EXHIBIT 2.1 EXECUTION COPY
================================================================================
SUBURBAN PROPANE PARTNERS, L.P.
RECAPITALIZATION AGREEMENT
BY AND AMONG
SUBURBAN PROPANE PARTNERS, L.P.,
SUBURBAN PROPANE, L.P.,
SUBURBAN PROPANE GP, INC.,
MILLENNIUM PETROCHEMICALS INC.
AND
SUBURBAN ENERGY SERVICES GROUP LLC
-------------------------
Dated as of November 27, 1998
-------------------------
================================================================================
NYFS08...:\63\76463\0001\1713\EXHD028S.160
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I.
DEFINITIONS................................................................ 2
1.01 Defined Terms.............................................. 2
ARTICLE II.
THE RECAPITALIZATION....................................................... 8
2.01 Amended Agreements; Termination of Distribution
Support Agreement........................................... 8
(a) Amended Agreements.................................... 8
(b) Termination of Distribution Support
Agreement............................................. 8
2.02 Payment of Special Distribution by Operating
Partnership................................................. 8
2.03 Redemption.................................................. 9
(a) Redemption of Subordinated Units and APUs............. 9
(b) Payment of the Redemption Price....................... 9
(c) Delivery of Redeemed Securities....................... 9
2.04 Admission of Successor General Partner to
Partnerships; Asset Purchase................................ 10
(a) Admission............................................. 10
(b) Asset Purchase........................................ 10
ARTICLE III.
CLOSING.................................................................... 10
3.01 Closing..................................................... 10
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES............................................. 10
4.01 Representations and Warranties of Each of the
MLP and the Operating Partnership........................... 10
(a) Organization, Standing and Power...................... 11
(b) Authority; Noncontravention........................... 11
(c) Brokers............................................... 12
(d) Litigation............................................ 13
(e) Capitalization........................................ 13
(f) Proxy Statement....................................... 14
(g) Financing............................................. 14
(h) Fairness Opinion...................................... 14
i
Page
----
4.02 Representations and Warranties of Each of
Millennium and the General Partner.......................... 14
(a) Organization, Standing and Power...................... 14
(b) Authority; Noncontravention........................... 14
(c) Brokers............................................... 15
(d) Litigation............................................ 16
(e) Ownership of Redeemed Securities...................... 16
(f) Proxy Statement....................................... 16
4.03 Representations and Warranties of the Successor
General Partner............................................. 17
(a) Organization, Standing and Power...................... 17
(b) Authority; Noncontravention........................... 17
(c) Brokers............................................... 18
(d) Litigation............................................ 18
(e) Contemplated Ownership of Successor
General Partner....................................... 18
(f) Proxy Statement....................................... 19
ARTICLE V.
ADDITIONAL COVENANTS....................................................... 19
5.01 No Sale, Solicitation or Pledge; Voting of
Subordinated Units.......................................... 19
5.02 Meeting of Holders; Proxy Statement......................... 21
5.03 Commercially Reasonable Efforts............................. 22
5.04 Consents, Approvals and Filings; Cooperation................ 22
5.05 Updating of Information..................................... 23
5.06 Resignation of Appointed Supervisors........................ 24
ARTICLE VI.
