1
EXHIBIT 10.1
EXECUTION COPY
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PURCHASE AGREEMENT
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BY AND AMONG
COLUMBIA ENERGY GROUP,
COLUMBIA PROPANE CORPORATION,
COLUMBIA PROPANE, L.P.,
AMERIGAS PROPANE, L.P.,
AMERIGAS PARTNERS, L.P.
AND
AMERIGAS PROPANE, INC.
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JANUARY 30, 2001
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TABLE OF CONTENTS
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ARTICLE I: THE TRANSACTIONS..............................................................................................1
SECTION 1.1 The Transactions....................................................................1
(a) Sale and Purchase of Buyer Limited Partnership Interests;
Capital Contribution of API to Buyer................................................1
(b) Contribution of Buyer Limited Partnership Interests to Buyer
Parent in Return for Buyer Parent Units; Capital Contribution
of API to Buyer Parent..............................................................2
(c) Buyer and Buyer Parent Financing; Capital Contributions to
Buyer...............................................................................2
(d) Distribution to Company and Assumption by Company of
Certain CPLP Assets and Liabilities.................................................3
(e) Contribution of Company Assets and Liabilities to CPC Sub;
Purchase of CPC Sub Membership Interests............................................3
(f) Execution and Delivery of Capital Contribution Agreement and
Merger Agreement....................................................................3
(g) Amendment of the Loan Agreement.....................................................4
(h) Purchase of the Company's CPLP Limited Partnership Interest
and the Triarc Note.................................................................4
(i) Merger of CPC Sub and CPLP..........................................................4
(j) Distribution to Seller and Assumption by Seller of Certain
Company Assets and Liabilities......................................................4
(k) Purchase and Sale of the Company Shares.............................................4
SECTION 1.2 Closing.............................................................................5
SECTION 1.3 Closing Deliveries..................................................................5
(a) Seller's Deliveries.................................................................5
(b) Buyer's Deliveries..................................................................7
(c) Registration Rights Agreement.......................................................9
SECTION 1.4 Purchase Price Adjustment...........................................................9
(a) Adjusted Net Working Capital; Adjusted Long-Term Liabilities........................9
(b) Purchase Price Adjustment...........................................................9
(c) Closing Date Financial Statements...................................................9
(d) Delivery of Closing Date Financial Statements; Access to
Records............................................................................10
(e) Objection to the Closing Date Financial Statements.................................10
(f) Resolution of Disputes.............................................................10
(g) Payment of Balance.................................................................10
SECTION 1.5 Allocation of Purchase Price.......................................................11
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ARTICLE II: REPRESENTATIONS AND WARRANTIES OF SELLER.....................................................................11
SECTION 2.1 Organization of Seller; Authority of Seller; Binding Effect
on Seller..........................................................................11
SECTION 2.2 Organization and Existence of the Company Parties; Authority
of the Subsidiaries; Binding Effect on the Subsidiaries............................12
(a) Organization and Existence of Company Parties; Qualification
of Company Parties.................................................................12
(b) Authority of the Company Parties; Binding Effect on Company
Parties; Enforceability............................................................12
SECTION 2.3 Capital Structure..................................................................13
(a) Company Capital Stock..............................................................13
(b) Subsidiaries' Capital Stock........................................................13
SECTION 2.4 Subsidiaries.......................................................................13
SECTION 2.5 No Material Adverse Change.........................................................14
SECTION 2.6 No Conflict........................................................................14
SECTION 2.7 No Default.........................................................................15
SECTION 2.8 Brokerage Arrangements.............................................................15
SECTION 2.9 Company Party Financial Statements; Undisclosed Liabilities........................15
SECTION 2.10 No Litigation......................................................................15
SECTION 2.11 Environmental Matters..............................................................16
SECTION 2.12 Labor Matters......................................................................17
SECTION 2.13 Compliance with Laws...............................................................17
SECTION 2.14 Intellectual Property..............................................................18
SECTION 2.15 Employee Benefit Plans; ERISA......................................................18
SECTION 2.16 Taxes..............................................................................20
SECTION 2.17 Corporate and Partnership Records..................................................22
SECTION 2.18 Material Contracts.................................................................22
SECTION 2.19 Real and Personal Property.........................................................23
SECTION 2.20 Bank Accounts......................................................................24
SECTION 2.21 Insurance Policies.................................................................24
SECTION 2.22 Inventory..........................................................................25
SECTION 2.23 Accounts Receivable................................................................25
SECTION 2.24 Propane Sales......................................................................25
SECTION 2.25 Letters of Credit and Guaranties...................................................25
ARTICLE III: REPRESENTATIONS AND WARRANTIES OF BUYER PARENT AND BUYER......................................................25
SECTION 3.1 Organization and Existence.........................................................25
SECTION 3.2 Authority; Binding Effect..........................................................26
SECTION 3.3 No Material Adverse Change.........................................................26
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SECTION 3.4 SEC Filings........................................................................26
SECTION 3.5 Ownership..........................................................................27
SECTION 3.6 No Conflict........................................................................27
SECTION 3.7 No Default.........................................................................28
SECTION 3.8 Brokerage Arrangements.............................................................28
SECTION 3.9 Purchase Not for Distribution......................................................28
SECTION 3.10 Governing Documents................................................................28
SECTION 3.11 Compliance with Laws...............................................................28
SECTION 3.12 Taxes..............................................................................29
ARTICLE IV: INVESTMENT....................................................................................................30
SECTION 4.1 Restricted Securities..............................................................30
SECTION 4.2 Purchase for Own Account; Investment...............................................30
SECTION 4.3 Information........................................................................30
SECTION 4.4 Legends............................................................................30
ARTICLE V: CERTAIN COVENANTS..............................................................................................31
SECTION 5.1 Access to Information..............................................................31
SECTION 5.2 Seller Conduct of Business.........................................................32
(a) Ordinary Course....................................................................32
(b) Restrictions on the Company Parties................................................32
(c) Tax Filings........................................................................34
(d) Employees of the Company Parties...................................................34
SECTION 5.3 Expenses...........................................................................34
SECTION 5.4 Approvals; Further Action; Commercially Reasonable Efforts.........................34
SECTION 5.5 Notification of Certain Matters....................................................35
SECTION 5.6 Certain Indebtedness...............................................................35
SECTION 5.7 No Public Announcement.............................................................36
SECTION 5.8 Use of Names.......................................................................36
(a) Licenses...........................................................................36
(b) Amendments; Necessary Actions......................................................36
(c) Cessation of Use...................................................................36
SECTION 5.9 Post-Closing Assistance............................................................37
SECTION 5.10 Noncompetition.....................................................................38
(a) Covenant Not to Compete............................................................38
(b) Non-Solicitation...................................................................38
(c) Hiring of Buyer's Employees........................................................38
(d) Remedies for Breach................................................................38
(e) Other Business.....................................................................39
SECTION 5.11 Registration Rights................................................................39
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SECTION 5.12 Additional Insured.................................................................39
SECTION 5.13 Pre-Closing Annual and Monthly Financial Statements................................39
SECTION 5.14 Pre-Closing Employment Taxes Cooperation...........................................40
SECTION 5.15 Information Concerning Partnership Tax Attributes..................................40
SECTION 5.16 Periodic Information Concerning Financing Arrangements.............................41
ARTICLE VI: CONDITIONS.....................................................................................................42
SECTION 6.1 Conditions to Each Party's Obligations.............................................42
(a) Governmental Consents..............................................................42
(b) Third Party Consents...............................................................42
(c) HSR Act............................................................................42
(d) No Injunctions or Restraints.......................................................42
(e) Deliveries.........................................................................42
SECTION 6.2 Conditions to Obligations of Buyer Parties.........................................42
(a) Representations and Warranties.....................................................42
(b) Performance of Obligations of Seller and Company Parties...........................43
(c) Resignations.......................................................................43
(d) No Company Material Adverse Effect.................................................43
(e) Seller's Counsel's Opinion.........................................................43
(f) Financing..........................................................................43
(g) Payment of Long-Term Liabilities...................................................43
(h) Richmond Office Leases.............................................................43
(i) Sinking Springs Terminal...........................................................43
(j) Transition Services Agreement......................................................44
(k) Buyer's Tax Counsel's Opinion......................................................44
(l) Various Tax Matters................................................................44
SECTION 6.3 Conditions to Obligations of Seller................................................44
(a) Representations and Warranties.....................................................44
(b) Performance of Obligations of Buyer................................................44
(c) Buyer Financing....................................................................44
(d) No Buyer Material Adverse Effect...................................................45
(e) Opinion of Counsel to Buyer and Buyer Parent.......................................45
ARTICLE VII: EMPLOYEE BENEFITS..............................................................................................45
SECTION 7.1 Seller Pension Plans...............................................................45
SECTION 7.2 401(k) Plan Benefits...............................................................45
SECTION 7.3 Seller Welfare or Other Benefit Plans..............................................45
SECTION 7.4 Post-Closing Employee Benefits.....................................................47
SECTION 7.5 Provision of Information to Company Employees......................................48
SECTION 7.6 Indemnification....................................................................48
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ARTICLE VIII: TERMINATION....................................................................................................49
SECTION 8.1 Events of Termination..............................................................49
(a) Consent............................................................................49
(b) Prohibition or Restriction.........................................................49
(c) Non-Occurrence.....................................................................49
ARTICLE IX: INDEMNIFICATION...............................................................................................49
SECTION 9.1 Obligation to Indemnify............................................................49
SECTION 9.2 Control of Remediation of Company Party Properties for
Which Seller Is Providing Indemnification..........................................53
ARTICLE X: TRIARC PURCHASE AGREEMENT......................................................................................55
SECTION 10.1 Representations and Warranties of the Seller.......................................55
SECTION 10.2 Representations, Warranties and Covenants of the Buyer
Parties...........................................................................55
SECTION 10.3 Indemnification....................................................................56
(a) Seller's Indemnification...........................................................56
(b) Buyer's Indemnification............................................................56
(c) Seller's and Buyer Parties' Cross Indemnification..................................56
(d) Absence of Certain Limitations on Indemnification Obligations......................56
SECTION 10.4 Consents under the Triarc Purchase Agreement.......................................57
ARTICLE XI: INDEMNIFICATION PROCEDURES; SURVIVAL OF REPRESENTATIONS AND WARRANTIES; EFFECT OF INSURANCE..................57
SECTION 11.1 Indemnification Procedures.........................................................57
SECTION 11.2 Survival; Termination; Insurance...................................................59
SECTION 11.3 Environmental Insurance............................................................60
ARTICLE XII: TAX MATTERS...................................................................................................60
SECTION 12.1 Tax Indemnity......................................................................60
SECTION 12.2 Returns and Payments...............................................................62
SECTION 12.3 Tax Benefits.......................................................................63
SECTION 12.4 Tax Refunds........................................................................63
SECTION 12.5 Contests...........................................................................63
SECTION 12.6 Time of Payment....................................................................65
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SECTION 12.7 Cooperation and Exchange of Information............................................65
SECTION 12.8 Conveyance Taxes...................................................................65
SECTION 12.9 Miscellaneous......................................................................65
ARTICLE XIII: MISCELLANEOUS.................................................................................................67
SECTION 13.1 Notices............................................................................67
SECTION 13.2 Governing Law; Dispute Resolution; Enforcement.....................................68
SECTION 13.3 Entire Agreement; Amendments and Waivers...........................................68
SECTION 13.4 Binding Effect and Assignment......................................................69
SECTION 13.5 Severability.......................................................................69
SECTION 13.6 Disclosure.........................................................................69
SECTION 13.7 Interpretation.....................................................................70
SECTION 13.8 References; Construction...........................................................70
SECTION 13.9 Context............................................................................70
SECTION 13.10 No Prejudice.......................................................................70
SECTION 13.11 Execution..........................................................................70
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SCHEDULES
Schedule 1-1(d) CPLP Assets and Liabilities (to be Distributed to the Company)
Schedule 1.1(e) Company Purchased Assets and Assumed Liabilities (to be Contributed to or Assumed by CPC Sub)
Schedule 1.1(j) Company Excluded Assets and Liabilities (to be Distributed to Seller)
Schedule 1.4(a)(x)-I Adjustments to Total Current Assets
Schedule 1.4(a)(x)-II Adjustments to Total Current Liabilities
Schedule 1.4(a)(y) Permitted Long-Term Liabilities
Schedule 1.5 Allocation of Purchase Price
Schedule 2.2(a)-I Company Subsidiaries
Schedule 2.2(a)-II Company Party Foreign Qualifications
Schedule 2.2(a)-III Company Party Investments
Schedule 2.3(b) Subsidiaries Capital Stock
Schedule 2.4 Liens on Interests in Subsidiaries
Schedule 2.5 Company Party Material Adverse Changes
Schedule 2.6 Company Party Required Consents; Conflicts
Schedule 2.7 Company Party Defaults
Schedule 2.8 Company Party Brokerage Arrangements
Schedule 2.9 Company Party Financial Statements
Schedule 2.10 Company Party Litigation
Schedule 2.11 Company Party Environmental Matters
Schedule 2.12 Company Party Labor Matters
Schedule 2.13 Exceptions to Company Party Compliance with Law
Schedule 2.14 Company Party Intellectual Property
Schedule 2.15(a) Employee Benefit Plans
Schedule 2.15(b) Multiemployer and Multiple Employer Plans
Schedule 2.15(c) Single Employer Plans
Schedule 2.15(g) Accrual of Benefit Plan Liabilities
Schedule 2.16 Company Party Tax Matters
Schedule 2.18(a) Company Party Material Contracts
Schedule 2.18(b) Fixed Supply and Purchase Obligations
Schedule 2.19(a)-I Company Party Real Property
Schedule 2.19(a)-II Liens Affecting Use of Company Party Real Property
Schedule 2.19(b) Breaches and Defaults under Leases; Leases Not in Full Force and Effect
Schedule 2.19(c) Outstanding Notices
Schedule 2.19(d) Liens on Personal Property
Schedule 2.20 Company Party Bank Accounts
Schedule 2.21 Company Party Insurance Policies
Schedule 2.23 Accounts Receivable
Schedule 2.24 Propane Sales
Schedule 2.25 Letters of Credit and Guaranties
Schedule 3.3 Buyer Party Material Adverse Changes
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Schedule 3.5(e) Liens on Partnership Interests
Schedule 3.6 Buyer Party Required Consents; Conflicts
Schedule 3.8 Buyer Party Brokerage Arrangements
Schedule 3.12(f) Tax Sharing Agreements
Schedule 5.2(b) Company Party Permitted Transactions
Schedule 5.2(d) Company Party Permitted Amendments to Benefit Plans
Schedule 5.8(b) Seller Trademarks
Schedule 5.12 Certain Environmental Insurance Policies
Schedule 5.15 Asset Classes for Purposes of Book Value and Section 704(c) Schedule
Schedule 7.3(b) Company Employees for Whom Seller Is Retaining Severance and
Other Obligations
Schedule 7.4(a) Buyer's Enhanced Severance Benefits
Schedule 9.1(c)(ii) Litigation Retained by Seller
Schedule 9.1(c)(iii) Seller Indemnified Properties
Schedule 10.1 Triarc Purchase Agreement
Schedule 13.8(a) Seller Knowledge Persons
Schedule 13.8(b) Buyer Knowledge Persons
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EXHIBITS
Exhibit A Capital Contribution Agreement
Exhibit B Merger Agreement
Exhibit C Amendment to Loan Agreement
Exhibit D Registration Rights Agreement
Exhibit E Trademark License Agreement
Exhibit F Seller's Counsel's Opinion
Exhibit G Terms and Conditions of Sinking Springs Terminal Lease
Exhibit H Transition Services Agreement
Exhibit I Buyer's Counsel's Opinion
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DEFINED TERMS
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Accounts Receivable...........................................................................................................25
Adjusted Long-Term Liabilities.................................................................................................9
Adjusted Net Working Capital...................................................................................................9
Affiliate ....................................................................................................................70
Agreement......................................................................................................................1
Assigned Asset................................................................................................................37
Assigning Party...............................................................................................................37
Assignee Party................................................................................................................37
API............................................................................................................................1
Atlantic.......................................................................................................................1
Atlantic Interest..............................................................................................................1
Benefit Plan..................................................................................................................18
Benefit Plans.................................................................................................................18
Book Value and Section 704(c).................................................................................................40
Business Day..................................................................................................................70
Buyer..........................................................................................................................1
Buyer's Counsel................................................................................................................8
Buyer Employee Benefit Plans..................................................................................................47
Buyer Financing Arrangement....................................................................................................3
Buyer Indemnification Basket..................................................................................................52
Buyer Indemnification Threshold...............................................................................................52
Buyer Indemnification Cap.....................................................................................................52
Buyer's Initial CPLP Limited Partnership Interest..............................................................................4
Buyer Indemnitees.............................................................................................................49
Buyer Limited Partnership Interests............................................................................................1
Buyer Limited Partnership Agreement............................................................................................3
Buyer Material Adverse Effect.................................................................................................26
Buyer Parent...................................................................................................................1
Buyer Parent Financing Arrangement.............................................................................................2
Buyer Parent Partnership Agreement.............................................................................................2
Buyer Parent Units.............................................................................................................2
Buyer Parties..................................................................................................................1
Buyer Partnership Agreement....................................................................................................2
Buyer Party....................................................................................................................1
Buyer Permits.................................................................................................................28
Buyer Required Consents.......................................................................................................27
Buyer's 401(k) Plan...........................................................................................................45
Buyer's Tax Counsel...........................................................................................................44
Capital Contribution Agreement.................................................................................................3
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Closing........................................................................................................................5
Closing Agreement.............................................................................................................22
Closing Date...................................................................................................................5
Closing Date Financial Statements..............................................................................................9
Code..........................................................................................................................19
Columbia......................................................................................................................36
Columbia Petroleum............................................................................................................36
Company........................................................................................................................1
Company Financial Statements..................................................................................................15
Company Material Adverse Effect...............................................................................................14
Company Parties................................................................................................................1
Company Party Property........................................................................................................51
Company Permits...............................................................................................................17
Company Propane Assets.........................................................................................................3
Company Required Consents.....................................................................................................14
Company Shares.................................................................................................................1
Company's CPLP Limited Partnership Interest....................................................................................1
Compensation Plans............................................................................................................46
Confidentiality Agreement.....................................................................................................31
Conoco.........................................................................................................................1
Contest.......................................................................................................................64
Contest Expenses..............................................................................................................60
CPC Sub........................................................................................................................3
CPC Sub Membership Interests...................................................................................................3
CPH............................................................................................................................1
CPH Shares.....................................................................................................................1
CPLP...........................................................................................................................1
Employee Benefit Plans........................................................................................................18
Environmental Laws............................................................................................................16
Environmental Claim...........................................................................................................17
Energy USA....................................................................................................................38
ERISA.........................................................................................................................18
Exchange Act..................................................................................................................26
Financing Arrangements.........................................................................................................3
GAAP...........................................................................................................................9
Governmental Entity...........................................................................................................17
Governmental Order............................................................................................................16
Hazardous Materials...........................................................................................................16
HSR Act.......................................................................................................................14
Including.....................................................................................................................70
Indemnified Party.............................................................................................................57
Indemnifying Party............................................................................................................57
Intellectual Property.........................................................................................................18
Interests.....................................................................................................................15
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Inventory.....................................................................................................................26
IRS...........................................................................................................................21
Knowledge.....................................................................................................................73
Leffler.......................................................................................................................36
Liens.........................................................................................................................14
Litigation....................................................................................................................16
Loan Agreement.................................................................................................................4
Losses........................................................................................................................52
Merger Agreement...............................................................................................................4
Multiemployer Plan............................................................................................................19
Multiple Employer Plan........................................................................................................19
National Propane Environmental Insurance Policy...............................................................................42
New York Court................................................................................................................72
Noncompete Period.............................................................................................................38
Notice........................................................................................................................70
Permitted Long-Term Liabilities................................................................................................9
Pre-Closing Financial Statements..............................................................................................40
Principal Closing Transactions.................................................................................................5
Properties....................................................................................................................25
Purchase Price.................................................................................................................5
Purchase Price Adjustment.....................................................................................................10
Registration Rights Agreement..................................................................................................9
SEC...........................................................................................................................28
Securities Act................................................................................................................28
Seller.........................................................................................................................1
Seller Environmental Indemnification Cap......................................................................................51
Seller Indemnification Basket.................................................................................................50
Seller Indemnification Threshold..............................................................................................50
Seller Indemnification Cap....................................................................................................50
Seller Indemnified Properties.................................................................................................52
Seller Indemnitees............................................................................................................52
Seller Pension Plans..........................................................................................................45
Seller Representatives........................................................................................................54
Seller Trademarks.............................................................................................................36
Seller Welfare or Other Benefit Plans.........................................................................................46
Seller's Counsel...............................................................................................................6
Significant Risk................................................................................................................
Single Employer Plans.........................................................................................................19
Site Remediation Work Plans...................................................................................................53
Special Limited Partner.......................................................................................................33
Structure Controversy.........................................................................................................66
Subsidiary....................................................................................................................12
Take or Pay...................................................................................................................22
Tax Allocation Statement......................................................................................................63
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Tax Indemnity Provisions......................................................................................................55
Tax Referee...................................................................................................................62
Tax Return....................................................................................................................22
Tax Ruling....................................................................................................................22
Taxes.........................................................................................................................21
Third Party Claim.............................................................................................................57
Trademark License Agreement...................................................................................................36
Transaction Documents.........................................................................................................11
Transactions...................................................................................................................5
Transition Services Agreement.................................................................................................44
Triarc Companies..............................................................................................................21
Triarc Note ...................................................................................................................3
Triarc Purchase Agreement.....................................................................................................21
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PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered into as
of the 30th day of January, 2001, by and between Columbia Energy Group, a
Delaware corporation ("Seller"), Columbia Propane Corporation, a Delaware
corporation (the "Company"), Columbia Propane, L.P., a Delaware limited
partnership ("CPLP"), of which CP Holdings, Inc., a Delaware corporation, is the
sole general partner ("CPH" and, together with the Company and CPLP, the
"Company Parties") AmeriGas Propane, L.P., a Delaware limited partnership
("Buyer"), AmeriGas Partners, L.P., a Delaware limited partnership and the
parent of the Buyer ("Buyer Parent"), and AmeriGas Propane, Inc., a Pennsylvania
corporation that is the general partner of each of the Buyer Parent and the
Buyer ("API," and together with Buyer and Buyer Parent, the "Buyer Parties," and
each individually, a "Buyer Party").
W I T N E S S E T H:
WHEREAS, Seller is the owner of 100% of the outstanding shares of the
common stock, par value $25.00 per share, of the Company (the "Company Shares");
and
WHEREAS, the Company is the owner of (i) 99.26% of the outstanding
limited partnership interests of CPLP (as such percentage interest may be
subsequently reduced by the transactions contemplated by Section 1.1(i), the
"Company's CPLP Limited Partnership Interest"), (ii) all of the issued and
outstanding capital stock (the "CPH Shares") of CPH, (iii) 50% of the issued and
outstanding capital stock (the "Atlantic Interest") of Atlantic Energy, Inc., a
Delaware corporation ("Atlantic"), which is a joint venture between the Company
and Conoco, Inc., a Delaware corporation ("Conoco"), and (iv) certain other
tangible and intangible assets of the Company used or useful in the propane
distribution business; and
WHEREAS, the parties desire to enter into the transactions provided for
in this Agreement upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto hereby agree as follows:
ARTICLE I
THE TRANSACTIONS
SECTION 1.1 The Transactions.
(a) Sale and Purchase of Buyer Limited Partnership Interests; Capital
Contribution of API to Buyer. Upon the terms and subject to the conditions of
this Agreement, and on the basis of and in reliance upon the representations,
warranties, covenants and agreements set forth herein, on the Closing Date,
Buyer shall sell and issue to Seller, and Seller shall purchase from
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Buyer, limited partnership interests of the Buyer valued at $52,500,000 (the
"Buyer Limited Partnership Interests"), for cash in the amount of $52,500,000.
Simultaneously with the transactions described in this Section 1.1(a), API will
contribute 1/98th of $52,500,000 (or $535,714.29) to Buyer to maintain its
ownership interest in Buyer, which amount shall constitute a capital
contribution to Buyer pursuant to the Amended and Restated Agreement of Limited
Partnership of Buyer (the "Buyer Partnership Agreement"). Buyer shall not make
any "reverse Section 704(c) allocations" (within the meaning of Treas. Reg.
1.704-3(a) (6)) by reason of the Transactions.
(b) Contribution of Buyer Limited Partnership Interests to Buyer Parent
in Return for Buyer Parent Units; Capital Contribution of API to Buyer Parent.
