EXECUTION COPY
Exhibit 2.3
UNITHOLDER AGREEMENT
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THIS UNITHOLDER AGREEMENT is made and entered into this July 31, 2003
among Inergy L.P., a Delaware limited partnership ("MLP") and United Propane,
Inc., a Maryland corporation (the "Unitholder").
RECITALS:
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A. MLP, Unitholder, Inergy Propane LLC, a Delaware limited liability
company ("Buyer") and certain other parties and entities have entered into that
certain Asset Purchase Agreement, dated June 30, 2003 (the "Asset Purchase
Agreement").
B. All capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to them in the Asset Purchase Agreement.
C. In connection with the closing of the Asset Purchase Agreement, MLP has
issued to Unitholder 508,518 MLP Common Units represented by Unit Certificate
No. CU 0158 (the "Restricted Units").
D. The Asset Purchase Agreement contemplates the execution and delivery of
this Agreement, whereby MLP and the Unitholder desire to create certain rights
and obligations with respect to the Restricted Units upon the terms and
conditions hereinafter set forth.
AGREEMENT:
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In consideration of the premises and of the mutual covenants and
agreements hereinafter set forth and set forth in the Asset Purchase Agreement,
the parties hereto do hereby agree as follows:
1. MLP's Right of First Refusal. Unitholder agrees that it will not
distribute, assign or otherwise transfer any of the Restricted Units without
prior written consent of MLP, unless Unitholder shall have first made the
following described offer to MLP:
(a) Unitholder Notice. The Unitholder shall give written notice
("Unitholder Notice") to MLP of the Unitholder's intention to transfer
Restricted Units. Such Unitholder Notice shall state:
(i) that the Unitholder intends to transfer Restricted Units;
(ii) the name and address of the prospective transferee or, if a
sale is to be made on the NASDAQ, a statement to that effect; and
(iii)the terms and conditions of such proposed transfer,
including the fees, commissions, underwriting discounts and other costs
that will be incurred in connection with the transfer (the "Transaction
Costs").
In the event of an involuntary transfer of the Restricted Units, the
transferee of such units (a "Unitholder" hereunder) shall notify MLP of such
involuntary transfer (also a "Unitholder Notice"), with such Unitholder Notice
to be given within five (5) days after such involuntary transfer.
(b) Option of MLP to Purchase Restricted Units. MLP may, at its
option, purchase all, but not less than all, of the Restricted Units that
are the subject of such Unitholder Notice, upon the following terms and
conditions:
(i) The purchase price for MLP's option to purchase shall be an
amount equal to (A) minus (B), where (A) equals that number of
Restricted Units that are the subject of a Unitholder Notice
multiplied by the average closing price for the MLP Common Units on
the NASDAQ for the five (5) trading days prior to the date on which
MLP receives the Unitholder Notice (the "Receipt Date"), and (B)
equals the Transaction Costs.
(ii) MLP may exercise its option by giving written notice to the
Unitholder within two (2) business days after the Receipt Date.
(iii)The closing of the purchase by MLP of Unitholder's
Restricted Units upon exercise of MLP's option hereunder shall be
held at the offices of MLP on such date and at such time as MLP shall
specify in its notice of exercise, but in no event more than ten (10)
days after the Receipt Date; provided, however, in the event such
purchase requires the consent of MLP's lending banks or other
financial lenders, then MLP may designate the closing to a date not
later than forty-five (45) days after the Receipt Date and, if such
later closing date is designated, MLP shall pay (as additional
purchase price for the Units) an amount equal to (X) minus (Y), where
(X) equals the product of the Prime Rate in effect on the Receipt
Date and the purchase price for the Units to be purchased with such
product being multiplied by a fraction, the numerator of which is the
number of days between the Receipt Date and the date of closing and
the denominator of which is 365, and (Y) equals the lesser of (1) the
amount determined in the foregoing clause (X) or (2) the sum of any
distribution paid or to be paid on the Units being purchased where
the record date for such distributions is on or after the Receipt
Date and on or prior to the date of closing (as used herein, "Prime
Rate" means the prime rate as published by Wachovia Bank).
(iv) In the event that MLP does not exercise its option with
respect to the Restricted Units desired to be transferred by
Unitholder, it shall be deemed to have failed to exercise its option
as to any such units and the Unitholder may transfer all, but not
less than all, of the Restricted Units proposed to be transferred;
provided however, that such transfer shall be made only in strict
accordance with the terms stated in the Unitholder Notice. In the
event that the Unitholder shall fail to make such transfer within
thirty (30) days following the expiration of the period designated
for exercise of the options by MLP, such Restricted Units shall again
become subject to all of the terms, conditions, restrictions, and
options set forth in this Agreement.
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(c) Continuing Restrictions. Except as provided in the succeeding
sentence, the person or entity to whom such Restricted Units are assigned
or otherwise transferred, voluntarily or involuntarily, shall hold such
units subject to the terms, conditions, restrictions and options set forth
in this Agreement, and shall acknowledge acceptance of this Agreement by
concurrently executing and delivering to MLP an agreement substantially the
same as this Agreement, in form and substance acceptable to counsel for
MLP. Any Restricted Units sold to MLP, sold pursuant to an effective
Registration Statement, whether on Form S-3 or otherwise, or sold by means
of a public market or exchange, including without limitation the NASDAQ,
shall not thereafter be subject to this Agreement or any of the
restrictions provided herein.