CONDITIONS PRECEDENT....................................................... 24
6.01 Conditions to Obligations of Each Party..................... 24
(a) Approval by Unitholders............................... 24
(b) Approval by Note Majority; Amendment of
Note Agreement........................................ 24
(c) Required Consents..................................... 24
(d) No Injunctions or Restraints; Actions................. 24
(e) Payment of Special Distribution....................... 25
(f) Concurrent Consummation of the Asset
Purchase.............................................. 25
(g) Amended Agreements.................................... 25
(h) Termination Agreement................................. 25
(i) Opinion of Counsel.................................... 25
(j) Resignations of Appointed Supervisors................. 25
ii
Page
----
6.02 Additional Conditions to Obligations of the MLP
and the Operating Partnership................................26
(a) Representations and Warranties........................ 26
(b) Performance of Obligations............................ 26
(c) Officer's Certificates................................ 26
(d) Receipt of Proceeds of the Loan....................... 26
(e) Delivery of Redeemed Securities....................... 27
(f) Millennium, General Partner and Successor
General Partner Certified Resolutions and
Incumbency Certificates............................... 27
(g) Fairness Opinion...................................... 27
(h) No Withdrawal of Recommendation by Special
Committee............................................. 27
6.03 Additional Conditions to Obligations of Each of
Millennium and the General Partner.......................... 27
(a) Representations and Warranties........................ 28
(b) Performance of Obligations............................ 28
(c) Officer's Certificates................................ 28
(d) Redemption Price...................................... 28
(e) MLP, Operating Partnership and Successor
General Partner Certified Resolutions and
Incumbency Certificates............................... 28
6.04 Additional Conditions to Obligations of the
Successor General Partner................................... 28
(a) Representations and Warranties........................ 28
(b) Performance of Obligations............................ 29
(c) Officer's Certificates................................ 29
(d) MLP, Operating Partnership, Millennium and
General Partner Certified Resolutions and
Incumbency Certificates............................... 29
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER.......................................... 30
7.01 Termination................................................. 30
7.02 Effect of Termination....................................... 31
7.03 Amendment................................................... 31
7.04 Extension; Waiver........................................... 32
7.05 Procedure for Termination, Amendment, Extension
or Waiver by the MLP........................................ 32
7.06 Termination Fees; Expense Reimbursement..................... 32
(a) Section 7.01(c) Termination Fee or Expense
Reimbursement......................................... 32
(b) Section 7.01(d) Termination Fee....................... 33
(c) Liquidated Damages.................................... 33
7.07 Extension Fee............................................... 33
iii
Page
----
ARTICLE VIII.
GENERAL PROVISIONS......................................................... 34
8.01 Survival of Representations and Warranties.................. 34
8.02 Fees and Expenses........................................... 34
8.03 Notices..................................................... 34
8.04 Interpretation.............................................. 35
8.05 Counterparts................................................ 35
8.06 Entire Agreement; No Third-Party Beneficiaries.............. 35
8.07 Governing Law............................................... 36
8.08 Assignment.................................................. 36
8.09 Enforcement; Severability................................... 36
8.10 Further Assurances.......................................... 36
8.11 Public Announcements........................................ 37
SCHEDULES
Schedule 2.01(a) -- Amended Agreements
Schedule 4.01(b) -- MLP Consents
Schedule 4.01(e) -- Plan Units
Schedule 4.02(b) -- General Partner/Millennium Consents
Schedule 4.03(b) -- Successor General Partner Consents
Schedule 4.03(e) -- Contemplated Ownership of Successor
General Partner
Schedule 6.01(c) -- Required Consents
EXHIBITS
Exhibit A -- Form of Purchase Agreement
Exhibit B -- Form of Termination Agreement
iv
SUBURBAN PROPANE PARTNERS, L.P.
RECAPITALIZATION AGREEMENT
--------------------------
RECAPITALIZATION AGREEMENT dated as of November 27, 1998 by and
among: (i) SUBURBAN PROPANE PARTNERS, L.P., a Delaware limited partnership (the
"MLP"); (ii) SUBURBAN PROPANE, L.P., a Delaware limited partnership of which the
MLP is the sole limited partner (the "Operating Partnership"); (iii) SUBURBAN
PROPANE GP, INC., a Delaware corporation which is the general partner of the MLP
and the general partner of the Operating Partnership (collectively in such
capacities, the "General Partner"); (iv) MILLENNIUM PETROCHEMICALS INC., a
Virginia corporation and the sole stockholder of the General Partner
("Millennium"); and (v) SUBURBAN ENERGY SERVICES GROUP LLC, a Delaware limited
liability company (the "Successor General Partner"). Capitalized terms used
herein but not defined where used have the meanings assigned to such terms in
Article I.
