVE EFFECT OF ANY OTHER PROVISION OF THE PLAN OR (B) REQUIRE THE RESOLICITATION OF ANY ACCEPTANCE OR REJECTION OF THE PLAN. Dated: July ___, 1999 Respectfully submitted, UNITED PETROLEUM CORPORATION By: Its: APPENDICES Appendix I -- The Merger Agreement. Appendix II -- Alternative Dispute Resolution Procedures For Treatment of Securities Claims Pursuant to The Plan of Reorganization Under Chapter 11 of the United States Bankruptcy Code For United Petroleum Corporation. TABLE OF CONTENTS Page ARTICLE I. DEFINITIONS AND INTERPRETATION.................................................1 1.1. Definitions..............................................................1 1.2. Interpretation..........................................................12 1.3. Application of Definitions and Rules of Construction Contained in the Bankruptcy Code...........................12 1.4. Other Terms.............................................................12 1.5. Appendices and Plan Documents...........................................12 ARTICLE II CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS.................................12 2.1. Claims and Equity Interests Classified..................................12 2.2. Administrative Expense Claims and Priority Tax Claims...................13 2.3. Claims and Equity Interests.............................................13 2.4. Separate Classification of Secured Claims...............................13 ARTICLE III IDENTIFICATION OF IMPAIRED CLASSES OF CLAIMS AND EQUITY INTERESTS........................................13 3.1. Unimpaired Classes of Claims and Equity Interests.......................13 3.2. Impaired Classes of Claims and Equity Interests.........................14 3.3. Impairment Controversies................................................14 ARTICLE IV. PROVISIONS FOR TREATMENT OF CLAIMS AND EQUITY INTERESTS UNDER THE PLAN...........................................14 4.1. Treatment of Claims and Equity Interests................................14 ARTICLE V. PROVISIONS FOR TREATMENT OF UNCLASSIFIED CLAIMS UNDER THE PLAN.........................................15 5.1. Treatment of Administrative Expense Claims..............................15 5.2. Treatment of Priority Tax Claims........................................16 ARTICLE VI. ACCEPTANCE OR REJECTION OF THE PLAN; EFFECT OF REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR EQUITY INTERESTS.........................................17 6.1. Classes Entitled to Vote................................................17 6.2. Class Acceptance Requirement............................................17 6.3. Confirmation Without Acceptance by All Impaired Classes.................17 ARTICLE VII. TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN LIABILITIES BY THE UPC TRUST............................18 7.1. Creation of UPC Trust and Appointment of Trustee........................18 7.2. Transfers of Certain Property of the Debtor to the UPC Trust............18 7.3. Transfers of Certain Property of the Infinity Parties to the UPC Claims Trust................................18 7.4. Distribution of Assets by the UPC Trust.................................19 7.5. Assumption of Certain Liabilities by the UPC Trust......................19 7.6. Certain Property Held in Trust by the Debtor and the Infinity Parties...19 7.7. Obligations of the UPC Trust with Regard to Claims Over.................20 7.8. Powers and Duties of the UPC Trustee....................................21 ARTICLE VIII. MEANS FOR IMPLEMENTATION OF THE PLAN..........................................22 8.1. Continued Corporate Existence...........................................22 8.2. The Merger..............................................................22 8.3. Vesting of Assets.......................................................22 8.4. Management..............................................................22 8.5. Reconstitution of UPC Board of Directors................................23 8.6. Officers ...............................................................23 8.7. The New UPC Charter and Bylaws..........................................23 8.8. Issuance of New UPC Common Stock........................................23 8.9. Issuance of New UPC Preferred Stock.....................................24 8.10. Cancellation of Instruments and Agreements..............................24 8.11. Effectuating Documents..................................................24 8.12. Treatment of Affiliate Claims...........................................25 8.13. Retention of Causes of Action...........................................25 8.14. Indemnification.........................................................25 8.15. Employee Benefits.......................................................25 8.16. Appointment of the Disbursing Agent.....................................26 8.17. Transactions on the Effective Date......................................26 8.18. Sources of Cash for Plan Distributions..................................26 ARTICLE IX. PROVISIONS GOVERNING DISTRIBUTIONS............................................27 9.1. Date of Distributions...................................................27 9.2. Disbursing Agent/UPC Trustee............................................27 9.3. Means of Cash Payment...................................................27 9.4. Delivery of Distributions...............................................27 9.5. Surrender of Notes, Instruments, and Securities.........................28 9.6. Expenses Incurred On or After the Effective Date and Claims of the Disbursing Agent and the UPC Trustee..................28 9.7. Time Bar to Cash Payments...............................................29 9.8. Initial and Interim Distributions.......................................29 9.9. Effect of Distributions on Account of Securities Claims.................29 ARTICLE X. PROCEDURES FOR RESOLVING AND TREATING CONTESTED CLAIMS AND EQUITY INTERESTS.........................................29 10.1. Objection Deadline......................................................29 10.2. Prosecution of Objections...............................................29 10.3. No Distributions Pending Allowance......................................30 10.4. Distributions After Allowance...........................................30 10.5. Estimation of Claims....................................................30 ARTICLE XI. POWERS AND DUTIES OF THE DISBURSING AGENT.....................................30 11.1. Exculpation.............................................................30 11.2. Powers and Duties of the Disbursing Agent...............................31 ARTICLE XII. TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES.........................31 12.1. Assumed If Not Rejected.................................................31 12.2. Cure Payments...........................................................32 12.3. Bar to Rejection Damages................................................32 ARTICLE XIII. CONDITIONS PRECEDENT TO CONFIRMATION OF THE PLAN AND THE OCCURRENCE OF THE EFFECTIVE DATE..........................32 13.1. Conditions Precedent to Confirmation....................................32 13.2. Conditions Precedent to the Occurrence of the Effective Date............33 13.3. Waiver of Conditions....................................................33 ARTICLE XIV. COMPROMISE AND SETTLEMENT OF CERTAIN CAUSES OF ACTION...................................................33 14.1. Compromise and Settlement Between and Among the Debtor, the UPC Trust and the Infinity Parties......................33 ARTICLE XV. RETENTION OF JURISDICTION.....................................................34 15.1. Scope of Jurisdiction...................................................34 ARTICLE XVI. MISCELLANEOUS PROVISIONS......................................................36 16.1. Notice of Entry of Confirmation Order and Relevant Dates................36 16.2. Payment of Statutory Fees...............................................36 16.3. No Interest or Attorneys'Fees...........................................36 16.4. Modification of the Plan................................................36 16.5. Revocation of Plan......................................................36 16.6. Exemption From Transfer Taxes...........................................37 16.7. Setoff Rights...........................................................37 16.8. Subordination Rights....................................................37 16.9. Compliance with Tax Requirements........................................37 16.10. Recognition of Guaranty Rights.........................................38 16.11. Compliance With All Applicable Laws....................................38 16.12. Discharge of Claims....................................................38 16.13. Injunctions............................................................38 16.14. Discharge of the Debtor................................................39 16.15. Exculpation............................................................41 16.16. Binding Effect.........................................................41 16.17. Notices42 16.18. Governing Law..........................................................43 16.19. Severability...........................................................44 EX-99.2 3 CONFIRMATION ORDER IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE In re: ) Chapter 11 ) UNITED PETROLEUM CORPORATION, ) Case No. 99-88 (PJW) ) Debtor. ) FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER AND ORDER CONFIRMING AMENDED PLAN OF REORGANIZATION United Petroleum Corporation ("UPC" or "Debtor"), as Debtor-In-Possession, having on July 23, 1999 filed the Second Amended Plan of Reorganization Under Chapter 11 of The Bankruptcy Code for United Petroleum Corporation (the "Plan"); and the Debtors having on July 23, 1999 filed the Second Amended Disclosure Statement With Respect to Second Amended Plan of Reorganization of United Petroleum Corporation (the "Disclosure Statement"); and the Court, by Order dated July 23, 1999 (the "Disclosure Approval Order") having approved the Disclosure Statement after notice and a hearing held on July 22, 1999 and July 23, 1999; and upon the affidavits of service filed herein reflecting compliance with the notice and solicitation requirements of the Disclosure Approval Order; and upon the Declaration of Kathleen Logan Certifying the Ballots Accepting and Rejecting the Plan filed with the Court on August 23, 1999; and objections to confirmation of the Plan having been filed by (i) John Rankin, (ii) Dan Dotan and Mantel Investments, (iii) The Internal Revenue Service, (iv) John Pisacreta and James Lynn (the "Securities Claim Objectors") and (v) the Securities and Exchange Commission (collectively, the "Objections'); and upon the submission of Plan Documents filed on August 13, 1999 (the "Plan Documents"); and upon the submission of the revised form of Merger Agreement on September 29, 1999 (the "Merger Agreement"), and after a hearing having been held on September 29, 1999 (the "Hearing"); and upon the evidence adduced and proffered and the arguments of counsel made at the Hearing; and the Court having reviewed all documents in connection with confirmation and having heard all parties desiring to be heard; and the Debtor, Infinity and the Securities Claim Objectors having reached an agreement as set forth herein regarding the terms on which the objections of the Securities Claim Objectors shall be resolved; and upon the record compiled in the case; and after due deliberation and consideration of all of the foregoing; and sufficient cause appearing therefor; the Court hereby makes the following: FINDINGS OF FACT AND CONCLUSIONS OF LAW: A. Capitalized terms used herein, but not defined herein, shall have the respective meanings attributed to such terms in the Plan and the Disclosure Statement. B. This Court has jurisdiction over the Debtor's chapter 11 case pursuant to 28 U.S.C. Section 1334(a) and 157(l). Venue of these proceedings and the chapter 11 case in this district is proper pursuant to 28 U.S.C. Section 1408 and 1409. This is a core proceeding pursuant to 28 U.S.C. Section 157(b)(2). C. The Plan complies with all of the applicable provisions of the Bankruptcy Code. D. The classification of claims and interests under the Plan is proper under Section 1122 of the Bankruptcy Code. E. The Plan provides equal treatment for each Claim or Interest of a particular class. F. The Debtor, as proponent of the Plan has complied with the applicable provisions of the Bankruptcy Code. G. The Plan has been proposed in good faith and not by any means forbidden by law. H. Any payments made or promised by the Debtor, or a person issuing securities or acquiring property under the Plan, for services or for costs and expenses in, or in connection with, the case, or in connection with the Plan and incident to the case, have been approved by, or is subject to approval of the Court as reasonable. I. In the Disclosure Statement, the identity, qualifications, and affiliation of the persons who are to serve as officers and directors of the reorganized debtor after confirmation of the Plan was fully disclosed and the appointment of such persons is consistent with the interests of the Debtor's creditors and equity security holders and with public policy. J. In the Disclosure Statement, the identity of any insider that will be employed or retained by the Debtor and his compensation has been fully disclosed. K. The provisions of Section 1129(a)(6) of the Bankruptcy Code are inapplicable to this case. L. The procedures by which the ballots for acceptance or rejection of the Plan were distributed and tabulated were fair, properly conducted, and complied with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Approval Order. M. As evidenced by the Disclosure Statement and at the Hearing, each holder of a Claim or Interest in each impaired class has either accepted the Plan or will receive or retain under the Plan property of a value, as of the Effective Date of the Plan, that is not less than the amount that such holder would receive or retain if the Debtor liquidated under Chapter 7 of the Bankruptcy Code on such date. N. With respect to each class of Claims or Interests, such class has accepted the Plan or such class is not impaired under the Plan and is, therefore, deemed to have accepted the Plan under Section 1126(f) of the Bankruptcy Code, except for Class 8. O. With respect to Class 8, the requirements of 11 U.S.C. Section 1129(b)(2)(c) have been satisfied. P. At least one impaired class of claims has accepted the Plan, determined without including any acceptances of the Plan by any insider. Q. Except to the extent that the holder of a particular claim has agreed to a different treatment of such Claim, the treatment of Claims under the Plan of the type specified in Sections 507(a)(1) and 507(a)(3) - 507(a)(8) of the Bankruptcy Code, if any, complies with the provisions of Section 1129(a)(9) of the Bankruptcy Code. R. No other chapter 11 plan has been moved for confirmation. S. The primary purpose of the Plan is not the avoidance of taxes or the requirements of Section 5 of the Securities Act of 1933. T. Confirmation of the Plan is not likely to be followed by the need for further financial reorganization of the Debtor. U. All fees payable under section 1930 of title 28 of the United States Code, have either been paid or will be paid under the Plan. V. The Plan and the Infinity Settlement Agreement are hereby modified as follows: (a) Infinity Securities Claims asserted in the Pisacreta/Tucci Action shall (including, without limitation, the Claims of the named plaintiffs therein, the members of the putative class sought to be certified therein whether or not the class is certified, and any opt-outs from such class) shall be excluded from the injunctive provisions of Section 16.13(c) of the Plan; (b) any assets in the UPC Trust after the satisfaction of all Allowed Securities Claims shall be distributed 100% to the Infinity Parties; and (c) the Infinity Parties shall retain all of their Causes of Action for contribution and indemnity against any Person with respect to the Infinity Securities Claims, except the Debtor, its affiliates and their respective officers, directors and employees. W. The settlements and compromises incorporated into the Plan (including, the settlement and compromise set forth in Section 14.1 of the Plan and the Infinity Settlement Agreement, as modified pursuant to paragraph V, above) meet the requirements for approval under section 1123(6)(3) of the Code and Bankruptcy Rule 9019 because, among other things, the settlements: i. reflect a reasonable balance of the risks and expenses of both future litigation and the continuation of this Chapter 11 Case, on the one hand, and early resolution of the disputes, on the other hand; ii. fall within the range of reasonableness for the resolution of complex litigation or litigable issues and claims; iii. are fair and equitable and in the best interest of the Debtor, the Debtor's estate and all holders of Claims and Equity Interests; and iv. Are essential to the Debtor's reorganization and the confirmation of the Plan. X. The Proponent, Infinity and FSCI have consented to the approval of the compromises and settlements described in Section 14.1 of the Plan, as modified hereby, and the exclusion of Infinity Securities Claims asserted in the Pisacreta/Tucci Action from the injunctive provisions set forth in Section 16.13(c) of the Plan. Y. The Plan, as modified hereby, does not materially adversely affect the treatment of any class of Claims or Equity Interests under the Plan. Consequently, all votes accepting the Plan shall constitute votes accepting the Plan, as modified hereby. Z. By operation of section 1145 of the Bankruptcy Code, the distribution of new UPC Common Stock to be issued under the Plan shall be exempt from registration under section 5 of the Securities Act of 1933, as amended, and any state or local law requiring registration for offer or sale of a security or registration or licensing of an issuer of, or broker or dealer in, a security. All such securities so issued shall be freely transferable by the initial recipients thereof (i) except for any such securities received by an underwriter within the meaning of section 1145(b) of the Bankruptcy Code and (ii) subject to any restriction contained in the terms of such securities themselves, in the Plan or any documents relating to the Plan. NOW, it is hereby, ORDERED, ADJUDGED, and DECREED, that: 1. All Objections, to the extent not settled or withdrawn, are hereby expressly overruled. 2. The Plan, as modified hereby (the "Modified Plan") and as supplemented by the Merger Agreement, is confirmed pursuant to section 1129 of the Bankruptcy Code; provided, however, that if there is any conflict between the terms of the Modified Plan and the terms of the Merger Agreement, the terms of the Modified Plan shall control and if there is any conflict between the terms of either the Modified Plan or Merger Agreement and the terms of this Confirmation Order, this Confirmation Order shall control. 3. The Merger Agreement and Plan Documents substantially in the forms previously filed with the Court, are approved and the Debtor is authorized and directed to execute, enter into and deliver such documents and to execute, implement and consummate the transactions contemplated thereby. 4. The Debtor is hereby authorized, empowered, and ordered to issue, execute, deliver, file and record any documents or court papers or pleadings, and to take any and all actions, that are necessary or desirable to implement, effectuate, and consummate the transactions contemplated by the Plan, whether or not specifically referred to therein and without further application or order of this Court, in each case with like effect as if exercised and taken by unanimous action of the directors and stockholders of the Debtor as may be necessary to cause the same to become effective under the Delaware General Corporation Law. 5. The Debtor shall remain a Debtor-in-Possession under the Bankruptcy Code until the Effective Date. The Debtor may consummate the transactions contemplated by the Plan and make distributions to creditors after the Effective Date in accordance with the Plan, and free of any restrictions imposed by the Bankruptcy Code. 6. Any and all pre-petition unexpired leases and executory contracts not previously rejected by the Debtor, unless specifically assumed pursuant to the Bankruptcy Code prior to the date hereof or the subject of a motion to assume or assume and assign pending on the date hereof, shall be deemed rejected by the Debtor effective as of the Effective Date of the Plan. 7. All proofs of claim with respect to claims arising from the rejection of executory contracts and unexpired leases shall, unless another order of the Bankruptcy Court provides for an earlier date, be filed with the Bankruptcy Court within thirty (30) days after the mailing of notice of the entry of this order. Any proof of claim that is not timely filed shall be released, discharged and forever barred from assertion against the Debtor, its estate or property or the Post-Confirmation Debtor. 8. The exculpation and injunction provisions set forth in the Modified Plan, including without limitation, those set forth in Sections 5.2, 8.14, 11.1, 16.12, 16.13, 16.14 and 16.15 of the Modified Plan, are approved; provided, however, that the injunction provided by section 5.2 of the Plan shall not result in the release by the United States Internal Revenue Service (the "IRS") of any claim against any responsible officer or director of the Debtor that otherwise would be liable to the IRS on any priority tax claim owed by the Debtor to the IRS and further provided that notwithstanding section 16.13(iv) of the Modified Plan, the IRS shall be permitted to offset against any claim of the Debtor or Reorganized Debtor against the IRS any claim of the IRS against the Debtor that was timely filed in the Debtor's Chapter 11 case, to the extent ultimately allowed. 9. Subject to paragraph 8 herein, on the Effective Date, all Persons who have been, are, or may be holders of Claims against or Equity Interests in the Debtor shall be enjoined from taking any of the following actions against or affecting the Debtor, its Estate, or its assets and property with respect to such Claims or Equity Interests (other than actions brought to enforce any rights or obligations under the Plan and appeals, if any, from this Confirmation Order): (i) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind against the Debtor, its Estate, or its assets or property, or any direct or indirect successor in interest to the Debtor, or any assets or property of such transferee or successor (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice); (ii) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means whether directly or indirectly any judgment, award, decree or order against the Debtor, its Estate, or its assets or property, or any direct or indirect successor in interest to the Debtor, or any assets or property of such transferee or successor; (iii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any Lien against the Debtor, its Estate, or its respective assets or property, or any direct or indirect successor in interest to any of the Debtor, or any assets or property of such transferee or successor other than as contemplated by the Plan; (iv) asserting any setoff, right of subrogation or recoupment of any kind, directly or indirectly against any obligation due the Debtor, its Estate, or its respective assets or property, or any direct or indirect successor in interest to any of the Debtor, or any assets or property of such transferee or successor; and (v) proceeding in any manner in any place whatsoever that does not conform to or comply with the provisions of the Plan or the settlement set forth in Article XIV of the Plan to the extent such settlements have been approved by the Bankruptcy Court in connection with confirmation of the Plan. 10. From and after the Effective Date, except (a) for Infinity Securities Claims asserted in the Pisacreta/Tucci Action, including, without limitation, the Claims of the named plaintiffs therein, the members of the putative class sought to be certified therein, whether or not such class is certified, and any opt-outs from such putative class (which claims shall not be affected or impaired in any way by this Order), and (b) as provided by paragraph 11 below, all Infinity Securities Claims shall channel and transfer to the UPC Trust, and all Persons who have been, are, or may be holders of any such Infinity Securities Claim shall be enjoined from taking any of the following actions against or affecting the Infinity Parties or their assets and property with respect to such Infinity Securities Claim (other than actions brought to enforce any rights or obligations under the Plan, the UPC Trust Agreement and the Infinity Settlement Agreement): (vi) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind against any Infinity Party or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor (including, without limitation, all suits, actions, and proceedings that are pending as of the Effective Date, which must be withdrawn or dismissed with prejudice); (vii) enforcing, levying, attaching, collecting or otherwise recovering by any manner or means whether directly or indirectly any judgment, award, decree or order against any Infinity Party or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor; (viii) creating, perfecting or otherwise enforcing in any manner, directly or indirectly, any Lien against any Infinity Party or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor; (ix) asserting any set-off, right of subrogation or recoupment of any kind, directly or indirectly against any obligation due any Infinity Party, or its assets or property, or its direct or indirect successors in interest, or any assets or property of such transferee or successor; and (x) proceeding in any manner in any place whatsoever that does not conform to or comply with the provisions of the Plan, or the settlements set forth in Article XIV of the Plan, the UPC Trust Agreement or the Infinity Settlement Agreement. 11. The injunction provided by paragraph 10 of this Confirmation Order shall terminate and be of no further force or effect if at any time or from time to time the UPC Trustee files with the Bankruptcy Court and serves upon the Infinity Parties a notice that the UPC Trust assets have been fully expended and that additional Allowed Securities Claims exist or that all Securities Claims have not yet been resolved and the Infinity Parties, within thirty (30) days after the filing of such notice, fail to make an additional contribution to the UPC Trust in an aggregate amount equivalent to (A) not less than $100,000 (provided that such amount must be at least enough to satisfy all outstanding Allowed Securities Claims in full and provide at least $25,000 to fund the expenses of the UPC Trust in liquidating any remaining Securities Claims) or (B) such lesser amount as may be agreed to by the UPC Trustee. 12. Nothing contained herein or in the Modified Plan shall impair the rights or claims asserted in the Pisacreta/Tucci Action by or on behalf of the named plaintiffs therein, the members of the class sought to be certified therein (whether or not such class is certified) or any opt-outs from such class. 13. Unless required to be filed by an earlier date by another order of this Court, all requests for payment of Administrative Claims, including all applications for final allowance of compensation and reimbursement of expenses of Professionals, must be filed and served on the Debtor, no later than forty-five (45) days after the Effective Date. Any person that is required to file and serve such a request for payment of an Administrative Claim and fails to timely file and serve such request, shall be forever barred, estopped and enjoined from asserting such Claim or participating in distributions under the Plan on account thereof. 14. The Debtor shall file objections to Claims with this Court no later than 60 days after the Effective Date, provided, however, that this deadline may be extended by the Court upon motion of the Post-Confirmation Debtor, without notice or a hearing. After the date hereof, no party, other than the Debtor or Post-Confirmation Debtor, may file objections to the allowance of claims. 15. This Order shall constitute all approvals and consents required, if any, by the laws, rules or regulations of any State or any other governmental authority with respect to the implementation or consummation of the Plan and any other acts that may be necessary or appropriate for the implementation or consummation of the Plan. 16. Pursuant to Section 1146(c) of the Bankruptcy Code, neither the making nor delivery of an instrument of transfer, nor the revesting, transfer and sale of any real property or personal property of the Debtor in accordance with the Plan, shall subject the Debtor to any state or local law imposing a stamp tax, transfer tax or similar tax or fee. 17. The provisions of the Plan and this Order shall be, and hereby are now, and forever afterwards, binding on the Debtor, all holders of Claims and Interests (whether or not impaired under the Plan and whether or not, if impaired, they accepted the Plan), any other party in interest, any other party making an appearance in this Chapter 11 Case, and any other person or entity affected thereby, as well as their respective heirs, successors, assigns, trustees, subsidiaries, affiliates, officers, directors, agents, employees, representatives, attorneys, beneficiaries, guardians, and similar officers, or any person claiming through or in the right of any such person or entity. 18. The Court hereby retains jurisdiction of this case (i) as provided for in the Plan, (ii) as provided for in this Order, and (iii) for the purposes set forth in Sections 1127 and 1142 of the Bankruptcy Code. 19. The compromises and settlements set forth in Section 14.1 of the Plan and in the Infinity Settlement Agreement, in substantially the form attached hereto as Exhibit A, are approved. 20. The UPC Trust Agreement and the ADR are hereby approved and the Debtor and the UPC Trustee once appointed may take such actions as are necessary to implement the terms thereof. 