At the Closing, immediately following the completion of the transactions
described in Section 1.1(a) above, upon the terms and subject to the conditions
of this Agreement, and on the basis of and in reliance upon the representations,
warranties, covenants and agreements set forth herein, on the Closing Date,
Buyer Parent shall sell and issue to Seller, and Seller shall purchase from
Buyer Parent, that number of fully paid (to the extent required under the Second
Amended and Restated Agreement of Limited Partnership of the Buyer Parent (the
"Buyer Parent Partnership Agreement")) and nonassessable (except to the extent
provided in the Delaware Revised Uniform Limited Partnership Act) common limited
partnership units of Buyer Parent valued at $52,500,000 (subject to a maximum
number of Buyer Parent Units of 3,027,682 and a minimum number of Buyer Parent
Units of 2,460,169) (the "Buyer Parent Units"), in return for the Buyer Limited
Partnership Interests (valued at $52,500,000), which shall be transferred and
assigned to the Buyer Parent. At the Closing, Buyer Parent shall deliver to
Seller a copy of an irrevocable letter of instruction sent to Buyer Parent's
transfer agent instructing it to deliver to Seller the Buyer Parent Units,
rounded to the nearest whole unit. The number of units of Buyer Parent
comprising the Buyer Parent Units shall be equal to $52,500,000 divided by the
average closing price of Buyer Parent Units on the New York Stock Exchange for
the 10 consecutive trading days ending on the second Business Day prior to the
Closing Date (subject to a maximum number of Buyer Parent Units of 3,027,682 and
a minimum number of Buyer Parent Units of 2,460,169). Buyer Parent shall not
make any "reverse Section 704(c) allocations" (within the meaning of Treas. Reg.
1.704-3(a)(6)) by reason of the Transactions. Buyer Parent shall allocate to
Seller in respect of the Buyer Parent Units items of income, gain, loss and
deduction in accordance with its existing policy for allocating such items
between a transferor and transferee of units that is described under the caption
"Tax Considerations - Disposition of Common Units - Allocations between
Transferors and Transferees" in the prospectus of Buyer Parent dated October 5,
2000 with respect to 9,000,000 Common Units. Simultaneously with the
transactions described above in this Section 1.1(b), API will contribute 1/99th
of $52,500,000 (or $530,303.03) to Buyer Parent pursuant to the Buyer Parent
Partnership Agreement to maintain its ownership interest in Buyer Parent, which
amount shall constitute a capital contribution to Buyer Parent pursuant to the
Buyer Parent Partnership Agreement.
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(c) Buyer and Buyer Parent Financing; Capital Contributions to Buyer.
(i) At the Closing, immediately following the completion of the transactions
described in Section 1.1(b), (i) Buyer Parent shall borrow $51,250,000 pursuant
to a financing arrangement with one or more creditors (the "Buyer Parent
Financing Arrangement") and shall contribute that amount to the Buyer, which
amount shall constitute a capital contribution to Buyer pursuant to the Buyer
Partnership Agreement, (ii) API will contribute 1/98th of $51,250,000 (or
$522,959.15) to Buyer to maintain its ownership interest in Buyer, which amount
shall constitute a capital contribution to Buyer pursuant to the Buyer Limited
Partnership Agreement, and (iii) Buyer shall borrow up to $103,750,000 from one
or more creditors through the issuance of first mortgage bonds (the "Buyer
Financing Arrangement" and, together with the Buyer Parent Financing
Arrangement, the "Financing Arrangements"). As part of the Buyer Financing
Arrangement and as security for its obligations under the first mortgage bonds,
the Buyer may agree, upon consummation of the transactions contemplated in this
Section 1.1, (i) to pledge to its creditors all of the Buyer's limited
partnership interest in CPLP, including the Company's CPLP Limited Partnership
Interest , to be acquired by the Buyer pursuant to Section 1.1(h), below), and
the Buyer's Initial CPLP Limited Partnership Interest, to be acquired by the
Buyer in the Merger pursuant to Section 1.1(i), below, and (ii) to pledge to its
creditors all of the Buyer's rights under the Promissory Note dated July 19,
1999 with the current outstanding balance due of $137,997,000 executed by
National Propane, L.P., a Delaware limited partnership (which is currently known
as CPLP through name change), as payor, in favor of the Company, as payee (the
"Triarc Note") to be acquired by the Buyer pursuant to Section 1.1(h), below),
and (iii) to grant its creditors a second lien on all of the assets of CPLP,
subordinate to the lien granted to the holder of the Triarc Note.
(d) Distribution to Company and Assumption by Company of Certain CPLP
Assets and Liabilities. At the Closing, immediately following the completion of
the transactions described in Section 1.1(c), CPLP shall distribute or assign,
as applicable, to the Company, and the Company shall take title to or assume, as
applicable, certain assets and liabilities of CPLP as more particularly
described in Schedule 1.1(d).
(e) Contribution of Company Assets and Liabilities to CPC Sub; Purchase
of CPC Sub Membership Interests. At the Closing, immediately following the
completion of the transactions described in Section 1.1(d), (i) the Company
shall form and organize a limited liability company pursuant to the Delaware
Limited Liability Company Act under the name CPC Sub, L.L.C. ("CPC Sub"), the
sole member of which shall be the Company, and the Company shall contribute to
CPC Sub the assets set forth in Schedule 1.1(e) and CPC Sub shall assume the
liabilities set forth on Schedule 1.1(e) (the "Company Propane Assets"), and
(ii) upon the terms and subject to the conditions of this Agreement, and on the
basis of and in reliance upon the representations, warranties, covenants and
agreements set forth herein, the Company shall sell to the Buyer, and the Buyer
shall purchase from the Company, all of the outstanding limited
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liability company membership interests of CPC Sub (the "CPC Sub Membership
Interests") in exchange for $60,852,000.
(f) Execution and Delivery of Capital Contribution Agreement and Merger
Agreement. At the Closing, immediately following the completion of the
transactions described in Section 1.1(e), (i) the Buyer shall, and the Seller
shall cause CPLP to, enter into a capital contribution agreement, substantially
in the form of Exhibit A (the "Capital Contribution Agreement"), providing for
the transfer by the Buyer to CPLP, no later than nine months following the
effective date of such merger, of assets and liabilities of the Buyer with a net
fair market value of not less than the amount specified in the Capital
Contribution Agreement in exchange for a limited partnership interest in CPLP
equal in value to the amount of such contribution, and (ii) the Buyer, CPC Sub,
the Seller, and CPLP shall enter into an agreement and plan of merger,
substantially in the form of Exhibit B, providing for the merger of CPC Sub with
and into CPLP (the "Merger Agreement").
(g) Amendment of the Loan Agreement. At the Closing, immediately
following the completion of the transactions described in Section 1.1(f), the
Company and CPLP shall enter into the First Amendment to the Loan Agreement,
dated July 19, 1999, between National Propane L.P. (now known as CPLP through
name change) and the Company (the "Loan Agreement"), substantially in the form
of Exhibit C.
(h) Purchase of the Company's CPLP Limited Partnership Interest and the
Triarc Note. At the Closing, immediately following the completion of the
transactions described in Section 1.1(g), upon the terms and subject to the
conditions of this Agreement, and on the basis of and in reliance upon the
representations, warranties, covenants and agreements set forth herein, the
Company shall sell to the Buyer, and the Buyer shall purchase from the Company,
(i) the Company's CPLP Limited Partnership Interest in exchange for $3,300,000
and (ii) the Company's rights and obligations under the Triarc Note and the Loan
Agreement in exchange for $138,000,000. Simultaneously with the transactions
contemplated by this Section 1.1(h), the Company shall declare and pay to the
Seller a special cash dividend in the amount of $202,152,000.
(i) Merger of CPC Sub and CPLP. At the Closing, immediately following
the completion of the transactions described in Section 1.1(h), CPC Sub shall be
merged with and into CPLP. The CPC Sub Membership Interests held by the Buyer
shall be converted into a limited partnership interest in CPLP of the percentage
specified in the Merger Agreement (the "Buyer's Initial CPLP Limited Partnership
Interest").
(j) Distribution to Seller and Assumption by Seller of Certain Company
Assets and Liabilities. At the Closing, immediately following the completion of
the transactions described in Section 1.1(i), upon the terms and subject to the
conditions of this Agreement, and on the basis of and in reliance upon the
representations, warranties, covenants and agreements set forth
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herein, the Company will distribute or assign, as applicable, to the Seller or
an affiliate of the Seller, and the Seller or such affiliate of the Seller shall
take title to or assume, as applicable, the assets and liabilities of the
Company as more particularly described on Schedule 1.1(j)
(k) Purchase and Sale of the Company Shares. At the Closing,
immediately following the completion of the transactions described in Section
1.1(j), the Seller shall sell, convey, distribute, assign and transfer the
Company Shares to the Buyer, upon the terms and subject to the conditions of
this Agreement and on the basis of and in reliance upon the representations,
warranties, covenants and agreements set forth herein, in exchange for
$6,098,000.
The transactions expressly described in Sections 1.1(a) - (k) (the "Principal
Closing Transactions"), together with any other transactions contemplated by
this Agreement and the other Transaction Documents, are collectively referred to
herein as the "Transactions". The aggregate amount of the payments from the
Buyer to the Company under Sections 1.1(e) and (h) and from the Buyer to the
Seller under Section 1.1(k), amounting, in the aggregate, to $208,250,000, are
referred to herein as the "Purchase Price."
SECTION 1.2 Closing. Unless this Agreement shall have been terminated pursuant
to Section 8.1, and subject to the satisfaction or waiver of each of the
conditions set forth in Article VI, the closing of the Transactions (the
"Closing") shall take place at 10:00 a.m. on the date that is the fifth Business
Day following the date on which the last to be fulfilled or waived of the
conditions set forth in Sections 6.1(a), (b), (c) or (d), Section 6.2(f) and
Section 6.2(l) hereof shall be fulfilled or waived in accordance with this
Agreement, but no earlier than the fifth Business Day following the date on
which the Buyer's Financing Arrangements have been completed, at the offices of
Morgan, Lewis & Bockius LLP, 101 Park Avenue, New York, New York 10178-0060,
unless another date, time or place is agreed to in writing by the parties
hereto. The actual date and time of the Closing are herein referred to as the
"Closing Date." At the Closing, the Transactions set forth in Section 1.1 shall
be consummated in their proper sequence in accordance with Section 1.1.
SECTION 1.3 Closing Deliveries. (a) Seller's Deliveries. The Seller, or such
other applicable party, shall deliver, or cause to be delivered, to the party
entitled thereto under Section 1.1, as applicable, at the Closing the following:
(i) the purchase price for the Buyer Limited Partnership Interests,
in the amount required by Section 1.1(a), by wire transfer of immediately
available funds to such bank account as shall have been designated by Buyer
Parent by notice given to the Seller not later than the second Business Day
prior to the Closing Date;
(ii) stock certificates or other certificates representing the
Company Shares and the CPC Sub Membership Interests, all of which shall be duly
endorsed in blank or
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accompanied by stock or unit transfer powers and with all requisite stock or
unit transfer tax stamps attached, and stock certificates or other certificates
representing the CPH Shares and Atlantic Interest;
(iii) a certificate or certificates representing the Company's CPLP
Limited Partnership Interest, duly endorsed in blank or accompanied by limited
partnership powers and with all requisite limited partnership transfer tax
stamps attached, and a certificate or certificates representing the CPLP General
Partnership Interest;
(iv) deeds, bills of sale and instruments of assignment and
assumption in such forms as may be required to effect the transfers contemplated
by Sections 1.1(d), 1.1(e), 1.1(h), and 1.1(j);
(v) all minute books and other corporate or partnership books and
records of each Company Party (as hereinafter defined);
(vi) a copy, certified as of the Closing Date, by Seller's
Secretary or Assistant Secretary, as the case may be, of the resolutions duly
adopted by the Board of Directors of Seller, authorizing the Transactions;
(vii) a copy, certified as of the Closing Date by the Secretary or
Assistant Secretary or other authorized person of the applicable Company Party,
as the case may be, of the resolutions or other similar approval duly adopted by
the Board of Directors or other governing body of each Company Party,
authorizing the Transactions;
(viii) certificates of good standing for Seller and each Company
Party in the State of Delaware, or such other applicable state of incorporation
or formation, and certificates of good standing in each foreign jurisdiction in
which any Company Party is qualified to do business, as certified as of a recent
date by the Secretary of State of the State of Delaware or any other appropriate
authority of such foreign jurisdictions, as the case may be;
(ix) the opinion of Schiff Hardin & Waite, counsel to the Seller
(the "Seller's Counsel"), required by Section 6.2(e);
(x) copies of the certificate of incorporation or formation, as the
case may be, for Seller and each Company Party that is a corporation or a
limited liability company, certified as of a recent date by the Secretary of
State of the State of Delaware;
(xi) copies of the bylaws, partnership agreement or operating
agreement, as the case may be, of Seller and each Company Party, as in effect on
the Closing Date, certified by the Secretary or the Assistant Secretary or other
authorized person of Seller and each Company Party, as the case may be;
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(xii) certificates of the Secretary or Assistant Secretary of
Seller, as the case may be, certifying as of the Closing Date as to the
incumbency and signatures of the officer(s) of Seller authorized to sign this
Agreement and the other documents to be delivered hereunder, together with
evidence of the incumbency of each such Secretary or Assistant Secretary;
(xiii) certificates of the Secretary or Assistant Secretary or such
other authorized person of each Company Party, as the case may be, certifying as
of the Closing Date as to the incumbency and signature of the officer(s) or
other authorized persons of each Company Party authorized to sign this Agreement
and the other documents to be delivered hereunder, together with evidence of the
incumbency of each such Secretary or Assistant Secretary or other authorized
person;
(xiv) a certificate or certificates, dated the Closing Date, of an
officer of Seller as to the matters contained in Sections 6.2(a), (b), (d), (g)
and (h);
(xv) the written resignations of all directors of each Company
Party referred to in Section 6.2(c);
(xvi) a certificate from the insurers under each of the
environmental insurance policies set forth in Schedule 5.12 that indicates that
the Buyer and each Company Party have been listed as an additional insured under
each of such policies and that such policies may not be terminated or canceled
prior to their expiration without Buyer's consent;
(xvii) an executed copy of the Transition Services Agreement
referred to in Section 6.2(j);
(xviii) an executed copy of the Capital Contribution Agreement
referred to in Section 1.1(f);
(xix) an executed copy of the Merger Agreement referred to in
Section 1.1(f);
(xx) an executed copy of Amendment No. 1 to the Loan Agreement
referred to in Section 1.1(g);
(xxi) a termination of any tax sharing agreements among the Seller,
the Company Parties, and their affiliates, effective as of the Closing Date;
(xxii) a FIRPTA affidavit from each of the Seller, the Company and
CPLP; and
(xxiii) signed copies of all required state filings and amendments
to certificates of incorporation and bylaws, prepared for filing at the Closing
Date, and copies of the resolutions required, in each case to effectuate the
name changes described in Section 5.8(b).
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(b) Buyer's Deliveries. Buyer and Buyer Parent shall deliver, or cause
to be delivered, to Seller at the Closing the following:
(i) an irrevocable letter of instruction to the Transfer Agent
instructing the Transfer Agent to issue the Buyer Parent Units to Seller;
(ii) the amounts required by Sections 1.1(e), (h) and (k) by wire
transfer of immediately available funds to such bank account as shall have been
designated by Seller or the Company, as applicable, by notice given to the Buyer
not later than the second Business Day prior to the Closing Date;
(iii) a copy, certified as of the Closing Date by a Secretary or
Assistant Secretary of API, as the case may be, of the resolutions duly adopted
by API, authorizing the Transactions;
(iv) a copy, certified as of the Closing Date by API, as the
general partner of each of the Buyer and the Buyer Parent, of the resolutions of
each of Buyer and Buyer Parent, authorizing the Transactions;
(v) certificates of good standing for each of Buyer and Buyer
Parent in each of their jurisdictions of formation, as certified as of a recent
date by the relevant Secretary of State or other appropriate authority of such
jurisdiction;
(vi) a copy of the certificate of formation of each of Buyer and
Buyer Parent, certified as of a recent date by the relevant Secretary of State
or other appropriate authority of its jurisdiction of formation;
(vii) a copy of the partnership agreement of each of Buyer and
Buyer Parent as in effect on the Closing Date, certified as of the Closing Date
by the Secretary or Assistant Secretary of API;
(viii) a copy of the Articles of Incorporation and Bylaws of API;
(ix) a certificate of the Secretary or Assistant Secretary of API
certifying as of the Closing Date as to the incumbency and signatures of the
officer(s) or representatives of API authorized to sign this Agreement and the
other documents to be delivered hereunder on behalf of Buyer and Buyer Parent,
together with evidence of the incumbency of each such Secretary or Assistant
Secretary;
(x) the opinion of Morgan, Lewis & Bockius LLP, counsel to the
Buyer Parties ("Buyer's Counsel") required by Section 6.3(e);
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(xi) a certificate dated the Closing Date of an officer of API as
to the matters contained in Sections 6.3(a), (b) and (d);
(xii) evidence of the listing, upon official notice of issuance, of
the Buyer Parent Units on the New York Stock Exchange;
(xiii) an executed copy of the Transition Services Agreement
referred to in Section 6.2(j);
(xiv) an executed copy of the Capital Contribution Agreement
referred to in Section 1.1(f); and
(xv) an executed copy of the Merger Agreement referred to in
Section 1.1(f).
(c) Registration Rights Agreement. On the Closing Date, Buyer Parent
and Seller shall each execute and deliver the Registration Rights Agreement,
dated the Closing Date, and in substantially the form annexed hereto as Exhibit
D (the "Registration Rights Agreement").
SECTION 1.4 Purchase Price Adjustment.
(a) Adjusted Net Working Capital; Adjusted Long-Term Liabilities. The
Buyer has entered into the Transactions on the assumption that, as of the
Closing Date, (i) the "Adjusted Net Working Capital" of the Company Parties is
not less than $23,000,000 (following the distributions of assets to and
assumption of liabilities by the Seller that are described in Section 1.1(j) and
the schedule thereto), and (ii) the Company Parties have no long-term
liabilities, other than the "Permitted Long-Term Liabilities." As used herein,
(x) the term "Adjusted Net Working Capital" means, with respect to the Company
Parties, the excess, if any, of the total consolidated current assets of the
Company Parties adjusted as set forth on Schedule 1.4(a)(x)-I over total
consolidated current liabilities adjusted as set forth on Schedule 1.4(a)(x)-II
computed as of the Closing Date, and (y) the term "Permitted Long-Term
Liabilities" means, with respect to the Company Parties, the liabilities set
forth on Schedule 1.4(a)(y). The amount of total consolidated current assets and
total consolidated current liabilities shall be determined in accordance with
generally accepted accounting principles ("GAAP") consistently applied, subject
to adjustment as set forth above.
(b) Purchase Price Adjustment. If, on the basis of the Closing Date
Financial Statements (as defined below), it is determined that the amount of
Adjusted Net Working Capital of the Company Parties as calculated in accordance
with Section 1.4(a), is either greater than or less than $23,000,000, then the
Purchase Price shall be either (i) increased by the amount by which Adjusted Net
Working Capital of the Company Parties exceeds $23,000,000 or (ii) decreased by
the amount by which Adjusted Net Working Capital of the Company Parties
(adjusted pursuant to Section 1.4(a)) is less than $23,000,000. If and to the
extent that the
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Company Parties have any long-term liabilities other than the Permitted
Long-Term Liabilities, the amount thereof shall be deducted from the Purchase
Price. The Purchase Price shall also be reduced by $145,000, the net present
value of the ground lease payments payable by the Company under the lease for a
portion of the Sinking Springs Terminal referred to in Section 6.2(i). Any net
increase or decrease in the Purchase Price as required by this Section 1.4(b) is
herein referred to as the "Purchase Price Adjustment."
(c) Closing Date Financial Statements. The "Closing Date Financial
Statements" shall mean the financial statements of the Company Parties as of the
Closing Date, which shall consist of a balance sheet and statements of profit
and loss, retained earnings and changes in financial position as of the Closing
Date and the results of the operations of the Company Parties for the portion of
the fiscal year then ended. The Closing Date Financing Statements shall include,
as a separate schedule, a computation of the Adjusted Net Working Capital and
the long-term liabilities of the Company Parties (other than the Permitted
Long-Term Liabilities) and the amount of the Purchase Price Adjustment. The
Closing Date Financial Statements shall be prepared in accordance with GAAP
consistently applied and with all adjustments which are necessary for the fair
presentation of the periods indicated. The Closing Date Financial Statements
shall be prepared using the general ledger accounts of the Company Parties
consistent with the past practices of the Company Parties after the distribution
to and the assumption by the Seller or an affiliate of the Seller as of the
Closing Date of the assets and liabilities of the Company referred to in Section
1.1(j) and the schedules thereto (which include former assets and liabilities of
CPLP that were distributed pursuant to Section 1.1(d)).
(d) Delivery of Closing Date Financial Statements; Access to Records.
Buyer shall provide Seller with a preliminary draft of the Closing Date
Financial Statements no later than the day which is 30 days following the
Closing Date. Buyer shall allow Seller and its agents access at all reasonable
times after the Closing Date to copies of the books, records and accounts of the
Company Parties and shall make available to Seller such information as Seller
may reasonably request to allow Seller to review the Closing Date Financial
Statements. Buyer and Seller will in good faith attempt to resolve any disputes
with respect to such calculation before the final Closing Date Financial
Statements are rendered and delivered. Buyer shall deliver to Seller the final
Closing Date Financial Statements no later than the day which is 45 days
following the Closing Date. The Closing Date Financial Statements shall be
prepared by Buyer in good faith and shall be certified by Buyer to be, as of the
date prepared, Buyer's good faith estimate of the information reflected therein.
(e) Objection to the Closing Date Financial Statements. Seller shall
give written notice to Buyer of any objection to the Closing Date Financial
Statements within 30 days after Seller's receipt of the final Closing Date
Financial Statements. Any such notice shall specify, in reasonable detail, the
items in the Closing Date Financial Statements to which Seller objects and shall
provide a summary of Seller's reasons for such objections.
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(f) Resolution of Disputes. Any dispute between Buyer and Seller with
respect to the Closing Date Financial Statements, including the calculation of
the Purchase Price Adjustment, which is not resolved within 15 days after
receipt by Buyer of the written notice from Seller specifying Seller's
objections as contemplated by Section 1.4(e) shall be referred to the
Philadelphia office of Deloitte & Touche, LLP, or if such accounting firm is
unable, unwilling or the parties otherwise agree, to such other nationally
recognized accounting firm as is mutually agreed to by the parties. Such
accounting firm shall be requested to render its decision with respect to those
matters which are disputed by Buyer and Seller within 30 days of such referral.
The decision by such accounting firm shall be final and binding on Seller and
Buyer. The cost of retaining such accounting firm (including its fees and
expenses) shall be shared equally by Buyer and Seller.
(g) Payment of Balance. If Seller does not provide a written notice of
objections to the final Closing Date Financial Statements within 30 days of
Seller's receipt thereof as contemplated by Section 1.4(e), any balance due to
Seller or refund due to Buyer as a result of the Purchase Price Adjustment shall
be paid no later than 10 days thereafter. Following delivery of Seller's written
notice of objections to the Closing Date Financial Statements, any balance due
to Seller or refund due to Buyer pursuant to the adjustments set forth in
Section 1.4(b) that is not in dispute shall be paid within 10 days of such
delivery (and any payment in respect of any amount in dispute shall be paid
within 10 days of the resolution of such dispute). Any payment made pursuant to
this paragraph shall be made together with simple interest commencing on the
Closing Date at the prime lending rate as announced from time to time in The
Wall Street Journal, in immediately available funds to an account designated by
Seller or Buyer, as the case may be, at least two days before the payment is
due.
SECTION 1.5 Allocation of Purchase Price. The Buyer Parties and the Seller shall
allocate the Purchase Price, for tax purposes, among the Company Shares, the
CPLP Limited Partnership Interest, the Company Propane Assets, and the Triarc
Note in the manner set forth on Schedule 1.5. Each of the Buyer Parties and the
Seller agrees to file, or to cause its affiliates to file, Internal Revenue
Service Form 8594, and all federal, state, local and foreign Tax Returns, in
accordance with Schedule 1.5 (which also contains agreed values for the assets
of CPLP). Each of the Buyer Parties and the Seller shall report the transactions
contemplated by Section 1.1 for federal Tax and all other Tax purposes in a
manner consistent with Schedule 1.5. Each of the Buyer Parties and Seller agree
to provide the other promptly with any information required to complete Form
8594. Each of the Buyer Parties and Seller further agree that, for federal and
state income tax purposes, the Buyer Parties will cause the tax basis that CPLP
has in its assets immediately prior to the Transactions to remain as the tax
basis in such assets immediately after the consummation of the Transactions. The
Buyer Parties and Seller shall notify and provide the other with reasonable
assistance in the event of an examination, audit or other proceeding regarding
any allocation of the Purchase Price. The Buyer Parties and Seller shall not
take any
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position in any tax return, tax proceeding or audit that is inconsistent with
the allocation set forth on Schedule 1.5.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer that:
SECTION 2.1 Organization of Seller; Authority of Seller; Binding Effect on
Seller. Seller has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware. Seller has the requisite
corporate power and authority to carry on its business as now being conducted
and has the requisite corporate power and authority to enter into this
Agreement, the Registration Rights Agreement, the Trademark License Agreement,
the Transition Services Agreement, the Capital Contribution Agreement, the
Merger Agreement and the bills of sale and assignment and assumption agreements
delivered pursuant to Section 1.3(iv) of this Agreement (collectively, the
"Transaction Documents"), to the extent the Seller is a party thereto, and to
consummate the Transactions. The execution and delivery by Seller of the
Transaction Documents to which the Seller is a party and the consummation by
Seller of the Transactions have been duly authorized by all necessary corporate
action on the part of Seller. The Transaction Documents to which the Seller is a
party have been duly executed and delivered by Seller and, assuming such
Transaction Documents constitute the valid and binding agreement of the
appropriate Buyer Party, such Transaction Documents constitute valid and binding
obligations of Seller, enforceable against Seller in accordance with their
terms, except that (i) such enforcement may be subject to applicable bankruptcy,
insolvency or other similar laws, now or hereafter in effect, affecting
creditors' rights generally, (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought and (iii) that the right to indemnification in the Registration
Rights Agreement may be limited by public policy or applicable securities laws.