W I T N E S S E T H:
--------------------
WHEREAS, as of the date hereof, 7,163,750 Subordinated Units and
220,000 APUs of the MLP are outstanding, all of which are owned of record and
beneficially by the General Partner;
WHEREAS, the Board of Supervisors, upon the unanimous recommendation
of the Special Committee, has determined that it is in the best interests of the
holders of Common Units to effect, and accordingly has unanimously approved, a
recapitalization of the MLP, which recapitalization includes a redemption by the
MLP from the General Partner of all of the outstanding Subordinated Units and
APUs (the "Redemption") and the other transactions contemplated in Article II
(the Redemption and such other transactions, collectively, the
"Recapitalization"), upon the terms and subject to the conditions set forth
herein;
WHEREAS, the Operating Partnership has obtained a commitment letter
dated October 30, 1998 (the "Commitment Letter") from The Bank of New York (the
"Lender"), pursuant to which the Lender has agreed, upon the terms and subject
to the conditions set forth therein, to underwrite a $150 million senior secured
credit facility under which the
Operating Partnership would borrow an amount (the "Loan") to be used, together
with other available cash resources, to finance the Redemption and certain
expenses of the Recapitalization;
WHEREAS, concurrently with the execution and delivery of this
Agreement, Millennium, the General Partner and the Successor General Partner are
entering into a Purchase Agreement substantially in the form of Exhibit A
attached hereto (the "Purchase Agreement"), pursuant to which, among other
things, the General Partner is selling to the Successor General Partner, and the
Successor General Partner is purchasing from the General Partner, all of the
General Partner's right, title and interest (i) as a general partner of the MLP,
(ii) in and to the Incentive Distribution Rights held by the General Partner
pursuant to the Partnership Agreement and (iii) as a general partner in the
Operating Partnership (collectively, the "Assets"), and the Successor General
Partner is assuming certain specified liabilities in connection therewith (the
"Asset Purchase"), upon the terms and subject to the conditions therein;
WHEREAS, concurrently with the consummation of the Recapitalization,
the Partnership Agreements will be amended and restated to permit and effect the
Recapitalization and the Asset Purchase; and
WHEREAS, the parties hereto wish to establish the terms and
conditions under which the Recapitalization shall occur;
NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
1.01 Defined Terms. Unless the context otherwise requires, the
following capitalized terms, as used herein, shall have the following meanings:
"APU Guarantor" has the meaning set forth in the Distribution
Support Agreement.
2
"APUs" has the meaning set forth in the Partnership Agreement.
"Acquisition Proposal" has the meaning set forth in Section 5.01(a).
"Affiliate" of any specified Person means any other Person directly
or indirectly controlling, controlled by, or under common control with, such
specified Person; provided that the Partnerships, Equistar Chemicals, LP and
their respective Subsidiaries, officers and employees shall not be considered
Affiliates of the General Partner for purposes of this Agreement. For purposes
of this definition of Affiliate, "control" means the possession, direct or
indirect, of the power to direct or cause the direction of the management of the
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise; "controlling" and "controlled" have corollary meanings.
"Agreement" means this Recapitalization Agreement, as amended,
modified or supplemented from time to time.
"Amended Agreements" means, collectively, the Amended Partnership
Agreement and the Amended Operating Partnership Agreement.
"Amended Operating Partnership Agreement" means the Second Amended
and Restated Partnership Agreement of the Operating Partnership, to be entered
into by the parties thereto (which shall not include the General Partner) in a
form to permit and effect the Recapitalization as agreed to by the Elected
Supervisors and the Successor General Partner.
"Amended Partnership Agreement" means the Second Amended and
Restated Partnership Agreement of the MLP, to be entered into by the parties
thereto (which shall not include the General Partner) in a form to permit and
effect the Recapitalization as agreed to by the Elected Supervisors and the
Successor General Partner.
"Appointed Supervisors" has the meaning set forth in the Partnership
Agreement.
"Asset Purchase" has the meaning set forth in the recitals of this
Agreement.
3
"Assets" has the meaning set forth in the recitals of this
Agreement.