21. The failure to reference or discuss any particular provision of the Plan in this Order shall have no effect on the validity, binding effect and enforceability or such provision and such provision shall have the same validity, binding effect and enforceability as every other provision of the Plan. 22. Pursuant to Bankruptcy Rule 2002(f)(7) and 3020(c), the Debtor is hereby directed to serve a notice of the entry of this Order on all holders of record of Claims and Interests as of the date hereof, all parties who have entered their appearance in this case and requested notice pursuant to Bankruptcy Rule 2002 and the Office of the United States Trustee no later than ten (10) days after the Effective Date of the Plan. Dated: Wilmington, Delaware October 7, 1999 s/Peter J. Walsh ------------------------------------ Peter J. Walsh Chief Judge, United States Bankruptcy Court EX-99.3 4 AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER AGREEMENT AND PLAN OF MERGER, dated as of September 29, 1999 (this "Agreement"), by and among F.S. Convenience Stores, Inc., a Florida corporation ("FSCI"), United Petroleum Corporation, a Delaware corporation (the "Company") and Chapter 11 debtor-in-possession, in case No. 99-88 (PJW) (the "Chapter 11 Case"), pending in the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), and United Petroleum Subsidiary, Inc., a Delaware corporation ("UPC Merger Sub"). WHEREAS, on July 23, 1999, the Company filed with the Bankruptcy Court its second amended chapter 11 reorganization plan (the "Chapter 11 Plan"); WHEREAS, pursuant to this Agreement and the Chapter 11 Plan, UPC Merger Sub shall acquire FSCI; WHEREAS, to complete such acquisition, the Company, UPC Merger Sub, and FSCI propose the merger of FSCI with and into UPC Merger Sub (the "Merger") in a forward triangular merger, such that the holders (collectively, the "FSCI Shareholder") of FSCI's capital stock (the "FSCI Common Stock") will receive certain common and preferred stock of the reorganized Company, and $3 Million in cash, pursuant to and subject to the terms and conditions of this Agreement and the Chapter 11 Plan; WHEREAS, on the Effective Date of the Chapter 11 Plan, each share of the Company's common stock then issued and outstanding shall be canceled, annulled and extinguished; and WHEREAS, on the Effective Date, the Company shall be authorized to issue 10,000,000 shares of New UPC Common Stock and 300,000 shares of New UPC Preferred Stock, NOW, THEREFORE, in consideration of the premises and of the mutual covenants, representations, warranties and agreements herein contained, and other good and valuable considerations, the receipt and adequacy of which are hereby conclusively acknowledged, the parties hereto, intending to be legally bound, agree as follows: ARTICLE I THE MERGER AND RELATED MATTERS Section 1.1 The Merger. (a) Subject to the terms and conditions of this Agreement, at the time of the Closing, a certificate of merger (the "Certificate of Merger") shall be duly prepared, executed and acknowledged by FSCI and UPC Merger Sub in accordance with the Delaware General Corporation Law, 8 Del. C. Section 101 et seq. (the "DGCL"). The Certificate of Merger and any certificate required to effect the Merger under the applicable provisions of Florida law shall be filed on the Closing Date with the Secretary of State of the State of Delaware and the Secretary of State of the State of Florida, respectively. The Merger shall become effective upon the filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the provisions and requirements of the DGCL. The date and time when the Merger shall become effective is hereinafter referred to as the "Effective Date" or "Effective Time." (b) At the Effective Time, FSCI shall be merged with and into UPC Merger Sub, the separate corporate existence of FSCI shall cease, and UPC Merger Sub shall continue as the surviving corporation under the laws of the State of Delaware (the "Surviving Corporation"). (c) From and after the Effective Time, the Merger shall have the effects set forth in section 259 of the DGCL. Section 1.2 Consideration. At the Effective Time, the FSCI Shareholder shall, by virtue of the Merger and without any action on the part of the FSCI Shareholder, in exchange for the surrender to the Company of all outstanding shares of FSCI Common Stock, receive (i) 2,400,000 fully paid and nonassessable shares of New UPC Common Stock (as defined in Section 2.2(c) hereof), (ii) 70,000 shares of New UPC Preferred Stock (as defined in Section 2.2(c) hereof), and (iii) cash in the amount of three million dollars ($3,000,000.00)(collectively, the "Merger Consideration"). Section 1.3 Certificate of Incorporation of the Surviving Corporation. The certificate of incorporation of UPC Merger Sub, in substantially the form attached as Exhibit A, shall be the certificate of incorporation of the Surviving Corporation (the "Certificate of Incorporation"). Section 1.4 Bylaws of the Surviving Corporation. The bylaws of UPC Merger Sub, in substantially the form attached as Exhibit B, shall be the bylaws of the Surviving Corporation ("Bylaws"). Section 1.5 Directors and Officers of the Surviving Corporation. At the Effective Time, the directors set forth in Schedule 1.5 shall be the directors of the Company and the Surviving Corporation, each of such directors to hold office, subject to the applicable provisions of the Certificate of Incorporation and Bylaws of the Company or the Surviving Corporation, as applicable, until the next annual stockholders' meeting of the Company or the Surviving Corporation, as applicable, and until their respective successors shall be duly elected or appointed and qualified. At the Effective Time, the officers described in Schedule 1.5 , subject to the applicable provisions of the Certificate of Incorporation and Bylaws of the Company or the Surviving Corporation, as appropriate, shall be the officers of the Company and the Surviving Corporation, as applicable until their respective successors shall be duly elected or appointed and qualified. Section 1.6 Closing. The Closing of the Merger shall take place at the offices of White & Case LLP, 200 South Biscayne Boulevard, Suite 4900, Miami, Florida, or, at the option of the lender providing the Merger Financing at the offices of the lender or counsel to such lender, as soon as practicable after the last of the conditions set forth in Article V hereof is fulfilled or waived but in no event later than 5:00 p.m., prevailing Eastern Time, on October 15, 1999, or at such other time and place and on such other date as FSCI, UPC Merger Sub and the Company shall mutually agree (the "Closing Date"). ARTICLE II REPRESENTATIONS AND WARRANTIES Section 2.1 Representations and Warranties of the Company and UPC Merger Sub. Except as may be otherwise disclosed in the Company Disclosure Schedule, attached or to be attached and initialed by all parties hereto, the Company and UPC Merger Sub hereby represent and warrant to FSCI as follows: (a) Due Organization, Good Standing and Corporate Power. Except as disclosed in Schedule 2.1(a) hereto, each of the Company and its subsidiaries is a corporation duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and each such corporation has all requisite corporate power and authority to own, lease and operate its properties and to carry on its business as now being conducted. Each of the Company and its subsidiaries is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except in such jurisdictions where the failure to be so qualified or licensed and in good standing would not have a material adverse effect on the business, properties, assets, liabilities, operations, results of operations, condition (financial or otherwise) (collectively, the "Condition") of the Company and its subsidiaries taken as a whole. The certificate of incorporation and bylaws of the Company, as amended and to be in effect as of the Effective Time, shall be substantially in the form attached hereto as Exhibit C. (b) Authorization and Validity of Agreement. Subject to the entry of the Confirmation Order and the occurrence of the Effective Date of the Chapter 11 Plan, the Company and UPC Merger Sub have full corporate power and authority to execute and deliver this Agreement and to consummate the transactions and enter into the agreements contemplated hereby. The execution, delivery and performance of this Agreement by the Company and UPC Merger Sub, and the consummation by them of the transactions contemplated hereby, have been duly authorized and approved by their respective Boards of Directors and, subject to the entry of the Confirmation Order and the occurrence of the Effective Date of the Chapter 11 Plan, (i) no other corporate action on the part of the Company or UPC Merger Sub is necessary to authorize the execution, delivery and performance of this Agreement by the Company and UPC Merger Sub and the consummation of the transactions contemplated hereby, and (ii) this Agreement will constitute a valid and binding obligation of the Company and UPC Merger Sub enforceable against the Company and UPC Merger Sub in accordance with its terms. Subject to the entry of the Confirmation Order and the occurrence of the Effective Date of the Chapter 11 Plan, this Agreement has been duly executed and delivered by the Company and UPC Merger Sub. (c) Capitalization. (i) Upon the Effective Date of the Chapter 11 Plan, the authorized capital stock of the Company will consist of 10,000,000 shares of common stock ("New UPC Common Stock"), 5,000,000 of which shall be issued and outstanding, and 300,000 shares of preferred stock, par value $100 per share ("New UPC Preferred Stock"), 140,000 shares of which shall be issued and outstanding. The authorized capital stock of UPC Merger Sub will consist of three thousand (3,000) shares of common stock, all of which shall be issued to and owned by the Company. New UPC Common Stock and New UPC Preferred Stock, when issued in accordance with the Chapter 11 Plan and this Agreement, (A) will be duly authorized, validly issued, fully paid and nonassessable, (B) will not be subject to, nor issued in violation of, any preemptive rights, and (C) will be free and clear of all liens, proxies, voting trusts, encumbrances, options or claims whatsoever. The holders of the New UPC Preferred Stock will have all of the powers, preferences and rights as set forth in the preference certificate. (ii) Schedule 2.1(c)(ii) lists all of the Company's subsidiaries. All of the outstanding shares of capital stock of each of the Company's subsidiaries have been duly authorized and validly issued, are fully paid and nonassessable, are not subject to, nor were they issued in violation of, any preemptive rights, and are owned, of record and beneficially, by the Company, free and clear of all liens, encumbrances, options or claims whatsoever. Except as contemplated by this Agreement, no shares of capital stock of the Company or any of the Company's subsidiaries are reserved for issuance and there are no outstanding or authorized options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to the capital stock of the Company or any subsidiary of the Company, pursuant to which the Company or such subsidiary is or may become obligated to issue any shares of capital stock of the Company or such subsidiary or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of the Company or such subsidiary. There are no restrictions of any kind that prevent the payment of dividends by any of the Company's subsidiaries. Except for the subsidiaries listed on Schedule 2.1(c)(ii), the Company does not own, directly or indirectly, any capital stock or other equity interest in any Person or have any direct or indirect equity or ownership interest in any Person and neither the Company nor any of its subsidiaries is subject to any obligation or requirement to provide funds for or to make any investment (in the form of a loan, capital contribution or otherwise) to or in any Person. (d) Consents and Approvals; No Violations. Assuming that filings required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), are made and the waiting period thereunder has been terminated or has expired, the filing of the Certificate of Merger and other appropriate merger documents, if any, as required by the DGCL or under the applicable provisions of Florida law, are made, the Bankruptcy Court enters an order, that may be the Confirmation Order, approving the Merger and this Agreement, and subject to the receipt of those consents and approvals identified in Schedule 2.1(d), the execution and delivery of this Agreement by the Company and UPC Merger Sub and the consummation by the Company and UPC Merger Sub of the transactions contemplated hereby will not: (i) violate any provision of the certificate of incorporation of the Company or UPC Merger Sub or the bylaws of the Company or UPC Merger Sub, each as in effect as of the Effective Time; (ii) violate any statute, ordinance, rule, regulation, order or decree of any court or of any governmental or regulatory body, agency or authority applicable to the Company or UPC Merger Sub or by which any of their respective properties or assets may be bound; (iii) require any filing with, or permit, consent or approval of, or the giving of any notice to, any governmental or regulatory body, agency or authority; or (iv) result in a violation or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation, payment or acceleration) under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of the Company or any of its subsidiaries under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, franchise, permit, agreement, lease, franchise agreement or other instrument or obligation to which the Company or any of its subsidiaries is a party, or by which it or any of their respective properties or assets may be bound, excluding from the foregoing clauses (iii) and (iv) filings, notices, permits, consents and approvals the absence of which, and violations, breaches, defaults, conflicts and liens that, in the aggregate, would not have a material adverse effect on the Condition of the Company and its subsidiaries taken as a whole; or (v) trigger any consent or approval requirements with respect to those leases, licenses, permits, or approvals held by the Company. (e) Company Reports and Financial Statements. Except as set forth in Schedule 2.1(e), since December 31, 1996, the Company has filed all forms, reports and documents, together with all exhibits and amendments thereto with the Securities and Exchange Commission (the "Commission") required to be filed by it pursuant to the federal securities laws and the Commission rules and regulations thereunder, and all such forms, reports and documents filed by the Company with the Commission (collectively, the "Commission Filings") have complied in all material respects with all applicable requirements of the federal securities laws and the Commission rules and regulations promulgated thereunder. The Company has heretofore delivered to FSCI true and complete copies of all Commission Filings since December 31, 1996. As of their respective filing dates, the Commission Filings did not contain any 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 light of the circumstances under which they were made, not misleading. Each of the consolidated balance sheets as of the end of the fiscal years ended December 31, 1997 and 1998 and the consolidated statements of operations, consolidated statements of stockholders' equity and consolidated statements of changes in financial position for the fiscal years ended December 31, 1997 and 1998 included in the Commission Filings, were prepared in accordance with generally accepted accounting principles (as in effect from time to time) applied on a consistent basis (except as may be indicated therein or in the notes or schedules thereto) and fairly present in all material respects the consolidated financial position of the Company and its consolidated subsidiaries as of the dates thereof and the results of their operations and changes in financial position for the periods then ended. (f) Minute Books. The minute books of the Company and its material subsidiaries, as previously made available to FSCI and its representatives, contain accurate records of all meetings of and corporate actions or written consents by the stockholders and Boards of Directors of the Company and its material subsidiaries since January 1, 1996. (g) Title to Properties; Encumbrances; Facilities. (i) The Company and each of its subsidiaries has good, valid and marketable title to (A) all its material tangible properties and assets (real and personal), including, without limitation, all the properties and assets reflected in the consolidated balance sheet as of December 31, 1998 included in the Disclosure Statement (the "Balance Sheet") except as indicated in the notes thereto and except for properties and assets reflected in the Balance Sheet that have been sold or otherwise disposed of in the ordinary course of business, and (B) all the tangible properties and assets purchased by the Company and any of its subsidiaries since December 31, 1998 except for such properties and assets that have been sold or otherwise disposed of in the ordinary course of business; in each case subject to no encumbrance, lien, charge or other restriction of any kind or character, except for (I) liens pertaining to indebtedness reflected in the Balance Sheet and described on Schedule 2.1(g), (II) liens consisting of zoning or planning restrictions, easements, permits and other restrictions or limitations on the use of real property or irregularities in title thereto that do not materially detract from the value of, or impair the use of, such property by the Company or any of its subsidiaries in the operation of its respective business, (III) liens for current taxes, assessments or governmental charges or levies on property not yet due and delinquent, and (IV) statutory landlord's liens, liens granted to landlords under leases for the Company Facilities, and fee mortgages made by such landlords. (ii) Schedule 2.1(g) sets forth a list of all Company Facilities now being occupied by the Company or any of its subsidiaries or used in connection with their respective operations. The Company Facilities are all premises leased or owned by the Company or any of its subsidiaries. Neither the Company nor any of its subsidiaries has received notice of any building or health code violations with respect to any of the Company Facilities. Each of the Company and its subsidiaries has complied with all federal, state and local laws, ordinances, rules and regulations applicable to each Company Facility, except where the failure to so comply would not have a material adverse effect on the Condition of the Company and its subsidiaries. There is no pending, proposed, or, to the Company's knowledge, threatened condemnation, eminent domain, or similar proceeding affecting any of the Company Facilities. (h) Compliance with Laws. The Company and its subsidiaries are in compliance with all applicable laws, regulations, orders, judgments and decrees except where the failure to so comply would not have a material adverse effect on the Condition of the Company and its subsidiaries taken as a whole. (i) Litigation. Except for the Chapter 11 Case and except as specifically disclosed in Schedule 2.1(i), there is no action, suit, proceeding at law or in equity, or any arbitration or any administrative or other proceeding by or before (or, to the best knowledge, information and belief of the Company, any investigation by) any governmental or other instrumentality or agency, pending, or, to the best knowledge, information and belief of the Company, threatened, against or affecting the Company or any of its subsidiaries, or any of their properties or rights. There are no such suits, actions, claims, proceedings or investigations pending or, to the best knowledge, information and belief of the Company, threatened, seeking to prevent or challenging the transactions contemplated by this Agreement. Except as disclosed in the Disclosure Statement, neither the Company nor any of its subsidiaries is subject to any judgment, order or decree entered in any lawsuit or proceeding that could have a material adverse effect on the Condition of the Company and its subsidiaries taken as a whole or on the ability of the Company or any subsidiary to conduct its business as presently conducted. Schedule 2.1(i) sets forth all litigation involving the Company or its subsidiaries that is pending or, to the Company's knowledge, threatened. (j) Employee Benefit Plans. (i) List of Plans. Set forth in Schedule 2.1(j) attached hereto is an accurate and complete list of all employee benefit plans ("Employee Benefit Plans") within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"), whether or not any such Employee Benefit Plans are otherwise exempt from the provisions of ERISA, established, maintained or contributed to by the Company or any of its subsidiaries (including, for this purpose and for the purpose of all of the representations in this Section 2.1(j)), all employers (whether or not incorporated) that by reason of common control are treated together with the Company as a single employer within the meaning of Section 414 of the Internal Revenue Code of 1986, as amended (the "Code")). (ii) Status of Plans. Neither the Company nor any of its subsidiaries maintains any Employee Benefit Plans subject to ERISA. (iii) Contributions. Full payment has been made of all amounts that the Company or any of its subsidiaries is required, under applicable law or under any Employee Benefit Plan or any agreement relating to any Employee Benefit Plan to which the Company or any of its subsidiaries is a party, to have paid as contributions thereto as of the last day of the most recent fiscal year of such Employee Benefit Plan ended prior to the date hereof. The Company has made adequate provision for reserves to meet contributions that have not been made because they are not yet due under the terms of any Employee Benefit Plan or related agreements. Benefits under all Employee Benefit Plans are as represented and have not been increased subsequent to the date as of which documents have been provided to FSCI. (iv) [Intentionally Omitted] (v) Tax Qualification. Each Employee Benefit Plan intended to be qualified under Section 401(a) of the Code has been determined to be so qualified by the Internal Revenue Service and nothing has occurred since the date of the last such determination that resulted or is likely to result in the revocation of such determination. (vi) Transactions. No Reportable Event (as defined in Section 4043 of ERISA) has occurred with respect to any Employee Benefit Plan for which the 30-day notice requirement has not been waived by the Pension Benefit Guaranty Corporation ("PBGC") and neither the Company nor any of its subsidiaries has engaged in any transaction with respect to the Employee Benefit Plans that would subject it to a tax, penalty or liability for prohibited transactions under ERISA or the Code nor has any of their respective directors, officers, or employees, to the extent they or any of them are fiduciaries with respect to such Employee Benefit Plans, breached any of their responsibilities or obligations imposed upon fiduciaries under Title I of ERISA or would result in any claim being made under or by or on behalf of any such Employee Benefit Plans by any party with standing to make such claim. (vii) Other Plans. The Company currently does not maintain any employee or non-employee benefit plans or any other foreign pension, welfare or retirement benefit plans other than those listed in Schedule 2.1(k). (viii) Documents. The Company has made available to FSCI and its counsel true and complete copies of (A) all Employee Benefit Plans as in effect, together with all amendments thereto that will become effective at a later date, as well as the latest Internal Revenue Service determination letter obtained with respect to any such Employee Benefit Plan qualified under Section 401 or 501 of the Code and (B) Form 5500 for the most recent completed fiscal year for each Employee Benefit Plan required to file such form. (k) Employment Relations and Agreements. (i) Each of the Company and its subsidiaries is in substantial compliance with all federal, state or other applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and has not and is not engaged in any unfair labor practice; (ii) to the Company's knowledge, no unfair labor practice complaint against the Company or any of its subsidiaries is pending before the National Labor Relations Board; (iii) there is no labor strike, dispute, slowdown or stoppage actually pending or, to the Company's knowledge, threatened against or involving the Company or any of its subsidiaries; (iv) no representation question exists respecting the employees of the Company or any of its subsidiaries; (v) to the Company's knowledge, no grievance that might have a material adverse effect on the Condition of the Company and its subsidiaries as a whole or the conduct of their respective businesses exists, no arbitration proceeding arising out of or under any collective bargaining agreement is pending and no claim therefor has been asserted; (vi) no collective bargaining agreement is currently in effect or being negotiated by the Company or any of its subsidiaries; and (vii) neither the Company nor any of its subsidiaries has experienced any material labor difficulty during the last three years. There has not been, and to the best knowledge of the Company, there will not be, any change in relations with employees of the Company or any of its subsidiaries as a result of the transactions contemplated by this Agreement that could have a material adverse effect on the Condition of the Company and its subsidiaries or the Surviving Corporation taken as a whole. Except as disclosed in Schedule 2.1(k) attached hereto (which schedule lists the maximum payment that could be owed), there exist no employment, consulting, severance or indemnification agreements between the Company and any director, officer or employee of the Company or any agreement that would give any Person the right to receive any payment from the Company as a result of the Merger. (l) Taxes. Except as provided in Schedule 2.1(l), the Company has filed or caused to be filed, within the times and in the manner prescribed by law (including permitted extensions of time to file), all federal, state, local and foreign tax returns and tax reports that are required to be filed by, or with respect to, the Company or any of its subsidiaries. All federal, state, local and foreign income, profits, franchise, sales, use, occupancy, excise and other taxes and assessments (including interest and penalties) payable by, or due from, the Company or any of its subsidiaries (i) have either been fully paid or will be fully paid under the Chapter 11 Plan to the extent allowed as a Claim under the Chapter 11 Plan, and (ii) adequately disclosed and fully provided for in the books and financial statements of the Company and its subsidiaries. Except as provided in Schedule 2.1(l), the federal income tax liability of the Company and its subsidiaries has been finally determined for all fiscal years to and including the fiscal year ended December 31, 1996. No examination of any tax return of the Company or any of its subsidiaries is currently in progress. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any tax return of the Company or any of its subsidiaries. (m) Intellectual Properties. In the operation of its business the Company and its subsidiaries have used, and currently use, domestic and foreign patents, patent applications, patent licenses, software licenses, know-how licenses, trade names, trademarks, copyrights, unpatented inventions, service marks, trademark registrations and applications, service mark registrations and applications, copyright registrations and applications, trade secrets and other confidential proprietary information (collectively the "Company Intellectual Property"). Schedule 2.1(m) attached hereto contains an accurate and complete list of all Company Intellectual Property that is of material importance to the operation of the business of the Company or any of its subsidiaries. Unless otherwise indicated in Schedule 2.1(m) the Company (or the subsidiary indicated) owns the entire right, title and interest in and to the Company Intellectual Property listed on Schedule 2.1(m) used in the operation of its business (including, without limitation, the exclusive right to use and license the same) and each item constituting part of the Company Intellectual Property that is owned by the Company or a subsidiary and listed on Schedule 2.1(m) has been, to the extent indicated in Schedule 2.1(m), duly registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office or such other governmental entities, domestic or foreign, as are indicated in Schedule 2.1(m) and such registrations, filings and issuances remain in full force and effect. To the best knowledge of the Company, except as stated in such Schedule 2.1(m), there are no pending or threatened proceedings or litigation or other adverse claims affecting or with respect to the Company Intellectual Property. Schedule 2.1(m) lists all notices or claims currently pending or received by the Company or any of its subsidiaries during the past two years that claim infringement, contributory infringement, inducement to infringe, misappropriation or breach by the Company or any of its subsidiaries of any domestic or foreign patents, patent applications, patent licenses and know-how licenses, trade names, trademark registrations and applications, service marks, copyrights, copyright registrations or applications, trade secrets or other confidential proprietary information. To the best knowledge of the Company, except as indicated on Schedule 2.1(m), no Person is materially infringing the Company Intellectual Property. (n) Broker's or Finder's Fee. No agent, broker, Person or firm acting on behalf of the Company is, or will be, entitled to any fee, commission or broker's or finder's fees from any of the parties hereto, or from any Person controlling, controlled by, or under common control with any of the parties hereto, in connection with this Agreement or any of the transactions contemplated hereby. (o) Accounts Receivable. The accounts receivable of the Company and its subsidiaries as reflected in the Balance Sheet, to the extent uncollected on the date of this Agreement, and the accounts receivable reflected on the books of the Company are, on the basis of existing facts, valid and existing, represent monies due for goods sold and delivered or services rendered, and (subject to the aforesaid reserve) are subject to no refunds or other adjustments (except for returns or discounts for prompt payment given in the ordinary course of business) and to no defenses, rights of setoff, assignments, restrictions, encumbrances or conditions enforceable by third parties on or affecting any thereof. (p) Inventories. The inventories reflected in the Balance Sheet were, and those reflected on the books of the Company and its subsidiaries since such date have been, determined and valued in accordance with generally accepted accounting principles applied on a consistent basis as reflected in the consolidated balance sheet, and existed on the respective dates. Except for normal spoilage or obsolescence, the inventories of the Company and its subsidiaries consist of items that are good and merchantable and are of a quality and quantity presently usable or salable in the ordinary course of business. (q) Environmental Matters. (i) The Company and each subsidiary is, and at all times has been, in substantial compliance with, and has not been and is not in violation of or liable under, any Environmental Law with respect to any of their real properties, leaseholds or other real property interests owned or leased by the Company or any of its subsidiaries, and any buildings, plants, structures, or equipment (including motor vehicles), that are owned or leased both as of the date hereof and as of the Closing Date ("Company Facilities"). Except for matters covered by applicable state remediation programs, the Company and its subsidiaries have not received any actual or threatened order, notice, or other communication from (A) any governmental body or private citizen acting in the public interest, or (B) the current or prior owner or operator of any Company Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Company Facilities or any other properties or assets (whether real, personal, or mixed) in which the Company or any of its subsidiaries has an interest, or with respect to any Company Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by the Company, any of its subsidiaries or any other Person for whose conduct they are or may be held responsible, or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received. (ii) There are no pending or, to the knowledge of the Company, threatened claims, liens, or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the Company Facilities or any other properties and assets (whether real, personal, or mixed) in which the Company and of its subsidiaries has an interest. (iii) Except for matters covered by any applicable state remediation programs or applicable insurance policies, the Company and its subsidiaries have not received any citation, directive, inquiry, notice, order, summons, warning, or other communication that relates to Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential violation or failure to comply with any Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the Company Facilities. (iv) Except for matters covered by any applicable state remediation programs or by applicable insurance policies, the Company and its subsidiaries have no Environmental, Health, and Safety Liabilities with respect to