SECTION 2.2 Organization and Existence of the Company Parties; Authority of the
Subsidiaries; Binding Effect on the Subsidiaries.
(a) Organization and Existence of Company Parties; Qualification of
Company Parties. The Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of Delaware, and has the
requisite corporate power and authority to carry on its business as now being
conducted. Each person of which 50% or more of the total combined voting power
of all classes of capital stock or other voting interests is owned directly or
indirectly by the Company, including CPH, Atlantic, and CPLP (each, a
"Subsidiary," and together (and including, at the Closing Date, CPC Sub) the
"Subsidiaries") has been duly incorporated or formed and is validly existing and
in good standing in the jurisdiction in which it
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was organized, and has the requisite corporate or partnership power and
authority, as applicable, to carry on its business as now being conducted.
Schedule 2.2(a)-I lists each Subsidiary of the Company. Each Company Party is
duly licensed or qualified to do business and is in good standing in each
jurisdiction in which the nature of its business or the ownership or leasing of
its properties makes such qualification or licensing necessary, other than in
such jurisdictions where the failure to be so qualified (individually or in the
aggregate) would not have a Company Material Adverse Effect (as defined below).
Schedule 2.2(a)-II contains a list of each jurisdiction in which each Company
Party is duly licensed or qualified to do business as a foreign corporation or
foreign limited partnership. Except as set forth on Schedule 2.2(a)-III, no
Company Party has any direct or indirect investment or interest in or control
over any other corporation, partnership, joint venture or other business entity.
(b) Authority of the Company Parties; Binding Effect on Company Parties;
Enforceability. Each Company Party entering into the Transaction Documents has
the requisite corporate, partnership or limited liability company power and
authority to enter into the Transaction Documents to which such Company Party is
a party, and each Company Party has the requisite corporate, partnership or
limited liability company power and authority to consummate the Transactions.
The execution and delivery of each Transaction Document by the Company Party
that is entering into such Transaction Document and the consummation by it of
the Transactions have been duly authorized by all necessary corporate,
partnership or limited liability company action on the part of such Company
Party. The Transaction Documents have been duly executed and delivered by each
Company Party entering into such Transaction Documents and, assuming the
Transaction Documents constitute the valid and binding agreement of the
appropriate Buyer Party, each such Transaction Document constitutes a valid and
binding obligation of such Company Parties, enforceable against such Company
Parties in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought.
SECTION 2.3 Capital Structure.
(a) Company Capital Stock. The authorized capital stock of the Company
consists of 3,000 shares of common stock. As of the date hereof, 1,377 shares of
common stock of the Company are issued and outstanding. Except as set forth
above, no shares of common stock of the Company are issued, reserved for
issuance or outstanding. All outstanding Company Shares are duly authorized,
validly issued, fully paid and nonassessable and not subject to preemptive
rights. Seller is the record and beneficial owner of the Company Shares, free
and clear of all pledges, claims, liens, charges, encumbrances, liabilities and
security interests of any kind (together, "Liens"). There are no restrictions
upon the voting or transfer of any shares of
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common stock of the Company pursuant to the Company's Certificate of
Incorporation or bylaws or any agreement to which either Seller or the Company
is a party.
(b) Subsidiaries' Capital Stock. The authorized capital stock or
partnership or membership interests of each of the Subsidiaries is specified on
Schedule 2.3(b). The number of shares of common stock or partnership or
membership interests of each of the Subsidiaries that are issued and outstanding
as of the date hereof is specified for each Subsidiary on Schedule 2.3(b).
Except as set forth as Schedule 2.3(b), no shares of common stock or partnership
or membership interests of any Subsidiary are issued, reserved for issuance or
outstanding.
SECTION 2.4 Subsidiaries. Except as disclosed on Schedule 2.4, all of the
outstanding shares of the capital stock of each Subsidiary that is a corporation
have been duly issued and are fully paid and nonassessable and are owned by the
Company, by one or more Subsidiaries or by the Company and one or more
Subsidiaries, free and clear of all Liens. Except as set forth on Schedule 2.4,
all of the outstanding partnership interests in each Subsidiary that is a
partnership have been duly issued and are fully paid and nonassessable and are
owned, both beneficially and of record, by the Company, by one or more
Subsidiaries, or by the Company and one or more Subsidiaries, free and clear of
all Liens. All of the CPC Sub Membership Interests outstanding at the Closing
Date will have been duly issued and will be fully paid and nonassessable and
will be owned by the Company, free and clear of all Liens. Except as set forth
on Schedule 2.4 or as provided for in this Agreement, there are no securities,
options, warrants, rights, commitments or agreements of any kind to which any
Company Party is a party or by which any of them is bound obligating any of them
to issue, sell or deliver shares of capital stock, membership interests or other
equity or partnership interests of any of them. Except as set forth on Schedule
2.4, there are no restrictions upon the voting or transfer of any shares of
common stock or partnership or membership interests of any Company Party
pursuant to the certificate of incorporation, bylaws, partnership or operating
agreement or other governing instrument or any agreement to which such Company
Party is a party. Assuming the Buyer has the requisite power and authority to be
the lawful owner of the partnership interests of CPLP and the CPC Sub Membership
Interests, upon delivery of and payment for such partnership or membership
interests at the Closing as herein provided, good and valid title to such
partnership or membership interests will pass to Buyer, free and clear of all
Liens, other than any Liens arising from acts of Buyer on or following the
Closing Date.
SECTION 2.5 No Material Adverse Change. Since December 31, 1999, and except as
described on Schedule 2.5, there has not occurred any material adverse change
in, or effect on, or any event or circumstance that (individually or together
with any other such events or circumstances) would reasonably be expected to
have a material adverse effect on, the business, results of operations, assets,
liabilities, cash flows or financial condition of the Company Parties, taken as
a whole (any such change or effect, a "Company Material Adverse Effect");
provided, however, that a Company Material Adverse Effect shall not include any
change or effect due to
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(i) general business, economic or financial conditions affecting the industry or
lines of business in which the Company Parties participate and which do not
affect the Company Parties in any manner or degree materially different from the
industry as a whole and (ii) any continuation, but not a material worsening, of
an adverse trend or condition described on Schedule 2.5.
SECTION 2.6 No Conflict. Except for the required filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), and except as described on Schedule 2.6 (the "Company Required
Consents"), the execution and delivery of this Agreement and the performance of
the Transactions do not, and the fulfillment and compliance with the terms and
conditions hereof and the consummation of the Transactions will not, (a)
conflict with any of, or require the consent, approval or authorization of, or
any declaration or filing with or notice to, any person under, the terms,
conditions or provisions of the charter documents or bylaws or equivalent
governing instruments of the Seller or any Company Party, as applicable, (b)
violate any provision of, or require any consent, authorization or approval of,
or any declaration or filing with or notice to, any person under, any law or
administrative regulation or any judicial, administrative or arbitration order,
award, judgment, writ, injunction or decree applicable to the Seller or any
Company Party, (c) conflict with, result in a breach of, constitute a default
under (whether with notice or the lapse of time or both) or accelerate or permit
the acceleration of the performance required by, or require any consent,
authorization or approval under, any material agreement, lease, deed, mortgage,
indenture, commitment or instrument to which Seller or any Company Party, as
applicable, is a party or by which either the Seller or any Company Party is
bound or to which any assets of the Seller or any Company Party are subject, or
(d) result in the creation of any Lien on any of the Company Shares, CPH Shares,
CPC Sub Membership Interests, Atlantic Interest, CPLP Limited Partner Interest
and CPLP General Partner Interest to be acquired pursuant to the Transactions
(collectively, the "Interests"), or any material assets or properties of any
Company Party.
SECTION 2.7 No Default. Assuming receipt of the Company Required Consents and
except as set forth on Schedule 2.7, no Company Party is in material default
under, and no condition exists that with notice or lapse of time or both could
reasonably be expected to constitute a material default under, (a) any material
mortgage, loan agreement, indenture, evidence of indebtedness or other
instrument evidencing borrowed money or other material agreement to which it or
any of its properties is subject or bound, or (b) any judgment, order or
injunction of any Governmental Entity or arbitrator.
SECTION 2.8 Brokerage Arrangements. Except as set forth on Schedule 2.8, neither
the Seller nor any Company Party has entered (directly or indirectly) into any
agreement with any person, firm or corporation that would obligate Buyer, Seller
or any Company Party to pay any commission, brokerage, or "finder's fee" in
connection with the Transactions.
SECTION 2.9 Company Party Financial Statements; Undisclosed Liabilities.
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(a) Attached as Schedule 2.9 are copies of the unaudited consolidated
balance sheet of the Company Parties as at December 31, 2000, and the related
unaudited consolidated statement of income, cash flows and stockholders' equity
for the fiscal year then ended (including the notes thereto, if any) (the
"Company Financial Statements"). The Company Financial Statements have been
prepared in accordance with GAAP consistently applied except as noted therein
and fairly present in all material respects the consolidated financial position
of the Company Parties taken as a whole as of the respective dates set forth
therein and the results of operations and cash flows for the Company Parties for
the respective fiscal periods set forth therein (subject, in each case, to the
absence of footnotes and, in the case of the interim financial statements, to
normal year-end adjustments).
(b) Except (i) as disclosed to Buyer in this Agreement or as set
forth on Schedule 2.9, or reserved against or reflected on or provided for
on the Company Financial Statements, or (ii) as incurred after December
31, 2000 in the ordinary course of business consistent with prior
practice, to the Knowledge of Seller, no Company Party has any material
liabilities or obligations that would be required by GAAP consistently
applied to be reflected or reserved against on a balance sheet of the
Company Parties or in the notes thereto. The representations and
warranties set forth in this Section 2.9(b) do not apply to any
liabilities or obligations of the Company Parties for Taxes, which are
separately addressed in Section 2.16 of this Agreement.
SECTION 2.10 No Litigation. Schedule 2.10 sets forth a list of all suits,
lawsuits, actions, proceedings and arbitrations pending, as of the date hereof,
against or affecting any Company Party. Except as set forth on Schedule 2.10,
there is no (i) material claim, suit, lawsuit, action, proceeding, arbitration,
prosecution, inquiry or governmental investigation ("Litigation") pending or, to
the Knowledge of Seller, threatened against or affecting any Company Party, (ii)
material judgment, decree, injunction, rule or order of any Governmental Entity
or arbitrator ("Governmental Order") outstanding against any Company Party,
(iii) material dispute or disagreement pending or threatened in writing between
any Company Party and any of its customers or suppliers; or (iv) event, to the
Seller's Knowledge, that has occurred or claim that has been asserted that might
reasonably be expected to result in a material claim or other material
Litigation against Seller, any Company Party or their respective businesses or
assets. The representations and warranties set forth in this Section 2.10 do not
apply to any (x) claims, suits, lawsuits, actions, proceedings, arbitrations,
prosecutions, inquiries or governmental investigations, or (y) any judgments,
decrees, injunctions, rules or orders of any Governmental Entity or arbitrator,
relating, in the case of either clause (x) or (y), to Taxes, which are
separately addressed in Section 2.16 of this Agreement.
SECTION 2.11 Environmental Matters. Except as set forth on Schedule 2.11, to the
Knowledge of Seller:
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(a) each Company Party has obtained and is in material compliance with all
material licenses, permits and other authorizations required under all
applicable environmental laws, ordinances, rules and regulations and any binding
judicial or administrative interpretations thereof and all orders, decrees,
judgments and injunctions issued by a governmental agency of competent
jurisdiction in each case relating to pollution or the protection, cleanup or
restoration of the environment or natural resources ("Environmental Laws")
required for the conduct of its businesses and operations and is in compliance
in all material respects with all applicable Environmental Laws;
(b) there are or have been no releases of any chemical substance, product,
waste, or contaminants, including petroleum, petroleum products, propane
byproducts, lead, mercury, asbestos, polychlorinated biphenyls, and all other
materials and substances regulated pursuant to Environmental Laws ("Hazardous
Materials") at any businesses or operations of any Company Party that are or
have been in contravention of applicable Environmental Laws and could reasonably
be expected to give rise to (i) liabilities or obligations for any cleanup,
remediation, disposal or corrective action under any applicable Environmental
Laws or (ii) claims arising for personal injury, property damage, or damage to
natural resources, in the case of both (i) and (ii) in excess of $100,000 per
location;
(c) except for matters that have been fully remediated or otherwise
resolved, no Company Party (i) has received from any governmental authority any
written notice of noncompliance with, violation of, or liability or potential
liability under any applicable Environmental Laws, (ii) has received from any
governmental authority any written notice requesting any information pursuant to
Environmental Laws, other than routine requests received in the ordinary course
of business, (iii) has entered into any consent decree or order related to any
Environmental Laws or any environmental issue or (iv) is subject to any final
and nonappealable order of any court or governmental authority of competent
jurisdiction under any Environmental Laws;
(d) no Company Party has assumed, either contractually or by operation of
law, from any person or entity, any liability arising from or related to any
applicable Environmental Laws other than in connection with the purchase or
acquisition of assets or entities engaged in the distribution and sale of
propane, whether through the purchase of stock or assets, merger or otherwise;
(e) no Company Party, any predecessor of any Company Party, or any entity
previously owned by any Company Party has transported or arranged for the
treatment, storage, handling, disposal, or transportation of any Hazardous
Materials to any off-site location which has resulted or is expected to result
in an Environmental Claim for damages in excess of $100,000 per location against
any Company Party.
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For purposes of this Agreement, "Environmental Claim" means any and all
administrative or judicial actions, suits, orders, claims, Liens, notices,
notices of violations, investigations, complaints, requests for information,
proceedings, or other communication (written or oral), whether criminal or
civil, pursuant to or relating to any applicable Environmental Law by any person
(including any governmental or regulatory authority, private person and
citizens' group) based upon, alleging, asserting or claiming any actual or
potential (i) violation of or liability under any Environmental Law, (ii)
violation of any environmental permit, license or other authorization required
under applicable Environmental Laws or (iii) liability for investigatory costs,
cleanup costs, removal costs, remedial costs, response costs, natural resources
damages, property damage, personal injury, fines, or penalties arising out of,
based on, resulting from, or related to the presence, release, or threatened
release into the environment, of any Hazardous Materials at any location,
including any off-site location to which Hazardous Materials or materials
containing Hazardous Materials were sent for handling, storage, treatment or
disposal.
SECTION 2.12 Labor Matters. Except as set forth on Schedule 2.12, to the
Knowledge of Seller, no Company Party (a) is a party to, or bound by, any
collective bargaining agreement or other contract with a labor union or labor
organization or is the subject of any claims initiated by any labor organization
to represent any of its employees not currently represented by a labor
organization, (b) is the subject of any proceeding asserting that it has
committed an unfair labor practice or any threatened claims alleging that it has
committed an unfair labor practice or (c) is the subject of any strike, work
stoppage or material labor dispute.
SECTION 2.13 Compliance with Laws. Other than with respect to environmental
matters which are addressed in Section 2.11, and except as specifically
indicated on Schedule 2.13, each Company Party holds all required material
permits, licenses, exemptions, orders and approvals of all federal, state or
local courts or governmental agencies or authorities (each, a "Governmental
Entity") to conduct their respective businesses as currently conducted (the
"Company Permits"). Each Company Party is in compliance in all material respects
with the terms of the Company Permits. Each Company Party is in compliance in
all material respects with and, to the Knowledge of Seller, has not received any
notice of any material violation of, or material failure to comply with any
material statute, law, ordinance, regulation, rule, permit or order of any
Governmental Entity applicable to the Company Parties or their respective
businesses, assets or operations. Except as set forth on Schedule 2.13, to the
Knowledge of Seller, there are no material investigations or reviews pending or
threatened by any Governmental Entity relating to the operation of any Company
Party, and except as set forth on Schedule 2.13, there is no outstanding order,
writ, judgment, stipulation, injunction, decree, determination, award or other
order of any Governmental Entity against any Company Party that relates to the
business of the Company Parties.
SECTION 2.14 Intellectual Property. Except as set forth on Schedule 2.14, each
Company Party lawfully owns, possesses and uses all material patents, patent
rights, trademarks, trademark
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rights, copyrights, technology, software, trade secrets, know-how and computer
programs and proprietary information (together, "Intellectual Property") that is
necessary to permit the Company Parties to operate their businesses in the
ordinary course consistent with past practices, without any requirement to pay
any royalty, license fee or similar type of compensation. All patents,
copyrights, trademarks, trade names, service marks owned by the Company or used
by the Company in the conduct of its business is listed on Schedule 2.14. Except
as disclosed on Schedule 2.14, to Seller's Knowledge, the Company Parties are in
compliance in all material respects with the terms of all material licenses or
other agreements governing the Intellectual Property of the Company Parties that
is owned by any third party.
SECTION 2.15 Employee Benefit Plans; ERISA.
(a) Schedule 2.15(a) sets forth a list of all "employee benefit plans," as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and all material bonus or other incentive compensation,
deferred compensation, salary continuation, disability, stock award, stock
option, stock purchase, severance, parachute or other material employee benefit
policies or arrangements covering any current or former employees, officers or
directors of any Company Party, for which a Company Party is a participating
employer (each, a "Benefit Plan," and collectively, the "Benefit Plans"). Except
as otherwise indicated on Schedule 2.15(a), all of the Benefit Plans are
sponsored and maintained by the Seller, and no Company Party maintains any
Benefit Plan.
(b) Except as set forth on Schedule 2.15(b), no Company Party contributes
to a multiemployer plan as defined in Section 3(37) of ERISA (a "Multiemployer
Plan") or a plan with two or more contributing sponsors, at least two of which
are not under common control, within the meaning of Section 3063 of ERISA (a
"Multiple Employer Plan"). Except as set forth on Schedule 2.15(b), no Company
Party has any material liability due to a complete or partial withdrawal from a
Multiemployer Plan or Multiple Employer Plan prior to the date hereof or due to
the termination or reorganization of a Multiemployer Plan, and to the Knowledge
of Seller, no events have occurred and no circumstances exist that could
reasonably be expected to result in any such material liability to any Company
Party. Seller and each Company Party have provided Buyer with copies of
correspondence with any Multiemployer Plan or trustee thereof relating to
withdrawal liability of a Company Party in the event of a complete withdrawal by
a Company Party from any Multiemployer Plan.
(c) Benefit Plans maintained by Seller that are defined benefit plans
subject to Title IV of ERISA ("Single Employer Plans") are so noted on Schedule
2.15(c) and the Company Parties have no material liability under Section 4062 of
ERISA to the Pension Benefit Guaranty Corporation or to a trustee appointed
under Section 4042 of ERISA with respect to any such Single Employer Plan, and,
to the Knowledge of Seller, no events have occurred and no circumstances exist
that could reasonably be expected to result in any such material liability to
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the Company Parties. There have been no accumulated funding deficiencies, as
defined in Section 412 of the Code, whether or not waived, with respect to any
Single Employer Plans subject to Section 412 of the Code. All premiums payable
to the Pension Benefit Guaranty Corporation with respect to any Single Employer
Plan have been paid when due. There has not been, and will not be as a result of
the Transactions, with regard to any Single Employer Plan, any reportable event,
as defined in Section 4043 of ERISA, for which the reporting requirement has not
been waived by regulation. As of the date of the most recent actuarial report
for each Single Employer Plan, the fair market value of the assets (excluding
for this purpose any accrued but unpaid contributions) of such Single Employer
Plan equaled or exceeded the present value of all benefits accrued under such
Single Employer Plan, whether or not vested, based on the actuarial assumptions
that would be used if such Single Employer Plan were then terminated, and there
has not been a material adverse change in such funding status since such date.
(d) To the Knowledge of Seller, each Benefit Plan has been maintained in
all material respects in accordance with its terms and all applicable provisions
of ERISA, the Code and other applicable laws, other than the occurrence of
defects that are eligible for correction under the Internal Revenue Service
Employee Plans Correction Resolution System Program. No Company Party has
incurred any material liability for any excise, income or other taxes or
penalties with respect to any Benefit Plan covering employees or former
employees of a Company Party, and to the Knowledge of Seller, no circumstance
exists that could give rise to any such liability. There are no pending or, to
the Knowledge of Seller, threatened claims by any employees of a Company Party,
or against the sponsor or a fiduciary or any Benefit Plan, other than routine
benefit claims, that could result in any material liability, direct or indirect,
for any Company Party.
(e) All persons classified by the Company Parties as independent
contractors satisfy and have at all times satisfied the requirements of
applicable law to be so classified; the Company Parties have fully and
accurately reported their compensation on Internal Revenue Service ("IRS") Forms
1099 when required to do so; and the Company Parties have no obligations to
provide benefits with respect to such persons. No individuals are currently
providing, or have provided since July 19, 1999, services to the Company Parties
pursuant to a leasing agreement or similar type of arrangement, nor have the
Company Parties entered into any arrangement whereby services will be provided
by such individuals.
(f) There are no contracts, agreements, plans or arrangements, including
the provisions of this Agreement, covering any current or former officer,
director, employee, consultant, or independent contractor of any Company Party
that, individually or collectively, could give rise to or entail any payment (or
portion thereof) that would not be deductible pursuant to Sections 280G, 404 or
162 of the Code.
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(g) Except as described in Schedule 2.15(g), all liabilities, costs and
expenses arising under any Benefit Plans have been fully accrued and reflected
in the Company Financial Statements, and all such liabilities, costs and
expenses attributable to any period prior to the Closing Date will be fully
accrued and reflected in the Closing Date Financial Statements.
(h) Seller has determined, as a result of a general corporate
reorganization of Seller and its subsidiaries unrelated to the Transactions,
that a partial termination of the defined benefit pension plan subject to Title
IV of ERISA that is sponsored by the Seller (the "Seller's Title IV Pension
Plan") has occurred with respect to participants in Seller's Pension Plan whose
employment with the Seller and its affiliates terminates from and after January
1, 1999 and before June 1, 2001. Accordingly, provided that the Closing Date
occurs before June 1, 2001, employees of the Company Parties who are
participants in Seller's Title IV Pension Plan and in the related non-qualified
defined benefit pension plan sponsored by the Seller (together with Seller's
Title IV Pension Plan, the "Seller's Pension Plans") and whose employment with
the Seller and its affiliates is terminated as of the Closing Date will be fully
vested in their accrued benefits under Seller's Pension Plans as of the Closing
Date. Under the terms of Seller's 401(k) Plan (which is identified as such on
Schedule 2.15(a)), participants in Seller's 401(k) Plan are fully vested in
their account balances at all times.
SECTION 2.16 Taxes.
(a) Except as provided on Schedule 2.16:
(i) The Company Parties have filed or caused to be filed, within the
times and in the manner prescribed by law, all material Federal, state,
local and foreign Tax Returns and Tax reports that are required to be
filed by the Company Parties or with respect to the assets of any Company
Party and such returns and reports reflect accurately all material items
required to be reported therein for the periods covered thereby and are
true, complete and correct in all material respects;
(ii) The Company Parties have, within the time and in the manner
prescribed by law, paid (and until the Closing will pay within the time
and in the manner prescribed by law) all material Taxes imposed on or
incurred by such party that are currently due and payable;
(iii) No Company Party has requested any extension of time within
which to file any material Tax Return, which Tax Return has not since been
filed, or has executed any outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to
any Tax or Tax Returns of any Company Party for any period prior to the
date of the Closing, and no Company Party has been requested to enter into
any such agreement or waiver;
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(iv) There is no action, suit, proceeding, investigation, audit, or
claim now pending or threatened by any authority regarding any material
Tax relating to the Company Parties, or the assets of the Company Parties,
for any period prior to the Closing;
(v) No material deficiency for any Tax has been proposed, asserted
or assessed against any Company Party that has not been resolved and paid
in full;
(vi) The Company Parties have made available to the Buyer Parties
complete and accurate copies, covering all years ending on or after
December 31, 1996, of (A) all material Tax Returns, and any amendments
thereto, filed by any Company Party, (B) all material audit reports or
similar materials received from any taxing authority relating to any Tax
Return filed by any Company Party and (C) any material Closing Agreements
or Tax rulings (or any pending requests for such rulings) applicable with
respect to any Company Party;
(vii) No Company Party has filed a consent under Section 341(f) of
the Code. Except for the Purchase Agreement, dated April 5, 1999, by and
among CPLP, CPH, the Company, National Propane Partners, L.P., National
Propane Corporation, National Propane SGP, Inc., and Triarc Companies,
Inc. (the "Triarc Purchase Agreement"), no Company Party is or has been a
party to a Tax sharing, Tax indemnity or Tax allocation agreement;
(viii) CPLP has made an election under Section 754 of the Code to
adjust the basis of CPLP's assets under Section 743 of the Code, and such
election is currently in effect; and
(ix) Seller, the Company and their affiliates have treated CPLP as a
partnership for all federal, state and local income tax purposes during
the period in which Seller controlled CPLP and have not, and will not
prior to the Closing Date, file an election with any Tax authority to
cause CPLP to be treated as a corporation for any federal, state or local
income tax purpose; and to the Seller's Knowledge, CPLP will be at the
Closing Date an entity taxable as a partnership and not as a corporation
for all federal, state and local income tax purposes.
