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Exhibit 10.2
CAPITAL CONTRIBUTION AGREEMENT
THIS CAPITAL CONTRIBUTION AGREEMENT (this "Agreement"), dated as of
August ___, 2001, is entered into by and between COLUMBIA PROPANE, L.P., a
Delaware limited partnership (the "Partnership"), and AMERIGAS PROPANE, L.P., a
Delaware limited partnership (the "Buyer"), and is acknowledged and agreed to by
CP Holdings, Inc., a Delaware corporation, as the managing general partner of
the Partnership (the "General Partner").
R E C I T A L S
WHEREAS, the Buyer, the Partnership and the General Partner have
entered into an Amended and Restated Purchase Agreement, dated as of August 7,
2001, by and among Columbia Energy Group, Columbia Propane Corporation ("CPC"),
a Delaware corporation and the owner of approximately 99% of the outstanding
limited partnership interests of the Partnership (the "CPC Limited Partnership
Interest"), the Partnership, CPH, the Buyer, AmeriGas Partners, L.P. and
AmeriGas Propane, Inc. (the "Purchase Agreement"), pursuant to which the Buyer
proposes to acquire, among other things, the CPC Limited Partnership Interest;
WHEREAS, the Buyer, as a proposed successor in interest to CPC, desires
to be admitted to the Partnership as a Class A Limited Partner, in accordance
with Section 10.2 of the Amended and Restated Partnership Agreement of the
Partnership, dated July 19, 1999 (the "Partnership Agreement");
WHEREAS, pursuant to Sections 1.1(f) and (i) of the Purchase Agreement,
the Buyer has agreed to enter into this Agreement and to make, immediately
following the acquisition of the CPC Partnership Interest, a capital
contribution to the Partnership on the Closing Date (as defined in the Purchase
Agreement) in the amount specified and as further described herein;
WHEREAS, the purpose of such capital contribution is to improve the
financial condition, results of operations and cash flow of the Partnership; and
WHEREAS, the General Partner is willing to consent, pursuant to Section
10.2 of the Partnership Agreement, to the admission of the Buyer as a Class A
Limited Partner and to consent, pursuant to Section 5.3 of the Partnership
Agreement, to the making of such additional capital contribution, in each case
subject to the terms and conditions set forth herein;
W I T N E S S E T H
NOW, THEREFORE, in consideration of the premises and the respective
covenants and other agreements contained herein, and intending to be legally
bound hereby, the parties agree as follows:
1. Definitions. Capitalized terms used herein but not otherwise defined
shall have the meanings set forth in the Partnership Agreement.
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2. Admission of Buyer as Class A Limited Partner. Upon the consummation
of the transfer of the CPC Partnership Interest pursuant to Section 1.1(h) of
the Purchase Agreement, the Buyer hereby accepts and agrees to be bound, as a
Class A Limited Partner, by all of the terms and conditions of the Partnership
Agreement, and the General Partner hereby consents to the admission of the Buyer
as a Class A Limited Partner.
3. Agreement to Make Capital Contribution. Following the consummation
of the transfer of the CPC Partnership Interest pursuant to Section 1.1(h) of
the Purchase Agreement, the Buyer agrees to make a contribution (the "Capital
Contribution") of the Buyer Contributed Businesses (as defined in Schedule I
hereto), which include the Buyer Contributed Assets (as defined in Schedule I
hereto) and the related CPLP Assumed Liabilities (as defined in Schedule I
hereto), to the Partnership in exchange for an increased percentage interest in
the Partnership, based on the Net Agreed Value of the Buyer Contributed Assets,
as set forth in Section 4 of this Agreement. The Partnership agrees to accept
the Buyer Contributed Assets and to assume the related CPLP Assumed Liabilities,
subject to the terms and conditions set forth in Section 4 of this Agreement.
Such Capital Contribution shall be made at the time set forth in Section 1.1(i)
of the Purchase Agreement (the "Contribution Effective Time").