the Company Facilities or with respect to any other properties and assets (whether real, personal, or mixed) in which the Company or any of its subsidiaries (or any predecessor), has an interest, or at any property geologically or hydrologically adjoining the Company Facilities or any such other property or assets. (v) Except for matters covered by any applicable state remediation programs or by applicable insurance policies, there has been no Release or, to the knowledge of the Company, threat of Release, of any Hazardous Materials at or from the Company Facilities or, to the knowledge of the Company, at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by the Company Facilities, or from or by any other properties and assets (whether real, personal, or mixed) in which the Company or any of its subsidiaries has an interest, or to the knowledge of the Company any geologically or hydrologically adjoining property, whether by the Company, any of its subsidiaries or any other Person. (vi) The Company has made available to FSCI true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by the Company or any of its subsidiaries pertaining to Hazardous Materials or Hazardous Activities in, on, or under the Company Facilities, or concerning compliance by the Company, any of its subsidiaries, or any other Person for whose conduct they are or may be held responsible, with Environmental Laws. (r) Chapter 11 Proceedings. The Company has complied in all material respects with the Bankruptcy Code, and with all other laws, rules, regulations, decrees or orders applicable to or arising out of the Chapter 11 Case, except to the extent that any such non-compliance would not have a material adverse affect on Condition of the Company. To the best of the Company's knowledge, all lists of creditors and stockholders, schedules, statements of affairs, and financial reports filed by the Company with the Bankruptcy Court were complete and accurate in all material respects as of the date filed or made. Such notice of the Chapter 11 Case as is required by the Bankruptcy Code has been or will be given to all known holders of Claims (as such term is defined in the Bankruptcy Code), and the Company shall serve notice of the transactions contemplated by this Agreement on parties entitled to such notice under the Bankruptcy Code, as modified by orders in respect of notice that may be issued at any time and from time to time by the Bankruptcy Court. (s) Absence of Certain Changes. Except as disclosed in Schedule 2.1(s) hereto, since December 31, 1998: (i) there has not been any material adverse change in the Condition of the Company and its subsidiaries, taken as a whole; (ii) the businesses of the Company and its subsidiaries have been conducted only in the ordinary course; (iii) the Company and its subsidiaries have not incurred any material liabilities (direct, contingent or otherwise) or engaged in any material transaction or entered into any material agreement outside the ordinary course of business; (iv) the Company and its subsidiaries have not increased the compensation of any officer or granted any general salary or benefits increase to their employees other than in the ordinary course of business; and (v) the Company and its subsidiaries have not taken any action referred to in Section 3.4 hereof except as permitted or required thereby. (t) Material Contracts. Schedule 2.1(t) identifies all material contracts, agreements and other written or oral arrangements to which the Company or any of its subsidiaries is party and all arrangements that are filed with the Commission as part of the Commission Filings. True, correct and complete copies (with all amendments thereto) thereof have been made available to FSCI. "Material" contracts, agreements and arrangements are those that obligate the parties, in the aggregate, to in excess of $50,000 of obligations. With respect to each written arrangement so listed: (i) the written arrangement is legal, valid, binding, enforceable, and in full force and effect, and has not been materially amended or altered; (ii) the Company and its subsidiaries are not in breach or default, and no event has occurred that, with notice or lapse of time, or both, would constitute a breach or default by the Company or its subsidiaries or permit a party other than the Company or its subsidiaries to terminate, modify, or accelerate performance under any such written arrangement; and (iii) to the Company's knowledge, no party other than the Company or its subsidiaries is in breach or default, and no event has occurred that, with notice or lapse of time, or both, would constitute a breach or default or permit termination, modification, or acceleration, under any such written arrangement. (u) Liabilities. The Company and its subsidiaries have no material outstanding claims, liabilities or indebtedness, contingent or otherwise, required to be reflected in a financial statement prepared in accordance with GAAP, except as set forth in the financial statements delivered to FSCI, or referred to in the footnotes thereto, other than liabilities incurred subsequent to December 31, 1998 in the ordinary course of business not involving borrowings by the Company and its subsidiaries. Except for that indebtedness and those obligations identified in the Disclosure Statement, the Company and its subsidiaries are not in default in respect of the material terms and conditions of any material indebtedness or other agreements. The Company currently estimates that the allowed amount of such Claims will not exceed $250,000. However, the Company has scheduled as disputed approximately $900,000 of unsecured claims and proofs of unsecured claims, which the Company likewise disputes, have been filed totaling approximately $2,000,000. Although the Company believes that all of the disputed scheduled and filed claims will ultimately be disallowed by the Bankruptcy Court, there can be no assurance that some or all of the disputed scheduled and filed claims will not be allowed by the Bankruptcy Court. Section 2.2 Representations and Warranties of FSCI. Except as may be otherwise disclosed in the FSCI Disclosure Schedule, attached or to be attached and initialed by the parties, FSCI represents and warrants to the Company and UPC Merger Sub, as of the Effective Time, as follows: (a) Due Organization; Good Standing and Corporate Power. (i) FSCI and, as of the Effective Time, a subsidiary of FSCI ("FSCI Sub") formed solely to serve as a partner in the REWJB Gas Investments, a Florida general partnership (the "Gas Partnership"), Farm Stores Grocery, Inc., a Delaware corporation in which FSCI will own as of the Effective Time ten percent (10%) of the issued and outstanding stock ("FSG"), a subsidiary of FSG ("FSG Sub") formed solely to serve as a partner in REWJB Investments, a Florida general partnership (the "Drive-Thru Partnership" and, together with the Gas Partnership, the "Partnerships"), are each corporations duly incorporated, validly existing, and in good standing under the laws of their respective jurisdictions of incorporation and have all requisite corporate power and authority to own, lease and operate their respective properties and to carry on their respective businesses as now being conducted. FSCI, FSCI Sub, FSG, and FSG Sub are duly qualified or licensed to do business and are in good standing in each jurisdiction in which the property owned, leased or operated by it or the nature of the business conducted by it makes such qualification necessary, except in such jurisdictions where the failure to be so qualified or licensed and in good standing would not have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, as appropriate. (ii) Each of the Partnerships has been duly formed and is validly existing under the laws of the jurisdiction of its organization and has all requisite power and authority to own, lease and operate its properties and carry on its business as now being conducted. Each of the Partnerships is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the property owned, leased or operated by each of the Partnerships or the nature of the business conducted by the Partnerships makes such qualification necessary, except in such jurisdictions where the failure to be so qualified or licensed and in good standing would not have a material adverse effect on the Condition of the Partnerships. (b) Authorization and Validity of Agreement. FSCI has full corporate power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions and enter into the agreements contemplated hereby. The execution, delivery and performance of this Agreement by FSCI, and the consummation of the transactions contemplated hereby, has been duly authorized by the Board of Directors of FSCI. No other corporate action on the part of FSCI is necessary to authorize the execution, delivery and performance of this Agreement by FSCI and the consummation of the transactions contemplated hereby (other than the approval of this Agreement by the FSCI Shareholder). This Agreement has been duly executed and delivered by FSCI and is a valid and binding obligation of FSCI, enforceable against FSCI in accordance with its terms. (c) Capitalization. (i) The FSCI Common Stock is all of the authorized capital stock of FSCI and consists of 10,000 shares of common stock. As of the date hereof, (A) 10,000 shares of FSCI Common Stock are issued and outstanding, (B) no shares of FSCI Common Stock are reserved for issuance pursuant to outstanding options or stock incentive plans, (C) all issued and outstanding FSCI Common Stock is owned by the FSCI Shareholder, and (D) no shares of FSCI Common Stock are held in FSCI's treasury. All issued and outstanding shares of FSCI Common Stock have been validly issued and are fully paid and nonassessable, and are not subject to, nor were they issued in violation of, any preemptive rights. Except as set forth in this Section 2.2(c), at the Effective Time, and as contemplated by this Agreement, there will not be any outstanding or authorized options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to FSCI Common Stock or any other shares of capital stock of FSCI, pursuant to which FSCI is or may become obligated to issue shares of FSCI Common Stock, any other shares of its capital stock or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of the capital stock of FSCI. (ii) The authorized capital stock of FSG consists of 10,000,000 shares of common stock ("FSG Common Stock"),of which, as of the Effective Time, 1,000,000 will be issued (including 100,000 shares issued to FSCI) and outstanding or reserved for issuance under options or warrants. Except as set forth in the preceding sentence, (A) no shares of FSG Common Stock are reserved for issuance pursuant to outstanding options or stock incentive plans, (B) all issued and outstanding FSG Common Stock is owned beneficially by FSCI and FSCI Shareholder, and (C) no shares of FSG Common Stock are held in FSG's treasury. All issued and outstanding shares of FSG Common Stock have been validly issued and are fully paid and nonassessable, and are not subject to, nor were they issued in violation of, any preemptive rights. Except as set forth in this Section 2.2(c), at the Effective Time, and as contemplated by this Agreement, there will not be any outstanding or authorized options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to FSG Common Stock or any other shares of capital stock of FSG, pursuant to which FSG is or may become obligated to issue shares of FSG Common Stock, any other shares of its capital stock or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any shares of the capital stock of FSG. (iii) The interests in the Gas Partnership owned by FSCI are fully paid and nonassessable, were issued by the Gas Partnership in accordance with the Gas Partnership's partnership agreement dated September 9, 1992 ("Gas Partnership Agreement"), and are owned, of record and beneficially, by FSCI free and clear of all liens and encumbrances. The partnership interests owned by FSCI in the Gas Partnership constitute a forty percent (40%) interest in the Gas Partnership. Except for those interests in the Gas Partnership owned by Toni Gas & Food Stores, Inc., a Florida corporation, that are subject to being and that will be purchased by FSCI immediately prior to the Effective Time, there are no other outstanding interests in the Gas Partnership nor are there any options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to interests in the Gas Partnership pursuant to which the Gas Partnership is or may become obligated or any Person is entitled to acquire any interest in the Gas Partnership or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any interest in the Gas Partnership. As of the Effective Time, there will be no restrictions of any kind in the Gas Partnership Agreement that prevent the payment of distributions by the Gas Partnership. (iv) At the Effective time, the interests in the Drive-Thru Partnership owned by FSG and FSG Sub will be fully paid and nonassessable, will be issued by the Drive-Thru Partnership in accordance with the Drive-Thru Partnership's partnership agreement dated September 9, 1992 ("Drive-Thru Partnership Agreement"), and will be owned, of record and beneficially, by FSG and FSG Sub free and clear of all liens and encumbrances. The partnership interests owned by FSG in the Drive-Thru Partnership constitute a forty percent (99%) interest in the Drive-Thru Partnership. Except for those interests in the Drive-Thru Partnership owned by FSG Sub immediately prior to the Effective Time, there are no other outstanding interests in the Drive-Thru Partnership nor are there any options, warrants, rights, subscriptions, claims of any character, agreements, obligations, convertible or exchangeable securities, or other commitments, contingent or otherwise, relating to interests in the Drive-Thru Partnership pursuant to which the Drive-Thru Partnership is or may become obligated or any Person is entitled to acquire any interest in the Drive-Thru Partnership or any securities convertible into, exchangeable for, or evidencing the right to subscribe for, any interest in the Drive-Thru Partnership. As of the Effective Time, there will be no restrictions of any kind in the Drive-Thru Partnership Agreement that prevent the payment of distributions by the Drive-Thru Partnership. (v) Except for its interests in the Gas Partnership and stock of FSG and FSCI Sub that FSCI will acquire pursuant to or in furtherance of the Toni Agreement immediately prior to the Effective Time, at the Effective Time FSCI will not own, directly or indirectly, any capital stock or other equity interest in any Person or have any direct or indirect equity or ownership interest in any Person. Except as contemplated by this Agreement, each of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships are not subject to any obligation or requirement to provide funds for or to make any investments (in the form of a loan, capital contribution or otherwise) to or in any Person. (d) Consents and Approvals; No Violations. Assuming that filings required under the HSR Act are made and the waiting period thereunder has been terminated or has expired, the filing of the Certificate of Merger and other appropriate merger documents, if any, as required by the DGCL or under the applicable provisions of Florida law, are made, and the Bankruptcy Court enters an order, that may be the Confirmation Order, approving the Merger and this Agreement, and subject to the receipt of those consents and approvals identified in Schedule 2.2(d), the execution and delivery of this Agreement by FSCI and the consummation by FSCI of the transactions contemplated hereby will not: (i) violate any provision of the Certificate of Incorporation or Bylaws of FSCI, FSCI Sub, FSG, or FSG Sub, respectively, or the Gas Partnership Agreement or Drive-Thru Partnership Agreement, each as in effect as of the Effective Time; (ii) violate any statute, ordinance, rule, regulation, order or decree of any court or of any governmental or regulatory body, agency or authority applicable to FSCI, FSCI Sub, FSG, FSG Sub, the Partnerships, or by which their respective properties or assets may be bound; (iii) require any filing with, or permit, consent or approval of, or the giving of any notice to any governmental or regulatory body, agency or authority; (iv) result in a violation or breach of, conflict with, constitute (with or without due notice or lapse of time or both) a default (or give rise to any right of termination, cancellation or acceleration) under, or result in the creation of any lien, security interest, charge or encumbrance upon any of the properties or assets of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships under, any of the terms, conditions or provisions of any note, bond, mortgage, indenture, license, franchise, permit, agreement, lease or other instrument or obligation to which FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships are a party, or by which they or their respective properties or assets may be bound, excluding from the foregoing clauses (iii) and (iv) filings, notices, permits, consents and approvals the absence of which, and violations, breaches, defaults, conflicts and liens that, in the aggregate, would not have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships taken as a whole; or (v) trigger any consent or approval requirements with respect to those leases, licenses, permits, or approvals held by the Partnerships (excluding those leases, licenses, permits, or approvals with respect to the Walk-In Convenience Stores Partnerships to another entity in accordance with this Agreement). (e) FSCI Reports and Financial Statements. FSCI has delivered to the Company combined balance sheets for the Partnerships and each of their combined affiliates as of the end of the fiscal years ended September 1, 1996, August 31, 1997 and August 30, 1998 and the combined statements of operations, combined statement of equity and consolidated statements of changes in financial position for the Partnerships and each of their combined affiliates for the fiscal years ended September 1, 1996, August 31, 1997 and August 30, 1998. Such financial statements were prepared in accordance with generally accepted accounting principles (as in effect at the time such financial statements were prepared) applied on a consistent basis (except as may be indicated therein or in the notes or schedules thereto) and fairly present in all material respects the combined financial position of the Partnerships and their combined affiliates as of the dates thereof and the results of their operations and changes in financial position for the periods then ended. (f) Absence of Certain Changes. Except as disclosed in Schedule 2.2(f) hereto, since December 31, 1998: (i) there has not been any material adverse change in the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships, taken as a whole; (ii) the businesses of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have been conducted only in the ordinary course; (iii) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have not incurred any material liabilities (direct, contingent or otherwise) or engaged in any material transaction or entered into any material agreement outside the ordinary course of business; (iv) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have not increased the compensation of any officer or granted any general salary or benefits increase to their employees other than in the ordinary course of business; and (v) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have not taken any action referred to in Section 3.4 hereof except as permitted or required thereby. (g) Minute Books. The minute books of FSCI, FSG, and the managing general partner of the Partnership, as previously made available to the Company and its representatives, contain accurate records of all meetings of the stockholders or partners, as appropriate, all corporate actions or written consents by the stockholders and Boards of Directors of FSCI and FSG, and all actions on behalf of the Partnership by the managing general partner of the Partnership since January 1, 1996. (h) Title to Properties; Encumbrances. (i) FSCI, FSCI Sub, FSG, FSG Sub and the Partnerships have, or will acquire contemporaneously with the Merger, good, valid and marketable title to all of their respective material tangible properties and assets (real and personal), including, without limitation, all the properties and assets reflected in Schedule 2.2(h), subject to no encumbrance, lien, charge or other restriction of any kind or character, except for (A) liens pertaining to indebtedness reflected in the balance sheets of the Partnerships and described on Schedule 2.2(h), (B) liens consisting of zoning or planning restrictions, easements, permits and other restrictions or limitations on the use of real property or irregularities in title thereto that do not materially detract from the value of, or impair the use of, such property by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships in the operation of their respective businesses, (C) liens for current taxes, assessments or governmental charges or levies on property not yet due and delinquent, and (D) statutory landlord's liens, liens granted to landlords under leases for the FSCI Facilities, and fee mortgages made by such landlords. (ii) Schedule 2.2(h) sets forth a list of all FSCI Facilities now being occupied, or to be occupied on the Closing Date, by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships or used in connection with their respective operations. The FSCI Facilities are all, or will be on the Closing Date, premises leased or owned by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. Schedule 2.2(h) describes those leases of FSCI Facilities that require the landlord's consent to assignment of such leases. No notices of any building or health code violations with respect to any of the FSCI Facilities have been received and are pending or uncured which would be material to any FSCI Facility. Each of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have complied with all federal, state and local laws, ordinances, rules and regulations applicable to each FSCI Facility, except where the failure to so comply would not have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. Except as disclosed in Schedule 2.2(h), there is no pending, proposed, or, to FSCI's, knowledge, threatened condemnation, eminent domain, or similar proceeding affecting any of the FSCI Facilities. (i) Compliance with Laws. FSCI, FSCI Sub, FSG, FSG Sub and the Partnerships are in compliance with all applicable laws, regulations, orders, judgments and decrees except where the failure to so comply with the same would not have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships taken as a whole. (j) Litigation. Except as set forth in Schedule 2.2(j) hereto, there is no action, suit, proceeding at law or in equity, or any arbitration or any administrative or other proceeding by or before (or to the best knowledge, information and belief of the Company any investigation by) any governmental or other instrumentality or agency, pending, or, to the best knowledge, information and belief of FSCI, threatened, against or affecting FSCI, FSG, the Partnership, or any of their respective properties or rights that could have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. There are no such suits, actions, claims, proceedings or investigations pending or, to the best knowledge, information and belief of FSCI, threatened, seeking to prevent or challenging the transactions contemplated by this Agreement. FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships are not subject to any judgment, order or decree entered in any lawsuit or proceeding that could have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships, taken as a whole or on the ability of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships to conduct their respective businesses as presently conducted. Schedule 2.2(j) sets forth all litigation involving FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships that is pending or, to FSCI's knowledge, threatened against FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. (k) Employee Benefit Plans. (i) List of Plans. Set forth in Schedule 2.2(k) is an accurate and complete list of all Employee Benefit Plans within the meaning of Section 3(3) of ERISA, whether or not any such Employee Benefit Plans are otherwise exempt from the provisions of ERISA, established, maintained or contributed to by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships (including, for this purpose and for the purpose of all of the representations in this Section 2.2(k)), all employers (whether or not incorporated) that by reason of common control are treated together with the Company as a single employer within the meaning of Section 414 of the Code). (ii) Status of Plans. Except as set forth in Schedule 22(k) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships do not maintain any Employee Benefit Plans subject to ERISA. (iii) Contributions. Full payment has been made of all amounts that FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships are required, under applicable law or under any Employee Benefit Plan or any agreement relating to any Employee Benefit Plan to which FSCI, or FSG or the Partnership is or was a party, to have paid as contributions thereto as of the last day of the most recent fiscal year of such Employee Benefit Plan ended prior to the date hereof. FSCI has made adequate provision for reserves to meet contributions that have not been made because they are not yet due under the terms of any Employee Benefit Plan or related agreements. Benefits under all Employee Benefit Plans are as represented and have not been increased subsequent to the date as of which documents have been provided to the Company. (iv) [Intentionally Omitted] (v) Tax Qualification. Each Employee Benefit Plan of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships intended to be qualified under Section 401(a) of the Code has been determined to be so qualified by the Internal Revenue Service and nothing has occurred since the date of the last such determination that resulted or is likely to result in the revocation of such determination. (vi) Transactions. No Reportable Event (as defined in Section 4043 of ERISA) for which the 30-day notice requirement has not been waived by the PBGC has occurred with respect to any Employee Benefit Plan maintained by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships and FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have not engaged in any transaction with respect to the Employee Benefit Plans maintained by them that would subject any of them to a tax, penalty or liability for prohibited transactions under ERISA or the Code nor have any of their respective directors, officers, partners, or employees to the extent they or any of them are fiduciaries with respect to such Employee Benefit Plans, breached any of their responsibilities or obligations imposed upon fiduciaries under Title I of ERISA or would result in any claim being made under or by or on behalf of any such Employee Benefit Plans by any party with standing to make such claim. (vii) Other Plans. The Company currently does not maintain any employee or non-employee benefit plans or any other foreign pension, welfare or retirement benefit plans other than those listed in Schedule 2.1(k). (viii) Documents. FSCI has made available to the Company and its counsel true and complete copies of (A) all Employee Benefit Plans maintained by FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships as in effect, together with all amendments thereto that will become effective at a later date, as well as the latest Internal Revenue Service determination letter obtained with respect to any such Employee Benefit Plan qualified under Section 401 or 501 of the Code and (B) Form 5500 for the most recent completed fiscal year for each such Employee Benefit Plan required to file such form. (l) Employment Relations and Agreements. (i) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships are in substantial compliance with all federal, state or other applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, and have not and are not engaged in any unfair labor practice; (ii) to the knowledge of FSCI, no unfair labor practice complaint against FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships is pending before the National Labor Relations Board; (iii) there is no labor strike, dispute, slowdown or stoppage actually pending or, to the knowledge of FSCI, threatened against or involving FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships; (iv) no representation question exists respecting the employees of FSCI , FSG, or the Partnership; (v) to the knowledge of FSCI, no grievance that might have a material adverse effect on the Condition of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships or the conduct of their respective businesses exists, no arbitration proceeding arising out of or under any collective bargaining agreement is pending and no claim therefor has been asserted; (vi) no collective bargaining agreement is currently in effect or being negotiated by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships; and (vii) none of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships has experienced any material labor difficulty during the last three years. There has not been, and, to the best knowledge of FSCI, there will not be, any change in relations with employees of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships as a result of the transactions contemplated by this Agreement that could have a material adverse effect on the Condition of FSCI, FSG, the Partnership, or the Surviving Corporation, taken as a whole. Except as disclosed in Schedule 2.2(l) attached hereto (which schedule lists the maximum payment that could be owed), there exist no employment, consulting, severance or indemnification agreements (x) between FSCI and any director, officer or employee of FSCI or any agreement that would give any Person the right to receive any payment from FSCI as a result of the Merger, (y) between FSG and any director, officer or employee of FSG or any agreement that would give any Person the right to receive any payment from FSG as a result of the Merger, and (z) between the Partnership and any partner or employee of the Partnership or any agreement that would give any Person the right to receive any payment from the Partnership as a result of the Merger. (m) [Intentionally Omitted] (n) Taxes. FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have filed or caused to be filed, within the times and in the manner prescribed by law (including permitted extensions of time to file), all federal, state, local and foreign tax returns and tax reports that are required to be filed by, or with respect to, FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. All federal, state, local and foreign income, profits, franchise, sales, use, occupancy, excise and other taxes and assessments (including interest and penalties) payable by, or due from, FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships have been fully paid or adequately disclosed and fully provided for in the books and financial statements of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships. No examination of any tax return of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships is currently in progress. There are no outstanding agreements or waivers extending the statutory period of limitation applicable to any tax return of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. (o) Liabilities. FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have no material outstanding claims, liabilities or indebtedness, contingent or otherwise, required to be reflected in a financial statement prepared in accordance with GAAP, except as set forth in the financial statements delivered to the Company, or referred to in the footnotes thereto, other than liabilities incurred subsequent to December 31, 1998 in the ordinary course of business not involving