"Board of Supervisors" has the meaning set forth in the Partnership
Agreement.
"Certificates" has the meaning set forth in Section 2.03(b).
"Closing" has the meaning set forth in Section 3.01.
"Commitment Letter" has the meaning set forth in the recitals of
this Agreement.
"Common Units" has the meaning set forth in the Partnership
Agreement.
"Contribution, Conveyance and Assumption Agreement" means the
Contribution, Conveyance and Assumption Agreement dated as of March 4, 1996 by
and among the MLP, the Operating Partnership, Quantum Chemical Corporation, the
General Partner and Suburban Propane Inc.
"Delaware LP Act" has the meaning set forth in Section 4.01(a).
"Departing Partner" has the meaning set forth in the Partnership
Agreement.
"Distribution Support Agreement" means the Distribution Support
Agreement dated as of March 5, 1996 among the General Partner, Millennium
America Inc. (formerly Xxxxxx America Inc.) and the MLP.
"Elected Supervisors" has the meaning set forth in the Partnership
Agreement.
"Exchange Act" has the meaning set forth in Section 4.01(b).
"Fairness Opinion" has the meaning set forth in Section 4.01(h).
"General Partner" has the meaning set forth in the preamble of this
Agreement.
4
"Governmental Entity" has the meaning set forth in Section 4.01(b).
"Incentive Distribution Rights" has the meaning set forth in the
Partnership Agreement.
"Laws" has the meaning set forth in Section 4.01(b).
"Lender" has the meaning set forth in the recitals of this
Agreement.
"Liens" means any and all liens, mortgages, claims, charges,
pledges, licenses, leases, easements, rights of first offer or first refusal,
restrictions under any stockholders' or similar agreement, voting trusts or
voting agreements or encumbrances of any kind whatsoever.
"Loan" has the meaning set forth in the recitals of this Agreement.
"Material Adverse Effect" means, with respect to any Person, a
material adverse effect on the assets, properties, liabilities, business,
results of operations or condition (financial or otherwise) of such Person and
its Subsidiaries, taken as a whole.
"Meeting" has the meaning set forth in Section 5.02.
"Millennium" has the meaning set forth in the preamble of this
Agreement.
"MLP" has the meaning set forth in the preamble of this Agreement.
"Note Agreement" means the Note Agreement dated as of February 28,
1996, as amended, relating to the issuance by the Operating Partnership of $425
million aggregate original principal amount of 7.54% Senior Notes Due June 30,
2011 (the "Notes").
"Note Majority" means the approval of the holders of at least 51% of
the aggregate principal amount of the Notes.
"Operating Partnership" has the meaning set forth in the preamble of
this Agreement.
5
"Operating Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Suburban Propane, L.P. dated as of March 4,
1996 by and among the General Partner, as general partner, and the MLP, as
limited partner, as in effect immediately prior to the Closing.
"Orders" has the meaning set forth in Section 4.01(b).
"Outstanding" has the meaning set forth in the Partnership
Agreement.
"Partner" has the meaning set forth in the Partnership Agreement.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of Suburban Propane Partners, L.P. dated as of March 4, 1996
by and among the General Partner, the MLP's organizational limited partner and
each other Person which is a partner in the MLP, as in effect immediately prior
to the Closing.
"Partnership Agreements" means, collectively, the Partnership
Agreement and the Operating Partnership Agreement.
"Partnerships" means, collectively, the MLP and the Operating
Partnership.
"Person" means an individual, partnership, limited liability
company, joint venture, corporation, trust, unincorporated association, any
other entity, or a government or any department or agency or other unit thereof.
"Plan Units" has the meaning set forth in Section 4.01(e).
"Proxy Statement" has the meaning set forth in Section 4.01(f).
"Public Common Units" means all Outstanding Common Units, other than
those held by the General Partner and its Affiliates and the Successor General
Partner and its Affiliates.
6
"Purchase Agreement" has the meaning set forth in the recitals of
this Agreement.
"Recapitalization" has the meaning set forth in the recitals of this
Agreement.