(b) "Taxes," as used in this Agreement, shall mean any Federal, state,
county, local or foreign taxes, charges, fees, levies, or other assessments,
including all income, sales and use, ad valorem, transfer, gains, profits,
excise, franchise, real and personal property, gross receipts, business and
occupation, employment, disability, payroll, license, estimated, severance or
withholding taxes, other taxes or similar charges of any kind whatsoever imposed
by any
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Governmental Entity, whether imposed directly on a person or resulting under
Treasury Regulation Section 1.1502-6 (or any similar provision of state, local
or foreign law), as a transferee or successor, by contract or otherwise and
includes any interest and penalties (civil or criminal) on or additions to any
such taxes or in respect of a failure to comply with any requirement relating to
any Tax Return and any expenses incurred in connection with the determination,
settlement or litigation of any tax liability. "Tax Return" as used in this
Agreement, shall mean a report, return or other information required to be
supplied to a Governmental Entity with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities. "Tax Ruling," as used in this Agreement, shall mean a written ruling
of a taxing authority relating to Taxes. "Closing Agreement," as used in this
Agreement, shall mean a written and legally binding agreement with a taxing
authority relating to Taxes.
SECTION 2.17 Corporate and Partnership Records. The copies of the certificate of
incorporation or formation, bylaws, partnership agreement, operating agreement
or other governing instruments of Seller and the Company Parties that have been
made available or delivered to Buyer are complete and correct as of the date
hereof.
SECTION 2.18 Material Contracts. (a) Schedule 2.18(a) lists all material
contracts, agreements and documents evidencing rights of or commitments by any
Company Party to which any Company Party is a party or its property or assets
are bound as of the Closing Date. For purposes of this Agreement, each of the
following constitutes a material contract, agreement or document:
(i) any indenture, note, letter of credit, loan or credit agreement
relating to the borrowing of at least $1 million or to the direct or indirect
guaranty or assumption of the obligation of any other person of more than $1
million;
(ii) any (i) customer contract involving the payment or receipt
during the twelve months ended September 30, 2000 of an amount in excess of $1
million or that is expected to involve the payment or receipt during the twelve
months ended September 30, 2001 of an amount in excess of $1 million, and (ii)
any other contract involving the payment or receipt during the twelve months
ended September 30, 2000 of an amount in excess of $500,000 or that is expected
to involve the payment or receipt during the twelve months ended September 30,
2001 of an amount in excess of $500,000;
(iii) any lease of personal property having a fair market value in
excess of $500,000;
(iv) any joint venture, partnership or similar organizational
contract involving a sharing of profits or losses relating to all or any portion
of the business of the Company Parties;
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(v) any contract granting a third party a right of purchase of an
asset of any Company Party having a fair market value in excess of $500,000;
(vi) any contract giving a third party rights to buy from or sell to
any Company Party assets or stock with a fair market value in excess of $500,000
upon a change of control or change in ownership of any Company Party;
(vii) any agreement, license or instrument that prohibits any
Company Party from competing in the retail propane distribution business in any
geographical area in the United States;
(viii) any material supply contract containing "take or pay"
provisions; or
(ix) any material written agreement, arrangement or understanding
with any direct or indirect affiliate of Seller, other than in the ordinary
course of business. Except as set forth on Schedule 2.18(a), since December 31,
1999, there has not occurred any transaction between any Company Party on the
one hand and any affiliate thereof on the other, other than in the ordinary
course of business.
Except as set forth on Schedule 2.18(a), each such contract,
agreement and document is in full force and effect according to the terms of
each respective instrument, and each Company Party has complied in all material
respects with all requirements in connection therewith, and there is not under
any such contract, agreement or document, any existing material breach or
default (or event that, with notice, lapse of time or both, would constitute a
material breach or default) by any Company Party.
(b) Attached as Schedule 2.18(b) are complete and correct lists:
(i) breaking out the number of gallons of propane and the price per
gallon, by customer category (i.e., residential, commercial and wholesale), that
the Company is obligated to supply after January 1, 2001 pursuant to any fixed
price supply contracts or other agreements (including hedging contracts) and
reflecting, in the case of any requirements contracts, a good faith estimate of
volume based on historical information, if any, available to the Company, and
(ii) breaking out the aggregate number of gallons of propane and the
price per gallon, on a monthly basis, that the Company is obligated to purchase
or take title to or possession of after January 1, 2001 pursuant to any fixed
price purchase or other agreement (including hedging contracts).
SECTION 2.19 Real and Personal Property.
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(a) Schedule 2.19(a)-I sets forth a list of all material real property,
leaseholds and other interests in real property that will be held by any Company
Party on the Closing Date (other than easements, licenses or rights-of-way
involving annual payments of less than $10,000 each) (the "Properties"). Except
as set forth on Schedule 2.19(a)-II, the Company Parties will hold, as of the
Closing Date, an interest in the real property described on Schedule 2.19(a)-I
sufficient to permit the Company Parties to operate their businesses in the
ordinary course and consistent with past practices, according to the terms of
the instrument, conveyance or document creating such interest, free and clear of
all Liens and the Company Parties have good and indefeasible title to each of
the Properties (other than rights-of-way).
(b) Except as set forth on Schedule 2.19(b), each of the material leases,
subleases, easements, licenses and agreements described on Schedule 2.19(a) is
in full force and effect according to the terms of each respective instrument,
and to Seller's Knowledge, each Company Party to such material leases,
subleases, easements, licenses and agreements has complied in all material
respects with all requirements in connection therewith and there is not under
any such lease, sublease, easement, license or agreement, any existing material
breach or default (or event that, with notice, lapse of time or both, would
constitute a material breach or default) by any Company Party.
(c) Except as set forth on Schedule 2.19(c), there are no outstanding
notices and, to Seller's Knowledge, no facts or circumstances that would cause
it to believe that any Governmental Entity having jurisdiction over the
Properties intends to exercise the power of eminent domain or similar power with
respect to all or any part of the Properties.
(d) Except as set forth on Schedule 2.19(d), the Company Parties will
hold, as of the Closing Date, an interest in all material personal property used
in the business of the Company Parties sufficient to permit the Company Parties
to operate their businesses in the ordinary course and consistent with past
practices, free and clear of Liens, and the Company Parties have good and
marketable title to all material items of equipment and other tangible personal
property used in the ordinary course of business and consistent with past
practices.
SECTION 2.20 Bank Accounts. Schedule 2.20 sets forth the name of each bank,
savings and loan or other financial institution in which any Company Party has
any account or safe deposit box.
SECTION 2.21 Insurance Policies. Schedule 2.21 lists all currently effective
policies of insurance issued by third-party insurers, including amounts of
coverage thereof, that are maintained by Seller for the benefit of any Company
Party or by any Company Party for which any Company Party is named as an insured
party, in each case as of the Closing Date. Except as set forth on Schedule
2.21, such policies are in full force and effect and all premiums due have been
paid. There is no default by Seller or any Company Party under any such
insurance policy,
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and there has been no failure to give notice or to present any claim under any
such policy in a due and timely manner. There are no outstanding unpaid premiums
except in the ordinary course of business, and no notice of cancellation or
non-renewal of any such insurance policy has been received. None of the
insurance policies contain provisions for retroactive or retrospective premium
adjustments.
SECTION 2.22 Inventory. All inventory used in the business of any Company Party
(the "Inventory") (a) was acquired and has been maintained in accordance with
the regular business practices of the applicable Company Party, (b) consists of
items of a quality and quantity useable or saleable in the ordinary course of
the business consistent with past practice, (c) is owned by the applicable
Company Party free and clear of all Liens, and (d) is valued at prices equal to
the lower of cost determined on an average cost basis or market value, in either
case f.o.b. the applicable Company Party's storage or warehouse.
SECTION 2.23 Accounts Receivable. The Seller has delivered to the Buyer a list
of and the aging of the accounts receivable of the Company Parties relating to
their businesses as of September 30, 2000 (the "Accounts Receivable"). All
Accounts Receivable (a) are valid and genuine, (b) arise out of bona fide sales
and deliveries of goods, performance of services or other transactions in the
ordinary course of business and consistent with past practices, and (c) are not
subject to defenses, setoffs or counterclaims in any material amount except as
described on Schedule 2.23. The allowance for doubtful accounts has been
calculated in accordance with GAAP consistently applied in the Company Financial
Statements and, to the Knowledge of Seller, is adequate.
SECTION 2.24 Propane Sales. Information concerning the volumes (in gallons) of
propane sold by the Company Parties during the Company's 1999 fiscal year and
the nine-month period ended September 30, 2000, broken down by calendar month,
the average price at which propane was sold, and the average cost (including all
transportation costs) at which propane was purchased by the Company or any of
the Subsidiaries during its 1999 fiscal year and the nine-month period ended
September 30, 2000, broken down by calendar month, is set forth in Schedule
2.24, and Schedule 2.24 is correct and complete in all material respects.
SECTION 2.25 Letters of Credit and Guaranties. Schedule 2.25 lists all letters
of credit and guaranties to which any Company Party is a party, without regard
to any minimum dollar amount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER PARENT AND BUYER
The Buyer Parties hereby jointly and severally represent and warrant to
Seller that:
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SECTION 3.1 Organization and Existence. Each Buyer Party has been duly
incorporated or formed and is validly existing and in good standing under the
laws of the jurisdiction in which each is incorporated or formed, and each Buyer
Party has the requisite corporate or partnership power and authority to carry on
its business as now conducted. Each Buyer Party is duly licensed or qualified to
do business as a foreign corporation or limited partnership, and each of Buyer
Parent and Buyer is in good standing, in each jurisdiction in which the nature
of its business or the ownership or leasing of its properties makes such
qualification or licensing necessary, other than in the jurisdictions where the
failure to be so qualified (individually or in the aggregate) would not have a
Buyer Material Adverse Effect (as defined below).
SECTION 3.2 Authority; Binding Effect. Each Buyer Party entering into the
Transaction Documents has the requisite corporate or partnership power and
authority to enter into the Transaction Documents to which it is a party and to
consummate the Transactions. The execution and delivery of the Transaction
Documents by each Buyer Party that is entering into the Transaction Documents
and the consummation by each Buyer Party of the Transactions have been duly
authorized by all necessary corporate or partnership action on the part of such
Buyer Party. The Transaction Documents have been duly executed and delivered by
each Buyer Party entering into the Transaction Documents and, assuming such
Transaction Documents constitute the valid and binding agreement of the Seller
and the appropriate Company Parties, such Transaction Documents constitute valid
and binding obligations of such Buyer Parties, enforceable against such Buyer
Parties in accordance with their terms, except that (i) such enforcement may be
subject to applicable bankruptcy, insolvency or other similar laws, now or
hereafter in effect, affecting creditors' rights generally and (ii) the remedy
of specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before which
any proceeding therefor may be brought and (iii) that the right to
indemnification in the Registration Rights Agreement may be limited by public
policy or applicable securities laws.
SECTION 3.3 No Material Adverse Change. Since September 30, 2000, and except as
described on Schedule 3.3, there has not occurred any material adverse change
in, or effect on, or any event or circumstance that (individually or together
with any other such events or circumstances) would reasonably be expected to
have a material adverse effect on, the business, results of operations, assets,
liabilities, cash flows or financial condition of the Buyer Parties, taken as a
whole (any such change or effect, a "Buyer Material Adverse Effect"); provided,
however, that a Buyer Material Adverse Effect shall not include any change or
effect due to (i) general business, economic or financial conditions affecting
the industry or lines of business in which the Buyer Parties participate and
which do not affect the Buyer Parties in any manner or degree materially
different from the industry as a whole, and (ii) any continuation, but not a
material worsening, of an adverse trend or condition as described on Schedule
3.3.
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SECTION 3.4 SEC Filings. Since September 30, 1998, (a) Buyer Parent has timely
made all filings required to be made by the Securities Act of 1933, as amended
("Securities Act") and the Securities Exchange Act of 1934, as amended
("Exchange Act"), (b) all filings by Buyer Parent with the United States
Securities and Exchange Commission ("SEC"), at the time filed (in the case of
documents filed pursuant to the Exchange Act) or when declared effective by the
SEC (in the case of registration statements filed under the Securities Act)
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations of the SEC
thereunder, (c) no such filing, at the time described above, contained any
untrue statement of a material fact or omitted to state any material fact
required to be stated therein in order to make the statements contained therein,
in the light of the circumstances under which they were made, not misleading,
and (d) all financial statements contained or incorporated by reference therein
complied as to form when filed in all material respects with the rules and
regulations of the SEC with respect thereto, were prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto), and fairly present in all material respects the financial condition
and results of operations of Buyer Parent at and as of the respective dates
thereof and the consolidated results of its operations and changes in cash flows
for the periods indicated (subject in the case of unaudited statements, to
year-end audit adjustments).
SECTION 3.5 Ownership.
(a) As of December 31, 2000, there were 34,404,286 Buyer Parent Units
outstanding and 9,891,072 subordinated units of Buyer Parent outstanding, all of
which have been duly authorized by the Buyer Parent Partnership Agreement and
are validly issued and fully paid (to the extent required under the Buyer Parent
Partnership Agreement) and nonassessable (except to the extent provided in the
Delaware Revised Uniform Limited Partnership Act).
(b) API owns a 1.00% general partnership interest in Buyer Parent
pursuant to the Buyer Parent Partnership Agreement and a 1.01% general
partnership interest in Buyer pursuant to the Agreement of Limited Partnership
of Buyer. Buyer Parent owns all of the limited partnership interests in Buyer.
(c) As of October 31, 2000, API and its affiliates owned an aggregate
55% limited partnership interest in Buyer Parent.
(d) All of the outstanding limited partnership and general partnership
interests in Buyer Parent have been duly authorized and have been validly issued
in accordance with the Buyer Parent Partnership Agreement.
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(e) The general partnership interest of API in each of the Buyer and
the Buyer Parent, the limited partnership interest of API and its affiliates in
Buyer Parent, and the limited partnership interest of Buyer Parent in Buyer are
free and clear of any and all Liens, except as set forth on Schedule 3.5(e).
(f) Except as set forth in the Buyer Parent Partnership Agreement or
the Buyer Parent's SEC filings and except as issued under the AmeriGas Propane,
Inc. 2000 Long-Term Incentive Plan, there are no outstanding subscriptions,
options, convertible securities, warrants, calls or rights of any kind issued or
granted by, or binding upon, Buyer Parent to purchase or otherwise acquire any
security of or equity interest in Buyer Parent.
SECTION 3.6 No Conflict. Except for the required filings under the HSR Act and
except as described on Schedule 3.6 (the "Buyer Required Consents"), the
execution and delivery of the Transaction Documents and the performance of the
Transactions do not, and the fulfillment and compliance with the terms and
conditions hereof and the consummation of the Transactions will not, (a)
conflict with any of, or require the consent, approval or authorization of, or
any declaration or filing with or notice to, any person under, the terms,
conditions or provisions of the governing instruments of any Buyer Party, (b)
violate any provision of, or require any consent, authorization or approval of,
or any declaration or filing with or notice to, any person under, any law or
administrative regulation or any judicial, administrative or arbitration order,
award, judgment, writ, injunction or decree applicable to any Buyer Party, (c)
conflict with, result in a breach of, constitute a default under (whether with
notice or the lapse of time or both), accelerate or permit the acceleration of
the performance required by, or require any consent, authorization or approval
under, any material agreement, lease, deed, mortgage, indenture, commitment or
instrument to which any Buyer Party is a party or by which any Buyer Party is
bound or to which any of the assets of any Buyer Party are subject, or (d)
result in the creation of any Lien on the Buyer Parent Units or any material
assets or properties of any Buyer Party.
SECTION 3.7 No Default. Assuming receipt of the Buyer Required Consents, no
Buyer Party is in material default under, and no condition exists that with
notice or lapse of time or both could reasonably be expected to constitute a
material default under, (a) any material mortgage, loan agreement, indenture,
evidence of indebtedness or other instrument evidencing borrowed money or other
agreement to which it or any of its properties are bound, or (b) any material
judgment, order or injunction of any court, arbitrator or governmental agency.
SECTION 3.8 Brokerage Arrangements. Except as set forth on Schedule 3.8, no
Buyer Party has entered (directly or indirectly) into any agreement with any
person, firm or corporation that would obligate Seller or any Company Party to
pay any commission, brokerage or finder's fee in connection with the
Transactions.
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SECTION 3.9 Purchase Not for Distribution. The Interests will be acquired by
Buyer, or such other party acquiring the same pursuant to Section 1.1, for its
own account and not with a view to distribution. Buyer will not resell,
transfer, assign or distribute the Interests, except in compliance with the
registration requirements of the Securities Act or pursuant to an available
exemption therefrom.
SECTION 3.10 Governing Documents. The copies of the certificates of limited
partnership and all other governing instruments of the Buyer Parties that have
been made available or delivered to Seller are complete and correct as of the
date hereof.
SECTION 3.11 Compliance with Laws. Except as set forth in SEC filings by Buyer
Parent under the Securities Act or the Exchange Act, Buyer holds all required
material permits, licenses, exemptions, orders and approvals of all Governmental
Entities to conduct its respective businesses as currently conducted (the "Buyer
Permits") and is in compliance in all material respects with the terms of the
Buyer Permits. Except as set forth in SEC filings by Buyer Parent under the
Securities Act or the Exchange Act, Buyer is in compliance in all material
respects with, and to the Knowledge of Buyer, has not received any notice of any
material violation of, or failure to comply in any material respect with, any
statute, law, ordinance, regulation, rule, permit or order of any Governmental
Entity applicable to Buyer or its businesses, assets or operations.
SECTION 3.12 Taxes. Except as set forth in SEC filings by Buyer Parent under the
Securities Act or the Exchange Act,
(a) Buyer Parent and Buyer have filed or caused to be filed, within the
times and in the manner prescribed by law, all material Federal, state, local
and foreign Tax Returns and Tax reports that are required to be filed by Buyer
or Buyer Parent with respect to the assets of Buyer or Buyer Parent,
respectively, and such returns and reports (if any) reflect accurately all
material items required to be reported therein for the periods covered thereby
and are true, complete and correct in all material respects;
(b) Buyer Parent and Buyer have, within the time and in the manner
prescribed by law, paid (and until the Closing will pay within the time and in
the manner prescribed by law) all material Taxes imposed on or incurred by each
such party that are currently due and payable (if any);
(c) Neither Buyer Parent nor Buyer has requested any extension of time
within which to file any material Tax Return, which Tax Return has not since
been filed, or has executed any outstanding waivers or comparable consents
regarding the application of the statute of limitations with respect to any Tax
or Tax Returns of Buyer Parent or Buyer for any period prior to the date of the
Closing that is still outstanding, and neither Buyer Parent nor Buyer has been
requested to
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enter into any such agreement or waiver as to any statute of limitations period
that has not yet expired;
(d) There is no action, suit, proceeding, investigation, audit, or
claim now pending or threatened by any authority regarding any material Tax
relating to Buyer Parent or Buyer, or the assets of Buyer Parent or Buyer, for
any period prior to the Closing;
(e) No material deficiency for any Tax has been proposed, asserted or
assessed against Buyer Parent or Buyer that has not been resolved and paid in
full; and
(f) Except as set forth in Schedule 3.12(f), neither Buyer Parent nor
Buyer is or has been a party to a Tax sharing, Tax indemnity or Tax allocation
agreement.
ARTICLE IV
INVESTMENT
SECTION 4.1 Restricted Securities. Seller acknowledges that (i) issuance of the
Buyer Parent Units has not been and will not be registered or qualified under
the Securities Act or applicable state securities laws, and (ii) the Buyer
Parent Units are restricted securities under the Securities Act and such state
securities laws and therefore cannot be sold or transferred unless such transfer
is registered under the Securities Act and registered or qualified under
applicable state securities laws or an exemption from such registration and
qualification is available. Seller represents that it is familiar with Rule 144
promulgated under the Securities Act by the SEC, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
The Seller hereby acknowledges that, if it disposes of any Buyer Parent Units
pursuant to any exemption under the Securities Act, it will take all necessary
actions to perfect the exemption from registration provided thereby, including
(a) obtaining on behalf of the Buyer information to enable the Buyer Parent to
establish a reasonable belief that the purchaser is an accredited investor
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act, (b) advising such purchaser as to which exemption under the Securities Act
is being relied upon with respect to such resale and (c) furnishing the Buyer
Parent with an opinion of counsel, satisfactory to the Buyer Parent, that such
disposition will not require registration of the Buyer Parent Units under the
Securities Act.
SECTION 4.2 Purchase for Own Account; Investment. Seller has been advised that
the Buyer Parent Units will be issued by Buyer Parent pursuant to exemptions
under the Securities Act and applicable state securities laws and that Buyer
Parent's reliance upon such exemptions is predicated in part on Seller's
representations contained herein. Seller represents and warrants that the Buyer
Parent Units are being purchased for its own account, for investment, and
without a view to any distribution of the same within the meaning of the
Securities Act. Seller is in a
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financial position to hold the Buyer Parent Units indefinitely and to bear the
economic risk of its investment in the Buyer Parent Units.
SECTION 4.3 Information. Seller has been given access to publicly available
information regarding Buyer Parent, including, in particular, the Annual Report
of Buyer Parent on Form 10-K for the year ending September 30, 1999, the Buyer
Parent's Quarterly Reports on Form 10-Q for the quarters ending December 31,
1999, March 31, 2000 and June 30, 2000, and the Annual Report of Buyer Parent on
Form 10-K for the year ending September 30, 2000, and the Buyer Parent's
Registration Statement on Form S-3 filed on September 15, 2000, and the
prospectus contained therein, as supplemented through October 11, 2000, and has
utilized such information and access to its satisfaction for the purpose of
obtaining and verifying such information.
SECTION 4.4 Legends. Seller hereby acknowledges that the certificates evidencing
the Buyer Parent Units may bear one or all of the following legends:
(a) "These securities have not been registered under the Securities Act
of 1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated or otherwise transferred in the absence of a registration statement
in effect with respect to the securities under such Act or an opinion of counsel
satisfactory to the Buyer that such registration is not required or unless sold
pursuant to Rule 144 of such Act."
(b) Any legend required by the securities laws of any applicable
jurisdictions.
ARTICLE V
CERTAIN COVENANTS
SECTION 5.1 Access to Information. From the date of this Agreement to the
Closing or until this Agreement is terminated as provided in Article VIII,
Seller shall cause the Company Parties to, and the Company Parties shall,
provide to the Buyer Parties reasonable and prompt access to all of their books,
records (including making copies as reasonably requested), assets, properties
and (to the extent available) employees, and shall cause to be furnished to the
Buyer Parties such information in the possession or control of the Seller or the
Company Parties as Buyer may reasonably request, upon prior notice and during
normal business hours, unless such access and disclosure would violate the terms
of any agreement to which the Seller, the Company or any Subsidiary is bound or
any applicable law or regulation or the Seller reasonably concludes, upon the
advice of counsel, that such access or disclosure might be expected to result in
the loss of an available legal privilege. The Seller and the Buyer Parties shall
cooperate fully in the effort to identify a means of disclosing any information
requested by the Buyer in a manner that will preserve, for the Seller and the
Company Parties, any legal privilege available with respect to that information
in the event that the Transactions are not consummated. Subject to the
foregoing, the Seller shall cause the Company Parties to, and the Company
Parties shall,
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provide to the Buyer, its representatives and agents, access to (i) the books,
records, and employees of the Company Parties to allow the Buyer to make
presentations to and provide information to the employees of the Company Parties
regarding the Buyer's benefit plans; provided, however, that the Buyer shall not
distribute any written materials to the Seller's employees without the Seller's
prior written approval of such materials, which approval shall not be
unreasonably withheld, conditioned or delayed, and (ii) the management
information systems employees of the Company Parties and, for demonstrative
purposes only, the computer hardware, software, systems and facilities of the
Company Parties and all books and records of the Company Parties related
thereto. The confidentiality of any data or information acquired pursuant to
this Section 5.1 shall be maintained by Buyer and its representatives pursuant
to the terms of the letter agreement between API and Salomon Smith Barney Inc.
on behalf of the Seller, dated June 22, 2000 (the "Confidentiality Agreement"),
which each of the above-named parties hereby acknowledges is binding on it;
provided, however, that in the event that this Agreement is terminated as
provided in Article VIII, the obligation of the Buyer Parties to maintain the
confidentiality of any information and data provided to them under this Section
5.1 and the obligation of the Buyer Parties, under the Confidentiality
Agreement, not to solicit for employment any of the current employees of the
Company with whom any of the Buyer Parties has been directly or indirectly
introduced or otherwise had contact or become aware of in connection with the
Transactions shall remain in effect until the second anniversary of the date of
termination of this Agreement.