borrowings by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships. FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships are not in default in respect of the material terms and conditions of any material indebtedness or other agreement. (p) Intellectual Properties. In the operation of its business, FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have used, and currently use, domestic and foreign patents, patent applications, patent licenses, software licenses, know-how licenses, trade names, trademarks, copyrights, unpatented inventions, service marks, trademark registrations and applications, service mark registrations and applications, copyright registrations and applications, trade secrets and other confidential proprietary information, other than commercially available computer software programs (collectively the "Farm Store Intellectual Property"). Schedule 2.2(p) attached hereto contains an accurate and complete list of all Farm Store Intellectual Property that is of material importance to the operation of the business of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships. Unless otherwise indicated in Schedule 2.2(p), FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships owns the entire right, title and interest in and to the Farm Store Intellectual Property listed on Schedule 2.2(p) used in the operation of the businesses of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships (including, without limitation, the exclusive right to use and license the same) and each item constituting part of the Farm Store Intellectual Property that is owned by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships and listed on Schedule 2.2(p) has been, to the extent indicated in Schedule 2.2(p), duly registered with, filed in or issued by, as the case may be, the United States Patent and Trademark Office or such other government entities, domestic or foreign, as are indicated in Schedule 2.2(p) and such registrations, filings and issuances remain in full force and effect. To the best knowledge of FSCI, except as stated in such Schedule 2.2(p), there are no pending or threatened proceedings or litigation or other adverse claims affecting or with respect to the Farm Store Intellectual Property. Schedule 2.2(p) lists all material notices or claims currently pending or received by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships during the past two years that claim infringement, contributory infringement, inducement to infringe, misappropriation or breach by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships of any domestic or foreign patents, patent applications, patent licenses and know-how licenses, trade names, trademark registrations and applications, service marks, copyrights, copyright registrations or applications, trade secrets or other confidential proprietary information. To the best knowledge of FSCI, except as indicated on Schedule 2.2(p), no Person is materially infringing the Farm Store Intellectual Property. (q) Broker's or Finder's Fee. No agent, broker, Person or firm acting on behalf of FSCI, FSG, the Partnership, or FSCI Shareholder is, or will be, entitled to any fee, commission or broker's or finder's fees from any of the parties hereto, or from any Person controlling, controlled by, or under common control with any of the parties hereto, in connection with this Agreement or any of the transactions contemplated hereby. (r) Environmental Matters. Except as disclosed on Schedule 2.2(r) attached hereto: (i) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships are, and at all times have been, in substantial compliance with, and have not been and are not in violation of or liable under, any Environmental Law with respect to any of their respective real property, leaseholds or other real property interests owned or leased by the FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships, and any buildings, plants, structures, or equipment (including motor vehicles), that are owned or leased both as of the date hereof and as of the Closing Date (collectively, "FSCI Facilities"). Except for matters covered by the applicable state remediation programs, FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have not received any actual or threatened order, notice, or other communication from (A) any governmental body or private citizen acting in the public interest, or (B) the current or prior owner or operator of any FSCI Facilities, of any actual or potential violation or failure to comply with any Environmental Law, or of any actual or threatened obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the FSCI Facilities or any other properties or assets (whether real, personal, or mixed) in which FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships has an interest, or with respect to any FSCI Facility at or to which Hazardous Materials were generated, manufactured, refined, transferred, imported, used, or processed by FSCI, FSG, the Partnership, or any other Person for whose conduct they are or may be held responsible, or from which Hazardous Materials have been transported, treated, stored, handled, transferred, disposed, recycled, or received. (ii) There are no pending or, to the knowledge of FSCI, threatened claims, liens, or other restrictions of any nature, resulting from any Environmental, Health, and Safety Liabilities or arising under or pursuant to any Environmental Law, with respect to or affecting any of the FSCI Facilities or any other properties and assets (whether real, personal, or mixed) in which FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships or its subsidiaries has an interest. (iii) Except for matters covered by the applicable state remediation programs and/or by applicable insurance policies, FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have not received any citation, directive, inquiry, notice, order, summons, warning, or other communication that relates to Hazardous Activity, Hazardous Materials, or any alleged, actual, or potential violation or failure to comply with any Environmental Law, or of any alleged, actual, or potential obligation to undertake or bear the cost of any Environmental, Health, and Safety Liabilities with respect to any of the FSCI Facilities. (iv) Except for matters covered by the applicable state remediation programs and/or by applicable insurance policies, FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have no Environmental, Health, and Safety Liabilities with respect to the FSCI Facilities or with respect to any other properties and assets (whether real, personal, or mixed) in which FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships (or any predecessor), has an interest, or at any property geologically or hydrologically adjoining the FSCI Facilities or any such other property or assets. (v) Except for matters covered by the applicable state remediation programs and/or by applicable insurance policies, there has been no Release or, to the knowledge of FSCI, threat of Release, of any Hazardous Materials at or from the FSCI Facilities or, to the knowledge of FSCI, at any other locations where any Hazardous Materials were generated, manufactured, refined, transferred, produced, imported, used, or processed from or by the FSCI Facilities, or from or by any other properties and assets (whether real, personal, or mixed) in which FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships has an interest, or, to the knowledge of the FSCI and FSCI Shareholder, any geologically or hydrologically adjoining property, whether by FSCI, FSG, the Partnership, or any other Person. (vi) FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships have made available to the Company true and complete copies and results of any reports, studies, analyses, tests, or monitoring possessed or initiated by FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships pertaining to Hazardous Materials or Hazardous Activities in, on, or under the FSCI Facilities, or concerning compliance by FSCI, FSG, the Partnership, or any other Person for whose conduct they are or may be held responsible, with Environmental Laws. (s) Toni Agreement. Except as provided in Schedule 2.2(s), that certain letter agreement, by and between Jose P. Barad, as President of F.S. Dairy Plan, Inc., FSCI, and F.S. Stores, Inc., and Roberto Isaias, as President of Robi Dairy Plant, Inc., REW Dairy Investments, Inc., and Toni Gas & Food Stores, Inc., dated April 23, 1999 (the "Toni Agreement") a copy of which has been provided to the Company: (i) has been duly executed and delivered by the parties thereto; (ii) has been approved by all requisite corporate action of the parties thereto; (iii) constitutes a valid and binding obligation of each of the parties thereto, enforceable against each such party in accordance with its terms; and (iv) constitutes the entire agreement among the parties with respect to the transactions contemplated by the Toni Agreement and there have been no oral or written modifications to the Toni Agreement. (t) Material Contracts. Schedule 2.2(t) identifies all material contracts, agreements and other written or oral arrangements to which FSCI, FSG or the Partnership is a party and true, correct and complete copies (with all amendments thereto) thereof have been made available to the Company. "Material" contracts, agreements and arrangements are those that obligate the parties, in the aggregate, to in excess of $50,000 of obligations. With respect to each written arrangement so listed: (i) the written arrangement is legal, valid, binding, enforceable, and in full force and effect, and has not been materially amended or altered; and (ii) FSCI, any subsidiary of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships are not in breach or default, and no event has occurred that, with notice or lapse of time, or both, would constitute a breach or default by the FSCI, any subsidiary of FSCI, FSG or the Partnership or permit a party other than the Company or its subsidiaries to terminate, modify, or accelerate performance under any such written arrangement; and (iii) to FSCI's knowledge, no party other than FSCI, any subsidiary of FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships is in breach or default, and no event has occurred that, with notice or lapse of time, or both, would constitute a breach or default or permit termination, modification, or acceleration, under any such written arrangement. ARTICLE III TRANSACTIONS PRIOR TO CLOSING DATE; COVENANTS Section 3.1 Access to Information Concerning Properties and Records. (a) During the period commencing on the date hereof and ending on the Closing Date, the Company shall, and shall cause each of its subsidiaries to, upon reasonable notice, afford FSCI, and its counsel, accountants and other authorized representatives, full access during normal business hours to the properties, books and records of the Company and its subsidiaries in order that they may have the opportunity to make such investigations as they shall desire of the affairs of the Company and its subsidiaries; such investigation shall not, however, affect the representations and warranties made by the Company in this Agreement. The Company agrees to cause its officers and employees to furnish such additional financial and operating data and other information and respond to such inquiries as FSCI shall from time to time request. (b) During the period commencing on the date hereof and ending on the Closing Date, FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships shall, upon reasonable notice, afford the Company, and its counsel, accountants and other authorized representatives, full access during normal business hours to the properties, books and records of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships in order that it may have the opportunity to make such investigations as it shall desire of the affairs of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships; such investigation shall not, however, affect the representations and warranties made by FSCI in this Agreement. FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships agree to cause their respective officers and employees to furnish such additional financial and operating data and other information and respond to such inquiries as the Company shall from time to time request. Section 3.2 Confidentiality. Information obtained by FSCI and the Company pursuant to Section 3.1 hereof shall be subject to the provisions of the Confidentiality Agreements between the Company and FSCI, each executed during June, 1999. Section 3.3 Conduct of the Business of the Company Pending the Closing Date. The Company agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, as may be required by the Bankruptcy Court in connection with the Chapter 11 Case or Chapter 11 Plan, or otherwise consented to or approved in writing by FSCI, during the period commencing on the date hereof and ending on the Closing Date: (a) The Company and each of its subsidiaries will conduct their respective operations only according to their ordinary and usual course of business and will use their best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients and others having business relationships with them; (b) Neither the Company nor any of its subsidiaries shall (i) make any change in or amendment to its Certificate of Incorporation or By-Laws (or comparable governing documents); (ii) issue or sell any shares of its capital stock or any of its other securities, or issue any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure; (iii) declare, pay or make any dividend or other distribution or payment with respect to, or split, redeem or reclassify, any shares of its capital stock; (iv) enter into any contract or commitment except contracts in the ordinary course of business, including without limitation, any acquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (v) amend any employee or non-employee benefit plan or program, employment agreement, license agreement or retirement agreement, or pay any bonus or contingent compensation, except in each case in the ordinary course of business consistent with past practice prior to the date of this Agreement; (vi) agree, in writing or otherwise, to take any of the foregoing actions; (c) Without limiting the generality of subsection (a), above, the Company shall continue to pay its accounts payable in the ordinary course and in accordance with its regular and usual practices pertaining to timing of payment of such payables; and (d) The Company shall not, and shall not permit any of its subsidiaries to, (i) take any action, engage in any transaction or enter into any agreement that would cause any of the representations or warranties set forth in Section 2.1 hereof to be materially untrue as of the Closing Date, or (ii) purchase or acquire, or offer to purchase or acquire, any shares of capital stock of the Company. Section 3.4 Conduct of the Business of FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships Pending the Closing Date. FSCI agrees that, except as permitted, required or specifically contemplated by, or otherwise described in, this Agreement, or pursuant to alternative means to perform under the Toni Agreement, or otherwise consented to or approved in writing by the Company, during the period commencing on the date hereof and ending on the Closing Date: (a) FSCI will conduct its operations, will not close any stores (except as set forth on schedule 3.4(a)), and will cause FSCI Sub, FSG, FSG Sub, and the Partnerships to conduct their operation, only according to their ordinary and usual course of business and will use its commercially reasonable best efforts to preserve intact their respective business organization, keep available the services of their officers and employees and maintain satisfactory relationships with licensors, suppliers, distributors, clients and others having business relationships with FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships; (b) FSCI shall not and shall ensure that FSCI Sub, FSG, FSG Sub and the Partnerships do not (i) make any change in or amendment to its Certificate of Incorporation or By-Laws or partnership agreement (or comparable governing documents); (ii) issue or sell any shares of its capital stock or any of its other securities, or issue any securities convertible into, or options, warrants or rights to purchase or subscribe to, or enter into any arrangement or contract with respect to the issuance or sale of, any shares of its capital stock or any of its other securities, or make any other changes in its capital structure; (iii) declare, pay or make any dividend or other distribution or payment with respect to, or split, redeem or reclassify, any shares of its capital stock, except that, immediately prior to the Effective Time, the Partnerships may distribute its cash balances (other than funds in the cash registers of the "Walk-In Convenience Stores" (as defined below) as of the close of business on the business day immediately preceding the Effective Time) to the FSCI Shareholder; (iv) enter into any contract or commitment except contracts in the ordinary course of business, including without limitation, any acquisition of a material amount of assets or securities, any disposition of a material amount of assets or securities or release or relinquish any material contract rights; (v) amend any employee or non-employee benefit plan or program, employment agreement, license agreement or retirement agreement, or pay any bonus or contingent compensation, except in each case in the ordinary course of business consistent with past practice prior to the date of this Agreement; or (vi) agree, in writing or otherwise, to take any of the foregoing actions; (c) Without limiting the generality of subsection (a), above, FSCI, FSCI Sub, FSG, FSG Sub, and the Partnerships shall continue to pay their respective accounts payable in the ordinary course and in accordance with its regular and usual practices pertaining to timing of payment of such payables; and (d) FSCI shall not, and shall cause FSCI Sub, FSG, FSG Sub, and the Partnerships not to, take any action, engage in any transaction or enter into any agreement that would cause any of the representations or warranties set forth in Section 2.2 hereof to be materially untrue as of the Closing Date. Section 3.5 Best Efforts. Each of the Company and FSCI shall, and the Company shall cause each of its subsidiaries to and FSCI shall cause each of FSCI Sub, FSG, FSG Sub, and the Partnerships to, cooperate and use their respective commercially reasonable best efforts to take, or cause to be taken, all appropriate action, and to make, or cause to be made, all filings necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including, without limitation, their respective best efforts to obtain, prior to the Closing Date, all licenses, permits, consents, approvals, authorizations, qualifications and orders of governmental authorities and parties to contracts with the Company and its subsidiaries as are necessary for consummation of the transactions contemplated by this Agreement and to fulfill the conditions to the Merger. Section 3.6 HSR Act. The Company and FSCI shall, as soon as practicable, file Notification and Report Forms under the HSR Act with the Federal Trade Commission (the "FTC") and the Antitrust Division of the Department of Justice (the "Antitrust Division") and shall use their respective best efforts to respond as promptly as practicable to all inquiries received from the FTC or the Antitrust Division for additional information or documentation. Section 3.7 Merger Financing. FSCI shall use its best efforts together with HW Partners, L.P. to obtain, prior to the Effective Time, the Merger Financing. The Company and FSCI shall irrevocably commit the proceeds of the Merger Financing, as follows: (a) $17,000,000.00 for payment under the Toni Agreement by FSCI, (b) $3,000,000.00 for payment to the FSCI Shareholder as part of the Merger Consideration, (c) that amount required to make the payments due upon confirmation of the Chapter 11 Plan, and (d) the balance thereof for working capital or other corporate uses of the Surviving Corporation. Section 3.8 Plan Covenants. Unless and until this Agreement is terminated by FSCI or the Company or the Bankruptcy Court fails to confirm the Chapter 11 Plan (after giving effect to whatever amendments thereto FSCI may agree), the Company will not actively solicit any Person (other than FSCI) for the purpose of pursuing a sale or merger transaction with the Company or its subsidiaries or the assets of any of them. Further, the Company agrees to provide FSCI with prompt written notice of any offer or expression of interest (written or otherwise) it receives from any third party for any such transaction, and to include in such notice the identity of the Person expressing such interest and a description of the transaction proposed by such Person. Unless and until this Agreement is terminated by FSCI or the Company, the Company agrees: (a) to actively and with best efforts support and not directly or indirectly oppose the confirmation of the Chapter 11 Plan; (b) not to amend or modify the Chapter 11 Plan without the written consent of FSCI; (c) not to file, sponsor, or promote any plan or reorganization or liquidation other than the Chapter 11 Plan; and (d) not to seek dismissal of the Chapter 11 Case or conversion of the Chapter 11 Case to a case under Chapter 7 of the Bankruptcy Code. Section 3.9 Casualty Stores. There are two (2) convenience stores that have been affected by casualty (each a "Casualty Store" and, collectively, "Casualty Stores"). The Gas Partnership shall have the right to either (a) rebuild the Casualty Stores as it sees fit, or (b) transfer the Casualty Stores to the Drive-Thru Partnership. The Surviving Corporation shall make this election by written notice to FSG within three (3) months after the Effective Time. ARTICLE IV CONDITIONS PRECEDENT TO MERGER Section 4.1 Conditions Precedent to Obligations of UPC, UPC Merger Sub and FSCI. The respective obligations of FSCI, on the one hand, and the Company and UPC Merger Sub, on the other hand, to effect the Merger are subject to the satisfaction or waiver (subject to applicable law) at or prior to the Effective Time of each of the following conditions: (a) Effectiveness of the Chapter 11 Plan. All conditions precedent to the effectiveness of the Chapter 11 Plan shall have been satisfied or waived. (b) The Confirmation Order. The Confirmation Order shall have been entered in a form and content acceptable to FSCI and the Company, shall not have been modified, amended, dissolved, revoked or rescinded, shall be in full force and effect on the Closing Date, and, without the necessity of any further action or proceedings by the Company, any of its subsidiaries or the Bankruptcy Court, shall have, to the extent specified in the Plan, (i) on or prior to the Closing Date, effected a full and complete discharge and release of, and thereby extinguished, all debts of the Company and each of its subsidiaries (to the fullest extent possible under Section 1141(d)(1) of the Bankruptcy Code) (ii) extinguished all Existing Shares and Existing Equity Rights, and (iii) at and as of the Closing Date, authorized the issuance of New UPC Common Stock and New UPC Preferred Stock in accordance with the Plan. (c) Government Consents. All government consents necessary for the consummation of the Merger shall have been received (except for government consents, the absence of which will, alone and in the aggregate, not have a material adverse effect on the Condition of the Surviving Corporation either on or after the Closing) and any waiting period (and any extension thereof) with respect to the HSR Act shall have expired or been terminated. (d) Material Adverse Effect. Since the date hereof, there shall not have been any material adverse change with respect to the Company and its subsidiaries, FSCI, FSCI Sub, FSG, FSG Sub, or the Partnerships or their respective assets. (e) Due Diligence. FSCI and the Company shall be reasonably satisfied with the results of their due diligence investigations; (f) Injunction. No preliminary or permanent injunction or other order shall have been issued by any court or by any governmental or regulatory agency, body or authority that prohibits the consummation of the Merger and the transactions contemplated by this Agreement and that is in effect at the Effective Time; (g) Statutes. No statute, rule, regulation, executive order, decree or order of any kind shall have been enacted, entered, promulgated or enforced by any court or governmental authority that prohibits the consummation of the Merger or has the effect of making the issuance or the purchase of the Merger Stock illegal. (h) Merger Financing. The Merger Financing shall have been obtained, all conditions to the full funding of the Merger Financing shall have been satisfied or waived, and the proceeds of the Merger Financing shall have been irrevocably committed as provided in Section 3.7 of this Agreement. (i) Employment Agreements. The Company shall have entered into Employment Agreements with Jose Bared and Carlos Bared. Section 4.2 Conditions Precedent to Obligations of FSCI. The obligations of FSCI and FSCI Shareholder to effect the Merger are also subject to the satisfaction or waiver, at or prior to the Effective Time, of each of the following conditions: (a) Accuracy of Representations and Warranties. All representations and warranties of the Company and UPC Merger Sub contained herein shall be true and correct in all material respects as of the date hereof and at and as of the Closing, with the same force and effect as though made on and as of the Closing Date, except for representations and warranties made expressly as of a prior date, that shall continue to be true and correct in all material respects as of such prior date. (b) Performance by Company. The Company and UPC Merger Sub shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants and conditions, contained in this Agreement to be performed or complied with by it prior to the Closing Date; (c) License Agreement. Both the Company and FSCI shall have executed and delivered a License Agreement, substantially in the form attached hereto as Exhibit E, with respect to the Company's management of FSG from and after the Effective Time; and (d) Management Agreement. Both the Company and FSCI shall have executed and delivered a Management Agreement, substantially in the form attached hereto as Exhibit D, with respect to the Company's management of FSG from and after the Effective Time; and (e) Resignations of Officers and Directors. On the Closing Date, all existing officers and directors of the Company and its subsidiaries shall have tendered their respective resignations. (f) Other Transactions. The transactions contemplated by the Toni Agreement shall have been performed in their entirety and all consideration due there under shall have been paid. (g) Employment Agreements; UPET Related Party Transactions. Those contracts or other arrangements identified in Schedule 4.2(f) shall have been terminated (or other arrangements reasonably satisfactory to FSCI shall have been concluded with respect thereto) and those releases identified in Schedule 4.2(f) shall have been executed and delivered by the appropriate parties identified in Schedule 4.2(f). (h) Required Approvals. The Company shall have secured or properly applied for all necessary consents, approvals, permits, or licenses necessary to allow the Surviving Corporation to continue, both on and after the Closing Date, the sale of all merchandise sold by the Company's stores on the date of this Agreement, including, without limitation, gasoline and petroleum products (both as branded and unbranded products), any products offered for sale under or pursuant to any franchise agreement or license, tobacco products, alcoholic beverages, money orders, and state lottery tickets. (i) Distributor Agreement. The Company or FSCI and TCS Systems, Inc. shall have negotiated an agreement for the assignment to the Company of the Exxon Distributorship Agreement currently held by TCS Systems, Inc. (j) Good Standing. All companies identified in Schedule 2.1(a) shall be in good standing in the jurisdiction in which such company was formed. Section 4.3 Conditions Precedent to Obligation of the Company and UPC Merger Sub. The obligations of the Company and UPC Merger Sub to effect the Merger is also subject to the satisfaction or waiver, at or prior to the Effective Time, of each of the following conditions: (a) Accuracy of Representations and Warranties. All representations and warranties of FSCI contained herein shall be true and correct in all material respects as of the date hereof and at and as of the Closing, with the same force and effect as though made on and as of the Closing Date, except for representations and warranties made expressly as of a prior date, that shall continue to be true and correct in all material respects as of such prior date. (b) Performance by FSCI. FSCI shall have performed in all material respects all obligations and agreements, and complied in all material respects with all covenants and conditions, contained in this Agreement to be performed or complied with by it prior to the Closing Date; (c) License Agreement . The Company shall have received an executed original copy of a license agreement, substantially in the form of Exhibit E hereto, with respect to use of the "Farm Store" name; (d) Required Approvals. FSCI shall have used its best effort to secure all necessary consents, approvals, permits, or licenses necessary to allow the Surviving Corporation and the Partnerships, as appropriate, to continue, both on and after the Closing Date, the sale of all merchandise sold by the Walk-In Convenience Stores and the Drive-Thrus on the date of this Agreement, including, without limitation, gasoline and petroleum products (both as branded and unbranded products), any products offered for sale under or pursuant to any franchise agreement or license, tobacco products, alcoholic beverages, money orders, and state lottery tickets; provided, however, that FSCI shall on or before the Effective Date, secure all landlord consents necessary with respect to that certain Convenience Store number 2651 located in Osceola County, Florida (the "Required Consent Store") or deliver to the Company $450,000. In the event of a failure to secure, on or before the Effective Time, any necessary consents, approvals, permits, or licenses with respect to the transfer of any Convenience Store other than the Required Consent Store (each a "Non-Compliant Store"), then, as of the Effective Time, the Surviving Corporation shall assume all beneficial interests in and to such Non-Compliant Store, including all benefits and burdens related to ownership of such Non-Compliant Store, but legal title to such Non-Compliant Store shall be retained by the Drive-Thru Partnership and not be conveyed to the Surviving Corporation until such time, not to exceed sixty (60) days from and after the Effective Date, as the Drive-Thru Partnership, at the Drive-Thru Partnership's expense, shall have obtained such necessary consents, approvals, permits, or licenses with respect to such Non-Compliant Store. During such time, the Drive-Thru Partnership shall operate any Non-Compliant Store solely for the benefit of and without any management fee to the Surviving Corporation. If, upon the expiration of the sixty-day period after the Effective Date, the Drive-Thru Partnership has not obtained the required consents with respect to a Non-Compliant Store, then FSE shall initiate litigation and bear all costs related to obtaining such consents. (e) Ownership of Assets. Subject to the provisions of Section 4.3(d) and as described on schedule 3.4(a), on the Effective Date and immediately prior to the Effective Time: (i) FSCI shall own (A) ten percent (10%) of the issued and outstanding common stock of FSG, (B) an agreement, subject to approval by the Board of Directors of the Company, to purchase up to an additional fifteen percent (15%) of the issued and outstanding common stock of FSG, under a Purchase Agreement