Free Statement - District Court of Delaware - Delaware

Case 1:07-cv-00207-GMS

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE

BCG, INC. and CHESAPEAKE PRODUCTS & SERVICES, Plaintiffs, v. GLES, INC. d/b/a SWEET OIL COMPANY,

Defendant/Third-Party Plaintiff, v. SUNOCO, INC., Third-Party Defendant.

: : : : : : : : : : : : : : : : : :

C.A. No. 07-cv-207 (GMS) TRIAL BY JURY OF TWELVE DEMANDED NON-ARBITRATION CASE

STATEMENT OF UNDISPUTED FACTS 1. Third-Party Plaintiff GLeS Inc. d/b/a Sweet Oil Company ("Sweet Oil") was a motor fuel wholesaler that purchased fuel and resold that fuel to retail motor fuel facilities. 2. On September 18, 2000, Peninsula Oil Company ("Peninsula") and Tosco Refining, L.P. ("Tosco") entered into a Mobil Branded Distributor Agreement ("Distributor Agreement") with an expiration date of September 30, 2005. (D.I. 23 at ¶ 5). 3. The Distributor Agreement dated September 18, 2000 and attached hereto as Exhibit 1 is genuine and authentic. 4. Among other things, the Distributor Agreement gave Peninsula a nonexclusive license to use the Mobil trademark in connection with the sale of motor fuel at a number of retail locations in Maryland, including, among others, two retail facilities located in Delmar and Snow Hill, Maryland (hereinafter referred to as the Delmar and Duck-In Stations, respectively). 5. On February 25, 2002, Tosco and Peninsula entered into a Tosco Distributor Image Incentive Program Agreement for the Delmar Station ("Delmar Incentive Agreement"). (D.I. 23 at ¶ 9.)

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6. The Delmar Incentive Agreement dated February 25, 2002 and attached hereto as Exhibit 2 is genuine and authentic. 7. On May 2, 2001, Tosco and Peninsula entered into a Tosco Distributor Image Incentive Program Agreement for the Duck-In Station ("Duck-In Incentive Agreement"). 8. The Incentive Agreement dated May 2, 2001 and attached hereto as Exhibit 3 is genuine and authentic. 9. As a consequence of a merger, Conoco Phillips Company ("COP") succeeded to all of Tosco's interests under, among other things, the Distributor Agreement and the Delmar and Duck-In Incentive Agreements. 10. Plaintiffs, BCG, Inc., Chesapeake Products & Service, Inc. (collectively "Plaintiffs") and Peninsula were parties to a Dealer Agreement dated October 3, 2002 which, among other things, permitted plaintiffs to purchase Mobil branded motor fuel from Peninsula and use the Mobil trade name and mark in connection with the sale of motor fuel at the Delmar Station. 11. The Dealer Agreement dated October 3, 2002 and attached hereto as Exhibit 4 is genuine and authentic. 12. On March 21, 2003, Sweet Oil entered into a Sunoco Branded Distributor Agreement with Sunoco, Inc. (R&M) ("Sunoco"). 13. The Sunoco Branded Distributor Agreement dated March 21, 2003 and attached hereto as Exhibit 5 is genuine and authentic. 14. On April 28, 2004, COP assigned all of its right, title and interest under, among other things, the Distributor Agreement and the Delmar and Duck-In Incentive Agreements to Sunoco. (D.I. 30 at ¶ 6.) 15. On August, 31, 2005, Sweet Oil entered into an Assignment and Assumption Agreement with Peninsula wherein Peninsula assigned all of its rights and obligations under the Distributor Agreement, the Delmar and Duck-In Incentive Agreements and Dealer Agreement to Sweet Oil. (D.I. 23 at ¶ 7.) 16. The Assignment and Assumption Agreement dated August 31, 2005 and attached hereto as Exhibit 6 is genuine and authentic. 17. The Distributor Agreement was extended on a month by month basis subsequent to September 30, 2005. (D.I. 23 at ¶ 6.) 18. In January 2006, Sunoco informed Sweet Oil that Sunoco's rights to the Mobil brand would end in February 2007 and Sunoco offered to convert the Delmar and Duck-In Stations to Sunoco. (D.I. 23 at ¶ 23; Ex. 7.)