SECTION 5.2 Seller Conduct of Business.
(a) Ordinary Course. From the date of this Agreement to the Closing,
except as contemplated or permitted by this Agreement, Seller shall cause the
Company Parties to:
(i) within the restrictions set forth in Section 5.2(d), to
operate their respective businesses in the ordinary course as they were
being conducted prior to the execution of this Agreement and use
commercially reasonable efforts to maintain and preserve in all
material respects their business organizations intact and maintain in
all material respects their relationships with suppliers, customers,
lessors and others having business relations with them; and
(ii) make all capital expenditures previously planned or
budgeted pursuant to the operating plan of the Company Parties, and
make any and all modifications, repairs, replacements or substitutions
for lost, damaged, unworkable or non-usable goods, equipment and other
assets, in each case in the ordinary course of business consistent with
past practices.
(b) Restrictions on the Company Parties. Without first obtaining the
written consent of Buyer, which consent shall not be unreasonably withheld,
conditioned or delayed, from the
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date hereof until the Closing, except as otherwise contemplated or permitted by
this Agreement or as set forth on Schedule 5.2(b), Seller shall not permit any
Company Party to:
(i) make any material change in its financial reporting and
accounting methods, other than as required by any change in GAAP or
applicable law;
(ii) other than in the ordinary course of business consistent
with past practice, enter into any material contract or agreement or
terminate or amend in any material respect any material contract or
agreement to which it is a party, waive any material rights under any
material contract or agreement to which it is a party, or be in default
in any material respect thereunder;
(iii) declare, set aside or pay any distributions to its
members, stockholders or partners or split, combine or reclassify any
of its equity securities or issue or authorize the issuance of any
other securities in respect of, in lieu of or in substitution for any
of its equity securities, or purchase, redeem or otherwise acquire,
directly or indirectly, any such securities; provided, however, that
the Company Parties shall be permitted to pay cash dividends or make
cash distributions to the Seller prior to the Closing Date provided
that, if such dividend or distribution is made, the consolidated assets
of the Company Parties shall include, as of the Closing Date, cash in
the amount of at least $6,000,000.
(iv) acquire, merge into or with or consolidate with any
other corporation, partnership, person or other entity or acquire all
or substantially all of the business or assets of any corporation,
partnership, person or other entity or form, acquire any interest in or
contribute any assets to any partnership or joint venture or enter into
any similar arrangement;
(v) make any material change in its charter, bylaws, limited
partnership agreement, operating agreement or other governing
documents;
(vi) incur any indebtedness for borrowed money (except for
intercompany borrowings under existing working capital facilities in
ordinary course) or guarantee any such indebtedness or issue, sell or
guarantee any debt securities or any rights or warrants to acquire any
debt securities;
(vii) sell, lease, pledge, encumber or otherwise dispose of
any Property other than in the ordinary course of business consistent
with past practices;
(viii) issue, deliver or sell or authorize or propose the
issuance, delivery or sale of any of its equity securities or
securities convertible into its equity securities or any rights,
warrants, or options to acquire any such securities; provided, however,
that the
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Special Limited Partner or its successor shall be permitted to make
contributions to CPLP in order to maintain up to a 1% limited partner
interest in CPLP, as set forth in the Triarc Purchase Agreement and the
Limited Partnership Agreement of CPLP;
(ix) settle for an amount in excess of $1 million
(individually or in the aggregate) any claim, demand, lawsuit or state
or Federal regulatory proceeding not covered by insurance;
(x) make any capital expenditures in excess of $250,000 in the
aggregate (not including those made in the ordinary course of
business), unless made pursuant to the operating plan of the Company
Parties, which capital expenditures shall be required to be made
pursuant to Section 5.2(a)(ii);
(xi) (A) make or rescind any material express or deemed
election relating to Taxes, (B) make a request for a Tax Ruling or
enter into a Closing Agreement, (C) settle or compromise any material
claim, action, suit, litigation, proceeding, arbitration,
investigation, audit, or controversy relating to Taxes or (D) change
any of its methods of reporting material income or deductions for
Federal income tax purposes from those employed in the preparation of
its Federal income Tax Return for the taxable year ending December 31,
1999, except as may be required by a change in applicable law;
(xii) cancel or compromise any indebtedness owed to it or
waive any claims or rights except in the ordinary course of business
consistent with past practice;
(xiii) close any facilities that are material to the financial
condition, results of operations or business of any Company Party;
(xiv) enter into any contract or other agreement, or group of
related contracts or agreements, whether oral or written, for the
purchase or sale of propane with a contract or agreement value, alone
or together with such related contracts or agreements, in excess of $1
million; or
(xv) agree to do any of the foregoing.
(c) Tax Filings. From the date hereof until the Closing, Seller shall
cause each Company Party to (i) file or cause to be filed, within the times and
in the manner prescribed by law, all material Tax Returns that are required to
be filed by such person determined consistent with prior practices; (ii) pay or
cause to be paid, within the time and in the manner prescribed by law, all
material Taxes (including any estimated Taxes) imposed on such party that are
currently due and payable or that become due and payable; and (iii) establish
and maintain reserves adequate to pay all material Taxes not yet due or payable
as of the date of Closing and for any
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deferred taxes in accordance with GAAP, which, with respect to CPLP, shall be
determined assuming CPLP is a partnership for all federal, state and local
income tax purposes.
(d) Employees of the Company Parties. From the date hereof until the
Closing, Seller shall cause each Company Party to not (i) adopt any new employee
benefit plan, arrangement, practice or policy, or material employment,
consulting or other compensation arrangement, with or for the benefit of new or
existing employees, or, except as required by this Agreement or by law, amend
any existing employee benefit plan, arrangement, practice or policy, or existing
employment, severance, consulting or other compensation arrangement in any
material respect, without prior written consent of Buyer, which consent shall
not be unreasonably withheld or (ii) increase the compensation or level of
benefits applicable to its employees generally, except for normal increases
consistent with past practice.
SECTION 5.3 Expenses. Whether or not the Transactions are consummated, except as
otherwise specifically provided, each party hereto shall pay its own fees and
expenses incident to preparing for, entering into and carrying out this
Agreement and the consummation of the Transactions.
SECTION 5.4 Approvals; Further Action; Commercially Reasonable Efforts. From the
date hereof through the Closing, each of the parties hereto shall use its
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do or cause to be done, all things necessary, proper or advisable
to consummate and make effective the Transactions, including (i) using its
commercially reasonable efforts to obtain all Company Required Consents or Buyer
Required Consents and (ii) using its commercially reasonable efforts to make all
required regulatory filings and applications and to obtain as promptly as
possible all licenses, permits, consents, approvals, authorizations,
qualifications and orders of Governmental Entities or third parties as are
necessary for the consummation of the Transactions; provided, that Buyer shall
be primarily responsible for obtaining or transferring all required licenses,
permits and authorizations related to the ongoing business of the Company
Parties, if necessary, and Seller shall cooperate in such process as reasonably
requested by Buyer. Subject to Sections 6.1(b), 10.4 and 11.3, the Seller shall
bear the cost of obtaining the Company Required Consents and the Buyer shall
bear the cost of obtaining the Buyer Required Consents. Without limiting the
foregoing, as promptly as practicable following the execution of this Agreement,
each party shall prepare and file with the Federal Trade Commission and the
Department of Justice the appropriate filings and any supplemental information
which may be requested in connection therewith under the HSR Act, it being
agreed that Buyer is the primary "Acquiring Person" for purposes of the HSR Act
and shall pay the required filing fee. To the extent practicable in the
circumstances and subject to applicable laws, each party shall provide the other
with the opportunity to review all information relating to the other party, or
any of its subsidiaries, which appears in any filing made with, or written
materials submitted to, any Governmental Entity in connection with obtaining the
necessary regulatory approvals for the consummation of the
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Transactions. In case at any time after the Closing any further action is
necessary or desirable to carry out the purposes of this Agreement, each party
to this Agreement shall use its commercially reasonable efforts to take all such
necessary action.
SECTION 5.5 Notification of Certain Matters. Seller shall give prompt notice to
Buyer, and Buyer shall give prompt notice to Seller, as applicable, of (i) the
occurrence or non-occurrence of any event which would likely cause any
representation or warranty made by it contained in this Agreement to be untrue
or inaccurate in any material respect and (ii) any failure by it or any
affiliate to comply with or satisfy in any material respect any covenant,
condition or agreement to be complied with or satisfied by it or such affiliate
hereunder.
SECTION 5.6 Certain Indebtedness. Except as otherwise contemplated herein
(including Article I and Section 5.2), at or prior to the Closing, Seller shall
cause the Company Parties to repay in full any indebtedness owed by the Company
Parties to Seller or any of Seller's affiliates other than the Company Parties,
and all other intercompany accounts between the Company Parties, on the one
hand, and Seller and its other affiliates, on the other hand, shall be
eliminated by payment, contribution of capital, set-off or otherwise, which
shall be structured by Seller so that such repayment shall not result in any
payment obligation becoming due and payable pursuant to the Tax Indemnity
Provisions. Prior to the Closing except as contemplated herein (including
Article I and Section 5.2), Seller shall cause the Company Parties not to enter
into any new transactions, agreements, arrangements or understandings with
Seller and Seller's other affiliates, and Seller shall not charge any amounts
under any such existing agreements, arrangements and understandings with the
foregoing other than amounts charged in the ordinary course of business
consistent in nature, amount and method of determination with past practices.
All of the foregoing transactions shall be fully and accurately reflected in the
Closing Date Financial Statements.
SECTION 5.7 No Public Announcement. Immediately upon the execution of this
Agreement, the parties hereto shall issue a press release with respect to the
execution hereof and the Transactions, which press release shall be reasonably
satisfactory to Buyer and Seller. No party hereto shall issue any other press
release or make any other public announcement concerning this Agreement or the
Transactions without the prior approval of the other parties (other than as may
be required by law or by obligations pursuant to any listing agreement with any
securities exchange, in which event the party making the public announcement or
press release shall notify the other parties, as applicable, in advance of such
public announcement or press release), which approval shall not be unreasonably
withheld or delayed.
SECTION 5.8 Use of Names.
(a) Licenses. At the Closing, Seller shall enter into a royalty-free
license with a term of 18 months with the Buyer and the Company Parties
governing the temporary use of certain Seller names on vehicles, bulk storage
tanks and facility signage in substantially the form set
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forth in Exhibit E (the "Trademark License Agreement"). Seller covenants that,
(x) after the Closing, it shall not use any name, trademark or trade name
employing the names "Columbia," "Commonwealth," "National," "Leffler," or any
variations thereof in connection with any retail sales of propane or a propane
business, and (y) it shall obtain from Columbia Petroleum Corporation, a
Delaware corporation ("Columbia Petroleum"), or the purchaser of, or successor
to, Columbia Petroleum, a covenant binding on Columbia Petroleum or such
purchaser or successor, as well as its successors, not to use any name,
trademark or trade name employing the name "Leffler," "National" or "Columbia,"
or any variation thereof, in connection with any retail sales of propane or a
propane business.
(b) Amendments; Necessary Actions. On or prior to the Closing Date,
Seller shall cause the Company Parties to amend their respective certificates of
incorporation or equivalent governing instruments to change their corporate or
entity names to names selected by Buyer that do not include any Seller
trademarks that are set forth in Schedule 5.8(b) ("Seller Trademarks") or any
confusingly similar name.
(c) Cessation of Use. Notwithstanding any other provision of this
Section 5.8, Buyer shall use its commercially reasonable efforts to cause each
Company Party to cease, using any Seller Trademark on its vehicles, bulk storage
tanks and facilities, including by changing the Seller Trademarks used by the
Company Parties to marks that do not include any trademark or confusingly
similar mark, as soon as practicable following the Closing. In any event, upon
the expiration of the term of the Trademark License, each licensee under the
Trademark License shall cease all use of the Seller Trademarks. Any new
corporate name, trademark or service mark selected by Buyer pursuant to Section
5.8(b) shall be subject to the approval of Seller, not to be unreasonably
withheld. Notwithstanding the foregoing, the Buyer Parties and the Company
Parties shall not be obligated to remove the Seller Trademarks from any propane
tanks or cylinders of less than 2,000 gallon capacity.
SECTION 5.9 Post-Closing Assistance. (a) From and after the Closing Date, upon
the request of either Buyer or Seller, the parties hereto shall do, execute,
acknowledge and deliver all such further acts, assurances, deeds, assignments,
transfers, conveyances and other instruments and papers as may be reasonably
required or appropriate to carry out or effectuate the Transactions.
(b) For a period of two (2) years from the Closing Date, or such
greater period as is otherwise required by law, each of the Seller and the Buyer
Parties shall have reasonable access to all of the books and records relating to
the business of the Company Parties that are in the possession of the other
party or parties. Such access shall be afforded by the party or parties in
possession of such books or records, upon receipt of reasonable advance notice
and during normal business hours. The party or parties exercising such right of
access shall be solely responsible for any costs or expenses incurred by it or
them pursuant to this Section 5.9(b). If the party or parties in possession of
such books and records shall desire to dispose of any such books
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and records, such party or parties shall give the other party or parties, prior
to such disposition, a reasonable opportunity, at such other party or parties'
expense, to segregate and remove such books and records as such other party or
parties may select.
(c) For a period of two (2) years from the Closing Date, each of the
Seller and the Buyer Parties shall have reasonable access to the employees and
agents of the other party that currently have or have had duties in the past
with respect to the business of the Company Parties Such access shall be
afforded by the party or parties who employ such employee or employees or agent
or agents, upon receipt of reasonable advance notice and during normal business
hours for the purpose of providing the other party with information required by
such party in connection with the performance of its legal obligations with
respect to the business of the Company Parties. The party or parties exercising
such right of access shall be solely responsible for any costs or expenses
incurred by it or them pursuant to this Section 5.9(c).
(d) To the extent that the rights of any party hereto (an "Assigning
Party") that is a party to any agreement, lease, contract or other asset
transferred, assigned or contributed pursuant to Sections 1.1(d), (e), (f) or
(j) (an "Assigned Asset") to such other party or entity listed in such section
(the "Assignee Party") may not be transferred, assigned or contributed without
the consent of another Person, which consent has not been obtained, this
Agreement shall not constitute an agreement to transfer, assign or contribute
the same if an attempted transfer, assignment or contribution would constitute a
breach thereof or be unlawful, and the relevant Assigning Party, at its expense,
shall use commercially reasonable efforts to obtain any such required consent(s)
as promptly as possible. The Seller and the Buyer Parties agree that, if any
consent to an assignment of any such Assigned Asset shall not be obtained or if
any attempted assignment would be ineffective or would impair the rights and
obligations of the Assignee Party under the applicable Assigned Agreement so
that the Assignee Party would not in effect acquire the benefit of all such
rights and obligations, the Assignee Party, to the maximum extent permitted by
law, shall after the Closing appoint the Assigning Party to be such party's
representative and agent with respect to such Assigned Asset and the Assigning
Party shall, to the maximum extent permitted by law and such Assigned Asset
enter into such reasonable arrangements with the Assignee Party as are necessary
to provide such party with the benefits and obligations of such Assigned Asset.
The Seller and the Buyer Parties shall cooperate and shall each use commercially
reasonable efforts after the Closing to obtain an assignment of such Assigned
Asset to the relevant Assignee Party. The provisions of this Section 5.9(d)
shall not apply to any agreement to which a Company Party is a party and that is
not transferred by that Company Party pursuant to Sections 1.1(d), (e), (f) or
(j), including the Triarc Purchase Agreement.
SECTION 5.10 Noncompetition.
(a) Covenant Not to Compete. During the Noncompete Period (as defined
below), except with the prior written consent of Buyer, Seller shall not, and
shall cause its affiliates other
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than Energy USA, Inc. (f/k/a and d/b/a Bay State Propane) ("Energy USA") in its
current territory, to not, whether directly or indirectly, own, manage, operate,
join, control, finance or participate in the ownership, management, operation,
control or financing of, or be connected with, or permit its name to be used by
or in connection with, any business or enterprise engaged in the retail
distributing, marketing, leasing or selling of propane. For purposes of the
preceding sentence, the Noncompete Period shall be a five-year period commencing
on the Closing Date and ending on the fifth anniversary of the Closing Date (the
"Noncompete Period").
(b) Non-Solicitation. During the Noncompete Period, Seller agrees that
it will not (directly or indirectly) call on or solicit for the purpose of
selling propane to any person who is, or which as of the Closing Date was, or at
any time during the two years preceding the Closing Date has been a customer of
any Company Party or whose identity is known to any Company Party as one whom or
which any Company Party intended to solicit for the purpose of selling propane
within the succeeding year; provided, however, that the provisions of this
Section 5.10(b) shall not apply to any solicitation of customers by Energy USA
in its current territory.
(c) Hiring of Buyer's Employees. During the Noncompete Period, Seller
agrees that, after the Closing Date, it will hire or offer employment to
employees of the Company Parties employed by Buyer at the time of solicitation
only as a result of (i) general solicitation or (ii) contact initiated by such
employee. Nothing contained in this subsection (c) shall affect or be deemed to
affect in any manner any other provision of this Agreement.
(d) Remedies for Breach. Seller acknowledges that the provisions of
Sections 5.10(a), (b) and (c) are reasonable and necessary to protect the
interests of the Buyer Parties, that any violation of Sections 5.10(a), (b) and
(c) would result in irreparable injury to the Buyer Parties, and that damages at
law would not be reasonable or adequate compensation to the Buyer Parties for a
violation of such Sections. Seller further acknowledges that the Buyer Parties
shall be entitled to have the provisions of Sections 5.10(a), (b) and (c)
specifically enforced by preliminary injunctive relief without the necessity of
proving actual damages. If the provisions of this Agreement should ever be
deemed to exceed the time, geographic, product or other limitations permitted by
applicable law, then such provisions shall be deemed reformed to the maximum
time, geographic, product or other limitations permitted by law. In the event of
a breach of Section 5.10(a), (b) or (c), the Noncompete Period shall be extended
for a period equal to the period during which such breach or other violation was
occurring, and had not been fully and finally cured.
(e) Other Business. Nothing in this Section 5.10 shall prohibit Seller
or its affiliates from engaging in or soliciting customers for any energy
business other than the propane business.
SECTION 5.11 Registration Rights. Seller acknowledges that Buyer Parent's only
obligation to register the Buyer Parent Units for resale is as set forth in the
Registration Rights
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Agreement. Buyer Parent and Seller each acknowledge and confirm that if an
exemption from registration is available, it may be conditioned upon various
requirements including the time and manner of sale, the holding period for the
Buyer Parent Units, and on requirements relating to Buyer Parent which are
outside of Seller's control.
SECTION 5.12 Additional Insured. Prior to the Closing Date, Seller shall, or
shall cause the Company Parties to, list the Buyer and each of the Company
Parties as an additional insured on the environmental insurance policies set
forth on Schedule 5.12, and Seller shall not take any action to remove any of
the Company Parties as a named insured on Policy No. 2679090, underwritten by
American International Speciality Lines Insurance Company (the "National Propane
Environmental Insurance Policy"). Seller shall deliver to Buyer an insurance
certificate from the insurers under each such environmental insurance policy
evidencing the same. Except as set forth in Section 11.3, Seller agrees that it
shall not modify, terminate or cancel such policies prior to their expiration
date absent Buyer's prior written consent.
SECTION 5.13 Pre-Closing Annual and Monthly Financial Statements.
(a) The Seller or the Company shall prepare and deliver to the Buyer
copies of the unaudited consolidated balance sheets of the Company Parties, and
the related statements of income and cash flows, as of the end of each month
during the period from the date hereof to the Closing Date (collectively, the
"Pre-Closing Financial Statements"). Each of the Pre-Closing Financial
Statements shall be delivered to the Buyer within 20 days of the last day of the
period to which such Pre-Closing Financial Statement relates. Each of the
Pre-Closing Financial Statements shall be prepared in accordance with GAAP
consistently applied except as noted therein and shall fairly present in all
material respects the consolidated financial position of the Company Parties
taken as a whole as of the respective dates set forth therein and the results of
operation and cash flows for the Company Parties for the respective fiscal
period set forth therein (subject, in each case, to the absence of footnotes
and, in the case of interim financial statements, normal year-end adjustments).
(b) During the period from the date hereof until the Closing Date, the
Seller, upon reasonable notice by the Buyer, shall cause the Company Parties to,
and the Company Parties shall, provide access to the books, records and
employees of the Company Parties to the Buyer and its representatives and agents
and cooperate with the Buyer, in each case at such reasonable times as may be
requested by the Buyer, to allow the Buyer to prepare audited financial
statements for the Company Parties of up to three years.
SECTION 5.14 Pre-Closing Employment Taxes Cooperation. From the date hereof
until the Closing Date, the Seller shall cause the Company Parties to, and the
Company Parties shall, compile all information necessary for the distribution
of, and shall distribute to the intended recipients thereof and to the Company
Parties on or prior to the applicable due date, all required
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Form W-2s, 1099s and other employee and independent contractor tax forms
required by law for or relating to the calendar year ended December 31, 2000 in
the ordinary course of business consistent with past practices.
SECTION 5.15 Information Concerning Partnership Tax Attributes.
(a) The Seller shall cause Deloitte & Touche LLP or other independent
public accountants reasonably acceptable to the Buyer Parties to prepare a
schedule which sets forth the following, in each case based on data included in
the records of the Company Parties and used by the Company Parties in the
preparation of their Tax Returns (the "Book Value and Section 704(c) Schedule"):
(i) The aggregate book value, within the meaning of the Treas
Reg.Section 1.704-2(b)(2)(iv) rules for the maintenance of capital accounts, on
December 31, 2000 of the assets of CPLP in each of the classes that are set
forth on Schedule 5.15;
(ii) The aggregate maximum amount of income and gain that
could be allocated by CPLP to Triarc on December 31, 2000 by reason of Section
704(c) of the Code as a result of the sale of all of the assets of CPLP in a
class that is set forth on Schedule 5.15 and the method by which such Section
704(c) allocation is being taken into account; and
(iii) The aggregate maximum amount of income and gain that
could be allocated by CPLP to the Company on December 31, 2000 by reason of
Section 704(c) of the Code by reason of the sale of all of the assets of CPLP in
a class that is set forth on Schedule 5.15 and the method by which such Section
704(c) allocation is being taken into account.
The Seller shall deliver the Book Value and Section 704(c) Schedule to the Buyer
on or before February 26, 2001.
(b) From the date hereof to the Closing Date, the Seller shall cause
the Company Parties and their agents, including the independent accountants of
the Company Parties, to provide the Buyer Parties with access to any data used
in preparing the Book Value and Section 704(c) Schedule, together with an
opportunity to discuss such information with the Company Parties and their
agents at such time or times as the Buyer Parties may reasonably request.
(c) Neither the Seller nor any Company Party has knowingly
misrepresented or omitted or will knowingly misrepresent or omit any material
data provided to the independent accountants of the Company Parties for use in
preparing the Book Value and Section 704(c) Schedule, and the delivery of the
Book Value and Section 704(c) Schedule to the Buyer, together with a certificate
of the Seller identifying it as such, shall be deemed to constitute, for
purposes of this Agreement, a representation and warranty that neither the
Seller nor any Company Party
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has knowingly misrepresented or omitted any material data provided to the
independent accountants of the Company for use in preparing the Book Value and
Section 704(c) Schedule. The Buyer Parties acknowledge and agree that no
representation and warranty is or shall be made by the Seller with respect to
information contained in the Book Value and Section 704(c) Schedule other than
the representation and warranty described in this Section 5.15(c).
SECTION 5.16 Periodic Information Concerning Financing Arrangements. From the
date of this Agreement through the Closing Date, the Buyer Parties shall keep
the Seller apprised of the status of the Buyer Parties' negotiations concerning
the Financing Arrangements and shall furnish the Seller with drafts of the
proposed agreements and instruments evidencing the Financing Arrangements on a
sufficiently regular basis to enable the Seller to complete, in a timely manner,
the review of those agreements and instruments contemplated by Section 6.3(c).
ARTICLE VI
CONDITIONS
SECTION 6.1 Conditions to Each Party's Obligations. The respective obligations
of each party to effect the Transactions and the other actions to be taken at
the Closing shall be subject to the satisfaction or waiver at or prior to the
Closing of the following conditions:
(a) Governmental Consents. All filings required to be made prior to the
Closing Date with, and all consents, approvals, permits and authorizations
required to be obtained prior thereto from, any Governmental Entity in
connection with the consummation of the Transactions shall have been made or
obtained.