4. Valuation of the Buyer Contributed Businesses. The Buyer and the
General Partner agree that the Net Agreed Value of the Buyer Contributed
Businesses shall be $280,493,129, an amount equal to (i) the aggregate amount of
district office earnings before interest, taxes, depreciation and amortization
("EBITDA") of the Buyer Contributed Businesses for the 12-month period ended
December 31, 2000, (ii) less the PPX (pre-filled propane exchange) expenses
attributable to the Buyer Contributed Businesses and less (iii) 10% of the net
book value as of December 31, 2000 of any land, buildings, or bulk storage tanks
included in the Buyer Excluded Assets (as defined in Schedule I hereto), times a
multiple of 7, subject to the satisfaction of the following terms and conditions
at or prior to the Contribution Effective Time:
(a) The Buyer shall have furnished the General Partner with an opinion
of Valuation Research Corporation, an independent valuation firm (the "Valuation
Firm"), substantially in the form of Schedule II to this Agreement (the
"Valuation Opinion"); and
(b) Arthur Andersen LLP shall have delivered to the General Partner a
letter confirming that it has conducted the agreed-upon due diligence procedures
set forth in Schedule III to this Agreement, as requested by the General Partner
(the "Agreed-Upon Procedures Letter"), and the Agreed-Upon Procedures Letter
shall not have identified any material inaccuracies in the Buyer Information (as
defined below) or any material inadequacies in the accounting controls used in
generating the Buyer Information.
5. Representations and Warranties of the Buyer. The Buyer hereby
represents and warrants to the General Partner that (i) the aggregate amount of
district office EBITDA of the Buyer Contributed Businesses for the 12-month
period ended December 31, 2000 is at least $44,564,302, and (ii) the net book
value of any land, buildings, or bulk storage tanks included in the Buyer
Excluded Assets as of December 31, 2000 is at least $22 million, in each case as
determined in accordance with U.S. Generally Accepted Accounting Principles
("GAAP"). The Buyer further represents and warrants that the financial and
operational information provided to Arthur Andersen LLP, as the representative
of the General Partner, in connection with the
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Agreed-Upon Procedures Letter (the "Buyer Information") is, in the aggregate,
materially accurate and complete and that all financial information included in
the Buyer Information has been prepared in accordance with GAAP, consistently
applied over the periods indicated, and fairly present, in all material
respects, in relation to the consolidated financial statements of AmeriGas
Partners, L.P. and its subsidiaries taken as a whole, the selected financial
results of the Buyer Contributed Businesses for the periods indicated. The Buyer
further represents and warrants that there are no material undisclosed
contingent liabilities associated with the Buyer Contributed Businesses that are
required to be accrued or disclosed in accordance with GAAP.
6. Adjustment of Percentage Interests of the Buyer, the General Partner
and the Special Limited Partner. Upon the consummation of the Buyer's
acquisition of the CPC Limited Partnership Interest and the capital contribution
of the Buyer Contributed Businesses contemplated by Section 4 of this Agreement,
the Percentage Interests of the Buyer, the General Partner and the Special
Limited Partner shall be adjusted in accordance with the terms of the
Partnership Agreement and shall be as set forth in Schedule IV to this
Agreement. If it is subsequently determined that the fair market value of the
Buyer Contributed Businesses is less than the Net Agreed Value ascribed thereto
pursuant to Section 4 of this Agreement, then the parties hereto agree that, as
their sole remedy, the General Partner shall adjust the Percentage Interests of
the Buyer, the General Partner and the Special Limited Partner to reflect such
corrected fair market value, in accordance with the terms and conditions of the
Partnership Agreement, with retroactive effect to the Contribution Effective
Time, and the Buyer shall make such payments to the General Partner and the
Special Limited Partner to compensate the General Partner and the Special
Limited Partner for the incremental amount of any allocations or distributions
to which the General Partner and the Special Limited Partner would have been
entitled from the Contribution Effective Time to the date of such adjustment,
based on their adjusted Percentage Interests, together with simple interest
thereon at the rate of 6% per annum, as shall be necessary to account fully for
such interim allocations or distributions.