in substantially the form attached as Exhibit F, (C) eleven (11) retail convenience stores that do not sell gasoline and petroleum products ("Convenience Stores"), and (D) all issued and outstanding stock of FSCI Sub; (ii) FSCI and FSCI Sub will own all outstanding interests in the Gas Partnership; (iii) The Gas Partnership shall own or lease, (A) sixty-seven (67) retail convenience stores that also sell gasoline and petroleum products ("Gas Stores"), (B) nine (9) parcels of real estate on which Walk-In Convenience Stores are situated, (C) two (2) Casualty Stores, and (D) inventory (at customary levels used in the operation of the Walk-In Convenience Stores), store fixtures and equipment, merchandise, accounts and general intangibles used in the operation of the Walk-In Convenience Stores at that time; (iv) FSG and FSG Sub shall own all outstanding interests in the Drive-Thru Partnership; and (v) The Drive-Thru Partnership shall own or lease (A) all one hundred eight (108) "drive-thru" retail convenience stores operated by the Drive-Thru Partnership on the date of this Agreement ("Drive-Thrus"), (B) eleven (11) retail convenience stores that do not sell gasoline or petroleum products (together with the Convenience Stores and the Gas Stores, the "Walk-In Convenience Stores"), and (C) all right, title, and interest in and to the trade names, trademarks, service marks, trade dress, logos, emblems relating to the name "Farm Stores." (f) Closing Under Toni Agreement. The closing on the purchase of interests in the Partnerships under the Toni Agreement shall have occurred immediately prior to the Effective Time. ARTICLE V TERMINATION AND ABANDONMENT Section 5.1 Termination. This Agreement may be terminated and the transactions contemplated hereby may be abandoned, at any time prior to the Effective Time: (a) by mutual written consent of the Company and UPC Merger Sub, on the one hand, and of FSCI and FSCI Shareholder, on the other hand; or (b) by FSCI and FSCI Shareholder, on the one hand, or the Company and UPC Merger Sub, on the other hand, if the Effective Time shall not have occurred by October 15, 1999 or there has been a material breach of any representation, warranty, obligation, covenant, agreement or condition set forth in this Agreement on the part of the other party; or (c) by FSCI if the Chapter 11 Case is dismissed or converted to a case under Chapter 7 of the Bankruptcy Code. Section 5.2 Effect of Termination. In the event of the termination of this Agreement pursuant to Section 5.1 hereof by FSCI and FSCI Shareholder, on the one hand, or the Company and UPC Merger Sub, on the other hand, written notice thereof shall forthwith be given to the other party or parties specifying the provision hereof pursuant to which such termination is made, and this Agreement shall become void and have no effect, and there shall be no liability hereunder on the part of FSCI, FSCI Shareholder, the Company, or UPC Merger Sub, except that Sections 3.2 and 6.1 hereof shall survive any termination of this Agreement. Nothing in this Section 5.2 shall relieve any party to this Agreement of liability for breach of this Agreement. ARTICLE VI MISCELLANEOUS Section 6.1 Fees and Expenses. All costs and expenses incurred in connection with this Agreement and the consummation of the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, except for HSR fees payable by the Company as an acquiring person and the commitment fee payable to Hamilton Bancorp, Inc. Section 6.2 Representations and Warranties. The respective representations and warranties of the Company and UPC Merger Sub, on the one hand, and FSCI, on the other hand, contained herein or in any certificates or other documents delivered prior to or at the Closing shall not be deemed waived or otherwise affected by any investigation made by any party. However, this Agreement sets forth exclusively all of the parties' representations, warranties, covenants and agreements regarding the subject matter hereof, and no representations or statements of any party that is not included in this Agreement has been relied upon or shall have any legal effect. Except for the representations and warranties of the parties in this Agreement, each party has determined to enter into and consummate this Agreement based on its own independent investigation. Each and every such representation and warranty in this Agreement shall terminate as of, and not survive the Closing hereunder. This Section 6.2 shall have no effect upon any other obligation of the parties hereto, whether to be performed before or after the Effective Time. Section 6.3 Extension; Waiver. At any time prior to the Effective Time, the parties hereto, by action taken by or on behalf of the respective Boards of Directors of the Company, UPC Merger Sub or FSCI, may (i) extend the time for the performance of any of the obligations or other acts of the other parties hereto, (ii) waive any inaccuracies in the representations and warranties contained herein by any other applicable party or in any document, certificate or writing delivered pursuant hereto by any other applicable party, or (iii) waive compliance with any of the agreements or conditions contained herein. Any agreement on the part of any party to any such extension or waiver shall be valid only if set forth in an instrument in writing signed by such party. Section 6.4 Notices. All notices, requests, demands, waivers and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given if delivered in person or mailed, certified or registered mail with postage prepaid, or Federal Express or other recognized overnight courier delivery service or sent by telex, telegram or telecopier, as follows: (a) if to the Company, to: United Petroleum Corporation 2620 Mineral Springs Road Suite A Knoxville, TN 37917 Attention: President Fax No.: (423)688-3463 with a copy (that will not constitute notice) to: Young Conaway Stargatt & Taylor, LLP Rodney Square North, 11th Floor 1100 North Market Street P.O. Box 391 Wilmington, DE 19899-0391 Attention: Joel A. Waite, Esquire Fax No.: (302)571-1253 (b) if to the UPC Merger Sub, to: c/o United Petroleum Corporation 2620 Mineral Springs Road Suite A Knoxville, TN 37917 Attention: President Fax No.: (423)688-3463 with a copy (that will not constitute notice) to: Young Conaway Stargatt & Taylor, LLP Rodney Square North, 11th Floor 1100 North Market Street P.O. Box 391 Wilmington, DE 19899-0391 Attention: Joel A. Waite, Esquire Fax No.: (302)571-1253 (c) if to FSCI, to: F.S. Convenience Stores, Inc. 5800 N.W. 74th Ave. Miami, FL 33166 Attention: President Fax No.: (305) 592-2582 with a copy (that will not constitute notice) to: Berger Davis & Singerman, P.A. Suite 2950 200 South Biscayne Boulevard Miami, Florida 33131 Attention: Daniel Lampert, Esquire Fax No.: (305) 714-4340 or to such other Person or address as any party shall specify by notice in writing to each of the other parties. All such notices, requests, demands, waivers and communications shall be deemed to have been received on the date of delivery, or in the case of overnight courier service, the next business day, and unless if mailed, in which case on the third business day after the mailing thereof except for a notice of a change of address, that shall be effective only upon receipt thereof. Section 6.5 Entire Agreement. This Agreement and the schedules and other documents referred to herein or delivered pursuant hereto, collectively contain the entire understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior representations, warranties, agreements and understandings, oral and written, with respect thereto. The information disclosed in any one schedule to this Agreement shall be deemed to be disclosed for purposes of each and every other schedule attached to, or representation made in, this Agreement, provided that proper cross-reference is made to the appropriate schedule setting forth such disclosure information. Section 6.6 Binding Effect; Benefit; Assignment. This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto without the prior written consent of the other parties. Nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto or their respective successors and permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement. This Agreement is executed and delivered by each party solely in a corporate capacity. Section 6.7 Amendment and Modification. Subject to applicable law, including but not limited to the requirements of the Bankruptcy Code and the orders of the Bankruptcy Court, this Agreement may be amended, modified and supplemented in writing by the parties hereto in any and all respects before the Effective Time, by action taken by the respective Boards of Directors of FSCI, UPC Merger Sub and the Company (or by the respective officers authorized by such Boards of Directors). Section 6.8 Further Actions. Each of the parties hereto agrees that, subject to its legal obligations, it will use its best efforts to fulfill all conditions precedent specified herein, to the extent that such conditions are within its control, and to do all things reasonably necessary to consummate the transactions contemplated hereby. Section 6.9 Headings. The descriptive headings of the several Articles and Sections of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement. Section 6.10 Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, and all of which together shall be deemed to be one and the same instrument. Section 6.11 Applicable Law. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflict of laws rules thereof. Section 6.12 Severability. If any term, provision, covenant or restriction contained in this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions contained in this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. Section 6.13 Definitions. Capitalized terms used throughout this Agreement shall have the meanings ascribed to them in this Agreement. (a) Unless otherwise defined in the text of this Agreement, capitalized terms used in this Agreement shall have the following meanings: "Closing" means the consummation of the transactions contemplated by this Agreement on the Closing Date. "Company Disclosure Schedule" means the disclosure schedule prepared by the Company that is attached to this Agreement and incorporated by reference herein. "Confirmation Order" means a final order entered by the Bankruptcy Court confirming the Chapter 11 Plan. "Disclosure Statement" means the disclosure statement dated July 23, 1999 filed with the Bankruptcy Court on behalf of the Company and in support of the Chapter 11 Plan. "Environmental Law" means any federal, state, local or foreign law (including common law), statute, code, ordinance, rule, regulation or other requirement relating in any way to the environment, natural resources, or public or employee health and safety and includes, without limitation, the Comprehensive Environmental Response, Compensation, and Liability Act ("CERCLA"), 42 U.S.C. ss. 9601 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801 et seq., the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. ss. 136 et seq.., the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. ss. 6901 et seq.., the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et seq., the Clean Air Act, 42 U.S.C. ss. 7401 et seq., the Clean Water Act, 33 U.S.C. ss. 1251 et seq., the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq.., and the Oil Pollution Act of 1990, 33 U.S.C. ss. 2701 et seq., as such laws have been amended or supplemented, and the regulations promulgated pursuant thereto, and all analogous state and local statutes. "Environmental, Health, and Safety Liabilities" means any liability arising out of violation of an Environmental Law. "Existing Equity Rights" means options, warrants, or rights of any nature to receive any form of capital stock of the Company other than New UPC Common Stock or New UPC Preferred Stock. "Existing Shares" means all shares of capital stock of the Company other than New UPC Common Stock or New UPC Preferred Stock. "FSCI Disclosure Schedule" means the disclosure schedule prepared by FSCI that is attached to this Agreement and incorporated by reference herein. "Hazardous Activity" means any activity in which Hazardous Materials are used. "Hazardous Material" means any substance, material or waste which is regulated by any Governmental Authority of the United States, the Applicable Foreign Jurisdiction or other national government, including, without limitation, any material, substance or waste which is defined as a "hazardous waste," "hazardous material," "hazardous substance," "extremely hazardous waste," "restricted hazardous waste," "contaminant," "toxic waste" or "toxic substance" under any provision of Environmental Law, which includes, but is not limited to, petroleum, petroleum products, asbestos, urea formaldehyde and polychlorinated biphenyls. "Merger Financing" means a credit facility that will provide proceeds of not less than $20,000,000 and not more than $23,000,000 that will be (i) secured by the Walk-In Convenience Stores, (ii) not require any personal guarantees of any shareholder of the Company, (iii) upon such other terms and conditions as shall be acceptable by FSCI and the Company, and (iv) after the Effective Time, will be an obligation of the Surviving Corporation. "Person" means any natural person, corporation, general partnership, limited partnership, limited liability company, business trust, or other juridical entity. "Release" means any release, spill, emission, leaking, pumping, pouring, dumping, emptying, injection, deposit, disposal, discharge, dispersal, leaching or migration on or into the indoor or outdoor environment or into or out of any property. (b) Where any provision contained in this Agreement is expressly qualified by reference to "best knowledge," "knowledge," "known to" or similar qualification, the same shall mean the knowledge of any officer, director, or partner of a party. (Signature Page Follows) IN WITNESS WHEREOF, each of FSCI and the Company have caused this Agreement to be executed by their respective officers thereunto duly authorized, all as of the date first above-written. Attest: F.S. CONVENIENCE STORES, INC., a Florida corporation By: Secretary Name: Title: Attest: UNITED PETROLEUM CORPORATION, a Delaware corporation By: Secretary Name: Title: Attest: UNITED PETROLEUM SUBSIDIARY, INC., a Delaware corporation By: Witness Name: Title: EX-99.4 5 LOAN AGREEMENT LOAN AGREEMENT LOAN AGREEMENT dated November 3, 1999 among UNITED PETROLEUM CORPORATION, a corporation organized under the laws of the State of Delaware ("UPET"), UNITED PETROLEUM GROUP, INC., a corporation organized under the laws of the State of Delaware and formerly known as United Petroleum Subsidiary, Inc. ("UPET Group"), F.S. CONVENIENCE STORES, INC., a corporation organized under the laws of the State of Florida ("F.S. Stores"), F.S. GAS SUBSIDIARY, INC., a corporation organized under the laws of the State of Florida ("F.S. Gas"), F.S. NON-GAS SUBSIDIARY, INC., a corporation organized under the laws of the State of Florida ("F.S. Non-Gas"), REWJB GAS INVESTMENTS, a Florida general partnership ("REWJB Gas"), JACKSON-UNITED PETROLEUM CORPORATION, a corporation organized under the laws of the Commonwealth of Kentucky ("Jackson"), CALIBUR SYSTEMS, INC., a corporation organized under the laws of the State of Tennessee ("Calibur"), (UPET, UPET Group, F.S. Stores, F.S. Gas, F.S. Non-Gas, REWJB Gas, Jackson and Calibur, collectively, "Borrowers") and HAMILTON BANK, N.A., a national banking association ("Bank"). WHEREAS, Borrowers have requested the Bank to make available to Borrowers a US$4,233,000 Revolving Credit Facility, a US$8,300,000 Mortgage Loan Facility and a US$10,467,000 Term Loan Facility, all upon and subject to the terms and conditions of this Agreement; ACCORDINGLY, the parties agree as follows: ARTICLE I: DEFINITIONS In this Agreement: 1.1 "Banking Day" means any day other than a Saturday, Sunday or legal holiday on which banks are authorized or required to be closed in Miami, Florida and New York, New York, and, with respect to LIBOR Loans, a day on which banks also are open and dealing in Dollars in the London, England interbank market. 1.2 "Borrowing Base" means the Dollar amount determined in accordance with Section 2.1(c). 1.3 "Closing Date" means November 3, 1999 or such other date for closing the Loans as agreed to by the Bank and UPET. 1.4 "Collateral" means the assets of Borrowers described in Article VIII assigned to the Bank, mortgaged to the Bank or in which a security interest is granted to the Bank to secure the Loans and other Liabilities of Borrowers to the Bank. 1.5 "Collateral Agreements" means the Lease Assignments, the Mortgages, the Security Agreements, the Pledge Agreement and the collateral assignments of the Purchase Agreement and the Management Agreement. 1.6 "Commitments" means the obligations of the Bank to make the Revolving Credit Loans, the Mortgage Loan and the Term Loan to Borrowers. 1.7 "Documents" means this Agreement, the Notes and the Collateral Agreements. 1.8 "Dollars" and "US$" means lawful money of the United States of America. Any reference in this Agreement to payment in "Dollars" or "US$" means payment in immediately available Dollar funds. 1.9 "Drawing Date" means any date on which a Revolving Credit Loan is made by the Bank to a Borrower hereunder. 1.10 "Eurocurrency Reserve Requirements" means, for any day, the aggregate (without duplication) of the rates (expressed as a decimal fraction) of any reserve requirements in effect on such day (including, without limitation, basic, supplemental, marginal and emergency reserves under any regulations of the Board of Governors of the Federal Reserve System or other Governmental Authority having jurisdiction with respect thereto) dealing with reserve requirements prescribed for Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in Regulation D of such Board) maintained by a member bank of such system. 1.11 "Event of Default" means any of the events mentioned in Article X of this Agreement. 1.12 "GAAP" means generally accepted accounting principles applied on a basis consistent with those used in Borrowers' financial statements. 1.13 "Governmental Authority" means any nation or government, any state or other political subdivision thereof and any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government. 1.14 "Indebtedness" means any item which would properly be included as a liability on the liability side of a balance sheet prepared in accordance with GAAP as of any date as of which "Indebtedness" is to be determined. 1.15 "Lease Assignments" means the instruments of assignment of the Leases to the Bank. 1.16 "Leases" means the lease agreements by which Borrowers hold the leasehold interests described in Schedule 1.16 attached hereto, and any lease agreement by which any Borrower hereafter holds a leasehold interest meeting the requirements of Section 6.10. 1.17 "Liabilities" means all obligations of borrowers under this Agreement and the Notes and all other obligations of Borrowers to the Bank, its successors and assigns, of every kind, nature and description, direct or indirect, secured or unsecured, joint and several, absolute and contingent, due or to become due, now existing or hereafter arising, regardless of how they arose or by what instrument or whether evidenced by any agreement or instrument. "Liabilities" includes obligations to perform acts and to refrain from taking action as well as obligations to pay money. 1.18 "LIBOR" means in respect of each LIBOR Interest Period, the rate per annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) quoted on Reuters International System's "LIBO" page at approximately 11:00a.m. London time on the day two (2) Banking Days before the beginning of the LIBOR Interest Period for the offering by leading banks in the London interbank market of Dollar deposits for the term of such LIBOR Interest Period and in amounts comparable to the principal amount of the LIBOR Loan scheduled to be outstanding for the LIBOR Interest Period. 1.19 "LIBOR Determination Date" means the last Banking Day of each LIBOR Interest Period. 1.20 "LIBOR Interest Period" means each successive period of time used to determine the rate of interest applicable to the principal of a LIBOR Loan. The first LIBOR Interest Period of a LIBOR Loan shall commence on the date specified by UPET for the commencement of the LIBOR Loan and end on its first LIBOR Determination Date, and each subsequent LIBOR Interest Period shall commence on the LIBOR Determination Date for the preceding LIBOR Interest Period and end on the next succeeding LIBOR Determination Date. Except as otherwise provided herein, LIBOR Interest Periods shall be six (6) months for the LIBOR Mortgage Loan and one (1) month for a LIBOR Revolving Credit Loan. If any LIBOR Determination Date falls on a day which is not a Banking Day, it shall be adjusted and determined in accordance with the practices of the offshore Dollar interbank markets as from time to time in effect, provided, however, that the last LIBOR Interest Period shall end no later than the date specified by UPET for conversion of such LIBOR Loan into a Prime Rate Loan, the fifth (5th) anniversary of the Closing Date or the date all amounts outstanding hereunder become due whether by acceleration or otherwise, as the case may be. 1.21 "LIBOR Revolving Credit Loan", "LIBOR Mortgage Loan" and "LIBOR Loans" means a Revolving Credit Loan or the Mortgage Loan or both, respectively, at any time during which interest thereon is calculated with reference to LIBOR. 1.22 "Loans" means the Revolving Credit Loans, the Mortgage Loan and the Term Loan. 1.23 "Management Agreement" means the Management Agreement to be entered into between UPET Group and Farm Stores Grocery, Inc. 1.24 "Maturity Date" means the fifth anniversary (5th) of the Closing Date, but in no event later than October 30, 2004. 1.25 "Merger Plan" means the Agreement and Plan of Merger dated September 29, 1999 among F.S. Stores, UPET and UPET Group and joined for certain limited purposes by Farm Stores Grocery, Inc., as the same may be amended from time to time. 1.26 "Mortgage Loan" means the term loan described in Section 2.2. 1.27 "Mortgages" means the first mortgages or deeds of trust in favor of or for the benefit of the Bank on the Owned Real Properties. 1.28 "Notes" means the joint and several promissory notes of Borrowers evidencing the Loans in substantially the form of Exhibit A attached hereto. 1.29 "Owned Real Properties" means the real properties owned by Borrowers. Owned Real Properties owned by Borrowers on the Closing Date are described in Schedule 1.29 attached hereto. 1.30 "Person" means an individual, partnership, corporation, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature. 1.31 "Pledge Agreements" means the Pledge Agreements pledging the shares of Farm Stores Grocery, Inc. owned by one or more Borrowers and described in Section 8.3 to the Bank in substantially the form of Exhibit B attached hereto. 1.32 "Prime Rate" means the Dollar prime commercial rate as publicly announced from time to time by Citibank, N.A. as its "prime rate". 1.33 "Prime Rate Loans" means the Term Loan and a Revolving Credit Loan or the Mortgage Loan (or any portion thereof) or both, respectively, at any time during which interest thereon is calculated with reference to Prime Rate. 1.34 "Purchase Agreement" means the Purchase Agreement to be entered into between UPET Group and Farm Stores Grocery, Inc. granting UPET Group an option to purchase shares of Farm Stores Grocery, Inc. 1.35 "Requirement of Law" means, as to any Person, the Certificate of Incorporation and By-Laws or other organization or governing documents of such Person and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject. 1.36 "Revolving Credit Loans" means the revolving loans described in Section 2.1. 1.37 "Security Agreements" means the security agreements executed by each of the Borrowers granting the Bank a first security interest in all of the Borrower's personal property, each in substantially the form of Exhibit C hereto. 1.38 "Term Loan" means the term loan described in Section 2.3. 1.39 "Year 2000 Compliant" means that the relevant party's computers, computer systems and codes (i) will not fail to accurately and properly read, process, perform mathematical calculations, store, sort, distinguish, recognize, accept or interpret any data containing date information prior to, during and after the year 2000, (ii) will not fail to accurately and properly read and process the fact that the year 2000 is a leap year, (iii) will accurately and properly read and process so-called "magic dates" such as the date "9/9/99" or any other date field data used by the party to signify information other than the date and (iv) will be compatible with any other party's computer system as to Year 2000 Compliant matters with respect to circumstances described in (i) - (iii) above. ARTICLE II: THE LOANS 2.1 Revolving Credit Loans. (a) Drawdowns. The Bank agrees, on the terms and conditions set forth herein and upon at least two (2) Banking Days' prior notice from UPET, to make Revolving Credit Loans jointly and severally available to Borrowers in the aggregate principal amount not at any time exceeding the lesser of the Borrowing Base, as determined in subsection (c) below, or US$4,233,000. The notice from UPET shall specify whether the Revolving Credit Loan is to be a Prime Rate Loan or a LIBOR Loan, the Drawing Date of the Loan and the account at the Bank of a Borrower to which the Loan is to be credited and shall include or be accompanied by a certificate setting forth the current calculation of the Borrowing Base. (b) Repayment. Borrowers shall have the right to repay in whole or in part without penalty or premium Prime Rate Revolving Credit Loans at any time and LIBOR Revolving Credit Loans on LIBOR Determination Dates for the LIBOR Revolving Credit Loans being repaid. Any such repayments of a LIBOR Revolving Credit Loan also shall be upon at least two (2) Banking Days prior notice to the Bank. Borrowers shall have the right prior to the Maturity Date, or one (1) month prior to the Maturity Date in the case of a LIBOR Revolving Credit Loan, to reborrow as provided in this Section 2.1, provided, that, all outstanding Revolving Credit Loans shall be due and payable jointly and severally by the Borrowers on the Maturity Date. If at any time the aggregate principal amount of outstanding Revolving Credit Loans shall be greater than the Borrowing Base, Borrowers immediately shall repay Revolving Credit Loans in an amount sufficient to reduce the aggregate principal amount of outstanding Revolving Credit Loans to less than the Borrowing Base. Repayments shall be accompanied by payment of accrued interest on the amount repaid to the date of repayment and, in the case of any repayment of a LIBOR Revolving Credit Loan on a date other than its LIBOR Determination Date, any amount required by Section 4.4 hereof. (c) Borrowing Base. Until the first anniversary of the Closing Date, the Borrowing Base for Revolving Credit Loans shall be at any time an amount equal to the sum of eighty percent (80%) of Borrowers' eligible accounts receivable plus eighty percent (80%) of Borrowers' eligible inventory. Thereafter the Borrowing Base for Revolving Credit Loans shall be at any time an amount equal to the sum of eighty percent (80%) of Borrowers' eligible accounts receivable plus seventy percent (70%) of Borrowers' eligible inventory. Eligible accounts receivable are non-related accounts of any borrower (i.e., accounts due from parties not a Borrower or affiliated with any Borrower), for which there are no contra accounts, that are outstanding for up to 60 days from due date and otherwise complying with the representations and warranties and other terms and conditions of the Security Agreements. Any account with more than 50% of its balance past due more than 60 days will be deemed ineligible in its entirety. Eligible inventory is inventory of any Borrower complying with the representations and warranties and other terms and conditions of the Security Agreements and excludes the amount of any reserve, for obsolescence or otherwise, placed against such inventory on the financial statements of Borrowers. The Bank retains the right from time to time to establish standards of eligibility and reserves against availability in its sole but reasonable discretion. 2.2 Mortgage Loan. The Bank agrees, on the terms and conditions set forth herein, to make the Mortgage Loan to Borrowers in the principal amount of US$8,300,000 on the Closing Date. The Mortgage Loan shall be repayable jointly and severally by Borrowers in monthly level principal and interest payments based upon a fifteen (15) year amortization schedule (readjusted upon any change in interest rate to reflect such change in interest rate) and a balloon payment on the Maturity Date of all amounts then outstanding under the Mortgage Loan. Notwithstanding the foregoing, in no event shall the principal amount of the Mortgage Loan exceed eighty percent (80%) of the appraised value of the Owned Real Properties as set forth in the appraisals described in Article IX. 2.3 Term Loan. The Bank agrees, on the terms and conditions set forth herein, to make the Term Loan to Borrowers in the principal amount of US$10,467,000 on the Closing Date. The Term Loan shall be repayable jointly and severally by Borrowers beginning thirteen (13) months after the Closing Date in equal monthly principal payments based upon a six (6) year amortization schedule and a balloon payment on the Maturity Date of all amounts then outstanding under the Term Loan. Notwithstanding the foregoing or any other conflicting or inconsistent provision herein, if the original principal amount of the Mortgage Loan is less than US$8,300,000, the original principal amount of the Term Loan, at the option of UPET, may be increased by up to US$750,000 of the amount of such reduction in the Mortgage Loan, provided, however, that the aggregate principal amounts of the Mortgage Loan and the Term Loan shall not exceed US$18,767,000. 2.4 Interest. Borrowers jointly and severally shall pay interest on the unpaid principal amount of the Loans from the date made available by the Bank to a Borrower until maturity as follows: (a) Revolving Credit Loans shall bear interest at the option of UPET at rates per annum equal to (i) the sum of Prime Rate plus one percent (1.0%) or (ii) the sum of three and seven-eighths percent (3.875%) plus LIBOR. Any change in the Prime Rate shall take effect immediately with respect to interest on Prime Rate Revolving Credit Loans. Any Prime Rate Revolving Credit Loan may be converted into a LIBOR Revolving Credit Loan upon two (2) Banking Days prior notice by UPET to the Bank. Any LIBOR Revolving Credit Loan may be converted on any LIBOR Determination Date for such LIBOR Revolving Credit Loan into a Prime Rate Revolving Credit Loan upon two (2) Banking Days prior notice by UPET to the Bank. (b) The Mortgage Loan shall bear interest at the option of UPET at rates per annum equal to (i) the sum of Prime Rate plus one and one-eighths percent (1.125%) or (ii) the sum of four percent (4.0%) plus LIBOR. At least two (2) Banking Days prior to each six (6) month anniversary of the Closing Date, UPET shall advise the Bank whether the interest rate on the Mortgage Loan for the following six (6) month period shall be computed with reference to the Prime Rate in effect on the first day of such following six (6) month period or LIBOR for such following six (6) month period. If the Prime Rate option is selected, the interest rate for the entire six (6) month period shall be based upon the Prime Rate in effect on the first day of the six (6) month period. (c) The Term Loan shall bear interest at a rate per annum equal to the sum of Prime Rate plus three percent (3.0%). Any change in the Prime Rate shall take effect immediately. (d) All interest shall be computed on the basis of the actual number of days elapsed in a 360 day year and shall be payable monthly in arrears and on payment in full of the Loans. Borrowers agree that any amount of principal of any of the Loans, and to the extent permitted by law interest, that is not paid on its due date (whether at stated maturity, by acceleration or otherwise) shall bear interest from such due date until paid in full at a rate per annum equal to the rate provided in (a) - (c) above, as the case may be, plus five percent (5.0%), provided that such interest rate shall not at any time exceed the maximum rate allowed by law. Default interest shall be payable on demand. 