(b) Third Party Consents. All consents from third parties that are
required or advisable to be obtained based on or pursuant to material agreements
to which the Buyer Parties or the Seller Parties, as the case may be, are bound
or affected, including the Buyer Required Consents and the Company Required
Consents, shall have been obtained on reasonable terms and conditions in the
good faith judgment of the party responsible for, or obligated to bear the cost
of obtaining such consent, or any portion thereof, under the terms and
conditions of this Agreement.
(c) HSR Act. The waiting period (and any extension thereof) applicable
to the Transactions under the HSR Act shall have been terminated or shall have
otherwise expired.
(d) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction or other order issued by any court of
competent jurisdiction and no statute, rule or regulation of any Governmental
Entity preventing the consummation of any of the
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Transactions shall be in effect; provided, however, that the party invoking this
condition shall have used all reasonable efforts to have any such order or
injunction vacated.
(e) Deliveries. The parties shall have delivered to the party entitled
thereto all of the certificates, opinions and other items set forth in Section
1.3.
SECTION 6.2 Conditions to Obligations of Buyer Parties. The obligations of Buyer
Parties to effect the Transactions and the other actions to be taken at the
Closing are further subject to the satisfaction or waiver by Buyer Parties on or
prior to the Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Seller contained herein that are qualified by materiality shall be true and
correct as of the date hereof and as of the Closing Date (in each case except
where such representation or warranty is expressly made only as of another
specific date) and all other representations and warranties of Seller shall be
true in all material respects, in each case, as though such representations and
warranties were made at and as of the Closing Date (in each case except where
such representation or warranty is expressly made only as of another specific
date), except as otherwise contemplated by this Agreement; and Buyer shall have
received at the Closing a certificate, dated the Closing Date, signed on behalf
of Seller by an officer of Seller to such effect.
(b) Performance of Obligations of Seller and Company Parties. Seller
and the Company Parties shall have performed in all material respects all
obligations and fulfilled all covenants required to be performed by them under
this Agreement on or prior to the Closing Date, and Buyer shall have received a
certificate signed on behalf of Seller by an officer of Seller to such effect.
(c) Resignations. Buyer shall have received the written resignations of
all of the directors and officers of the Company Parties effective as of the
Closing Date.
(d) No Company Material Adverse Effect. No Company Material Adverse
Effect shall have occurred and be continuing, and Buyer shall have received a
certificate of an officer of Seller to such effect.
(e) Seller's Counsel's Opinion. Buyer shall have received the opinion
of Seller's Counsel, in the form annexed hereto as Exhibit F.
(f) Financing. The Buyer Parties shall have received financing on terms
reasonably satisfactory to the Buyer Parties in their good faith judgment in an
amount or in amounts necessary to consummate the Transactions.
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(g) Payment of Long-Term Liabilities. Seller shall have assumed or
otherwise paid and discharged the Adjusted Long-Term Liabilities of the Company
Parties as of the Closing Date (except for those long-term liabilities that the
Buyer Parties have agreed to assume and that are specifically set forth on
Schedule 1.4(a)(y)), and Buyer shall have received a certificate of an officer
of Seller to such effect.
(h) Richmond Office Leases. Seller (i) shall have assumed the
obligations of the Company Parties under the Richmond Arboretum office lease,
and Buyer shall have received a certificate of an officer of Seller to such
effect, or (ii) shall have assigned such obligations to a third party on terms
that include the release by the landlord of all obligations of the Company
Parties under such lease, and the Buyer shall have received evidence of such
assignment and release reasonably satisfactory to the Buyer.
(i) Sinking Springs Terminal. The Company shall have entered into a
lease with the owner of the Sinking Springs Terminal pursuant to which the owner
of the Sinking Springs Terminal agrees to lease to the Company a portion of the
Sinking Springs Terminal for use in the Company's propane business on the terms
and conditions set forth in Exhibit G and on such other terms as are reasonably
satisfactory to the Buyer.
(j) Transition Services Agreement. Buyer shall have received an
executed copy of a Transition Services Agreement in the form attached hereto as
Exhibit H (the "Transition Services Agreement").
(k) Buyer's Tax Counsel's Opinion. Buyer shall have received the
opinion of tax counsel to the Buyer Parties ("Buyer's Tax Counsel"), in form and
substance satisfactory to the Buyer.
(l) Various Tax Matters. The Buyer shall have received the Book Value
and Section 704(c) Schedule and, based on the Buyer's review thereof over a
period of up to five Business Days following Buyer's receipt thereof, shall be
satisfied in its sole discretion with the Book Value and Section 704(c) Schedule
and with its review of the data and information used in the preparation of that
schedule in accordance with Section 5.15.
SECTION 6.3 Conditions to Obligations of Seller. The obligations of Seller to
effect the Transactions and the other actions to be taken at the Closing are
further subject to the satisfaction or waiver by Seller on or prior to the
Closing Date of the following conditions:
(a) Representations and Warranties. The representations and warranties
of the Buyer Parties contained herein that are qualified by materiality shall be
true and correct as of the date hereof and as of the Closing Date (in each case
except where such representation or warranty is expressly made only as of
another specific date) and all other representations and warranties of the Buyer
shall be true in all material respects, in each case, as though such
representations and
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warranties were made at and as of the Closing Date (in each case except where
such representation or warranty is expressly made only as of another specific
date) , except as otherwise contemplated by this Agreement; and Seller shall
have received at the Closing a certificate, dated the Closing Date, signed on
behalf of Buyer by an officer of Buyer to such effect.
(b) Performance of Obligations of Buyer. Buyer shall have performed in
all material respects all obligations and fulfilled all covenants required to be
performed by it under this Agreement on or prior to the Closing Date, and Seller
shall have received a certificate signed on behalf of Buyer by an officer of
Buyer to such effect.
(c) Buyer Financing. The Seller shall have received copies, in a timely
manner, of all agreements and instruments evidencing the Financing Arrangements
and, based on Seller's review thereof over a period of up to five Business Days
following the date on which the Financing Arrangements have been completed,
shall not have determined, in its good faith judgment based on the advice of
independent counsel to the Seller, that solely as a result of the terms and
conditions of the Financing Arrangements, there is a significant risk of a
material breach of the Tax Indemnity Provisions of the Triarc Purchase
Agreement. For purposes of this condition, a "significant risk" shall mean that
Seller shall have determined, based on the advice of independent counsel, that
there is at least a one-in-three risk that the stated result will occur. If
Seller shall make the adverse determination regarding the terms and conditions
of the Financing Arrangements as provided above, Seller shall promptly send
notice thereof to Buyer, and Buyer and Seller shall in good faith negotiate an
adjustment to the terms and conditions of the Financing Arrangements to
eliminate such adverse determination. If the parties are unable to negotiate a
mutually acceptable adjustment, either party may terminate this Agreement in
accordance with Section 8.1(c).
(d) No Buyer Material Adverse Effect. No Buyer Material Adverse Effect
shall have occurred and be continuing; and Seller shall have received a
certificate of an officer of Buyer to such effect.
(e) Opinion of Counsel to Buyer and Buyer Parent. Seller shall have
received the opinion of Buyer's Counsel, in the form annexed hereto as Exhibit
I.
ARTICLE VII
EMPLOYEE BENEFITS
SECTION 7.1 Seller Pension Plans. Effective as of the Closing Date, Seller shall
cause (i) the Company to terminate its participation in and to cease to be a
participating employer of, and (ii) the employees of the Company to cease to
actively participate in, all defined benefit
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pension plans sponsored or maintained by Seller (the "Seller Pension Plans"). On
and after the Closing Date, Seller shall be solely liable and responsible for
all benefits, liabilities and obligations arising under or relating to the
Seller Pension Plans, the Company's termination from participation in such Plans
or the cessation of benefits accruals by the Company's employees under such
Plans, including any and all benefits and obligations relating to employees of
the Company who were participants in such Seller Pension Plans prior to the
Closing Date. For purposes of this Article VII, the term "Company" shall refer
to all Company Parties and their Subsidiaries.
SECTION 7.2 401(k) Plan Benefits. Effective as of the Closing Date, Seller shall
permit each Company employee or former employee who is a participant in Seller's
401(k) Plan (which is identified as such on Schedule 2.15(a)) to elect a
distribution, including an eligible rollover distribution as defined in Code
Section 402(c), of his account balance under Seller's 401(k) Plan (which
eligible rollover distribution may, at the election of such Company employee or
former employee, include promissory notes or other evidences of indebtedness
with respect to outstanding loans, and may, with Buyer's consent, include other
in-kind assets) from Seller's 401(k) Plan to a 401(k) plan maintained by Buyer
or an affiliate of Buyer ("Buyer's 401(k) Plan"). Buyer shall cause Buyer's
401(k) Plan to accept such eligible rollover distributions from Seller's 401(k)
Plan, including those with promissory notes or other evidences of indebtedness
with respect to outstanding loans. To the extent necessary, Buyer and Seller
each shall amend its 401(k) Plan to permit such distributions.
SECTION 7.3 Seller Welfare or Other Benefit Plans.
(a) Effective as of the Closing Date, Seller shall cause the Company to
cease to act as a participating employer in, and the employees of the Company to
cease to be actively covered by and participate in, the welfare plans, fringe
benefit plans and all other employee benefit plans, programs or arrangements,
sponsored or maintained by Seller (the "Seller Welfare or Other Benefit Plans").
The Company shall reverse, prior to the Closing, any accrual on the Company
Financial Statements for the accrued and unpaid vacation of Company employees,
and the Company shall establish, on the Closing Date Financial Statements, an
accrual for the amount of the six unscheduled personal holidays earned for 2001,
but not taken on or prior to the Closing Date, by Company employees under the
Company's holiday policy. On the Closing Date, the Company shall pay each
employee who will continue to be employed by the Company following the Closing
(or whose employment will be terminated as of that date) for the amount of any
accrued vacation under the Company's vacation policy that have not been taken by
the employee on or prior to the Closing Date . On and after the Closing Date,
Seller shall be solely liable and responsible for all other benefits,
liabilities and obligations of the Seller Welfare or Other Benefit Plans, the
Company's termination from participation in such Plans or the cessation of
coverage of the Company's employees under such Plans, including any and all
benefits or obligations thereunder relating to employees or retired or other
former employees of the Company
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attributable to or payable on account of any event occurring on, prior to, or
after the Closing Date to the extent that the amount of such benefits,
liabilities and obligations have not been fully accrued and reflected in the
Company Financial Statements after giving effect to the adjustments thereto as
set forth in Section 1.4 and the schedule thereto.
(b) Anything contained herein to the contrary notwithstanding (i)
Seller shall assume or retain all financial responsibility, including
responsibility for the provision of employee benefits, insurance and workers
compensation benefits, for any inactive employees of the Company, including
employees who are on long-term disability or other paid or unpaid leave of
absence (other than a leave of absence under the Company's Sick Leave Plan),
until such employees return to active employment with the Company, (ii) Seller
shall assume or retain sole responsibility for severance and all other benefit
liabilities for the Company employees listed on Schedule 7.3(b), irrespective of
whether such employees have terminated employment with the Company as of the
Closing Date, (iii) with respect to any Seller Welfare or Other Benefit Plan
that offers medical or life insurance benefits to retirees, Seller shall be
solely responsible for any and all obligations and liabilities for those
employees or former employees of the Company who are or at any time become
entitled to receive benefits under such Plans, (iv) Seller shall be solely
responsible for complying with the applicable COBRA requirements with respect to
Company employees who terminated employment with the Company on or before the
Closing Date, and (v) Seller shall be solely responsible for all benefits or
compensation due or which becomes due to any employees or former employees of
the Company under the Benefit Plans identified as "Compensation Plans" in
Schedule 2.15(a) in connection with their employment on or before the Closing
Date, except to the extent that such obligations have been fully accrued and
reflected as a liability in the Company Financial Statements after giving effect
to the adjustments thereto in Section 1.4.
(c) Any employee of the Company who is on a leave of absence, as of the
Closing Date, under the Company's Sick Leave Plan (other than those employees
listed on Schedule 7.3(b) whose employment with the Company is terminated as of
the Closing Date) shall remain an employee of the Company following the Closing
Date and shall be eligible for benefits, if any, under the Buyer's short-term
disability plan. No later than the second anniversary of the Closing Date, the
Seller shall reimburse the Buyer for the amount of (i) any benefits paid under
the Buyer's short-term disability plan during the six-month period following the
Closing Date to any employee of the Company who was on a leave of absence under
the Company's Sick Leave Plan on the Closing Date and remained on such leave of
absence for more than 20 days following the Closing Date, and (ii) the amount,
as determined by Buyer's insurer on an actuarial basis, of any benefits payable
to such an employee under any long-term disability plan maintained by the Buyer
in the event that such employee fails to return to active employment following
such leave of absence and is transferred to a long-term disability plan
maintained by the Buyer. The Buyer
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shall furnish the Seller with a reasonably detailed statement of the names and
aggregate amount due to Buyer under this Section 7.3(c) at least 30 days before
such amount is payable.
SECTION 7.4 Post-Closing Employee Benefits.
(a) From and after the Closing Date, Buyer shall provide or cause to be
provided to all continuing employees of the Company, other than the employees
listed on Schedule 7.3(b), pursuant to employee benefit and compensation plans,
policies or arrangements (including all compensation, bonus, fringe benefits,
welfare benefits, medical, dental and other health plans, short term and long
term disability pay, vacation pay, severance pay or termination pay, deferred
compensation arrangements, retirement and pension benefits) maintained or
contributed to by Buyer, the Company, or Buyer's other affiliates (together, the
"Buyer Employee Benefit Plans"), benefits and compensation not less favorable in
the aggregate than those provided by Buyer or its affiliate to other similarly
situated employees of Buyer; provided, however, that Buyer shall also provide,
to any continuing employee of the Company whose employment with the Company is
terminated on or before the first anniversary of the Closing Date, other than
the employees listed on Schedule 7.3(b), the enhanced severance benefits
described in Schedule 7.4(a). From and after the Closing Date, Buyer shall
provide, or cause to be provided, to employees of the Company credit for
purposes of eligibility to participate, vesting or qualification or eligibility
for any benefit or privilege (including vacation, sick leave and disability)
based on length of service, (but not for determining accruals under a defined
benefit pension plan as defined in Section 3(2) of ERISA) under Buyer Employee
Benefit Plans for service with the Company performed at any time prior to the
Closing, to the extent such service was recognized for such purposes under plans
of like kind maintained by Seller immediately prior to the Closing Date. Nothing
in this Section 7.4 shall be deemed to affect or limit the obligations of any of
the Company Parties to comply, after the Closing Date, with any of their
obligations under any collective bargaining agreements to which such Company
Party is a party.
(b) The Company and Buyer shall waive all limitations as to preexisting
condition exclusions, waiting periods and physical examination requirements
(except for physical examinations required by regulation or corporate policy
with respect to drug testing or required due to the Company employee's failure
to enroll within the applicable time period when first eligible for coverage)
with respect to participation and coverage requirements applicable to the
Company employees under any of the Buyer Employee Benefit Plans that are welfare
plans, funds or programs (within the meaning of section 3(1) of ERISA) in which
such Company employees may be eligible to participate after the Closing, other
than exclusions or waiting periods that are already in effect with respect to
such Company employees and that have not been satisfied as of the Closing Date.
The Company and Buyer shall credit each Company employee (or dependent) with the
amount paid during the plan year or calendar year, as applicable, in which the
Closing Date occurs by such Company employee (or dependent) toward applicable
deductible or out-of-pocket maximum provisions of Buyer's Employee Benefit
Plans.
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(c) Buyer shall credit each Company employee who continues in
employment with Buyer after the Closing Date with the six unscheduled personal
holidays provided during 2001 under the Company's holiday policy to the extent
such holidays have not been taken by such Company employee between January 1,
2001 and the Closing Date and shall either permit such Company employees to take
such holidays during 2001 or shall compensate such Company employees for any
such holidays which they are not permitted to take. The Buyer shall also
compensate any employee whose employment with the Company is terminated, for any
reason, in 2001 for the amount of an holidays not taken by such employee prior
to the date of termination.
SECTION 7.5 Provision of Information to Company Employees. Subject to the
provisions of Section 5.1, the Seller, Company Parties and Buyer Parties shall
cooperate to provide, prior to the Closing Date, information to employees of the
Company Parties concerning the status of their benefits under the Seller's
benefit plans and the Buyer's benefit plans on and after the Closing Date,
including their benefits under the Seller's flexible spending account plans.
SECTION 7.6 Indemnification. Seller shall indemnify and hold Buyer Parties
harmless from and against any and all liabilities, claims, demands, judgments,
settlements, payments, losses, costs, damages and expenses whatsoever that Buyer
Parties may sustain, suffer or incur that result from, arise out of or pertain
to any claims relating to the Seller Pension Plans, Seller 401(k) Plan or Seller
Welfare or Other Benefit Plans or the benefits provided thereby, whether arising
before, on or after the Closing Date, or to any breach of Seller's obligations
under this Article VII. Buyer Parties shall indemnify and hold Seller harmless
from and against any and all liabilities, claims, demands, judgments,
settlements, payments, losses, costs, damages and expenses whatsoever that
Seller may sustain, suffer or incur that result from, arise out of or pertain to
any claims relating to the Buyer Employee Benefit Plans or the benefits provided
thereby, whether arising on or after the Closing Date or to any breach of
Buyer's obligations under this Article VII.
ARTICLE VIII
TERMINATION
SECTION 8.1 Events of Termination. Notwithstanding any other provision hereof,
this Agreement may be terminated prior to the Closing Date as set forth below.
(a) Consent. By Buyer and Seller at any time upon their mutual written
agreement.
(b) Prohibition or Restriction. By Seller or Buyer in writing, if there
shall be any order, injunction or decree of any Governmental Entity which
prohibits or restrains any party
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from consummating the Transactions, and such order, injunction or decree shall
have become final and nonappealable.
(c) Non-Occurrence. By Seller or Buyer in writing, if the Closing has
not occurred on or prior to April 30, 2001, unless due to the failure of the
party seeking to terminate this Agreement to materially perform each of its
obligations under this Agreement required to be performed by it on or prior to
the Closing Date.
SECTION 8.2 Effect of Termination. If this Agreement is terminated as permitted
under Section 8.1, no party hereto (or its officers or directors) will have any
liability or further obligation to any other party to this Agreement, except for
willful breaches of and intentional misstatements in or pursuant to this
Agreement prior to the time of such termination and except for obligations
pursuant to the last sentence of Section 5.1 hereof and any liability resulting
from the breach hereof; provided, however, that the obligations of the parties
in the last sentence of Section 5.1 and Sections 5.3 and 5.7 shall survive such
termination.
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Obligation to Indemnify.
(a) Subject to the limitations set forth in Section 11.2(c), Seller
agrees to indemnify and hold harmless the Buyer Parties, the Company Parties,
and their respective directors, officers, partners, employees, agents and
affiliates, and the successors and assigns of such entities and persons
(collectively, the "Buyer Indemnitees") from and against all losses,
liabilities, claims, costs, expenses (including reasonable attorneys" fees and
expenses of outside counsel) and damages of whatsoever kind or nature
(collectively, "Losses") that the Buyer Indemnitees may incur, suffer or sustain
to the extent arising from or related to:
(i) any breach of the representations and warranties of Seller
contained in this Agreement (other than (A) the representations and warranties
of Seller contained in Sections 2.11 (captioned "Environmental Matters"), any
breach of which is governed by Section 9.1(b), (B) the representations and
warranties of Seller contained in Section 2.16(a)(i) through (vi) (captioned
"Taxes"), which expire at Closing, (C) the representations and warranties of
Seller contained in Section 2.16(a)(vii), (viii) and (ix), any breach of which
is governed by Article XII, and (D) the representations and warranties of Seller
contained in Section 10.1 (captioned "Representations and Warranties of
Seller"), any breach of which is governed by Section 10.3); and
(ii) any breach of any of the covenants and agreements of
Seller or the Company Parties contained in this Agreement;
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provided, however, that Seller shall not have any liability under clause (i)
above unless the aggregate of all Losses for which Seller would, but for this
proviso, be liable, exceeds on a cumulative basis an amount equal to 1% of the
Purchase Price (the "Seller Indemnification Basket"), and then only to the
extent of any such excess; provided further, that Seller shall not have any
liability under clause (i) above for any individual breach where the Loss
relating thereto is less than $50,000 and the Losses with respect to such
breaches shall not be aggregated for purposes of the first proviso to this
Section 9.1(a) (the "Seller Indemnification Threshold"); provided further, that
Seller shall not have any liability under Section 9.1(a) to the extent that such
liability is specifically reserved for and properly accrued as a current
liability in the Closing Date Financial Statements after giving effect to the
adjustments thereto as set forth in Section 1.4 and the schedules to such
section; and provided further, that the maximum amount for which Seller shall be
liable in the aggregate under Section 9.1(a)(i) shall not exceed 25% of the
Purchase Price (the "Seller Indemnification Cap").
(b) Notwithstanding the limitations set forth in Section 9.1(a) but
subject to the limitations set forth in Section 11.2(c), Seller agrees to
indemnify and hold harmless the Buyer Indemnitees from and against all Losses
that the Buyer Indemnitees may incur, suffer or sustain to the extent arising
from or related to:
(i) any breach of the representations and warranties of Seller
contained in Section 2.11 ("Environmental Matters");
(ii) any investigation, treatment, removal, containment,
monitoring or other remediation or response actions taken in response to any
third party or governmental inquiry, action, claim, lawsuit, proceeding or
governmental mandated remediation (A) to reduce to acceptable levels risks from
concentrations of Hazardous Materials present or released on, at or under, or
which are migrating from, and otherwise to bring into compliance with the
Environmental Laws, any present or former property of any Company Party not
identified on Schedule 9.1(c)(iii) where coal tar was present or had been
released prior to the Closing Date (the "Unknown Coal Tar Sites") or (B) to
prevent or mitigate the presence or release of Hazardous Materials at, on or
under any of the Unknown Coal Tar Sites; provided, however, that the Buyer
Indemnitees shall be entitled to indemnification under this Section 9.1(b)(ii)
only to the extent that the third-party or governmental inquiry, action, claim,
lawsuit, proceeding or governmental mandated remediation giving rise to such
Losses occurs, and notice thereof has been given to the Seller as provided in
Section 11.1(a), on or before the fourth anniversary of the Closing Date; and
(iii) any third party or governmental inquiry, action, claim,
lawsuit, proceeding or governmental mandated remediation relating to (A)
compliance or noncompliance with any Environmental Laws, on or prior to the
Closing Date, in connection with any of the properties of the Company Parties (a
"Company Party Property"), or (B) the transportation, treatment, storage,
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handling or disposal of any Hazardous Materials by or on behalf of any Company
Party, any predecessor to any Company Party, or any entities previously owned by
any Company Party at or to any off-site location (an "Off-Site Location") on or
prior to the Closing Date; provided, however, that the Buyer Indemnitees shall
be entitled to indemnification under this Section 9.1(b)(iii) only to the extent
that the third-party or governmental inquiry, action, claim, lawsuit, proceeding
or governmental mandated remediation giving rise to such Losses occurs, and
notice thereof has been given to the Seller as provided in Section 11.1(a), on
or before the second anniversary of the Closing Date and only to the extent that
such Losses exceed $100,000, per property or location, for each such Company
Party Property or Off-Site Location;
and provided, further, that the maximum amount for which the Seller shall be
liable, in the aggregate, under clauses (i), (ii) and (iii) of this Section
9.1(b) shall not exceed 25% of the Purchase Price (the "Seller Environmental
Indemnification Cap").