"Redeemed Securities" has the meaning set forth in Section 2.03(a).
"Redemption" has the meaning set forth in the preamble of this
Agreement.
"Redemption Price" has the meaning set forth in Section 2.03(a).
"SEC" has the meaning set forth in Section 4.01(b).
"Special Committee" means a special committee of the Board of
Supervisors established to evaluate the Recapitalization consisting of the
Elected Supervisors, Xxxx Xxxx Xxxxxxx, Xxxxxx X. Xxxxx, Xx. and Xxxxxx X.
Xxxxx.
"Special Distribution" has the meaning set forth in Section 2.02.
"Subordinated Units" has the meaning set forth in the Partnership
Agreement.
"Subsidiary" means, with respect to any specified Person, any
corporation or other legal entity of which such Person or any of its
Subsidiaries Controls or owns, directly or indirectly, more than 50% of the
stock or other equity interests entitled to vote on the election of the members
to the board of directors or similar governing body.
"Successor General Partner" has the meaning set forth in the
preamble of this Agreement.
"Superior Proposal" has the meaning set forth in Section 5.01(a).
"Termination Agreement" has the meaning set forth in Section
2.01(b).
"Transaction Expenses" means any and all costs and expenses of the
Partnerships incident to the preparation, negotiation and execution and delivery
of this Agreement,
7
the credit agreement to be entered into by the Operating Partnership pursuant to
the Commitment Letter or otherwise in connection with the financing of the
Redemption, the Proxy Statement and the agreements and other documents or
instruments to be entered into pursuant to this Agreement and the consummation
of the transactions contemplated hereby and thereby.
"Unit Majority" has the meaning set forth in the Partnership
Agreement.
ARTICLE II.
THE RECAPITALIZATION
2.01 Amended Agreements; Termination of Distribution Support
Agreement.
(a) Amended Agreements. At the Closing, the Amended
Partnership Agreement and the Amended Operating Partnership Agreement shall be
entered into by the parties thereto. Other than in its capacity as a Departing
Partner, from and after the Closing, the General Partner shall not have any
obligation or liability under the Amended Partnership Agreement or the Amended
Operating Partnership Agreement. The Amended Partnership Agreement, among other
things, shall effect the amendments set forth in Schedule 2.01(a) attached
hereto and such other amendments as the Elected Supervisors and the Successor
General Partner together shall deem necessary or desirable.
(b) Termination of Distribution Support Agreement. At the
Closing, the parties to the Distribution Support Agreement shall enter into a
letter substantially in the form of Exhibit B attached hereto terminating the
Distribution Support Agreement and the rights and obligations of the parties
thereto thereunder (the "Termination Agreement").
2.02 Payment of Special Distribution by Operating Partnership. At
the Closing and pursuant to the Amended Operating Partnership Agreement, the
Operating Partnership shall make a special distribution to the MLP, as limited
partner of the Operating Partnership, or shall make a loan to the MLP, out of
the proceeds of the Loan and other available cash resources, in an amount
sufficient for the MLP to pay the Redemption Price and to pay any and all
8
Transaction Expenses not paid by the Operating Partnership (the "Special
Distribution").
2.03 Redemption.
(a) Redemption of Subordinated Units and APUs. At the Closing,
upon the terms and subject to the conditions set forth in this Agreement, the
MLP shall redeem all 7,163,750 Subordinated Units and all 220,000 APUs and any
additional APUs purchased or to be purchased as described in the last sentence
of this paragraph (a) (such APUs and Subordinated Units together, the "Redeemed
Securities") for an aggregate cash payment of $69 million (as adjusted as
described below in this paragraph (a), the "Redemption Price"). The Redemption
Price shall be reduced dollar-for-dollar based on the amount of any and all
distributions pursuant to Section 6.4 or Section 6.5 of the Partnership
Agreement on the Subordinated Units or the APUs on or after the date of this
Agreement but prior to the Closing. In addition, the Redemption Price shall be
increased dollar-for-dollar based on the amount of any and all contributions to
the MLP that the General Partner (or the APU Guarantor) may be obligated to make
in exchange for additional APUs pursuant to the Distribution Support Agreement
on or after the date of this Agreement but prior to the Closing.