7. Further Assurances. The parties hereto shall, from time to time
after the Closing Date, at the request of the other party and without further
compensation, execute, acknowledge and deliver to the other party all such other
bills of sale, assignments, transfers, conveyances and other documents as may
reasonably be required to more effectively assign, transfer and convey the
assets being contributed hereunder to the Partnership. If requested by the
Partnership, the Buyer shall cooperate in the prosecution or enforcement of any
claims, rights or benefits that are transferred to the Partnership under this
Agreement but that require prosecution or enforcement by the Partnership and in
the defense of any claim made against the Partnership as a result of the
liabilities transferred to the Partnership under this Agreement.
8. Additional Contributions by the Buyer. The Buyer shall make
additional contributions of cash to the Partnership, from time to time, to the
extent necessary to pay any liability that the Partnership assumes in connection
with any contribution by the Buyer of assets to the Partnership by reason hereof
and that is not paid by the Partnership. To the extent the Buyer makes any such
contribution, it shall be subrogated to the rights of the holder of such
liability against the Partnership. For purposes of the preceding sentence, a
liability shall be deemed to be assumed by the Partnership if the instrument
pursuant to which the liability was assumed states that the liability is being
assumed by the Partnership and such instrument is this Agreement or makes
reference to this Agreement.
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9. Third-Party Beneficiaries. Except for the Seller, who shall be an
express third party beneficiary to the representations of the Buyer set forth in
Section 5 of this Agreement, nothing in this Agreement shall confer any rights
upon any other person or entity that is not a party or a successor or assignee
of a party to this Agreement.
10. Discharge of Obligations; Future Capital Contributions Permitted.
Upon the Buyer's contribution of the Buyer Contributed Business, the Buyer shall
have discharged its obligations under Sections 1.1(f) and 1.1(i) of the Purchase
Agreement. This Agreement shall in no way limit the right of the parties to make
capital contributions in cash or property to the Partnership at any time after
the Closing Date, in addition to the capital contribution provided for in this
Agreement, subject to the terms and conditions of the Partnership Agreement.
11. Governing Law. The provisions of this Agreement shall be governed
by and enforced in accordance with the laws of the State of Delaware, without
giving effect to its conflict of laws principles.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement as of the date first written above.
COLUMBIA PROPANE, L.P.
By: CP Holdings, Inc.
Its: Managing General Partner
By:
--------------------------------
Name:
Title:
AMERIGAS PROPANE, L.P.
By: AmeriGas Propane, Inc.
Its: General Partner
By:
--------------------------------
Name:
Title:
ACKNOWLEDGED AND AGREED TO:
CP HOLDINGS, INC.,
as the Managing General Partner of
Columbia Propane, L.P.