(c) Notwithstanding the limitations in Section 9.1(a) and (b) but
subject to the limitations set forth in Section 11.2(c), Seller agrees to
indemnify and hold harmless the Buyer Indemnitees from and against all Losses
that the Buyer Indemnitees may incur, suffer or sustain, at any time, to the
extent arising from or related to:
(i) any acts or omissions of Columbia Petroleum, its direct or
indirect subsidiaries or affiliates, any predecessor entity and their respective
successors and assigns, whether occurring prior to, on or after the Closing
Date, relating to the business, assets, operations of Columbia Petroleum, or
from the sale of Columbia Petroleum to any third party;
(ii) either (A) any Litigation set forth on Schedule
9.1(c)(ii) or (B) any act or omission of a Company Party, whether or not covered
by insurance, including any Losses arising out of employment-related or
job-related claims of former employees, contractors or agents of the Seller or
any Company Party, provided that, in each such case, the injury or damage giving
rise to such Loss occurred on or prior to the Closing Date;
(iii) either (A) the investigation, treatment, removal,
containment, monitoring or other remediation or response actions taken (I) to
reduce to acceptable levels risks from concentrations of Hazardous Materials
present or released on, at or under, on or prior to the Closing Date (or that
may subsequently migrate from Hazardous Materials present or released on, at or
under, on or prior to the Closing Date) and otherwise to bring into compliance
with the Environmental Laws, as of the Closing Date, any of the properties set
forth on Schedule 9.1(c)(iii) (the "Seller Indemnified Properties"), or (II) to
prevent or mitigate the presence or release of Hazardous Materials that were at,
on or under any of the Seller Indemnified Properties on or prior to the Closing
Date, or (B) any third party or governmental inquiry, action, claim, lawsuit,
proceeding or governmentally mandated remediation relating to (I) compliance or
noncompliance with any Environmental Laws, on or prior to the Closing Date, in
connection with any of the Seller Indemnified Properties, or (II) the
transportation, treatment, storage,
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handling or disposal of any Hazardous Materials, on or prior to the Closing
Date, by or on behalf of any Company Party, any predecessor to any Company
Party, or any entities previously owned by any Company Party at or to any
Off-Site Location from any of the Seller Indemnified Properties transferred to
the Seller or an affiliate of the Seller pursuant to Section 1.1(j);
(iv) any matters for which Seller is responsible, or for which
Seller has agreed to indemnify Buyer Parties, in each case pursuant to Article
VII and specifically Section 7.6;
(v) any liability arising out of the assets and liabilities of
CPLP and the Company, respectively, that are to be distributed to the Seller or
an affiliate of Seller pursuant to Sections 1.1(d) and 1.1(j), not including any
Seller Indemnified Properties, for which the Seller's indemnification
obligations are set forth in Section 9.1(c)(iii); and
(d) Subject to the limitations set forth in Section 11.2(c), Buyer
Parties severally agree to indemnify and hold harmless Seller, its directors,
officers, partners, employees, agents and affiliates, and the successors and
assigns of such entities and persons (collectively, the "Seller Indemnitees")
from and against all Losses that the Seller Indemnitees may incur, suffer or
sustain to the extent arising from or related to:
(i) any breach of the representations and warranties of
the Buyer Parties contained in this Agreement (other
than the representations and warranties set forth in
Section 10.2 (captioned "Representations, Warranties
and Covenants of the Buyer Parties"), which are
governed by Section 10.3); or
(ii) any breach of any of the covenants, obligations and
agreements of the Buyer Parties contained in this
Agreement (other than the covenants set forth in
Section 10.2, which are governed by Section 10.3);
provided, however, that the Buyer Parties shall not have any liability under
clause (i) above unless the aggregate of all Losses for which the Buyer Parties
would, but for this proviso, be liable, exceeds on a cumulative basis an amount
equal to 1% of the Purchase Price (the "Buyer Indemnification Basket"), and then
only to the extent of any such excess; provided further, that the Buyer Parties
shall not have any liability under clause (i) above for any individual breach
where the Loss relating thereto is less than $50,000 and the Losses with respect
to such breaches shall not be aggregated for purposes of the first proviso to
this Section 9.1(d) (the "Buyer Indemnification Threshold"); and provided
further, that the maximum amount for which the Buyer Parties shall be liable in
the aggregate under Section 9.1(d)(i) shall not exceed 25% of the Purchase Price
(the "Buyer Indemnification Cap").
(e) Notwithstanding the limitations in Section 9.1(d) but subject to
the limitations set forth in Section 11.2(c), Buyer Parties agree to indemnify
and hold harmless the Seller Indemnitees from and against all Losses that the
Seller Indemnitees may incur, suffer or sustain,
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at any time, to the extent arising from or related to any matters for which the
Buyer Parties are responsible, or for which the Buyer Parties have agreed to
indemnify the Seller pursuant to Article VII and specifically Section 7.6.
SECTION 9.2 Control of Remediation of Company Party Properties for Which Seller
Is Providing Indemnification. Seller shall have the right to control the
remediation of (i) any of the Seller Indemnified Properties or (ii) any Unknown
Coal Tar Sites or other Company Party Properties with respect to which Buyer has
given notice of a Third Party Claim pursuant to Section 11.1(a) and Seller has
elected to assume the defense pursuant to Section 11.1(b). In the event that the
property to be remediated is owned by a Company Party or used by a Company Party
in the conduct of its business, Seller and Buyer Parties agree as follows:
(a) The development, planning, administration and performance
of the remediation, including but not limited to the development and execution
of plans and selection of contractors, shall be at Seller's sole and exclusive
direction and discretion, subject to the Seller's compliance with the provisions
of this Section 9.2. Seller shall provide the Buyer on a reasonably current
basis copies of all site assessment work plans and reports which are filed with
any governmental authority in connection with any such remediation (the "Site
Remediation Work Plans").
(b) Seller shall use reasonable commercial efforts to conduct
the remediation in a manner that does not unduly interfere with the conduct of
the business of the Company Parties. Seller shall be responsible for ensuring
that its employees, agents and representatives perform all remediation work in
accordance with the applicable Site Remediation Work Plan and any and all
applicable required federal, state and local laws and shall obtain all required
permits, licenses or governmental approvals in connection with such remediation.
All remediation work shall be conducted by personnel qualified to perform the
work and in accordance with accepted practices. Seller or the independent
contractor performing the remediation work shall maintain general liability and
workers' compensation insurance in customary amounts and, upon the request of
the Buyer Parties, shall furnish Buyer Parties with proof of such coverage prior
to beginning the remediation. Seller shall be liable to Buyer Parties for any
Losses incurred by Buyer Parties as the result of any claims for personal injury
(including workers' compensation claims) or property damage arising out of the
performance of the remediation work by Seller or its agents, including any
independent contractor engaged by Seller.
(c) Upon Seller's request, Buyer shall grant, or cause the
Company Parties to grant, access to the Seller and its employees, agents,
independent contractors, subcontractors or representatives (the "Seller
Representatives") to the property to be remediated during commercially
reasonable hours for the purpose of conducting the remediation in accordance
with the Site Remediation Work Plans. Buyer Parties shall use commercially
reasonable efforts not to interfere with or otherwise impede, nor shall Buyer
Parties cause or permit any person within
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their control to interfere with or otherwise impede, Seller's access to the
property to be remediated or the execution of the remediation project. Buyer
shall be liable to Seller Parties for any Losses incurred by Seller as a result
of Buyer's breach of the provisions of this Section 9.2(c), including any
refusal by the Buyer to grant the Seller and Seller Representatives access to
the property in a manner sufficient to enable the Seller to complete the
remediation in a timely manner and in accordance with the requirements of any
governmentally mandated or court-ordered remediation or the terms and conditions
of any agreement with a third party providing for such remediation.
(d) Seller, its agents, employees and contractors, shall have
the right to use, store and maintain on the property to be remediated machinery
and equipment necessary or appropriate for execution of the remediation until
such time as the remediation is completed, provided that any machinery and
equipment stored on the property is stored in a manner which does not
unreasonably interfere with the conduct of the business of the Company Parties.
Buyer shall not use, remove or otherwise disturb, nor shall Buyer cause or
permit any person within its control to use, remove or otherwise disturb such
machinery or equipment while stored at the property. Subject to the preceding
sentence, Seller shall bear the risk of loss related to, and assume and
indemnify the Buyer Parties against, any loss or other damage to any machinery
or equipment stored on such property.
(e) Upon Seller's request, Buyer shall make available to Seller
access to utilities, including water and electricity, and Seller shall either
arrange to have its use of the utilities separately metered or shall reimburse
the Buyer Parties for such amount as Buyer Parties and Seller shall agree
represents the portion of utilities charges attributable to Seller's use of
utility services in connection with the remediation.
(f) Upon completion of the remediation project, Seller shall
use reasonable commercial efforts to restore to its pre-work condition any
Company Party Property then held or used by the Buyer or a Company Party
consistent with the Site Remediation Work Plan. Buyer Parties acknowledge and
agree that, at the completion of the remediation project certain restrictions or
limitations may be placed on the current and future use of the real property
affected by the remediation, and the Buyer Parties consent to the placement of
any such limitations or restrictions, provided that such limitations or
restrictions do not materially interfere with or deprive the Buyer Parties of
the reasonable use of the property as a propane distribution facility. Seller
shall provide the Buyer Parties with a copy of all reports produced, or the
analysis of any samples taken, in connection with the remediation.
ARTICLE X
TRIARC PURCHASE AGREEMENT
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SECTION 10.1 Representations and Warranties of the Seller. Seller represents and
warrants that the copy of the Triarc Purchase Agreement provided by the Seller
to the Buyer Parties and attached as Schedule 10.1 (i) is the complete
agreement, (ii) is in full force and effect according to its terms and has not
been amended, either orally or in writing, nor has any provision of the same
been waived, (iii) assuming it is enforceable against Triarc, National Propane
SGP, Inc. and National Propane Corporation, is enforceable against, and
constitutes the valid and binding agreement of, the Company Parties executing
the same, except that (A) such enforcement may be subject to applicable
bankruptcy, insolvency or other similar laws, now or hereafter in effect,
affecting creditors' rights generally and (B) the remedy of specific performance
and injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought. The Company Parties have complied in all material respects with
the terms and conditions of the Triarc Purchase Agreement prior to the Closing.
No material breach or default by any Company Party (or event that, with notice,
lapse of time, or both, would constitute a material breach or default by any
Company Party) has occurred under the Triarc Purchase Agreement prior to the
Closing.
SECTION 10.2 Representations, Warranties and Covenants of the Buyer Parties.
(a) The Buyer Parties acknowledge and confirm that (i) they have
received a copy, certified by Seller to be true and complete, of the Triarc
Purchase Agreement, and (ii) they have read and are familiar with, and
understand the effect and import of the Triarc Purchase Agreement, including the
last paragraph of Section 5.2, Section 5.9, and Section 5.14 (as defined in
Section 9.1(c) of the Triarc Purchase Agreement, the "Tax Indemnity Provisions")
and Section 9.1(c) and Section 9.2(a) of such Agreement. Each of the Buyer
Parties acknowledges and agrees that, following the Closing, the Company Parties
that are parties to the Triarc Purchase Agreement shall continue to be bound by
all of their obligations under the Triarc Purchase Agreement.
(b) Each of the Buyer Parties hereby agrees that, from and after the
Closing Date and until such time as the Company or any of the Company Parties is
no longer bound by any of the Tax Indemnity Provisions of the Triarc Purchase
Agreement, it will cause the Company Parties to conduct their business and take,
or refrain from taking, any and all actions necessary and/or required to perform
their obligations under the Triarc Purchase Agreement and not to breach
materially any of the covenants or agreements contained therein, including any
of the Tax Indemnity Provisions of the Triarc Purchase Agreement.
(c) Buyer shall make in accordance with the terms and conditions of the
Capital Contribution Agreement the capital contribution that Buyer has agreed to
make to CPLP under such agreement.
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SECTION 10.3 Indemnification.
(a) Seller's Indemnification. Subject to the limitations set forth
in Section 11.2(c), Seller agrees to indemnify and hold harmless the Buyer
Indemnitees from and against all Losses that the Buyer Indemnitees may incur,
suffer or sustain pursuant to the Triarc Purchase Agreement to the extent
arising from or related to any acts or omissions of the Seller, the Company
Parties or any of their affiliates prior to the consummation, on the Closing
Date, of any of the Principal Closing Transactions.
(b) Buyer's Indemnification. Subject to the limitations set forth in
Section 11.2(c), Buyer Parties severally agree to indemnify and hold harmless
the Seller Indemnitees from and against all Losses that the Seller Indemnitees
may incur, suffer or sustain pursuant to the Triarc Purchase Agreement to the
extent arising from or related to any acts or omissions of the Buyer Parties,
the Company Parties or any of their affiliates after the consummation, on the
Closing Date, of all of the Principal Closing Transactions, including any
failure to comply with Section 10.2(c).
(c) Seller's and Buyer Parties' Cross Indemnification. The Buyer
Parties, on one hand, and the Seller, on the other hand, intend and believe that
the consummation of the Principal Closing Transactions will not: (i) violate the
Tax Indemnity Provisions or any other provisions of the Triarc Purchase
Agreement, (ii) impose any indemnification obligations on the Buyer Parties, the
Company Parties or their affiliates under or pursuant to the Triarc Purchase
Agreement, or (iii) otherwise trigger adverse tax consequences to Triarc or its
affiliates under the Triarc Purchase Agreement, including any of the Tax
Indemnity Provisions of the Triarc Purchase Agreement. However, if the parties'
intention and belief is incorrect and any of the Principal Closing Transactions
occurring on the Closing Date or the change in the partnership tax year of CPLP
resulting from the consummation of the Principal Closing Transactions
constitutes, or is alleged to constitute, a breach or other violation of the Tax
Indemnity Provisions of the Triarc Purchase Agreement, then, subject to the
limitations set forth in Section 11.2(c), any Losses sustained by either party
as the result of such breach or alleged breach shall be apportioned between the
Buyer Parties, on one hand, and the Seller, on the other hand, and such parties
shall bear such Losses in a ratio of 2:1, with the Buyer Parties jointly and
severally bearing 66.67% of such Losses and the Seller bearing 33.33% of such
Losses.
(d) Absence of Certain Limitations on Indemnification Obligations. The
indemnification obligations of the Seller under this Section 10.3 shall not be
subject to the Seller Indemnification Cap, the Seller Indemnification Basket, or
the Seller Indemnification Threshold, and the indemnification obligations of the
Buyer under this Section 10.3 shall not be subject to the Buyer Indemnification
Cap, the Buyer Indemnification Basket, or the Buyer Indemnification Threshold.
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SECTION 10.4 Consents under the Triarc Purchase Agreement. The Buyer Parties, on
the one hand, and the Seller, on the other hand, intend and believe that the
consummation of the Principal Closing Transactions on the Closing Date will not
require the Seller or the Company Parties to obtain the consent of the Special
Limited Partner under the Amended and Restated Agreement of Limited Partnership
of CPLP (formerly National Propane, L.P.) or the consent of Triarc, or of any
affiliate of Triarc, under the Triarc Purchase Agreement. However, if the
parties' intention and belief is incorrect, the cost, if any, of obtaining any
such consent that the parties deem necessary or advisable to effect the
consummation of the Principal Closing Transactions on the Closing Date shall be
apportioned between the Seller, on the one hand, and the Buyer Parties, on the
other hand, and such parties shall bear such cost in a ratio of 2:1, with the
Seller bearing 66.67% of such cost and the Buyer Parties jointly and severally
bearing 33.33% of such cost.
ARTICLE XI
INDEMNIFICATION PROCEDURES;
SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
EFFECT OF INSURANCE
SECTION 11.1 Indemnification Procedures.
(a) The party seeking indemnification under Sections 9.1 or 10.3 of
this Agreement (the "Indemnified Party") agrees to give the party from which
such indemnification is sought (the "Indemnifying Party") notice in writing of
the assertion of any claim or demand made by, or an action, proceeding or
investigation instituted by, any person not a party to this Agreement (a "Third
Party Claim") in respect of which indemnity may be sought under such Section
promptly after such Indemnified Party learns of the Third Party Claim; provided,
however, that failure to give such notice shall not affect the indemnification
provided hereunder except to the extent the Indemnifying Party shall have been
materially prejudiced as a result of such failure (except that the Indemnifying
Party shall not be liable for any expenses incurred during the period in which
the Indemnified Party failed to give such notice). Thereafter, the Indemnified
Party shall deliver to the Indemnifying Party, within five calendar days after
the Indemnified Party's receipt thereof, copies of all notices and documents
(including court papers) received by the Indemnified Party relating to the Third
Party Claim.
(b) If a Third Party Claim is made against an Indemnified Party for
which indemnification may be sought under Sections 9.1 or 10.3(a) or (b), the
Indemnifying Party will be entitled to participate in the defense thereof and,
if it so chooses, to assume the defense thereof with counsel selected by the
Indemnifying Party. Should the Indemnifying Party so elect to assume the defense
of a Third Party Claim, the Indemnifying Party will not as long as it conducts
such defense be liable to the Indemnified Party for legal expenses subsequently
incurred by the Indemnified Party in connection with the defense thereof. If the
Indemnifying Party assumes
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such defense, the Indemnified Party shall have the right to participate in the
defense thereof and to employ counsel, at its own expense, separate from the
counsel employed by the Indemnifying Party, it being understood that the
Indemnifying Party shall control such defense. The Indemnifying Party shall be
liable for the fees and expenses of counsel employed by the Indemnified Party
for any period during which the Indemnifying Party has not assumed the defense
thereof (other than during any period in which the Indemnified Party shall have
not yet given notice of the Third Party Claim as provided above). If the
Indemnifying Party chooses to defend or prosecute any Third Party Claim, all of
the parties hereto shall cooperate in the defense or prosecution thereof. Such
cooperation shall include the retention and (upon the Indemnifying Party's
request) the provision to the Indemnifying Party of records and information
which are reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder. Whether or not the Indemnifying
Party shall have assumed the defense of a Third Party Claim, the Indemnified
Party shall not admit any liability with respect to, or settle, compromise or
discharge, such Third Party Claim without the Indemnifying Party's prior written
consent.
(c) If a Third Party Claim is made against an Indemnified Party for
which indemnification may be sought under Section 10.3(c), the defense or
settlement of such Third Party Claim (i) shall be controlled by the Seller, in
the event that such Third Party Claim results from a Contest which the Seller
has the right to control and (ii) shall be controlled the Buyer, in the event
that such Third Party Claim results from a Contest which the Buyer has the right
to control, in each case as determined pursuant to Section 12.5(b) of this
Agreement. Notwithstanding any other provision in this Section 11.1(c), neither
the Buyer Parties, on the one hand, nor the Seller, on the other hand, shall
undertake any defense of a Third Party Claim for which indemnification may be
sought under Section 10.3(c) unless the controlling party shall have obtained,
on behalf of both the controlling party and the non-controlling party, an
opinion of independent counsel selected by the controlling party to the effect
that a reasonable basis (within the meaning of Section 6662(d)(2)(B)(ii)(II) of
the Code) exists for pursuing such contest. Moreover, neither party shall be
entitled to settle any dispute governed by this Section 11.1(c) without first
obtaining the written consent of the other party; provided, however, such
written consent will not be unreasonably withheld by the non-controlling party.
The Buyer Parties, on one hand, and the Seller, on the other hand, shall bear
any of out-of-pocket fees, and the other costs and expenses involved in such
defense or settlement (including attorney's fees) in a ratio of 2:1, with the
Buyer bearing 66.67% of such fees and costs and the Seller bearing 33.33% of the
same. The Seller and Buyer shall cooperate and provide each other with such
information as either of them or their respective affiliates may reasonably
request of the other in conducting the defense of any such claim. Such
cooperation and information shall include providing copies of relevant Tax
Returns or portions thereof, together with accompanying schedules, related work
papers and documents relating to rulings or other determinations by taxing
authorities and of any correspondence or other documents relating to such Third
Party
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Claim. Each party and its affiliates shall make its employees and agents
available on a basis mutually convenient to both parties to provide explanations
of any information or documents provided hereunder.
(d) The indemnification procedures set forth in this Section 11.1 shall
not apply to the rights to indemnification contained in Section 12.1, which are
governed by the provisions of Article XII.
SECTION 11.2 Survival; Termination; Insurance.
(a) The representations and warranties set forth in Section 2.16
(captioned "Taxes"), other than the representations set forth in Section
2.16(a)(vii), (viii) and (ix), shall not survive the Closing. The
representations and warranties in Section 10.1 (captioned "Representations and
Warranties of the Seller") and 10.2 (captioned "Representations, Warranties and
Covenants of the Buyer Parties") shall survive the Closing and shall remain in
effect for so long as the Tax Indemnity Provisions of the Triarc Purchase
Agreement remain in effect. The representations and warranties set forth in
Section 2.16(a)(vii), (viii), and (ix) shall survive the Closing and shall
remain in effect until the expiration of the applicable statute of limitations
period for the payment of Taxes. The representations and warranties in Section
2.11 (captioned "Environmental Matters") shall survive the Closing but shall
terminate and expire at the close of business on the second anniversary of the
Closing Date. All other representations and warranties contained in this
Agreement (including the representation and warranty made by the Seller pursuant
to Section 5.15(c)) shall survive the Closing but shall terminate and expire at
the close of business on the date that is 18 months after the Closing Date. All
covenants and agreements contained in this Agreement shall be perpetual, unless
otherwise specified.
(b) The indemnities provided in this Agreement shall survive the
Closing and shall be perpetual; provided, however, that the indemnities provided
under Sections 9.1(a)(i), 9.1(b)(i) and 9.1(d)(i) shall terminate when the
applicable representation or warranty terminates and the indemnities set forth
in Section 9.1(b)(ii) and (iii) shall terminate, in accordance with their terms,
on the fourth and second anniversary, respectively, of the Closing Date, except
as to any item as to which the person to be indemnified shall have, before the
expiration of the applicable indemnification period, previously made a claim by
delivering a notice (stating in reasonable detail the basis of such claim) to
the Indemnifying Party in accordance with Section 11.1(a). After the Closing,
the indemnities provided in Section 9.1, Section 10.3, and Article XII shall be
the sole and exclusive remedy at law or in equity for any breach of
representation, warranty, covenant or agreement or other claim arising out of
this Agreement or the Transactions, other than a breach of the covenants
contained in Sections 5.8 and 5.10 with respect to which injunctive relief may
be sought.
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(c) The amount of any Losses for which indemnification is provided
under this Agreement shall be (i) reduced by any amounts recovered or
recoverable by the Indemnified Party under insurance policies with respect to
such Losses, including any of the environmental insurance policies identified on
Schedule 5.12, (ii) increased to take account of any Tax cost incurred (grossed
up for such increase) by the Indemnified Party arising from the receipt of
indemnity payments hereunder and (iii) reduced to take account of any Tax
benefit realized by the Indemnified Party arising from the incurrence or payment
of any such Losses. Such Tax cost or Tax benefit, as the case may be, shall be
computed for any year using the Indemnified Party's actual Tax liability with
and without (i) the receipt of any indemnification payments made pursuant to
this Agreement and (ii) the incurrence or payment of any Losses for which
indemnification is provided under this Agreement in such year. In the event that
the Indemnified Party actually realizes a Tax cost or Tax benefit for a year(s)
subsequent to the year in which the indemnity payment is made, the Indemnifying
Party shall pay the amount of such Tax cost or the Indemnified Party shall pay
the amount of such Tax benefit, as the case may be, in such subsequent year(s).
SECTION 11.3 Environmental Insurance. Seller and Buyer shall cooperate to ensure
the continuity of insurance coverage under the environmental policies set forth
on Schedule 5.12. Without limitation of the foregoing, the Seller and the Buyer
agree that Seller may, at Seller's expense, take such action as may be necessary
to effect the following changes to the policies set forth on Schedule 5.12: (i)
include the Seller as a named insured under each environmental policy set forth
in Schedule 5.12; (ii) include the Seller's indemnification obligations to the
Buyer Indemnitees under this Agreement as an "insured contract" under the
National Propane Environmental Insurance Policy; (iii) eliminate from coverage
under the National Propane Environmental Insurance Policy liabilities arising
from acts or omissions of the Company Parties or the Buyer Parties after the
Closing; and (iv) eliminate any of the Company Parties as a named insured on one
or more of the environmental insurance policies set forth in Schedule 5.12 which
relate solely to the Seller Indemnified Properties if the Seller should
determine that such elimination is appropriate; provided, however, in no event
shall part (iv) hereof apply to the National Propane Environmental Insurance
Policy. Buyer shall bear the cost associated with transferring the National
Propane Environmental Insurance Policy to the extent any change of ownership
resulting from the Transactions is determined to be an assignment of such
policy, except to the extent that such cost arises out of the transfer to the
Seller of any coal tar site included in the Seller Indemnified Properties, which
cost shall be borne by Seller. Seller and Buyer agree to cooperate in making and
prosecuting claims against the insurance policies of Seller and the Company
Parties in effect prior to the Closing Date that may provide coverage for any
Losses, regardless of the party entitled to indemnification hereunder.
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ARTICLE XII
TAX MATTERS
SECTION 12.1 Tax Indemnity.
(a) Seller agrees to indemnify and hold harmless the Buyer Indemnitees
from and against the following Taxes (except for the Buyer Indemnitees' share of
the Taxes referred to in Section 12.8 or to the extent reflected in the Closing
Date Financial Statements) and, except as otherwise provided in Section 12.5,
against any costs or expenses (including reasonable attorneys fees and expenses
of outside counsel) incurred in contesting such Taxes ("Contest Expenses"): (i)
all Taxes imposed on the Company Parties with respect to Taxable periods of such
person ending on or before the Closing Date, including all income, gains and
other amounts earned or realized by the Company Parties through the Closing
Date, all of which shall be included in the Seller's tax returns or in tax
returns of consolidated or combined groups of which Seller is a member, (ii) all
Taxes, if any, that would not otherwise have been payable by the Company or CPH
in a period that ends after the Closing Date if the items of income, gain, loss
and deduction that would be allocated to the general partner interest in CPLP
that is held by CPH for the period ended at the end of the Closing Date under
the "closing of the books" method were excluded from the income of CPH, (iii)
with respect to Taxable periods beginning before the Closing Date and ending
after the Closing Date, all Taxes imposed on the Company Parties, in each case
which are allocable, pursuant to Section 12.1(c), to the portion of such period
ending on the Closing Date, and (iv) all Taxes, if any, payable by the Company
Parties after the Closing arising from or related to a breach of the
representations and warranties of the Seller in Section 2.16(a)(vii), (viii) and
(ix) and that would not otherwise have been payable by the Company Parties. The
obligations of the Seller under this Section 12.1 shall not be subject to the
Seller Indemnification Cap, the Seller Indemnification Basket or the Seller
Indemnification Threshold.