2.5 Prepayment of the Mortgage Loan and the Term Loan. (a) Mandatory Prepayments. (i) The net cash proceeds from the sale of any non-real estate assets (other than (1) sales of inventory in the ordinary course of business, (2) sales of assets to the extent the proceeds are applied to the repair or replacement of Collateral and (3) immaterial sales not exceeding US$50,000 in any fiscal year of Borrowers) of any of the Borrowers shall be used to repay the Term Loan. Any remaining excess proceeds from the sale of any non-real estate assets after payment in full of the Term Loan, shall be applied first to the Mortgage Loan and then to the Revolving Credit Facility. Prepayments under this subsection shall be due within ten (10) days of receipt of any cash proceeds. (ii) The net cash proceeds from the sale of any real estate assets of any of the Borrowers shall be used to repay the Mortgage Loan. Any remaining excess proceeds for the sale of any real estate, after application to the Mortgage Loan, shall be applied first to the Term Loan and then the Revolving Credit Facility. Prepayments under this subsection shall be due within ten (10) days of receipt of any cash proceeds. (iii) Fifty percent (50%) of the cash proceeds received by any Borrower from the issuance of debt securities by any Borrower, net of all costs and expenses associated with the issuance of such debt securities, shall be used to reduce Borrowers' obligations first under the Term Loan, second under the Mortgage Loan and third under the Revolving Credit Facility. Prepayments under this subsection shall be due within five (5) days of receipt of any cash proceeds. (iv) Twenty-five percent (25%) of the cash proceeds received by any Borrower from the issuance of equity securities by any Borrower net of all costs and expenses associated with the issuance of such equity securities, shall be used to reduce Borrowers' obligations first under the Term Loan, second under the Mortgage Loan and third under the Revolving Credit Facility. Prepayments under this subsection shall be due within five (5) days of receipt of any cash proceeds. (v) The Term Loan shall be prepaid by an amount equal to twenty-five percent (25%) of UPET's consolidated net income plus depreciation and amortization (during the period under review) minus principal payments made and net cash capital expenditures (during the period under review), all computed in accordance with GAAP. The calculations and prepayments shall be effected for the six months prior to each fiscal year and for each intervening six month period and for any "short" fiscal year due to a change in UPET's fiscal year, provided that the first period to which this subsection is applicable shall be the six month period ending June 30, 2000 or the end of the "short" fiscal year if a change in UPET's fiscal year occurs prior to June 30, 2000. Prepayments under this subsection shall be due within ninety (90) days of the end of a fiscal year for a period under review ending on a fiscal year end and within forty-five (45) days of the end of any intervening period under review. (vi) Any partial prepayments shall be applied to installments of principal due in the inverse order of their maturity. Any mandatory prepayment of a LIBOR Loan on a date other than its LIBOR Determination Date may, at the Bank's sole option, (A) be held as cash collateral until such LIBOR Loan's next LIBOR Determination Date and applied as a prepayment on such LIBOR Determination Date or (B) be applied immediately by the Bank as a prepayment, but without Borrowers incurring any liability for any indemnity payment of any amount otherwise required by Section 4.4 hereof. (b) Voluntary Prepayments. Borrowers shall have the right, on any Banking Day, to prepay the Mortgage Loan or the Term Loan or both in whole or in part, provided that any prepayment of a LIBOR Loan on a day other than a LIBOR Determination Date with respect thereto shall be subject to payment of any amount required by Section 4.4 hereof. Any partial prepayments shall be in the amount of US$100,000 or an integral multiple thereof and shall be applied to installments of principal due in the inverse order of their maturity. (c) Exit Fee. Any prepayment shall be accompanied by prepayment of accrued interest on the amount prepaid. Subsequent to 18 months from the Closing Date, an Exit Fee shall be payable for prepayments of the Mortgage Loan or the Term Loan or both, other than pursuant to Subsection 2.5(a) (v), in amounts equal to (i) the amount prepaid divided by (A) the total principal amounts of the Mortgage Loan and the Term Loan outstanding 18 months after the Closing Date less (B) the principal amortization amounts scheduled to be paid from 18 months after the Closing Date to the Maturity Date multiplied by (ii) US$350,000, provided, however, that if prepayments of the Mortgage Loan or the Term Loan or both have occurred within 18 months from the Closing Date, the US$350,000 amount set forth above shall be reduced by the percentage that such prepayments within 18 months of the Closing Date bear to the total original principal amounts of the Mortgage Loan and the Term Loan. 2.6 Payments. All payments hereunder shall be made without setoff or counterclaim and shall be made through demand deposit accounts maintained by each Borrower at the Bank's Main Office, 3750 N.W. 87th Avenue, Miami, Florida 33178, U.S.A., (or at such other branch or office of the Bank as the Bank may from time to time specify by notice to UPET). 2.7 Withholding and Taxes. (a) All amounts payable under this Agreement or under any of the other Documents shall be made without set-off or counterclaim and clear of and without deduction for any and all present and future taxes, levies, imposts, deductions, charges, withholdings, contributions, services, surcharges, exchange commissions, penalties and all liabilities with respect thereto imposed by any governmental or taxing authority (other than income or franchise taxes based on or measured by the overall net income or capital of the Bank imposed by the United States of America or the State of Florida), including any stamp or other taxes, registration fees or other duties, levies, imposts, notarial fees or other charges of any nature whatsoever by whomsoever imposed with respect to the preparation, execution, delivery, registration, performance and enforcement of this Agreement and any of the other Documents (collectively, "Taxes"). Borrowers agree to cause all Taxes to be paid on behalf of the Bank directly to the appropriate Governmental Authority. If for any reason Borrowers are prohibited from paying any Taxes on behalf of the Bank, then all payments made on or in respect of this Agreement including payments made pursuant to this Section, shall be increased so that, after provisions for such Taxes, including Taxes on such increase, the amounts received by the Bank will equal the amounts the Bank would have received if no Taxes were due on such payments. If any of the amounts referred to in this Section are paid by or on behalf of the Bank, the Bank shall promptly so notify Borrowers and Borrowers shall, upon demand, promptly indemnify the Bank for such payments, together with any interest, penalties and expenses in connection therewith, plus interest thereon at the rate specified in Section 2.4(c) hereof. (b) If, at any time and for any reason there is a change in the basis of taxation of payments in respect of this Agreement or a Loan (except for changes in taxes based upon or measured by income or capital of the Bank or the Bank's franchise taxes) and the result thereof is to increase the cost to the Bank of maintaining the Loans of to reduce any amount receivable under this Agreement, then Borrowers shall promptly pay the Bank, upon its demand, any additional amount necessary to compensate the Bank for such increased cost or reduced amount receivable. (c) Borrower shall provide the Bank with original tax receipts, notarized copies of tax receipts, or such other documentation as will prove payment of tax in a court of law applying the U.S. Federal Rules of Evidence, for all Taxes paid by Borrowers pursuant to this Section. Borrower shall deliver such receipts or other documentation to the Bank within 30 days after the due date for the related Tax. (d) The Bank shall upon request provide reasonable assistance to Borrowers for the purpose of establishing any reduction in or exemption from deduction or withholding or any liability for any Taxes or avoiding or mitigating such increased costs or reduced amounts receivable, such assistance in the case of Taxes to be limited to the timely provision of properly completed and executed documentation sufficient to establish to the relevant taxing authorities the entitlement to such reduction or exemption. (e) The obligations of Borrowers under this Section shall survive the payment in full or principal and interest on the Loans and the cancellation of the Notes and any of the other Documents. ARTICLE III: EXPENSES AND FEES 3.1 Structuring Fees. Borrower shall pay to the Bank on the Closing Date Structuring Fees equal to (a) 1.5% flat, or US$63,495, on the Revolving Credit Loan Commitment, (b) 1.5% flat, or US$124,500, on the Mortgage Loan Commitment and (c) 7.7577625% flat, or US$812,005, on the Term Loan Commitment. The nonrefundable US$500,000 fee paid upon delivery of the September 27, 1999 commitment letter for this Loan Agreement and the US$50,000 paid upon acceptance of such commitment letter shall be applied to the total amount of the Structuring Fees. The Bank shall deduct such balance of the Structuring Fees from the proceeds of the Revolving Credit Loans. 3.2 Expenses. Borrowers shall pay to the Bank all documentation costs, filing and search fees, title insurance premiums and other expenses, including reasonable legal fees of counsel to the Bank, incurred in connection with the preparation of the Documents. The Bank shall deduct such amounts from the proceeds of the Revolving Credit Loans. 3.3 Future Expenses. Borrowers shall pay on demand, whether any Event of Default hereunder shall have occurred and regardless of whether any proceeding to enforce the same shall have been commenced, the Bank's standard loan fees as set from time to time by notice to the Bank's customers generally, all costs and expenses of the Bank, including, without limitation, all fees and disbursements of counsel to the Bank, incurred in connection with the enforcement of the Documents, including any appeals, any waivers or consents in connection herewith or the preparation of any amendment to or modification of the Documents. ARTICLE IV: YIELD PROTECTION AND ILLEGALITY 4.1 Inability to Determine Interest Rate. In the event that prior to the first day of any LIBOR Interest Period: (a) the Bank shall have determined (which determination shall be conclusive and binding upon Borrowers) that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining LIBOR for such LIBOR Interest Period, or (b) the Bank determines that the LIBOR rate for such LIBOR Interest Period will not adequately and fairly reflect the cost to the Bank (as conclusively certified by the Bank) of maintaining the relevant LIBOR Loan during such LIBOR Interest Period, the Bank shall give notice thereof to UPET as soon as practicable. If such notice is given, the Loans shall remain or shall be converted to on the first day of such LIBOR Interest Period, as the case may be, Prime Rate Loans. 4.2 Illegality. Notwithstanding any other provision herein, if any change after the date hereof in any Requirement of Law or in the interpretation or application thereof shall make it unlawful for the Bank to make or maintain the LIBOR Loans as contemplated by this Agreement, the LIBOR Loans shall be converted automatically to Prime Rate Loans on the last day of the then current LIBOR Interest Period or within such earlier period as required by law. If any such conversion of the LIBOR Loans occurs on a day which is not a LIBOR Determination Date with respect thereto, Borrowers shall pay to the Bank such amounts, if any, as may be required pursuant to Section 4.4 unless such illegality was due to the fault of the Bank. 4.3 Requirements of Law. (a) In the event that any change after the date hereof in any Requirement of Law or in the interpretation or application thereof or compliance by the Bank with any request or directive (whether or not having the force of law) from any central bank or other Governmental Authority made subsequent to the date hereof: (i) shall impose, modify or hold applicable any reserve, special deposit, compulsory loans or similar requirement against assets held by, deposits or other liabilities in or for the account of LIBOR Loans, or any other acquisition of funds by, any office of the Bank which is not otherwise included in the determination of the LIBOR hereunder; or (ii) shall impose on the Bank any other condition; and the result of any of the foregoing is to increase the cost to the Bank, by an amount which the Bank deems in its reasonable judgment to be material, of maintaining the LIBOR Loans or to reduce any amount receivable hereunder in respect thereof then, in any case, Borrowers shall promptly pay the Bank, upon its demand, any additional amounts necessary to compensate the Bank for such increased cost or reduced amount receivable. If the Bank becomes entitled to claim any additional amounts pursuant to this subsection, it shall promptly notify UPET of the event by reason of which it has become so entitled. A certificate as to any additional amounts payable pursuant to this subsection setting forth the calculation thereof in reasonable detail (as determined by the Bank in its reasonable discretion) submitted by the Bank to UPET shall be conclusive in the absence of manifest error. This covenant shall survive the termination of the Loans and the payment of the Notes and all other amounts payable hereunder. (b) In the event that the Bank shall have determined that any change in any Requirement of Law regarding capital adequacy or in the interpretation or application thereof or compliance by the Bank or any corporation controlling the Bank with any request or directive regarding capital adequacy (whether or not having the force of law) from any Governmental Authority made subsequent to the date hereof does or shall have the effect of reducing the rate of return on the Bank's capital as a consequence of its LIBOR obligations hereunder to a level below that which the Bank or such corporation could have achieved but for such change or compliance (taking into consideration the Bank's or such corporation's policies with respect to capital adequacy) by an amount deemed by the Bank, in its reasonable judgment, to be material, then from time to time, after submission by the bank to UPET of a written request therefor, Borrowers shall pay to the Bank such additional amount or amounts as will compensate the Bank for such reduction. A certificate as to any additional amount payable pursuant to this subsection setting forth the calculation thereof in reasonable detail (as determined by the Bank in its reasonable discretion) to UPET shall be conclusive in the absence of manifest error. (c) Upon request by the Bank, from time to time, Borrowers shall pay the cost of all Eurocurrency Reserve Requirements applicable to the LIBOR Loans. If the Bank is or becomes entitled to receive payments in respect of Eurocurrency Reserve Requirements pursuant to this subsection, it shall promptly notify UPET thereof. A certificate as to the amount of such Eurocurrency Reserve Requirements setting forth the calculation thereof in reasonable detail (as determined by the Bank in its reasonable discretion) submitted by the Bank to UPET shall be conclusive in the absence of manifest error. This covenant shall survive the termination of this Agreement and the payment of the Loans and all other amounts payable hereunder. (d) If requested by UPET, payments required under this Section 4.3 may be made in equal monthly installments over the twelve months following notice by the Bank to UPET pursuant to this Section 4.3. (e) If payments are required under this Section 4.3, Borrowers may convert the LIBOR Loans so affected into Prime Rate Loans subject to Section 4.4. 4.4 Indemnity. Borrowers agree to indemnify the Bank and to hold the Bank harmless from any loss or expense which the Bank may sustain or incur as a consequence of (a) default by any Borrower in payment when due of the principal amount of or interest on a LIBOR Loan, (b) default by Borrowers in making any prepayment on a LIBOR Loan after Borrowers or UPET have given a notice thereof in accordance with the provisions of this Agreement or (c) the making of a payment, conversion to a Prime Rate Loan or prepayment of a LIBOR Loan on a day which is not a LIBOR Determination Date with respect thereto, including, without limitation, in each case, any such loss or expense arising from the reemployment of funds obtained by the Bank or from fees payable to terminate the deposits from which such funds were obtained. Payments required under this Section 4.4 shall be made within ten (10) days after notice thereof by the Bank. A certificate as to any additional amount payable pursuant to this Section 4.4 setting forth the calculation thereof in reasonable detail (as determined by the Bank in its reasonable discretion) to UPET shall be conclusive in the absence of manifest error. This covenant shall survive the payment of the Loans or the Notes, and all other amounts payable hereunder. ARTICLE V: REPRESENTATIONS AND WARRANTIES Borrowers represent and warrant to the Bank that: 5.1 Binding Obligations. Each Borrower is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation, has the corporate power to own its property and to carry on its business as now being conducted, is duly qualified to engage in business and is in good standing as a foreign corporation in each jurisdiction in which the character of the properties owned by it or the transaction of its business makes such qualification necessary (except where the failure to obtain such qualification does not have any material adverse effect on the Borrowers) and has full power, authority and legal right to incur the Indebtedness and other obligations provided for in the Documents to which it is a party, to execute and deliver the Documents to which it is a party and to perform and observe the terms and provisions hereof and thereof. This Agreement constitutes, and the Notes when executed and delivered for value will constitute, legal, valid and binding obligations of Borrowers, enforceable against Borrowers in accordance with their respective terms, except as the foregoing may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting enforceability of creditors' rights generally at the time in effect (regardless of whether enforcement is sought in equity or law). 5.2 Corporate Authorizations. The execution, delivery and performance of the Documents and the borrowing hereunder have been duly authorized by all necessary action on the part of Borrowers including, without limitation, the authorization of all partners or Boards of Directors of Borrowers, and all necessary approvals of Governmental Authorities in connection therewith have been received. 5.3 Absence of Restrictions. The execution, delivery and performance by Borrowers of the Documents and the borrowings hereunder will not (i) violate any provision of law or the charters or by-laws of Borrowers, (ii) violate, be in conflict with, result in a breach of or constitute a default under any order of any court, arbitrational tribunal or Governmental Authority or under any material mortgage, indenture, contract, undertaking or other agreement to which any Borrower is a party or by which any Borrower or any of its properties, assets or revenues is bound, (iii) violate any governmental or agency rule or regulation (including, without limitation, Regulations U and X of the Board of Governors of the Federal Reserve System of the United States of America) or (iv) result in the creation or imposition of any security interest, lien, charge or other encumbrance of any nature whatsoever upon any of its properties, assets or revenues, other than as contemplated herein. 5.4 Financial Position and Statements. The financial statements listed in Schedule 5.4, together with supporting schedules and notes, of Borrowers delivered to the Bank have been prepared in accordance with GAAP and correctly set forth in all material respects Borrower's financial position as at or for the periods shown therein and show all known material liabilities, direct or contingent, as of such dates. Except for the payment of the expenses of the transactions contemplated hereby and by the Merger Plan, there have been no material adverse changes in Borrowers' financial position since the date of the latest of such financial statements. 5.5 Litigation. Except as provided in Schedule 5.5, there are no material actions, suits, proceedings or claims pending against or materially affecting any Borrower which, if adversely determined, would have a material adverse effect on the financial condition or business of such Borrower. 5.6 Bankruptcy Plan. (a) Bankruptcy Approvals. Each of the Borrowers, to the extent applicable, has obtained all necessary and requisite authority, consents and approvals of the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") in the Chapter 11 bankruptcy proceedings styled United Petroleum Corporation, Case No. 99-88(PJW) (the "Bankruptcy Proceedings") to enter into and consummate the transactions contemplated in this Loan Agreement and in the Merger Plan, including, without limitation, incurring of the indebtedness and granting of the liens provided for herein. (b) Effectiveness of Plan. The Second Amended Plan of Reorganization for UPET (the "Plan") and the Order Confirming the Amended Plan by the Bankruptcy Court (the "Confirmation Order") in the Bankruptcy Proceedings (1) are in full force and effect, have not been withdrawn, modified or amended as of the date hereof, and are enforceable in accordance with their respective terms, (2) are not the subject of any motion for reconsideration or rehearing, whether under Rules 59 or 60 of the Federal Rules of Civil Procedure or otherwise, and (3) are not the subject of any appeal, extension of time for appeal, stay pending appeal or similar pleading. (c) Effective Date. All of the conditions precedent to the occurrence of the Effective Date, as defined in the Plan, including as set forth in Section 13.1 and 13.2 thereof or otherwise, have been satisfied as of the date hereof. The Effective Date, as defined in the Plan, and all of the transactions or events described in Section 8.17 of the Plan, including substantial consummation of the Plan, have occurred as of the date hereof or will occur simultaneously with the consummation of the transactions contemplated under this Loan Agreement. (d) Compliance With Plan. Each of the Borrowers, to the extent applicable, has fully complied with all of the provisions of the Plan, and the Order and the United States Bankruptcy Code in connection with the transactions contemplated herein, including the incurrence of the indebtedness herein or the granting of the liens provided for herein. To the extent applicable, no Borrower is in default of the Plan, the Order or the provisions of the United States Bankruptcy Code or will be in default thereof as a result of the transactions contemplated herein, including the incurrence of the indebtedness herein or the granting of the liens provided for herein. (e) Reasonably Equivalent Value. Each of the Borrowers has received reasonably equivalent value in exchange for the indebtedness incurred under this Loan Agreement and in exchange for the liens granted pursuant hereto. Each of the Borrowers is solvent as of the date hereof and will not be made insolvent as a result of the transactions contemplated hereunder, the term solvent meaning that each Borrower's property, at a fair valuation, is greater than the sum of its debts, including the indebtedness being incurred hereunder. Each of the Borrowers does not and will not, as a result of the transactions hereunder, have or be left with an unreasonably small capital with which to conduct its business. Each of the Borrowers do not intend to incur and will not incur, including as a result of the transactions contemplated hereunder, debts that would be beyond such Borrower's ability to pay as they matured. (f) Notice. Each of the Borrowers, to the extent applicable, has provided, or caused to be provided, proper notice of the Bankruptcy Proceedings and the related claims bar date therein to all known and suspected creditors, whether secured or unsecured, liquidated or unliquidated, contingent or fixed, priority or non-priority or disputed or undisputed, and that each Borrower, to the extent applicable, has fully complied with the provisions of that certain Order of the Bankruptcy Court Fixing Bar date for Filing Proofs of Claim and Approving Form and Manner of Notice of Bar Date, dated February 17, 1999 (the "Bar Date Order"). No Borrower is aware of, or has reason or basis to be aware of, any claimant or creditor or UPET that has not received proper notice of the Bar Date Order, or the claims bar date contained therein. 5.7 Title to Properties; No Liens. Except as provided in Schedule 5.7(a), Borrowers have good and marketable title to all of their respective properties and assets and, except as provided in Schedule 5.7(b) or as permitted or required by the provisions hereof, none of the properties, assets and revenues of Borrowers are subject to any mortgage, lien, security interest, pledge or other charge or encumbrance or any similar arrangement of any kind. 5.8 Payment of Taxes. Except as provided in Schedule 5.8, Borrowers have filed, or caused to be filed, all tax returns which are required to be filed by any of them, and have paid or caused to be paid all taxes as shown on such returns or on any assessment received by any of them, to the extent that such taxes have become due. 5.9 Agreements. Except as provided in Schedule 5.9, none of Borrowers is in default, in any manner which would materially and adversely affect any of its business, properties, assets, operations or condition (financial or otherwise), in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any agreement or instrument to which it is a party or by which it or any of its properties, assets or revenues is bound. 5.10 Correct Information. The information, exhibits and reports furnished by Borrowers in connection with the negotiation and preparation of this Agreement are correct and taken as a whole do not contain any omissions or misstatements of fact which would make the statements contained therein misleading or incomplete in any material respect. 5.11 Year 2000 Compliant. Each Borrower is in all material respects Year 2000 Compliant with respect to its computers, computer systems and codes. 5.12 Year 2000 Indemnity. Borrowers hereby indemnify the Bank and hold the Bank harmless from any loss or expense which the Bank may sustain or incur as a consequence of all or any part of the Year 2000 Compliant representations and warranties made herein or otherwise in writing by Borrowers in connection herewith being incorrect, false or misleading. This covenant shall survive the payment of the Loans and cancellation of the Notes, and all other amounts payable hereunder. ARTICLE VI: AFFIRMATIVE COVENANTS From the date hereof and until payment in full of all amount due hereunder and the performance of all other obligations of Borrowers to the Bank, Borrowers agree with the Bank that, unless the Bank shall otherwise consent in writing, Borrowers shall: 6.1 Corporate Existence, Properties, Insurance. Except as provided in the Merger Plan, do or cause to be done all things necessary to preserve and keep in full force and effect each Borrower's corporate existence, rights and franchises and comply with all laws applicable to it; at all times maintain, preserve and protect all trade names and preserve all the remainder of each Borrower's property used or useful in the conduct of its business and keep the same in good repair, working order and condition and from time to time make, or cause to be made, all needful and proper repairs, renewals, replacements, betterments and improvements thereto so that the business carried on in connection therewith may be properly and advantageously conducted at all times; and maintain insurance to such extent and against such risks as is customary and with companies similarly situated and as specifically set forth in Schedule 6.1. 6.2 Payment of Indebtedness, Taxes. (a) Pay or cause to be paid all of each Borrower's Indebtedness and obligations promptly and in accordance with normal terms and trade practices and (b) pay and discharge or cause to be paid and discharged promptly all taxes, assessments and governmental charges or levies imposed upon any Borrower or upon its income and profits, or upon any of its property, real, personal or mixed or upon any part thereof, before the same shall become in default, as well as all lawful claims for labor materials and supplies or otherwise which, if unpaid, might become a lien or charge upon its properties or any part thereof; provided, however, that Borrowers shall not be required to pay and discharge or cause to be paid and discharged any such Indebtedness, tax, assessment, charge, levy or claim so long as the amount, applicability or validity thereof shall be contested in good faith by appropriate proceedings and the relevant Borrower shall have set aside on its books adequate reserves with respect to any such Indebtedness, tax, assessment, charge, levy or claim, so contested. 6.3 Financial Statements, Reports. Furnish to the Bank: (a) at each time UPET files its Form 10-K, but in no event later than within one hundred twenty (120) days after the end of each of its fiscal years, an audited consolidated and consolidating balance sheet and statement of income and surplus of each of Borrowers and Farm Stores Grocery, Inc., together with supporting schedules, all certified by an independent certified public accountant of recognized standing selected by Borrowers or Farm Stores Grocery, Inc., as the case may be, and with regard to Borrowers only approved in writing by the Bank (the form of such certification to include statements that the audit of the financial statements has been conducted in accordance with generally accepted accounting standards and that the financial statements present the financial condition of Borrowers and Farm Stores Grocery, Inc., as the case may be, in accordance with generally accepted accounting principles consistently applied, all as existing at the end of the appropriate period); (b) within sixty (60) days after the end of each intervening fiscal quarterly period, similar financial statements to those referred to in subsection (a) above, unaudited but similarly certified to by the chief financial officer of Borrowers or Farm Stores Grocery, Inc., as the case may be; (c) with each of the financial statements submitted under subsections (a) or (b) above, a certificate executed by the chief financial officer of UPET to the effect that to his knowledge no Event of Default or event which, upon notice or lapse of time or both, would constitute an Event of Default has occurred and is continuing; (d) within fifteen (15) days after the end of each fiscal quarterly period, accounts receivable and inventory reports of Borrowers setting forth in detail acceptable to the Bank the determination of the Borrowing Base at the end of such fiscal quarterly period; and (e) promptly, from time to time, such other information regarding the operations, business, affairs and financial condition of Borrowers, including the Borrowing Base, as the Bank may reasonably request. 