By:
--------------------------------
Name:
Title:
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SCHEDULE I
BUYER CONTRIBUTED BUSINESSES
1. Buyer Contributed Assets: The "Buyer Contributed Assets" consist of, except
for the Buyer Excluded Assets (as defined below), all of the right, title and
interest of the Buyer in and to the assets, personal properties, rights, causes
of action and other claims of every kind and description, wherever situated,
tangible or intangible, owned by the Buyer or used by it as of the Closing Date
(as defined in the Purchase Agreement) in conducting the Buyer's existing
propane distribution operations, but only to the extent such operations are
conducted out of the Buyer Contributed Locations (as defined below)
(collectively, the "Buyer Contributed Businesses"), including all of the
following:
a. the accounts receivable of the Buyer relating to the Buyer
Contributed Businesses as of the Closing Date; all inventory and merchandise
(including propane, appliances, tanks and cylinders, appliances, parts and
fittings), wherever located, held by the Buyer Contributed Businesses for sale
to the public; all propane tanks and cylinders, wherever located, owned by the
Buyer and used or useful in connection with the Buyer Contributed Businesses;
all tools, fittings, dispensers and tubings (including the Buyer's stock of
tools, fittings, dispensers and tubings on the vehicles included in the Buyer
Contributed Assets); all machinery and equipment (including plant and office
equipment, computer hardware and software and communications equipment); all
motor vehicles, spare parts, furniture, furnishings, and other personal property
used in the ordinary course to operate the Buyer Contributed Businesses; and all
cash and bank accounts relating to the Buyer Contributed Businesses;
b. the business and operations of the Buyer Contributed Businesses as a
going concern and all of the goodwill of the Buyer (as defined in the Purchase
Agreement) related to the Buyer Contributed Businesses, including all customer
and supplier lists, all business records, all sales, marketing and other
records, and all files and correspondence, in whatever form, relating to the
Buyer Contributed Businesses;
c. all rights of the Buyer under all written or oral contracts,
agreements, leases, subleases and other leasehold interests and interests in
real property, plans, instruments or other documents, commitments, arrangements,
undertakings, practices or authorizations that are or may be binding on any
person, including the customer deposits relating thereto, that are being
assigned to CPLP, but solely to the extent related to the Buyer Contributed
Businesses and excluding any rights, duties or obligations of the Buyer under or
pursuant to the Purchase Agreement or the other documents executed in connection
with the Transactions (as defined in the Purchase Agreement) (the "Buyer
Assigned Contracts"), and all assignable rights of the Buyer under all licenses,
franchises, permits, consents, approvals, waivers and other authorizations,
governmental or otherwise that are being assigned to CPLP, but solely to the
extent related to the Buyer Contributed Businesses, and excluding any rights,
duties or obligations of the Buyer under or pursuant to the Purchase Agreement
or the other documents executed in connection with the Transactions (the "Buyer
Assigned Licenses");
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d. all rights of the Buyer relating to the CPLP Assumed Liabilities (as
defined below), but excluding any rights, duties or obligations of the Buyer
under or pursuant to the Purchase Agreement or the other documents executed in
connection with the Transactions;
e. all rights of the Buyer under express or implied warranties from
vendors relating to the Buyer Contributed Assets;
f. all designs, models, manuals, drawings, instructions, specifications
and directions for all of the Buyer Contributed Assets, and all records relating
to the Buyer Assigned Contracts and the Buyer Assigned Licenses; and
g. the right to insurance proceeds related to the insurance policies
that are Buyer Assigned Contracts and that are related to the Buyer Contributed
Businesses.
2. Buyer Excluded Assets. Notwithstanding anything to the contrary set forth
above, nothing in this Schedule I shall be construed as conferring on CPLP, and
CPLP is not acquiring in connection with the transactions described herein, any
right, title or interest in or to any land, buildings, or bulk storage tanks
used at the Buyer Contributed Locations (or the peripheral equipment attached
thereto), or any rights, duties or obligations of the Buyer under or pursuant to
the Purchase Agreement or the other documents or instruments executed in
connection with the Transactions, including any defenses, counter-claims,
set-off rights, limitation, or such related rights (collectively, the "Buyer
Excluded Assets").
3. CPLP Assumed Liabilities. Any and all liabilities associated with the Buyer
Contributed Assets, the Buyer Assigned Contracts and the Buyer Assigned
Licenses, including all accrued liabilities and trade payables incurred by the
Buyer Contributed Businesses in the ordinary course of business in accordance
with past practices, but excluding any liabilities for funded indebtedness of
the Buyer (collectively, the "CPLP Assumed Liabilities").