(b) The Buyer Parties agree jointly and severally to indemnify and hold
harmless the Seller Indemnitees for (i) all Taxes and associated expenses not
allocated to Seller pursuant to clauses (i) and (ii) of Section 12.1(a) (except
as otherwise provided herein) and (ii) any obligation of Seller arising from or
relating to any act or failure to act by any Company Party or any Buyer Party or
any affiliate, successor or assignee of any of them occurring after the Closing
Date. The obligations of the Buyer Parties under this Section 12.1 shall not be
subject to the Buyer Indemnification Cap, the Buyer Indemnification Basket or
the Buyer Indemnification Threshold.
(c) In the case of Taxes that are payable with respect to a Taxable
period that begins before the Closing Date and ends after the Closing Date, the
portion of any such Tax that is allocable to the portion of the period ending on
the Closing Date shall be:
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(i) in the case of Taxes that are either (A) based upon or
related to income or receipts, or (B) imposed in connection with any
sale or other transfer or assignment of property (real or personal,
tangible or intangible) (other than conveyances pursuant to this
Agreement, as provided under Section 12.8), deemed equal to the amount
which would be payable if the Taxable period ended with the Closing
Date; and
(ii) in the case of Taxes imposed on a periodic basis with
respect to the assets of any Company Party, or otherwise measured by
the level of any item, deemed to be the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears
basis, the amount of such Taxes for the immediately preceding period),
multiplied by a fraction the numerator of which is the number of
calendar days in the period ending on the Closing Date and the
denominator of which is the number of calendar days in the entire
period.
SECTION 12.2 Returns and Payments.
(a) Seller shall prepare and file or otherwise furnish in proper form
to the appropriate taxing authority (or cause to be prepared and filed or so
furnished) in a timely manner all Tax Returns relating to the Company Parties
(i) that are due on or before the Closing Date and (ii) that relate to any
period through the Closing Date, and pay or cause to be paid all Taxes shown as
due thereon (and the Buyer Parties shall do the same, including making or
causing to be made payments shown as due, with respect to any Tax Return for the
Company Parties due after the Closing Date). Tax Returns of the Company Parties
not yet filed for any Taxable period that begins before the Closing Date shall
be prepared in a manner consistent with past practices employed with respect to
the Company Parties (except to the extent counsel for Seller or counsel for the
Company renders a legal opinion that there is no reasonable basis in law
therefor or determines that a Tax return cannot be so prepared and filed without
being subject to penalties). With respect to any Tax Return required to be filed
by Buyer or Seller with respect to the Company Parties and as to which an amount
of Tax is allocable to the other party under Section 12.1(c), the filing party
shall provide the other party and its authorized representatives with a copy of
such completed Tax Return and a statement certifying the amount of Tax shown on
such Tax Return that is allocable to such other party pursuant to Section
12.1(c) (the "Tax Allocation Statement"), together with appropriate supporting
information and schedules at least 45 days (or such other time period as is
agreed by the parties, such agreement not to be unreasonably withheld) prior to
the due date (including any extension thereof) for the filing of such Tax
Return, and such other party and its authorized representatives shall have the
right to review and comment on such Tax Return and Tax Allocation Statement
prior to the filing of such Tax Return. If after such review, the reviewing
party disagrees with any item on such Tax Return or Tax Allocation Statement and
the parties cannot agree as to the appropriate treatment or calculation thereof,
the issue in dispute shall be reviewed by an independent nationally recognized
accounting firm (the "Tax Referee") agreed to by the parties. If the parties are
unable
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to agree upon an independent nationally recognized accounting firm, Buyer
and Seller shall each have the right to request that the American Arbitration
Association appoint such a firm (provided that such firm has not performed any
services for any party with respect to the Transactions and is not the customary
Tax advisor to any party). Each party agrees to execute, if requested by the Tax
Referee, a reasonable engagement letter. All fees and expenses relating to the
work, if any, to be performed by the Tax Referee shall be borne pro rata by
Seller and Buyer in proportion to the allocation of the dollar amount of the
items as to which there is a disagreement between Seller and Buyer made by the
Tax Referee such that the prevailing party pays a lesser proportion of the fees
and expenses. The Tax Referee shall determine in accordance with the terms of
this paragraph the appropriate treatment or calculation of any items as to which
there is a disagreement. The findings of the Tax Referee shall be binding on all
parties, and the Tax Return shall be completed and filed in a manner consistent
with such findings. Any amounts allocated to the non-filing party on the Tax
Allocation Statement shall be paid to the filing party in accordance with the
provisions of Section 12.6 hereof.
(b) Seller and Buyer agree to report the Transactions and file all Tax
Returns in a manner consistent with the obligations imposed by the Triarc
Purchase Agreement upon the Company Parties.
(c) CPLP shall divide the items of income, gain, loss and deduction
that are allocated to the CPLP Limited Partner Interest between the Company and
Buyer for the CPLP taxable year in which the Closing occurs by closing the books
of CPLP at the end of the day on which the Closing occurs.
SECTION 12.3 Tax Benefits. Any indemnifiable Tax Losses payable by an
indemnifying party under this Article XII shall be reduced by the present value
of (a) any benefit that was (or will) be realized by the indemnified party, or
any affiliate thereof, resulting from any refund, credit or reduction in
otherwise required Tax payments (including any interest payable thereon)
attributable to any item that generated or that relates to the indemnified Tax
Losses and (b) any Tax savings (including any refund, credit or other Tax
reduction) attributable to the deductibility of the indemnified party's or its
affiliate's payment of any Tax Losses for which it receives an indemnification
payment. Such present value shall be computed as of the first date on which the
right to the refund, credit or other Tax reduction arises or otherwise becomes
available to be utilized (i) using the maximum marginal rate of the relevant Tax
payable by the indemnified party for any Tax year in which such savings or
refund were or will be available after first reflecting all other items of
income, gain, deduction, loss or credit for such period, and (ii) using a
discount rate of 5.5% per annum. To the extent that the parties cannot agree
whether any Tax savings exists (or will be realized) or on the appropriate
treatment of any Tax savings, such disagreement shall be resolved by the Tax
Referee (selected, and all fees and expenses related thereto borne by the
parties, in a manner consistent with that provided in Section 12.2). Seller
shall be entitled to the benefit of any indemnification right or payment
(including any insurance
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or similar payment), other than an indemnification payment made pursuant to this
Agreement, available to or received by Buyer, the Company Parties, or any
affiliate of either, in connection with a Tax loss for which Seller has an
obligation to indemnify Buyer.
SECTION 12.4 Tax Refunds. Any Tax refund (including any interest with respect
thereto) relating to the Company Parties for Taxes paid for any Taxable period
or portion thereof prior to the Closing Date shall be: (a) the property of
Seller, and if received by Buyer or the Company Parties shall be paid over
promptly to Seller, to the extent it was not included as an asset in the Closing
Date Financial Statements and relates solely to a tax period ending on or before
the Closing Date, or (b) the property of the Buyer, and if received by Seller or
any of its affiliates shall be paid over promptly to the Buyer, in all other
cases.
SECTION 12.5 Contests.
(a) After the Closing, Buyer shall promptly notify Seller in writing of
the commencement of any Tax audit or administrative or judicial proceeding or of
any demand or claim on Buyer or the Company Parties which, if determined
adversely to the taxpayer, would be grounds for indemnification under this
Article XII. Such notice shall contain factual information (to the extent known
to Buyer or any Company Party) describing the asserted Tax liability in
reasonable detail and shall include copies of any notice or other document
received from any taxing authority in respect of any such asserted Tax
liability. If Buyer fails to give Seller prompt notice of an asserted Tax
liability as required by this Section 12.5, then (i) if Seller is precluded by
the failure to give prompt notice from contesting the asserted Tax liability in
either the administrative or the judicial forum, then Seller shall not have any
obligation to indemnify for any Tax or Contest Expense arising out of such
asserted Tax liability, and (ii) if Seller is not so precluded from contesting
but such failure to give prompt notice results in a detriment to Seller, then
any amount which Seller is otherwise required to pay Buyer pursuant to Section
12.1 with respect to such liability shall be reduced by the amount of such
detriment, if calculable.
(b) Prior to the Closing Date, Seller shall control any audit, claim
for refund or administrative or judicial proceeding involving any asserted Tax
liability (any such audit, claim for refund or proceeding relating to an
asserted Tax liability is referred to herein as a "Contest"). After the Closing
Date, in the case of a Contest that relates to a Tax Return (or any item
relating thereto or reported thereon) for a Taxable period ending on or before
the Closing Date, Seller shall at its expense undertake and control the conduct
of such Contest, and for all Taxable periods straddling or beginning on the day
after the Closing Date, Buyer shall control such Contests; provided, however,
that Buyer shall control a contest solely as to any portion of the Tax Return of
CPLP for the taxable year ending on the Closing Date, the resolution of which
could cause a payment to be made to Triarc pursuant to the Tax Indemnity
Provisions of the Triarc Purchase Agreement. If Seller does not assume the
defense of any such Contest for a Taxable period ending on or before the Closing
Date, Buyer may defend the same in such
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manner as it may deem appropriate, including settling such Contest (subject,
however, to Section 12.5(d) if such settlement would adversely affect Seller)
after giving ten days" prior written notice to Seller setting forth the terms
and conditions of settlement. In the event of a Contest covered by the second
sentence of this paragraph that involves issues relating to a potential
adjustment for which Seller has liability that also involves separate issues
relating to a potential adjustment for which Buyer would be liable, Buyer shall
have the right, at its expense, to control the Contest but only with respect to
the latter issues.
(c) Neither Buyer nor Seller shall enter into any compromise or agree
to settle any claim pursuant to any Contest which would adversely affect the
other party for such year or a subsequent or prior year without the written
consent of the other party, which consent may not be unreasonably withheld,
conditioned or delayed.
(d) Notwithstanding any other provision of this Section 12.5, the
defense of any Third Party Claim in respect of which indemnity may be sought
under Section 10.3 shall be subject to all obligations imposed by the Triarc
Purchase Agreement with respect to the Contest of such Third Party Claim.
SECTION 12.6 Time of Payment. Payment of any amounts due under this Article XII
in respect of Taxes shall be made (i) at least three Business Days before the
due date of the applicable estimated or final Tax Return required to be filed by
either Buyer or Seller, as the case may be, that shows Taxes due for which the
other party is responsible under Sections 12.1(a), (b) or (c), and (ii) within
three Business Days following an agreement between Seller and Buyer that an
indemnity amount is payable, an assessment of a Tax by a Taxing authority, or a
"determination" having been made as such term is defined in Section 1313(a) of
the Code. If liability under this Article XII is in respect of Contest Expenses,
payment of any amounts due under this Article XII shall be made within five
Business Days after the date when the relevant party has been notified that such
party has a liability for a determinable amount under this Article XII and is
provided with calculations or other materials supporting such liability.
SECTION 12.7 Cooperation and Exchange of Information. Seller and Buyer shall
provide each other with such cooperation and information as either of them or
their respective affiliates reasonably may request of the other in filing any
Tax Return, amended Tax Return or claim for refund, determining a liability for
Taxes or a right to a refund of Taxes or participating in or conducting any
Contest in respect of Taxes. Such cooperation and information shall include
providing copies of relevant Tax Returns or portions thereof, together with
accompanying schedules, related work papers and documents relating to rulings or
other determinations by taxing authorities. Each party and its affiliates shall
make its employees available on a basis mutually convenient to both parties to
provide explanations of any documents or information provided hereunder. Each of
Seller and Buyer shall retain all Tax Returns, schedules and work papers,
records and other documents in its possession relating to Tax matters of the
Company
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and the Subsidiaries for each Taxable period first ending after the Closing Date
and for all prior Taxable periods until the later of (i) the expiration of the
statute of limitations of the Taxable periods to which such Tax Returns and
other documents relate, without regard to extensions except to the extent
notified in writing of such extensions for the respective Tax periods, or (ii)
three years following the due date (without extension) for such Tax Returns. Any
information obtained under this Section 12.7 shall be kept confidential except
as may be otherwise necessary in connection with the filing of Tax Returns or
claims for refund or in conducting a Contest or as otherwise may be required by
law, regulation or the rules of any stock exchange.
SECTION 12.8 Conveyance Taxes. Buyer and Seller shall share equally any real
property transfer or gains, sales, use, transfer, value added, stock transfer,
and stamp taxes, any transfer, recording, registration, and other fees, and any
similar Taxes which become payable in connection with the Transactions. Seller
and Buyer shall file such applications and documents as shall permit any such
Tax to be assessed and paid on or prior to the Closing Date in accordance with
any available pre-sale filing procedures. Buyer or Seller, as appropriate, shall
execute and deliver all instruments and certificates necessary to enable the
other to comply with any filing requirements relating to any such Taxes.
SECTION 12.9 Miscellaneous.
(a) To the extent permitted by law, Seller and Buyer agree to treat all
payments made by either of them to or for the benefit of the other (including
any payments to any Company Party) under this Article XII or under other
indemnity provisions of this Agreement as adjustments to the Purchase Price or
as capital contributions for Tax purposes and that such treatment shall govern
for purposes hereof except to the extent that the laws of a particular
jurisdiction provide otherwise.
(b) Neither Seller nor any Buyer Party shall make or cause to be made
any election or take or cause to be taken any action which would materially
increase the other party's liability to pay Taxes pursuant to the terms of this
Agreement unless (i) such election or action is required by law, (ii) such
election or action is required in order to comply with such party's obligations
under Article X of this Agreement, or (iii) the party making such election or
taking such action provides a written waiver of its rights to any claim for any
additional Taxes that such party might have pursuant to the terms of this
Agreement resulting from such election or action.
(c) The Buyer Parties, on the one hand, and the Seller, on the other
hand, will report for all Tax purposes the Tax consequences of the Principal
Closing Transactions in a manner consistent with the form and order of the
Principal Closing Transactions, as described in Section 1.1 (the "Reporting
Position"). In the event that any Tax authority proposes to characterize the
Principal Closing Transactions in a manner other than that of the Reporting
Position, the Buyer
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Parties, on the one hand, and the Seller, on the other hand, agree to contest
such proposed recharacterization of the Principal Closing Transactions by a Tax
authority (a "Structure Controversy") in good faith using commercially
reasonable efforts to defend the Reporting Position. In addition, the Buyer
Parties, on the one hand, and the Seller, on the other hand, agree that an
alternative method of analyzing the Principal Closing Transactions, is that the
Company would have (i) exchanged a portion of the Triarc Note for Buyer Limited
Partnership Interests, (ii) exchanged the Buyer Limited Partnership Interests
for Buyer Parent Units, and (iii) distributed the Buyer Parent Units to Seller
in connection with the transactions described in Section 1.1(h) (the
"Alternative Structure") in lieu of (y) the Seller cash transfers and
partnership contributions described in Section 1.1 (a) and (b), and (z) the
portion of Section 1.1(h) relating to the cash sale of the Triarc Note. To the
extent that issues relating to he substance of the Principal Closing
Transactions are raised by a Tax authority in a Structure Controversy, the
parties agree to present the Alternative Structure as a secondary argument to
the Reporting Position as representing the intent of the parties (absent certain
financing constraints) and as being consistent with the substance of the
Principal Closing Transactions. To the extent that the Principal Closing
Transactions are recharacterized by a Tax authority as involving a contribution
by Seller of any property to Buyer in exchange for Buyer Limited Partnership
Interests, the Buyer may make remedial allocations within the meaning of Treas.
Reg. Section 1.704-3(d), if any, with respect to such property.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices. Any notice, request, instruction, correspondence or other
document to be given hereunder by either party to the other (each, a "Notice")
shall be in writing and delivered in person or by courier service requiring
acknowledgment of receipt of delivery or mailed by certified mail, postage
prepaid and return receipt requested, or by telecopier, as follows:
If to Seller, addressed to:
Columbia Energy Group
801 East 86th Street
Merrillville, Indiana 46410
Attn: Chief Financial Officer
Facsimile: (219) 647-6060
with a copy to:
Schiff Hardin & Waite
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6600 Sears Tower
Chicago, Illinois 60606
Attn: Peter V. Fazio, Jr.
Facsimile: (312) 258-5600
If to Buyer Parties, in person, by courier or telecopier, to:
AmeriGas Propane, L.P.
460 North Gulph Road
King of Prussia, PA 19406
Attention: Vice President - Law
Fax: 610-768-7694
If to Buyer Parties by U.S. Mail, to:
AmeriGas Propane, L.P.
P.O. Box 965
Valley Forge, PA 19482
Attn: Vice President - Law
with a copy to:
Morgan, Lewis & Bockius LLP
1701 Market Street
Philadelphia, PA 19103-2921
Attn: Howard L. Meyers
Fax: 215-963-5299
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by facsimile shall be confirmed by appropriate
answer back and shall be effective upon actual receipt if received during the
recipient's normal business hours, or at the beginning of the recipient's next
Business Day after receipt if not received during the recipient's normal
business hours. All Notices by facsimile shall be confirmed promptly after
transmission in writing by certified mail or personal delivery. Any party may
change any address to which Notices are to be given to it by giving Notice as
provided above of such change of address.
SECTION 13.2 Governing Law; Dispute Resolution; Enforcement.
(a) The provisions of this Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of New York, without
giving effect to the conflicts of laws principles thereof.
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(b) In the event of any dispute arising under this Agreement, prior to
the commencement of litigation, an officer of Buyer and an officer of Seller
shall attempt in good faith to resolve the dispute consistent with the terms of
this Agreement. If they are unable to resolve the dispute in this manner within
a reasonable period of time, the parties may pursue judicial remedies with
respect to such dispute.
(c) Each party hereto hereby irrevocably and unconditionally (i)
consents and submits to the exclusive jurisdiction of the courts of the State of
New York that are located within New York County and of the United States of
America located in the State of New York that are located within New York County
(each, a "New York Court") for any actions, suits or proceedings arising out of
or relating to this Agreement or the Transactions, (ii) agrees that any such
action, suit or proceeding may be brought or maintained only in a New York Court
and in no other forum, and (iii) irrevocably and unconditionally waives any
objection to the laying of venue of any action, suit or proceeding arising out
of or related to this Agreement or the Transactions in any New York Court
located in New York, New York, and further irrevocably and unconditionally
waives and agrees not to plead a claim in any such court that any such action,
suit or proceeding has been brought in an inconvenient forum.
SECTION 13.3 Entire Agreement; Amendments and Waivers. This Agreement (including
all exhibits and schedules hereto) and the Confidentiality Agreement constitute
the entire agreement between the parties hereto pertaining to the subject matter
hereof and supersede all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. The Buyer Parties
acknowledge that neither Seller nor any affiliate nor any officer, director,
employee, representative, agent or advisor of any of them makes or has made any
representation or warranty, express or implied, or any other inducement or
promise to the Buyer Parties except as specifically made in this Agreement.
Buyer has sufficient knowledge and experience in financial and business matters
so as to be capable of evaluating the risks and merits of its purchase of the
Interests and the other Transactions and is capable of bearing the economic
risks thereof. No supplement, modification or waiver of this Agreement shall be
binding unless executed in writing by the party to be bound thereby. The failure
of a party to exercise any right or remedy shall not be deemed or constitute a
waiver of such right or remedy in the future. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (regardless of whether similar), nor shall any such waiver
constitute a continuing waiver unless otherwise expressly provided.
SECTION 13.4 Binding Effect and Assignment. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective permitted
successors and assigns; but neither this Agreement nor any of the rights,
benefits or obligations hereunder shall be assigned by any party hereto without
the prior written consent of either Buyer or Seller, as applicable, and any such
assignment that is not consented to shall be null and void; provided,
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however, that a party may assign this Agreement to (a) a subsidiary or parent or
other entity owned or controlled by (or owning or controlling) that party upon
notice to the other parties (which assignment shall not release, affect or
reduce in any way the assigning party's obligations under this Agreement), or
(b) a person that (i) purchases all or substantially all of the assets that are
being conveyed hereunder or (ii) merges with the Company or any of the
Subsidiaries; provided, further, however, that the right to assign shall not be
construed to permit any Buyer Party or any of its affiliates to take any action
that is prohibited by the Triarc Purchase Agreement or by Section 10.2 of this
Agreement. Nothing in this Agreement, express or implied, is intended to confer
upon any person other than the parties hereto and their respective permitted
successors and assigns, any rights, benefits or obligations hereunder.
SECTION 13.5 Severability. If any provision of the Agreement is rendered or
declared illegal or unenforceable by reason of any existing or subsequently
enacted legislation or by decree of a court of last resort, the parties hereto
shall promptly meet and negotiate substitute provisions for those rendered or
declared illegal or unenforceable, but all of the remaining provisions of this
Agreement shall remain in full force and effect.
SECTION 13.6 Disclosure. Disclosure of a matter in any schedule to this
Agreement shall not be deemed disclosure with respect to any other schedule,
unless it is obvious from the disclosure itself that it also applies to another
schedule. The mere inclusion of an item in any schedule shall not be deemed an
admission that such item represents a material exception of fact, event or
circumstance. The Buyer Parties shall be entitled to rely upon the
representations and warranties contained herein without undertaking any
independent investigation or being held to any minimal or "reasonable person"
standard of due diligence.
SECTION 13.7 Interpretation. The Article and Section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties hereto and shall not in any way affect the meaning or
interpretation of this Agreement.
SECTION 13.8 References; Construction. References to any "Article," "Exhibit,"
"Schedule" or "Section," without more, are to Articles, Exhibits, Schedules and
Sections to or of this Agreement. Unless otherwise expressly stated, clauses
beginning with the term "including" set forth examples only and in no way limit
the generality of the matters thus exemplified; such term shall be given the
meaning commonly associated with the phrase, "including, without limitation."
For the purposes of this Agreement, except as used in Section 5.15(c),
"Knowledge" means the actual knowledge of (a) with respect to Seller, those
persons listed on Schedule 13.8(a), and (b) with respect to the Buyer Parties,
those persons listed on Schedule 13.8(b). For purposes of this Agreement,
"person" means an individual, corporation, partnership, joint venture,
association, trust, unincorporated organization or other entity. For purposes of
this Agreement, "affiliate" of any person means another person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such first person. For purposes of this Agreement,
"Business Day" means any day other than (i) a
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Saturday, (ii) a Sunday or (iii) any other day on which commercial banks in New
York are authorized or obligated by law to close. To the extent that any of the
Seller's representations and warranties in Article II speak as to operating
matters relating to Atlantic, they shall be unqualified except as otherwise
stated in the applicable representation or warranty. To the extent that any of
the Seller's representations and warranties in Article II speak as to any other
matters concerning Atlantic, they shall be qualified by, and be made subject to,
the Seller's Knowledge.
SECTION 13.9 Context. Whenever the context so requires, the singular number
includes the plural and vice versa, and a reference to one gender includes the
other gender and the neuter.
SECTION 13.10 No Prejudice. This Agreement has been jointly prepared by the
parties hereto and the terms hereof shall not be construed in favor of or
against any party on account of its participation in such preparation.
SECTION 13.11 Execution. This Agreement may be executed in multiple counterparts
each of which shall be deemed an original and all of which shall constitute one
instrument.
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EXECUTED as of the date first set forth above.
COLUMBIA ENERGY GROUP
By: /s/ M. W. O'DONNELL
----------------------------------
Name: Michael W. O'Donnell
--------------------------------
Title: Executive Vice President and Chief
Financial Officer
-------------------------------
COLUMBIA PROPANE CORPORATION
By: /s/ A. MASON BRENT
----------------------------------
Name: A. Mason Brent
--------------------------------
Title: President and Chief Executive Officer
-------------------------------
COLUMBIA PROPANE, LP, by CP Holdings,
Inc., as General Partner
By: /s/ A. MASON BRENT
----------------------------------
Name: A. Mason Brent
---------------------------------
Title: President and Chief Executive Officer
-------------------------------
AMERIGAS PROPANE, L.P.,
by AmeriGas Propane, Inc., as General Partner
By: /s/ ROBERT H. KNAUSS
----------------------------------
Name: Robert H. Knauss
--------------------------------
Title: Vice President - Law
-------------------------------
AMERIGAS PARTNERS, L.P.,
by AmeriGas Propane, Inc., as General Partner
By: /s/ ROBERT H. KNAUSS
----------------------------------
Name: Robert H. Knauss
--------------------------------
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Title: Vice President - Law
-------------------------------
AMERIGAS PROPANE, INC.
By: /s/ ROBERT H. KNAUSS
----------------------------------
Name: Robert H. Knauss
--------------------------------
Title: Vice President - Law
-------------------------------
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