6.4 Branding Agreements. (a) Within 180 days from the Closing Date enter into agreements with major oil companies acceptable to the Bank to have not less than 40% of its stores' gasoline sales branded one (1) year from the Closing Date and (b) within one (1) year from the Closing Date enter into agreements with major oil companies acceptable to the Bank to have an additional 40% of its stores' gasoline sales branded within eighteen (18) months from the Closing Date. 6.5 Management Agreement. Cause UPET Group to enter into the Management Agreement for the management by UPET Group of Farm Stores Grocery, Inc. and providing for a management fee payable to UPET Group of not less than US$2,500,000 annually so long as the Loans remain unpaid and cause UPET Group to fulfill all of its obligations under the Management Agreement. 6.6 Maintenance of Collateral. Ensure that all Collateral shall be and remain free and clear of any liens, claims or encumbrances in favor of any Person other than to the Bank, as provided in Schedule 5.7(b) or as permitted by the provisions hereof. 6.7 Tangible Net Worth. Maintain a consolidated ratio, tested quarterly, of debt to "Tangible Net Worth" not exceeding 3.5 x 1, adjusted to 3.0 x 1 at the conclusion of UPET's fiscal year 2000 and to 2.0 x 1 at the conclusion of UPET's fiscal year 2001. As used herein, "Tangible Net Worth" means net worth as defined in GAAP less goodwill and related party receivables. 6.8 EBITDA. Maintain a consolidated ratio, tested quarterly and computed in accordance with GAAP, of (a) earning before interest, taxes, depreciation and amortization to (b) current maturities of long term debt plus interest expense not less than 1.4 x 1 during UPET's fiscal year 2000 and 1.2 x 1 thereafter, to be tested at the time of UPET's filing of its Forms 10-Q and 10-K. 6.9 Additional Owned Real Properties. (a) Not later than thirty (30) days prior to closing, (i) notify the Bank of any proposed acquisition of a direct or indirect ownership interest in any additional Owned Real Properties, and (ii) provide the Bank with a title commitment, hard copies of all title exceptions, current survey, current environmental audit and any other information reasonably requested by the Bank to evaluate such property; and (b) if requested by the Bank, grant a first-priority mortgage, deed of trust or security deed (as appropriate) in favor of the bank encumbering such additional Owned Real Properties, or spread the lien of the Mortgages (for any additional real property located in a jurisdiction in which a Mortgage has been recorded or filed and remains in effect) to such property, in each case pursuant to a form of mortgage, deed of trust, security deed or spreader agreement approved by the Bank. The mortgage instrument shall be in recordable form and shall be recorded in the appropriate public or land records simultaneously with the recording of the instrument of conveyance of such Owned Real Properties. 6.10 Additional Leases. (a) Grant a first-priority collateral assignment in favor of the Bank encumbering any additional Lease hereafter entered into by any Borrower or spread the lien of the Lease Assignments (for any additional Leases leasing property located in a jurisdiction in which a Lease Assignment has been recorded or filed and remains in effect) to such Lease, in each case pursuant to a form of Lease Assignment or spreader agreement approved by the Bank. The Lease Assignment or spreader shall be in recordable form and shall be recorded in the appropriate public or land records simultaneously with the recording of a short form or memorandum of such additional Lease; and (b) either cause any such additional Lease to include the following provisions or obtain the landlord's specific consent to the Bank containing the following provisions: (i) that the tenant's interest in the Lease is freely assignable and that the landlord's consent is not required for the collateral assignment or other pledge of the tenant's interest in the lease to tenant's lender (the "Leasehold Mortgagee"); (ii) that the landlord agrees that any and all liens of the landlord against the Collateral for the payment of rent, whether statutory or otherwise, are automatically subject and subordinate to the security interest in the Collateral granted by the tenant in favor of the Leasehold Mortgagee; (iii) that a short form or memorandum of the Lease in recordable form shall be executed by the parties and promptly recorded in the appropriate public or land records; (iv) that the Lease shall not be subordinate to any mortgage placed on the landlord's interest in the lease premises unless the landlord's lender enters into a non-disturbance agreement with the tenant in form satisfactory to the tenant; (v) that the landlord agrees (A) not to amend or modify the Lease or accept a surrender of the Lease without the Leasehold Mortgagee's written consent, which shall not be unreasonably withheld; (B) to notify the Leasehold Mortgagee in writing if the tenant fails to pay the required rent when due or otherwise commits a default under the Lease that would entitle the landlord to terminate the Lease; (C) to accept a cure of the tenant's default of offered by the Leasehold Mortgage within 30 days after the landlord's written notice to the Leasehold Mortgagee; and (D) to accept the Leasehold Mortgagee or its designee as the landlord's new tenant under the Lease if the Leasehold Mortgagee exercises its rights against the tenant under its collateral assignment of the Lease, provided that the tenant's defaults under the Lease are cured and the new tenant assumes the Lease; and (vi) that the landlord consents and agrees that the Leasehold Mortgagee shall have the right to enter the lease premises where the Collateral is located for the purpose of removing, selling or otherwise dealing with the Collateral; provided that the Leasehold Mortgagee shall be responsible for any cost of repair of physical injury (but not diminution of value) caused by any such removal. Even if the Leasehold Mortgagee or its designee does not elect to cure the tenant's default and assume the Lease as landlord's new tenant as described above, then the Leasehold Mortgagee shall nevertheless have up to 30 days after the landlord's notice of default in which to remove the Collateral from the lease premises, provided that the Leasehold Mortgagee pays to the landlord on demand all rent accruing under the Lease from the date such notice is received until the Collateral is removed. 6.11 Inspection. Permit authorized representatives of the Bank to visit and inspect the offices and properties of Borrowers from time to time upon reasonable notice during normal business hours, to examine the books and records of Borrowers and make copies or extracts therefrom and to discuss the affairs and accounts of Borrowers with their officers. 6.12 Observance of Legal Requirements. Observe and comply in all material respects with all statutes, rules, regulations, guidelines or other requirements having the force of law which now or at any time hereafter may be applicable to any of Borrowers, provided that a Borrower may defer observation and compliance with requirements as to which it contests the validity or application thereof in good faith and by appropriate proceedings if such deferral does not materially hinder Borrowers operations. 6.13 Obtain Approvals. Promptly obtain each consent, license, authorization or approval and make each filing or registration which hereafter shall be either necessary or desirable to enable each Borrower to comply with its obligations hereunder, and promptly furnish evidence thereof to the Bank. 6.14 Furnish Notice. Furnish to the Bank, as soon as possible and in any event within fifteen (15) days after becoming aware of the occurrence of any Event of Default, or any event which with the lapse of time or notice or both would constitute an Event of Default, a statement of a senior executive officer of UPET setting out the details of such Event of Default or event and the action which Borrowers propose to take in order to cure the effect thereof. ARTICLE VII: NEGATIVE COVENANTS From the date hereof and until payment in full of all amounts due hereunder and the performance of all other obligations of Borrowers to the Bank, Borrowers agree with the Bank that, unless the Bank shall otherwise consent in writing, Borrowers shall not: 7.1 Indebtedness. Incur any Indebtedness other than (a) accrued expenses, trade debt, wage obligations and similar Indebtedness in the ordinary course of business, (b) the issuance of debt securities the principal of which is repayable only after payment in full of the Loans, (c) Indebtedness to fund capital expenditures of up to US$1,821,000 to be incurred in 2000, US$1,121,000 to be incurred in 2001 and US$1,121,000 to be incurred in 2002 and each year thereafter which Indebtedness for equipment purchases may be secured by a purchase money security interest and (d) immaterial Indebtedness not exceeding US$50,000 in any fiscal year of Borrowers. Any such Indebtedness for capital expenditures must be at prevailing market rates and on terms acceptable to the Bank in its reasonable discretion. 7.2 Dividends. Pay any dividend on any class of stock of any Borrower, except for dividends paid exclusively in shares of stock of one or more Borrowers or dividends paid exclusively to one or more Borrowers. 7.3 Nature of Business. Permit any material changes to be made in the character of the business of Borrowers from that conducted by them on the date hereof except as provided in the Merger Plan. 7.4 Mergers, Consolidations and Sale of Assets. (a) Enter into any merger, amalgamation or consolidation, (b) except in the ordinary course of its business, sell, lease or otherwise transfer or dispose of a substantial part of its assets except as provided in the Merger Plan or otherwise exclusively among Borrowers other than transfers to or from Calibur or Jackson or (c) sell or dispose of any material assets for deferred payment of all or part of the sales price unless (1) the Bank approves the creditworthiness of the purchaser and any other obligor or (2) a Borrower shall hold a first security interest in such sold assets to secure the deferred portion of the sales price. ARTICLE VIII: COLLATERAL The loans and all other Liabilities of Borrowers to the Bank shall be secured by the following Collateral: 8.1 Mortgages. The Bank shall be granted a first mortgage on the interests of the Borrowers in the Owned Real Estate. 8.2 Leases. Borrowers shall collaterally assign to the Bank the Borrowers' rights under the Leases. 8.3 Pledge. F.S. Non-Gas shall pledge to the Bank its ten percent (10%) common stock interest in Farm Stores Grocery, Inc. together with any additional purchase or acquisitions of Farm Stores Grocery, Inc. stock by any of Borrowers. 8.4 Life Insurance. F.S. Stores shall assign to the Bank the Key Man Life Insurance policy in the amount of US$5,000,000 on the life of Mr. Jose Bared issued by an insurance company acceptable to the Bank. 8.5 Management Agreement. The rights of UPET Group under the Management Agreement shall be collaterally assigned to the Bank. 8.6 Purchase Agreement. The rights of UPET Group under the Purchase Agreement shall be collaterally assigned to the Bank. 8.7 Other Corporate Assets. The Bank shall be granted a first security interest in all other corporate assets of the Borrowers. 8.8 Trademark. Borrowers shall cause Farm Stores Grocery, Inc. to agree for the benefit of the Bank not to encumber the Farm Stores trademark (except on terms that provide that default under any such encumbrance shall not affect Borrowers' rights under the License Agreement relating to the trademark and the usage thereof by Borrowers) and to allow use of the mark by Borrowers at no cost to Borrowers at least so long as the Loans are outstanding. ARTICLE IX: CONDITIONS 9.1 Conditions Precedent. The obligation of the Bank to extend any credit hereunder is subject to Borrowers taking the following action and the Bank having received the following documents in form and substance satisfactory to it and its counsel. (a) This Agreement, the Notes and the Collateral Agreements duly executed by Borrowers party to each such Document; (b) The shares of Farm Stores Grocery, Inc. pledged under the Pledge Agreement, duly endorsed in blank, or by separate stock power executed in blank, to the order of the Bank; (c) Evidence of the application for the Key Man Life Insurance policy in the amount of US$5,000,000 on the life of Mr. Jose Bared; (d) Evidence of the agreement for the benefit of the Bank of Farm Stores Grocery, Inc. not to encumber the Farm Stores trademark and to allow use of the mark by Borrowers at no cost to Borrowers at least so long as the Loans are outstanding; (e) The assignment to the Bank of the rights of UPET Group under the Management Agreement including specifically a collateral assignment of the management fee payable to UPET Group thereunder; (f) The assignment to the Bank of the rights of UPET Group under the Purchase Agreement including specifically a collateral assignment of the option to UPET Group thereunder; (g) Evidence of the filing of UCC-1 Financing Statements for the security interests granted to the Bank; (h) Appraisals of the Owned Real Estate by an appraiser acceptable to and in form and substance acceptable to the Bank; (i) Mortgagee Title Insurance for the Mortgages [and other real estate documents including independent environmental assessment for compliance with Federal and State regulations] in form acceptable to and containing only such exceptions as are acceptable to the Bank and its counsel, including specifically Messrs. Paul, Hastings, Janofsky & Walker, special real estate counsels to the Bank; (j) The following documents related to the Chapter 11 bankruptcy proceedings styled United Petroleum Corporation, Case No. 99-88(PJW), all in form acceptable to the Bank and its counsel, including specifically Messrs. Genovese Lichtman Joblove & Battista, special bankruptcy counsel to the Bank: (i) Certified copy of the Motion for Entry of Order Establishing Bar Date for Filing Proofs of Claims and Approving Form and Manner of Notice Thereof. (ii) Certified copy of the Order Fixing Bar Date For Filing Proofs of Claim and Approving Form and Manner of Notice of Bar Date. (iii) Certified copy of the Second Amended Disclosure Statement. (iv) Certified copy of the Order Approving Second Amended Disclosure Statement. (v) Certified copy of the Second Amended Plan of Reorganization. (vi) Certified copy of the Findings of Fact, Conclusions of Law and Order Confirming Amended Plan; (k) Evidence of environmental, casualty, liability and business interruption insurance acceptable to the Bank; (l) Certificate of Mr. Jose Bared of the shares of UPET to be owned by him at the completion of the Closing and as to any agreements with respect to such shares; (m) Copies of resolutions of the Boards of Directors of Borrowers, certified as of a current date by the Secretary or an Assistant Secretary of each Borrower, authorizing the execution and delivery of the Documents to which it is a party and the borrowings hereunder; (n) Incumbency Certificates of the officers of each Borrower, including specimen signatures of such officers empowered to execute the Documents to which it is a party and any documents other relating hereto, certified as of a current date by the Secretary or an Assistant Secretary of each Borrower; and (o) Copies of the Certificate or Articles of Incorporation or other charter documents and all amendments thereto of each Borrower, currently certified by the relevant Governmental Authority (such certified charter documents shall include evidence of good standing from the appropriate Governmental Authority). 9.2 Conditions Subsequent. Borrowers covenant to provide, and the obligation of the Bank to continue extending any credit hereunder is subject to Borrowers taking the following action and the Bank having received the following documents in form and substance satisfactory to it and its counsel: (a) Within sixty (60) days of the Closing Date, evidence of the assignment to the Bank of the Key Man Life Insurance policy in the amount of US$5,000,000 on the life of Mr. Jose Bared; and (b) Within sixty (60) days of the Closing Date, evidence of the release or subordination of the mortgages and security interests of Pennzoil Products Company in assets of Calibur and evidence of the correction of the legal description of the Dekalb County, Georgia Owned Real Property. ARTICLE X: EVENTS OF DEFAULT 10.1 Events of Default. If any of the following events shall have occurred and shall be continuing: (a) Failure of Payment. Borrowers fail to pay any principal, interest or other amounts due under this Agreement or with respect to the Documents on the due date and in the manner provided hereunder or therein and, in the case of interest, such default shall continue for more than five (5) days; or (b) Misstatements. Any material representation, warranty or other statement made herein or otherwise in writing by or on behalf of a Borrower in connection herewith proves to be or have been incorrect or misleading in any material respect as of the date at which it is made or deemed to be made; or (c) Other Obligations. A Borrower defaults in any payment of principal of or interest on any other obligation for the payment of borrowed money or under a financing lease, in excess of US$100,000 in the aggregate, when such obligation becomes due and payable, or is required to be prepaid prior to the stated maturity thereof, and, in the case of interest, such default shall continue for more than five (5) days; or a Borrower defaults in the performance of any other agreement, term or condition contained in any agreement or instrument pursuant to which such Borrower has borrowed money or under a financing lease, or by which any obligation for the payment of borrowed money is created, if the effect of such default is to cause such obligation in excess of US$100,000 in the aggregate to become due and payable prior to its stated maturity; or (d) Performance of Covenants. Borrowers default in the due performance or observance of any covenant, condition or provision on the part of Borrowers to be performed or observed pursuant to the documents and such default, if capable of cure, is not cured (i) within fifteen (15) days after Borrowers becomes aware of such default or (ii) in the event the default is incapable of cure within such fifteen (15) days, within sixty (60) days if Borrowers provide the Bank with reasonable assurance that such default is capable of cure within such 60 day period, promptly commence to cure the default and thereafter continue diligently to cure the default; or (e) Judgments. A Borrower shall permit any judgment for more than US$100,000 against it to remain undischarged for a period of more than thirty (30) days unless during such period such judgment shall be effectively stayed, on appeal or otherwise; or (f) Business Operations; Bankruptcy. A Borrower suspends the operations (other than in the ordinary course of business and not for reasons of insolvency and similar acts) of any of its businesses (other than in connection with the sales or closures of stores in the ordinary course of business), becomes insolvent, is unable to pay its debts as they mature or admits such inability in writing, calls a meeting of its creditors, files for or suffers to be filed against it any petition under any provision of any bankruptcy, insolvency, reorganization, rearrangement, readjustment of debt or similar law or statute or any application for the process of controlled administration, or a Borrower applies for or permits to be appointed any receiver, trustee or custodian for it or any substantial portion of its property or any order for relief is entered with respect to a Borrower under any bankruptcy code or any similar law of any jurisdiction and the same shall remain undischarged for a period of sixty (60) days; or (g) Condemnation. All or a substantial part of a Borrower's property is condemned, seized or otherwise appropriated, or custody of such property is assumed by any Governmental Authority or court or other Person purporting to act under the authority of government of any jurisdiction, or a Borrower is prevented from exercising normal control over all or a substantial part of its property and such default is not remedied within 30 days after it occurs; or (h) Change of Control. Mr. Jose Bared disposes of shares of UPET which the Bank, after consultation with UPET, determines to be adverse to the best interest of Borrowers or Mr. Jose Bared ceases to be the Chief Executive Officer of UPET and UPET Group, and the Bank after consultation with UPET determines such action to be adverse to the best interest of Borrowers; or (i) Enforceability. This Agreement, or any provision hereof, at any time after its execution and delivery and for any reason whatsoever ceases to be in full force and effect, valid and enforceable both in the jurisdictions in which the Borrowers operate and in the State of Florida, or Borrowers at any time fail to agree that this Agreement and all provisions hereof are in full force and effect, valid, and enforceable both in the jurisdictions in which the Borrowers operate and in the State of Florida; then the Bank by notice to UPET may declare the entire unpaid principal amount of the Loans to be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived. 10.2 Exercise of Rights. Upon the occurrence of an Event of Default and at any time thereafter, the Bank shall have the right in its sole discretion to determine which rights, security, liens, guarantees, security interests or remedies it shall retain, pursue, release, subordinate, modify or take any other action with respect to, without in any way modifying or affecting any of the other of them or any of its rights hereunder. Notwithstanding any other rights which the Bank may have under applicable law and hereunder, Borrowers agree that, should at any time an Event of Default occur or be continuing, the Bank shall have the right to apply (including, without limitation, by way of setoff) any of Borrowers' property held by, or thereafter coming into possession of, the Bank (including, without limitation, deposit account balances) to a reduction of Indebtedness of Borrowers to the Bank. ARTICLE XI: MISCELLANEOUS 11.1 Notices. Except as otherwise specified herein, all notices, requests, demands or other communications to or upon the parties hereto under the Documents shall be deemed to have been duly given or made when delivered in writing (including telecommunications) to the party to which such notice, request, demand or other communication is required or permitted to be given or made under this Agreement, at the address or facsimile number set forth opposite the name of such party on the signature lines set forth below, or at such other address or facsimile number as the parties hereto may hereafter specify to the other in writing. Written notices shall be deemed delivered upon receipt if delivered by hand or five Business Days after mailing. Notices provided by any of the other means referred to above shall be deemed delivered upon receipt. 11.2 Waiver of Rights. No failure to exercise and no delay in exercising, on the part of the Bank, any right, power or privilege under the Documents shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 11.3 Cumulative Remedies, Conflicts. Each of the Documents and the obligations of Borrowers hereunder and thereunder are in addition to and not in substitution for any other obligations or security interests now or hereafter held by the Bank and shall not operate as a merger of any contract or debt or suspend the fulfillment of or affect the rights, remedies or powers of the Bank in respect of any obligation or other security interest held by it for the fulfillment thereof. The rights and remedies provided in the Documents are cumulative and not exclusive of any other rights or remedies provided by law. If any conflict exists between the terms of this Agreement and the terms of any of the other Documents to which UPET, UPET Group, F.S. Stores, F.S. Gas, F.S. Non-Gas or REWJB Gas are parties, the terms of this Agreement shall control. 11.4 Successors; Governing Law. This Agreement shall be binding upon and inure to the benefit of Borrowers and the Bank, and their respective successors and assigns, except that none of Borrowers may assign or transfer its rights hereunder without the prior written consent of the Bank. This Agreement shall be governed by and construed in accordance with the laws of the State of Florida. 11.5 Consent to Jurisdiction; Process Agent. (a) Borrowers hereby irrevocably submit to the nonexclusive jurisdiction of any Florida State or Federal court sitting in Miami-Dade County, Florida in any action or proceeding arising out of or relating to this Agreement and the other Documents, and Borrowers hereby irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such Florida State or Federal court. Each Borrower hereby irrevocably appoints CT Corporation, 1200 South Pine Island Road, Plantation, Florida 33324, its successors or any other person acting on behalf of such person ("Process Agent"), as its agent and attorney-in-fact to receive on its behalf of its property, service of copies of the summons and complaint and any other process which may be served in any such action or proceeding. Such service may be made by mailing or delivering a copy of such process to a Borrower in care of the Process Agent at the Process Agent's address set forth above or such other address as the Process Agent shall designate in writing to the Bank, and each Borrower hereby irrevocably authorizes and directs the Process Agent to accept such service on its behalf. (b) Borrowers hereby irrevocably waive any objection which any of them may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any Florida State or Federal court sitting in Miami-Dade County, Florida, and hereby further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. (c) Nothing in this Section 11.5 shall affect the right of the Bank to serve legal process in any other manner permitted by law or affect the right of the Bank to bring any action or proceeding against Borrowers or their property in the courts of other jurisdictions. 11.6 Currency Conversion. This is a credit transaction in which the specification of Dollars is of the essence, and Dollars shall be the currency of account in all events. The payment obligations of the Borrowers under this Agreement and the other Documents shall not be discharged by an amount paid in another currency or in another place, whether pursuant to a judgment or otherwise, to the extent that the amount so paid on conversion to Dollars in accordance with normal banking procedures does not yield the amount of Dollars due hereunder. Notwithstanding the foregoing, if for the purpose of obtaining or enforcing judgment in any court it is necessary to convert a sum due hereunder in Dollars into another currency (the "Second Currency"), the rate of exchange which shall be applied shall be that at which in accordance with normal banking procedures the Bank could purchase Dollars with the Second currency on the Business Day preceding that on which final judgment is given. If payment of any sum due hereunder is made to or received by the Bank, whether by judicial judgment (and notwithstanding the rate of exchange actually applied in giving such judgment), or otherwise, in a Second Currency, the obligations hereunder of Borrowers shall be discharged only in the net amount of Dollars that on the Business Day following receipt by the Bank of any sum adjudicated to be due in a Second Currency, the recipient in accordance with its normal bank procedures is able to lawfully purchase with such amount of Second Currency. To the extent that the Bank is not able to purchase sufficient Dollars with such amount of Second Currency to discharge the Dollar obligations to the Bank, the obligations of Borrowers to the Bank shall not be discharged with respect to such difference, and Borrowers agrees that any such undischarged amount will be due as a separate debt and shall not be affected by payment of or judgment being obtained for any other sums due under or in respect of this Agreement. To the extent that the Bank is able to purchase an amount in Dollars in excess of the amount necessary to discharge such Dollar obligations, the Bank shall promptly remit such excess to Borrowers. 11.7 Amendments. The terms of this Agreement may not be amended, modified or waived except by written agreement between Borrowers and the Bank. 11.8 Usury. Anything herein to the contrary notwithstanding, the obligations of Borrowers to pay interest shall be subject to the limitation that payment of interest shall not be required to the extent that receipt of such payment by the Bank would be contrary to the provisions of any law applicable to the Bank limiting the maximum rate of interest which may be charged or collected by the Bank. 11.9 Survival of Agreements. All covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the making by the Bank of the credit herein contemplated and shall continue in full force and effect so long as such credit is outstanding and unpaid. 11.10 Severability. Any provision hereof which is prohibited or unenforceable shall be ineffective only to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof. 11.11 Descriptive Headings. The captions in this Agreement are for convenience of reference only and shall not define or limit the provisions hereof. 11.12 Waiver of Trial by Jury. BORROWERS AND BANK EACH HEREBY WAIVES ITS RIGHT TO TRIAL BY JURY IN ANY LITIGATION BASED HEREON OR ARISING OUT OF OR IN CONNECTION WITH ANY AGREEMENT, DOCUMENT OR INSTRUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY. 11.13 Confidentiality. The Bank agrees (on behalf of itself and each of its Affiliates, directors, officers, employees, and representatives) to keep confidential, in accordance with its customary procedures of handling confidential information of the same nature and in accordance with safe and sound banking practices, any non-public information supplied to it by Borrowers or any of their Subsidiaries pursuant to this Agreement; provided, however, that nothing herein shall limit the disclosure of any such information (i) to the extent required by statute, rule, regulation or judicial process, (ii) to counsel for the Bank so long as such counsel confirms it shall keep the non-public information confidential in accordance with these provisions, (iii) to bank examiners, auditors or accountants or to any other regulatory agency or body with proper authority (including non-governmental regulatory agencies or bodies), (iv) in connection with any litigation to which the Bank is a party where disclosure of such information is, in the opinion of counsel for the Bank, necessary or advisable in connection with any action, claim, suit or proceeding, directly or indirectly, involving or potentially involving the Bank and arising out of, based upon, relating to or involving this Agreement or any Note, or any transactions contemplated hereby or arising hereunder, (v) to any assignee or participant of the Bank's rights hereunder, so long as such assignee or participant first acknowledges that it is bound by the provisions of this Section 10.13, or (vi) to any credit agency that rates the financial condition of the Bank or the claims paying ability of the Bank or the financial condition of any Borrower. To the extent disclosure is required under clauses (i), (iii) and (iv) above, the Bank agrees to use its best efforts to give the Borrower prompt prior notice thereof if allowed by law. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers as of the date first written above. Address for Bank: HAMILTON BANK, N.A. 3750 N.W. 87th Avenue Miami, Florida 33178 By: Attn: Alina Cannon ------------------------------------- Name: Alina Cannon Telephone: (305) 717-5500 Title: Vice President Facsimile: (305) 717-6873 By: ------------------------------------- Name: J. Reid Bingham Title: General Counsel Address for all Borrowers: UNITED PETROLEUM CORPORATION 5800 N.W. 74th Avenue Miami, Florida 33166 By: Attn: Mr. Jose Bared ------------------------------------- Name: Carlos Bared Telephone: (305) Title: Vice President Facsimile: (305) UNITED PETROLEUM GROUP, INC. By: ------------------------------------- Name: Carlos Bared Title: President F.S. CONVENIENCE STORES, INC. By: ------------------------------------- Name: Carlos Bared Title: Vice President F.S. GAS SUBSIDIARY, INC. By: ------------------------------------- Name: Carlos Bared Title: Vice President F.S. NON-GAS SUBSIDIARY, INC. By: ------------------------------------- Name: Carlos Bared Title: Vice President REWJB GAS INVESTMENTS By: ------------------------------------- Name: Carlos Bared Title: Vice President JACKSON-UNITED PETROLEUM CORPORATION By: ------------------------------------- Name: Carlos Bared Title: Vice President CALIBUR SYSTEMS, INC. By: ------------------------------------- Name: Carlos Bared Title: Vice President EX-99.5 6 STOCKHOLDERS AGREEMENT STOCKHOLDERS AGREEMENT This STOCKHOLDERS AGREEMENT is made as of November 3, 1999, by and among United Petroleum Corporation, a Delaware corporation (the "Corporation"), Infinity Investors Limited, a Nevis, West Indies corporation, Fairway Capital Limited, a Nevis, West Indies corporation, Seacrest Capital Limited, a Nevis, West Indies corporation (collectively, the "Investor") and Joe Bared and Miriam Bared (collectively, "Bared"). The Investor and Bared are sometimes collectively referred to as the "Stockholders" and individually as a "Stockholder.") Capitalized terms used herein are defined in Section 12 hereof. The Corporation and the Stockholders desire to enter into this Agreement for the purposes, among others, of (i) assuring continuity in the management and ownership of the Corporation, (ii) limiting the manner and terms by which the Stockholders' stock may be transferred, and (iii) providing the Stockholders with certain registration rights. NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as follows: 1. Restrictions on Transfer of Shareholder Shares. No Stockholder shall sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of (collectively, a "Transfer") any interest in any Stockholder Shares for a period of two (2) years from the date hereof (the "Termination Date"). 2. Stockholder Preemptive Rights. Prior to the Termination Date, and for so long as any Stockholder owns any Stockholder Shares, each time the Corporation proposes to sell shares of its capital stock or options, warrants or other rights to buy capital stock for cash (except any capital stock issued pursuant to a stock option or warrant plan of the Corporation which does not exceed ten percent (10%) of the issued and outstanding capital stock of the Corporation at the time the warrant or option plan is adopted by the Corporation), the Corporation shall also make an offering of such shares to the Stockholders in accordance with the following provisions: (a) The Corporation shall deliver a notice to each Stockholder stating the number of shares to be offered and the price and the terms on which it proposes to offer such shares. Such notice shall be sent to the addresses set forth in the records of the Corporation. (b) Within 15 days after delivery of the notice, each Stockholder may elect to purchase, at the price and on the terms specified in the notice, up to its Pro Rata Portion of such shares by delivering written notice of such election to the Corporation within such 15 calendar days. (c) Any shares referred to in the notice that are not elected to be purchased as provided in subsection (b) above may, during the 180-day period thereafter, be offered by the Corporation to any other person or persons at a price not less than, and on terms no more favorable to the offeree than, those specified in the notice. 3. Board of Directors. (a) From and after the date hereof and until the Termination Date, each Stockholder shall vote all of his Stockholder Shares and any other voting securities of the Corporation over which such Stockholder has voting control and shall take all other necessary or desirable actions within his control (whether in his capacity as a stockholder, director, member of a Board of Directors committee or officer of the Corporation or otherwise, and including, without limitation, attendance at meetings in person or by proxy for purposes of obtaining a quorum and execution of written consents in lieu of meetings), and the Corporation shall take all necessary and desirable actions within its control (including, without limitation, calling special board and stockholder meetings), so that: (i) the number of directors on the Board shall be five (5) directors; (ii) the following persons shall be elected to the Board: (A) Two (2) representatives designated by the Investor (the "Investor Directors"); (B) Two (2) representatives designated by Bared (the "Bared Directors"); and (C) L. Grant Peeples (the "Independent Director"). (iii) the removal from the Board (with or without cause) of any representative designated hereunder by the Investor or Bared shall be at only the Investor's, or Bared's written request, respectively; (iv) in the event that any representative designated hereunder by the Investor or Bared for any reason ceases to serve as a member of the Board during his term of office, the resulting vacancy on the Board shall be filed by a representative designated by the Investor or Bared, respectively, as provided hereunder; provided that any representative removed for cause shall not be designated again as a member of the Board; and (v) Expansion of the Board and election of its additional members will initially be subject to the mutual agreement of the Investor Directors and Bared Directors and whenever they do not agree on such a matter, may be submitted to the vote of all stockholders of the Corporation at a duly called meeting. (vi) Each member of the Board shall abstain acting in the event of a direct or indirect financial interest (excluding matters that relate to Farm Stores Grocery, Inc., so long as UPET has a financial interest in it). (b) The Board shall not appoint any committee with the authority to act on behalf of the Board without the consent of the Investor Directors and the Bared Investors. (c) If any party fails to designate a representative to fill a directorship pursuant to the terms of this Section 3, the election of a person to such directorship shall be accomplished in accordance with the Corporation's bylaws and applicable law. 4. Piggyback Registrations. (a) Right to Piggyback. Subject to Section 1 hereof, whenever the Corporation proposes to register any of its Common Stock under the Securities Act (other than the initial public offering, pursuant to a transaction described under Rule 145 of the Securities Act, a transaction registering securities convertible into Common Stock or pursuant to Form S-8 or its successor forms) and the registration form to be used may be used for the registration of the Stockholder Shares of the Stockholders (a "Piggyback Registration"), the Corporation shall give prompt written notice to the Stockholders of its intention to effect such a registration and will include in such registration the Stockholder Shares of the Stockholders with respect to which the Corporation has received written requests for inclusion therein within 15 days after the receipt of the Corporation's notice. (b) Right to Shelf Registration. Subject to Section 11 hereof, in addition to the Piggyback Registration provided pursuant to paragraph 4(a), the Stockholders shall be entitled to request an unlimited number of Form S-3 resale registrations (a "Short Form Registration") in which the Corporation will pay all Registration Expenses; provided that the Corporation and the securities meet the eligibility requirements for such form and provided further that the Short Form Registration shall only be effective for 180 days and shall be subject to no sale periods upon notice to the Stockholders participating therein if in the reasonable judgment of the Corporation such Short Form Registration conflicts with the Corporation's business plans or another existing or proposed registration statement. The Corporation shall use its best efforts to make Short-Form Registrations available for the resale of Stockholder Shares. (c) Expenses. The Registration Expenses of the Stockholders shall be paid by the Corporation in all Piggyback Registrations and Short-Form Registrations. (d) Priority on Primary Registrations. If a Piggyback Registration is an underwritten primary registration on behalf of the Corporation, and the managing underwriters advise the Corporation in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Corporation shall include in such registration (i) first, the securities the Corporation proposes to sell, (ii) second, the Stockholder Shares of the Investor and Bared requested to be included in such registration (on a pro rata basis), together with any securities underlying any warrants issued to the lenders or underwriters of the Corporation on a pro rata basis, (iii) third, other securities requested by other persons to be included in such registration. (e) Priority on Secondary Registrations. If a Piggyback Registration is an underwritten secondary registration on behalf of holders of the Corporation's securities, and the managing underwriters advise the Corporation in writing that in their opinion the number of securities requested to be included in such registration exceeds the number which can be sold in such offering without adversely affecting the marketability of the offering, the Corporation shall include in such registration (i) first, the securities requested to be included therein by the Investor and Bared on a pro rata basis, together with any securities underlying any warrants issued to the lenders or underwriters of the Corporation on a pro rata basis, (ii) second, other securities requested by other persons to be included in such registration. 5. Registration Procedures. Whenever the Stockholders have requested that any securities be registered pursuant to this Agreement, the Corporation shall use its best efforts to effect the registration and the sale of such securities in accordance with the intended method of disposition thereof, and pursuant thereto the Corporation shall as expeditiously as possible: (a) prepare and file with the Securities and Exchange Commission a registration statement with respect to such securities and use its best efforts to cause such registration statement to become effective (provided that before filing a registration statement or prospectus or any amendments or supplements thereto, the Corporation shall furnish to the counsel selected by the Stockholders covered by such registration statement copies of all such documents proposed to be filed, which documents will be subject to the review and comment of such counsel); (b) prepare and file with the Securities and Exchange Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective for a period of not less than 180 days and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended methods of disposition by the sellers thereof set forth in such registration statement; (c) furnish to each seller of securities such number of copies of such registration statement, each amendment and supplement thereto, the prospectus included in such registration statement (including each preliminary prospectus) and such other documents as such seller may reasonably request in order to facilitate the disposition of the securities owned by such seller; (d) use its best efforts to register or qualify such securities under such other securities or blue sky laws of such jurisdictions as any seller reasonably requests and do any and all other acts and things which may be reasonably necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of the securities owned by such seller (provided that the Corporation shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this subparagraph, (ii) subject itself to taxation in any such jurisdiction, or (iii) consent to general service of process in any such jurisdiction); (e) notify each seller of Stockholder Shares, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement contains an untrue statement of a material fact or omits any fact necessary to make the statements therein not misleading, and, at the request of any such seller, the Corporation shall prepare a supplement or amendment to such prospectus so that, as thereafter delivered to the purchasers of such Stockholder Shares, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading; (f) cause all such securities to be listed on each securities exchange on which similar securities issued by the Corporation are then listed and, if not so listed, to be listed on the NASD automated quotation system and, if listed on the NASD automated quotation system, use its best efforts to secure designation of all such securities covered by such registration statement as a Nasdaq national market security within the meaning of Rule 11Aa2-1 of the Securities and Exchange Commission or, failing that, to secure Nasdaq authorization for such securities and, without limiting the generality of the foregoing, to arrange for at least two market makers to register as such with respect to such securities with the NASD; (g) provide a transfer agent and registrar for all such securities not later than the effective date of such registration statement; (h) enter into such customary agreements (including underwriting agreements in customary form) and take all such other actions as the Selling Stockholder or the underwriters, if any, reasonably request in order to expedite or facilitate the disposition of such securities (including, without limitation, effecting a stock split or a combination of shares); (i) make available for inspection by any seller of securities, any underwriter participating in any disposition pursuant to such registration statement and any attorney, accountant or other agent retained by any such seller or underwriter, all financial and other records, pertinent corporate documents and properties of the Corporation, and cause the Corporation's officers, directors, employees and independent accountants to supply all information reasonably requested by any such seller, underwriter, attorney, accountant or agent in connection with such registration statement; (j) otherwise use its best efforts to comply with all applicable rules and regulations of the Securities and Exchange Commission, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve months beginning with the first day of the Corporation's first full calendar quarter after the effective date of the registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act and Rule 158 thereunder; (k) permit the Selling Stockholder which, in its sole and exclusive judgment, might be deemed to be an underwriter or a controlling person of the Corporation, to participate in the preparation of such registration or comparable statement and to require the insertion therein of material, furnished to the Corporation in writing, which in the reasonable judgment of the Selling Stockholder and its counsel should be included; (l) in the event of the issuance of any stop order suspending the effectiveness of a registration statement, or of any order suspending or preventing the use of any related prospectus or suspending the qualification of any Common Stock included in such registration statement for sale in any jurisdiction, the Corporation shall use its best efforts promptly to obtain the withdrawal of such order; and (m) in the event of an underwritten offering obtain a cold comfort letter from the Corporation's independent public accountants and an opinion from the Corporation's counsel in customary form and covering such matters of the type customarily covered by cold comfort letters or opinions, respectively as any underwriter may reasonably request. 6. Registration Expenses. (a) All expenses incident to the Corporation's performance of or compliance with this Agreement, including without limitation all registration and filing fees, fees and expenses of compliance with securities or blue sky laws, printing expenses, messenger and delivery expenses, and fees and disbursements of counsel for the Corporation and all independent certified public accountants, underwriters (excluding discounts and commissions and selling expenses (including brokers' fees and commissions)) and other persons retained by the Corporation (all such expenses being herein called "Registration Expenses"), shall be borne by the Corporation as provided in this Agreement, except that the Corporation shall, in any event, pay its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit or quarterly review, the expense of any liability insurance and the expenses and fees for listing the securities to be registered on each securities exchange on which similar securities issued by the Corporation are then listed or on the NASD automated quotation system. (b) In connection with each Piggyback Registration or Short Form Registration, the Corporation shall reimburse the Stockholders for the reasonable fees and disbursements to the extent the Corporation's counsel has not performed the work. (c) To the extent Registration Expenses are not required to be paid by the Corporation, each holder of securities included in any registration hereunder shall pay those Registration Expenses allocable to the registration of such holder's securities so included, and any Registration Expenses not so allocable shall be borne by all sellers of securities included in such registration in proportion to the aggregate selling price of the securities to be so registered. 7. Indemnification. (a) The Corporation agrees to indemnify, to the extent permitted by law, the Selling Stockholder, its officers and directors and each person who controls the Selling Stockholder (within the meaning of the Securities Act) against all losses, claims, damages, liabilities and expenses caused by any untrue or alleged untrue statement of material fact contained in any registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, except insofar as the same are caused by or contained in any information furnished in writing to the Corporation by the Selling Stockholder expressly for use therein or by the Selling Stockholder's failure to deliver a copy of the registration statement or prospectus or any amendments or supplements thereto after the Corporation has furnished the Selling Stockholder with a sufficient number of copies of the same. In connection with an underwritten offering, the Corporation shall indemnify such underwriters, their officers and directors and each person who controls such underwriters (within the meaning of the Securities Act) to the same extent as provided above with respect to the indemnification of the Selling Stockholder. (b) In connection with any registration statement in which the Selling Stockholder is participating, the Selling Stockholder shall furnish to the Corporation in writing such powers of attorney, custody agreements and letters of direction and other information and affidavits as the Corporation reasonably requests for use in connection with any such registration statement or prospectus and, to the extent permitted by law, shall only have to indemnify the Corporation, its directors and officers and each person who controls the Corporation (within the meaning of the Securities Act) against any losses, claims, damages, liabilities and expenses resulting from any untrue or alleged untrue statement of material fact contained in the registration statement, prospectus or preliminary prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information or affidavit so furnished in writing by the Selling Stockholder to the Corporation for specific use in such registration statement, prospectus or amendment or supplement thereto and which remained in the final prospectus delivered to the purchaser of such securities; provided that the obligation to indemnify shall be limited to the net amount of proceeds received by the Selling Stockholder from the sale of Stockholder Shares pursuant to such registration statement. (c) Any person entitled to indemnification hereunder shall (i) give prompt written notice to the indemnifying party of any claim with respect to which it seeks indemnification and (ii) unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such claim, permit such indemnifying party to assume the defense of such claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. (d) The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling person of such indemnified party and shall survive the transfer of securities. The Corporation also agrees to make such provisions, as are reasonably requested by any indemnified party, for contribution to such party in the event the Corporation's indemnification is unavailable for any reason. (e) If the indemnification provided for in this Section 7 is unavailable or insufficient to hold harmless an indemnified party, then each indemnifying party, to the extent that it would have been or was obligated to provide indemnification under this Section 7, shall contribute to the amount paid or payable by such indemnified party as a result of the claims. losses, changes or liabilities referred to in this Section 7 in such proportion as is appropriate to reflect the relative benefits received by the Stockholders on the one hand and the Corporation on the other. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law then each indemnifying party shall contribute to such amount paid or payable by such indemnified party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Stockholders on the one hand and the Corporation on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof), as well as any other relevant equitable considerations. The relative fault 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 Stockholders on the one hand or the Corporation on the other and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 8. Participation in Underwritten Registrations. No person may participate in any registration hereunder which is underwritten unless such person (i) agrees to sell such person's securities on the basis provided in any underwriting arrangements approved by the person or persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents required under the terms of such underwriting arrangements; provided that no holder of securities included in any underwritten registration shall be required to make any representations or warranties to the Corporation or the underwriters other than representations and warranties regarding such holder and such holder's intended method of distribution. 9. Legend. Each certificate evidencing Stockholder Shares and each certificate issued in exchange for or upon the Transfer of any Stockholder Shares shall be stamped or otherwise imprinted with legends in substantially the following form (in addition to any other applicable legends). "The shares of New UPC Common Stock represented by this certificate are issued pursuant to the Plan of Reorganization for United Petroleum Corporation, as confirmed by the United States Bankruptcy Court for the District of Delaware. The Corporation's Certificate of Incorporation contains restrictions prohibiting the sale, transfer, disposition, purchase or acquisition of any shares of Common Stock without the prior written authorization of the Corporation's Board of Directors (or its designee) by or to any person (a) who beneficially owns, directly or through attribution (as determined under Section 382 of the Internal Revenue Code of 1986 as amended from time to time (the "Code")), 5% or more of the total fair market value of the then issued and outstanding shares of Common Stock of the corporation, or (b) who, upon the sale, transfer, disposition, purchase or acquisition of any shares of Common Stock of the Corporation would beneficially own, directly or through attribution (as determined under Section 382 of the Code), or would cause another person beneficially to own, directly or through attribution (as determined under Section 382 of the Code), 5% or more of the total fair market value of the then issued and outstanding shares of common stock, if that sale, transfer, disposition, purchase or acquisition would jeopardize UPC's preservation of its federal income tax attributes pursuant to Sections 382 or 383 of the Code; provided however, that for so long as the percentage point changes in ownership of the common stock (as described in Section 382(g)(1) of the Code) since the Effective Date do not total more than thirty (30) percentage points, the above restrictions shall be applied by substituting "10%" for "5%". UPC will furnish a copy of its Certificate of Incorporation to the holder of record of this certificate without charge upon written request addressed to UPC at its principal place of business." "THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO ADDITIONAL RESTRICTIONS ON TRANSFER, REPURCHASE OPTIONS AND CERTAIN OTHER AGREEMENTS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED NOVEMBER 3, 1999. A COPY OF SUCH AGREEMENT MAY BE OBTAINED BY THE HOLDER HEREOF AT THE CORPORATION'S PRINCIPAL PLACE OF BUSINESS WITHOUT CHARGE." The Corporation shall imprint such legend on certificates evidencing outstanding Stockholder Shares. The legend set forth above shall be removed from the certificates evidencing any Stockholder Shares after the Termination Date. 10. Conflicting Agreements. Each Stockholder represents that it has not granted and is not a party to any proxy, voting trust or other agreement which is inconsistent with or conflicts with the provisions of this Agreement, and no holder of Stockholder Shares shall grant any proxy or become party to any voting trust or other agreement which is inconsistent with or conflicts with the provisions of this Agreement. No Stockholder shall act, for any reason, as a member of a group or in concert or enter into any agreement or arrangement with any other person in connection with the acquisition, disposition or voting of Stockholder Shares in any manner which is inconsistent with the provisions of this Agreement. 11. Actions Consistent with Agreement. The Corporation shall not circumvent this Agreement by taking any action through a subsidiary or affiliate that would be prohibited under this Agreement. The certificate of incorporation and bylaws of the Corporation may be amended in any manner permitted thereunder, except that neither the certificate nor the bylaws shall be amended in any manner that would conflict with, or be inconsistent with, the provisions of this Agreement. 12. Definitions. "Bared Directors" shall have the meaning set forth in Section 3(a)(ii) hereof. "Corporation" shall have the meaning set forth in the preamble and shall include all of the Corporation's subsidiaries. "Independent Director" shall have the meaning set forth in Section 3(a)(ii) hereof. "Investor Directors" shall have the meaning set forth in Section 3(a)(ii) hereof. "Piggyback Registration" shall have the meaning set forth in Section 4(a) hereof. "Registration Expenses" shall mean all expenses related to registration pursuant to Sections 4(a) and 4(b) of this Agreement. "Securities Act" means the Securities Act of 1933, as amended from time to time. "Stockholder" shall have the meaning as set forth in the preamble and shall include their permitted successors and assigns. "Stockholder Shares" means (i) any common stock of the Corporation purchased or otherwise acquired by any Stockholder (ii) any equity securities issued or issuable directly or indirectly with respect to the Common Stock referred to in clause (i) above by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization, and (iii) any other shares of any class or series of capital stock of the Corporation held by a Stockholder. As to any particular shares constituting Stockholder Shares, such shares shall cease to be Stockholder Shares when they have been sold to the public through a Public Sale even if thereafter they are reacquired by a Stockholder. "Transfer" shall have the meaning set forth in Section 1 hereof. 13. Transfers in Violation of Agreement. Any Transfer or attempted Transfer of any Stockholder Shares in violation of any provision of this Agreement shall be void, and the Corporation shall not record such Transfer on its books or treat any purported transferee of such Stockholder Shares as the owner of such shares for any purpose. 14. Amendment and Waiver. Except as otherwise provided herein, no modification, amendment or waiver of any provision of this Agreement shall be effective against the Corporation, the Investor or Bared unless such modification, amendment, termination or waiver is approved unanimously in writing by the Corporation, the Investor and Bared. The failure of any party to enforce any of the provisions of this Agreement shall in no way be construed as a waiver of such provisions and shall not affect the right of such party thereafter to enforce each and every provision of this Agreement in accordance with its terms. 15. Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision or any other jurisdiction, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein. 16. Entire Agreement. Except as set forth herein, this document embodies the complete agreement and understanding among the parties hereto with respect to the subject matter hereof and supersedes and preempts any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way. 17. Successors and Assigns. Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by the Corporation and its successors and assigns and the Stockholders and any permitted subsequent holders of Stockholder Shares and the respective successors and permitted assigns of each of them, so long as they hold Stockholder Shares. 18. Counterparts. This Agreement may be executed in separate counterparts each of which shall be an original and all of which taken together shall constitute one and the same agreement. 19. Remedies. The Corporation, the Investor and Bared shall be entitled to enforce their rights under this Agreement specifically, to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights existing in their favor. The parties hereto agree and acknowledge that money damages may not be an adequate remedy for any breach of the provisions of this Agreement and that the Corporation, any Investor and Bared may in its sole discretion apply to any court of law or equity of competent jurisdiction for specific performance and/or injunctive relief (without posting a bond or other security) in order to enforce or prevent any violation of the provisions of this Agreement. 20. Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, or mailed first class mail (postage prepaid) or sent by reputable overnight courier service (charges prepaid) to the Corporation at the address set forth below and to any other recipient at the address indicated on the schedules hereto and to any subsequent holder of Stockholder Shares subject to this Agreement at such address as indicated by the Corporation's records, or at such address or to the attention of such other person as the recipient party has specified by prior written notice to the sending party. Notices will be deemed to have been given hereunder when delivered personally, three days after deposit in the U.S. mail and one day after deposit with a reputable overnight courier service. The Corporation's address is: United Petroleum Corporation 2620 Mineral Springs Road, Suite A Knoxville, Tennessee 37917 21. Governing Law. This Agreement will be construed and interpreted in accordance with and governed by the laws of the State of Delaware. 22. Termination. This Agreement shall expire on the tenth anniversary of the date of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Stockholders Agreement on the day and year first above written. UNITED PETROLEUM CORPORATION By: Its: INFINITY INVESTORS LIMITED By: Its: FAIRWAY CAPITAL LIMITED By: Its: SEACREST CAPITAL LIMITED By: Its: Joe Bared Miriam Bared -----END PRIVACY-ENHANCED MESSAGE-----