2. Unitholder's Voting Agreement. With respect to any matter voted upon by
MLP, Unitholder agrees to vote all Restricted Units in favor of and in
accordance with any recommendation of the majority of the board of directors of
MLP, and not directly or indirectly vote against or take any other action or
refrain from taking any other action against or in opposition to such board of
directors of MLP.
3. Restrictive Legend. The certificates representing the Restricted Units
held by the Unitholder, and any other party who acquires the Restricted Units
subject to this Agreement, shall have placed thereon a legend reading as
follows:
"This certificate and all interests represented by this
certificate are subject to restrictions on transfer and
voting as set forth in that Unitholder Agreement executed
and entered into on the 31st day of July, 2003, copies of
which may be inspected during the regular business hours
of this Company. Neither this certificate nor any interest
represented by this certificate may be sold, transferred,
pledged, or otherwise disposed of, voluntarily or involun-
tarily, except upon strict compliance with the provisions
of the said Unitholder Agreement."
4. Termination. This Agreement shall, automatically and without any action
on the part of either party, terminate on [insert third anniversary of Closing
Date]; provided, however, if either party breaches any of its obligations
arising prior to such termination, such party shall continue to have liability
for such breach.
5. Miscellaneous.
(a) Successors. All rights and obligations pursuant to this Agreement
shall adhere to and be binding upon the parties hereto, their heirs,
administrators, executors, successors and assigns. In the event that any
party to this Agreement shall cease to be a unitholder of the Company
through a disposition of shares in a manner permitted hereunder, all
rights, options and obligations of such person under this Agreement shall
thereafter terminate.
(b) Entire Agreement; Amendments. Except as contemplated under the
Asset Purchase Agreement, this Agreement cancels and supersedes all
previous agreements
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relating to the subject matter of this Agreement, written or oral, between
the parties hereto and contains the entire understanding of the parties
hereto and shall not be amended, modified or supplemented in any manner
whatsoever except as otherwise provided herein or in writing signed by
each of the parties hereto.
(c) Severability. If for any reason any provision hereof shall be
determined to be invalid or unenforceable, the validity and effect of the
other provisions hereof shall not be affected thereby.
(d) Notices. All notices, requests, demands and other communications
hereunder shall be given (i) by personal delivery (with a written
confirmation by the person making such delivery), (ii) by certified or
registered mail with postage prepaid, (iii) by fax (with confirmation
confirmed), or (iv) by nationally-recognized overnight courier as follows::
If to Unitholder:
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Name: With Copy To:
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Robert A. Pascal Saul Ewing LLP
28 Floral Avenue 100 South Charles Street
Key West, Florida 33040 Baltimore 21201, MD
Attn: Harry D. Shapiro
Facsimile Number: (410)332-8660
If to Buyer:
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Name: With Copy To:
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Inergy Propane, LLC Stinson Morrison Hecker LLP
Two Brush Creek Blvd., suite 200 1201 Walnut, Suite 2800
Kansas City, Missouri 64112 Kansas City, Missouri 64106
Attn: John J. Sherman Attn: Paul E. McLaughlin
Facsimile Number: (816) 471-3854 Facsimile Number: (816) 691-3495
or to such other addresses as either party may provide to the other in writing
in accordance with this paragraph 4(d). Such notice, request, demand or other
communication is received: (i) when delivered, if delivered by personal
delivery; (ii) on the date received as conclusively evidenced by a signed
receipt, if sent by certified or registered mail with postage prepaid, (iii) on
the date of the confirmation of successful fax transmission, if so transmitted,
and (iv) on the date received as conclusively evidenced by a written delivery
confirmation of a nationally recognized courier, if sent in such manner.
(e) Construction. Whenever the context of this agreement requires, the
use of masculine gender pronouns shall include the appropriate feminine and
neuter pronouns and the singular number includes the plural.
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(f) Law Governing. This Agreement shall be governed by and construed
and interpreted in accordance with the laws of the State of Delaware
applicable to agreements made and to be performed entirely within such
state, including all matters of enforcement, validity and performance.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original and all of
which shall constitute one agreement which is binding upon all the parties
hereto, notwithstanding that all parties are not signatories to the same
counterpart.
(h) Specific Performance. Unitholder hereby acknowledges and agrees
that the remedy at law available to MLP would be inadequate for any breach
of the Agreement whereby Unitholder or its legal representative would
refuse to transfer the shares of the Company in accordance with the terms
of this Agreement or whereby Unitholder would attempt to transfer shares of
MLP not in accordance with the terms of this Agreement. In recognition of
that fact, Unitholder hereby agrees that, in addition to any other remedies
which it may have, MLP shall be entitled to specific performance of all
affirmative duties with respect to the transfer of units of MLP hereunder
and to an injunction, restraining order or other form of equitable relief
prohibiting a violation of any of the restrictive covenants with respect to
the transfer of MLP Units hereunder.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
INERGY, L.P.
By /s/ John J. Sherman
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Name: John J. Sherman
Title: President
UNITED PROPANE, INC.
By: /s/ Robert A. Pascal
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Name: Robert A. Pascal
Title: Chairman
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