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19. The letter dated January 27, 2006 and attached hereto as Exhibit 7 is genuine and authentic. 20. Sunoco also informed Sweet Oil that the Delmar Station would need to be converted to a Sunoco station pursuant to the terms of the Distributor Agreement and that Sweet Oil should inform Plaintiffs of the rebranding. (D.I. 23 at ¶ 24; Ex. 7.) 21. BCG refused to rebrand the Delmar Station to sell Sunoco branded motor fuel. (D.I. 23 at ¶ 25.) 22. By letter dated May 9, 2006, Sunoco reaffirmed its prior notifications to Sweet Oil that the Mobil brand would not be available after June 1, 2006. 23. The letter dated May 9, 2006 and attached hereto as Exhibit 8 is genuine and authentic. 24. On November 2, 2006, Sunoco informed Sweet Oil that the Distributor Agreement would terminate and non-renew effective February 2, 2007 because Sunoco's right to sell Mobil branded motor fuels would end in February 2007 and that Plaintiffs' failure to rebrand the Delmar Station to Sunoco was a breach of the Incentive Agreement, obligating Sweet Oil to pay liquidated damages under the agreement. (D.I. 23 at ¶ 8 & 27; Ex. 2 & 9.) 25. The letter dated November 2, 2006 and attached hereto as Exhibit 9 is genuine and authentic. 26. On November 27, 2006, Sunoco further demanded payment in full from Sweet Oil of the amounts paid to Plaintiffs under the Delmar Incentive Agreement and the DuckIn Incentive Agreement. 27. The letter dated November 27, 2006 and attached hereto as Exhibit 10 is genuine and authentic. 28. On January 23, 2007, Sunoco again informed Sweet Oil that Plaintiffs' failure to rebrand the Delmar Station to Sunoco was a breach of the Delmar Incentive Agreement, obligating Sweet Oil to pay liquidated damages under the agreement immediately. (D.I 23 at ¶ 27; Ex. 2 & 11.) 29. The letter dated January 23, 2007 and attached hereto as Exhibit 11 is genuine and authentic. 30. On January 23, 2007, Sweet Oil and Sunoco entered into a Mutual Cancellation Agreement that cancelled the Sunoco Branded Distributor Agreement. 31. The Mutual Cancellation Agreement dated January 23, 2007 attached hereto as Exhibit 12 is genuine and authentic. 32. The Duck-In Station did not convert to the Sunoco brand.

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33. On or about February 2, 2007, at Sunoco's instruction, the Delmar and DuckIn Stations were debranded as Mobil stations and they ceased to sell Mobil branded motor fuel to the motoring public.

/s/ Seth J. Reidenberg Seth J. Reidenberg (#3657) Young, Conaway, Stargatt, & Taylor, LLP The Brandywine Building 1000 West Street, 17th 19801 P.O. Box 391 Wilmington, DE 19899-0391 Telephone No.: 302-571-6600 Hugh J. Hutchinson (pro hac vice) Leonard, Sciolla, Hutchinson, Leonard, & Tinari LLP 1515 Market Street, 18th Floor Philadelphia, PA 19102 Telephone No.: 215-567-1530 Attorneys for Defendant/Third-Party Plaintiff, GLeS, Inc., d/b/a Sweet Oil Company Dated: April 7, 2008

/s/ Matthew A. Kaplan Matthew A. Kaplan (#4956) PEPPER HAMILTON LLP Hercules Plaza, Suite 5100 1313 N. Market Street P.O. Box 1709 Wilmington, DE 19899-1709 Telephone No.: 302-777-6500 A. Christopher Young (pro hac vice) PEPPER HAMILTON LLP 3000 Two Logan Square Eighteenth and Arch Streets Philadelphia, PA 19103-2799 Telephone No.: 215-981-4190 Attorneys for Third-Party Defendant, Sunoco, Inc. (R&M) Dated: April 7, 2008

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