4. Buyer Contributed Locations. The Buyer Contributed Locations consist of the
following locations (collectively, the "Buyer Contributed Locations"):
5558 Middleboro, MA
5560 Londonderry, NH
5570 Saranac Lake, NY
5574 Barre, VT
5576 Gonic, NH
5586 Rutland, VT
5611 South Burlington, VT
5997 Laconia, NH
7560 Lyndonville, VT
5105 Vineyard Haven, MA
5321 Topsfield, MA
5332 Westfield, MA
5559 Hyannis, MA
5566 Cobleskill, NY
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5572 Ticonderoga, NY
5577 Lancaster, NH
5585 Plattsburgh, NY
5593 Morrisville, VT
5594 Newport, VT
5595 North Conway, NH
5598 Catskill, NY
5600 Claremont, NH
5602 Waitsfield, VT
5604 St Johnsville, NY
5753 Shokan, NY
7569 Sheldon, VT
9333 Alder Creek, NY
9335 Schuylerville, NY
9350 Sidney, NY
1720 Jacksonville, FL
1723 Fernandina Beach, FL
5124 Inverness, FL
7285 Ocala, FL
7325 Leesburg, FL
9805 St Augustine, FL
1510 Plant City, FL
5055 Tavernier, FL
5115 Pensacola, FL
5131 Metter, GA
5336 Brooksville, FL
5711 Waycross, GA
7290 Citra, FL
7320 Land-O-Lakes, FL
2050 Greene County, MO
5226 Taos, NM
5240 Gallup, NM
5301 Mountain Home, AR
1020 Albuquerque, NM
1420 Dyersburg, TN
2240 Robertsdale, AL
2250 Mobile, AL
4444 Fulton, KY
5048 Boone County, AR
5119 North Little Rock, AR
5303 Salem, AR
5311 Bossier City, LA
7245 Wewahitchka, FL
7260 Blountstown, FL
7265 Panama City, FL
7270 Defuniak Springs, FL
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7273 Marianna, FL
7275 Chipley, FL
9780 Malone, FL
1245 Cadillac, MI
1590 Collinsville, IL
4000 Lansing, MI
5024 Coldwater, MI
5338 Wayland, MI
5374 Kalamazoo, MI
5433 Davenport, IA
5542 Waterman, IL
5679 Traverse City, MI
1201 Kendallville, IN
1250 Alma, MI
1260 Capac, MI
1280 Parma, MI
5025 Three Rivers, MI
5248 Belding, MI
5249 Lake Odessa, MI
5254 Hartford, MI
5256 Harrison, MI
5260 Holland, MI
5261 Atlanta, MI
5262 Alpena, MI
5273 Salem, IL
5286 Gagetown, MI
5295 Sterling Heights, MI
5299 Waterford, MI
5320 Saginaw, MI
5341 Grand Rapids, MI
5360 Mio, MI
5393 South Bend, IN
5420 Burton, MI
5484 Goshen, IN
5490 Rock Falls, IL
5498 Howell, MI
5510 Danville, IL
5517 Hale, MI
5671 Ludington, MI
0560 Montrose, CO
0570 Gunnison, CO
0613 Grand Junction, CO
1170 Craig, CO
1190 Alamosa, CO
3900 Rogers, MN
3901 Brainerd, MN
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5463 Villa Ridge, MO
5480 Wisconsin Rapids, WI
1550 Waterloo, IL
1850 Green Bay, WI
5033 Flint Hill, MO
5247 Orfordville, WI
5264 Franksville, WI
5275 Noble, IL
5277 Eldorado, IL
5346 Allenton, WI
5347 Baraboo, WI
5350 Iola,WI
5363 Dodgeville,WI
5365 Madison, WI
5471 Eagle River, WI
5550 Milwaukee, WI
5552 Beaver Dam, WI
5657 Dove Creek, CO
0130 San Jose, CA
0135 Concord, CA
0210 Santa Cruz, CA
0260 Sacramento, CA
0261 Modesto, CA
1040 Jackson, CA
1156 Angels Camp, CA
5162 Hanford, CA
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SCHEDULE II
(attached)
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SCHEDULE III
(attached)
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