(b) Payment of the Redemption Price. The Redemption Price
shall be payable against delivery to the MLP of the certificate(s) representing
the Redeemed Securities (the "Certificates") by wire transfer of immediately
available funds into an account designated by the General Partner to the MLP in
writing prior to the Closing.
(c) Delivery of Redeemed Securities. At the Closing, and
against payment of the Redemption Price, the General Partner shall deliver to
the MLP the Certificate(s) registered in the General Partner's name against
payment of the Redemption Price, duly endorsed in blank or accompanied by
transfer powers duly executed in blank and otherwise in proper form for
transfer, with any required transfer stamps affixed thereto.
9
2.04 Admission of Successor General Partner to Partnerships; Asset
Purchase.
(a) Admission. At the Closing, but immediately prior to the
consummation of the Asset Purchase, the Successor General Partner shall be
admitted to the MLP as a general partner in accordance with Sections 4.6 and
10.3 of the Partnership Agreement, and also shall be admitted to the Operating
Partnership as a general partner in accordance with Sections 4.2 and 10.3 of the
Operating Partnership Agreement, and shall assume the rights and duties of the
General Partner under the Partnership Agreements in accordance therewith.
(b) Asset Purchase. At the Closing, upon the terms and subject
to the conditions set forth in the Purchase Agreement, the General Partner and
the Successor General Partner shall consummate the Asset Purchase upon the terms
and conditions set forth in the Purchase Agreement.
ARTICLE III.
CLOSING
3.01 Closing. Unless this Agreement shall have been terminated and
the transactions contemplated herein shall have been abandoned pursuant to
Section 7.01, and subject to the satisfaction or waiver of the conditions set
forth in Article VI, the closing of the Recapitalization (the "Closing") shall
take place at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, XX 00000 at 10:00 A.M. on the first business day following the date on
which the last of the conditions to be fulfilled or waived set forth in Article
VI shall be fulfilled or waived in accordance with this Agreement, unless
another date, time or place is agreed to in writing by the parties hereto.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES
4.01 Representations and Warranties of Each of the MLP and the
Operating Partnership. Each of the MLP and the Operating Partnership, jointly
and severally, hereby represents and warrants to each of the General Partner,
Millennium and the Successor General Partner that:
10
(a) Organization, Standing and Power. It is a limited
partnership duly organized, validly existing and in good standing under the
Delaware Revised Uniform Limited Partnership Act (as amended, modified or
supplemented from time to time, the "Delaware LP Act") and has the requisite
limited partnership power and authority to carry on its business as now being
conducted.
(b) Authority; Noncontravention. It has all requisite limited
partnership power and authority to enter into this Agreement and, subject to the
approval of a Unit Majority, to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary partnership action on its part, subject to the
approval of a Unit Majority. This Agreement has been duly executed and delivered
by it and, assuming this Agreement constitutes the valid and binding agreement
of each of the other parties hereto, constitutes a valid and binding obligation
of it, enforceable against it in accordance with its terms, except to the extent
enforceability may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to or affecting creditors' rights and remedies generally.
The execution and delivery by it of this Agreement do not, and the consummation
by it of the transactions contemplated by this Agreement and compliance by it
with the provisions hereof as of the Closing will not, (i) subject to the
approval of a Unit Majority, conflict with any of the provisions of the
Partnership Agreements or the Certificate of Limited Partnership of the MLP or
the Certificate of Limited Partnership of the Operating Partnership, (ii)
subject to the approval of the Note Majority and the governmental filings and
other matters referred to in the following sentence, conflict with or require
the consent of any Person under any indenture or other agreement, permit,
concession, franchise, license or similar instrument or undertaking to which it
or any of its Subsidiaries is a party or by which it or any of its Subsidiaries
or any of their assets is bound, except as set forth in Schedule 4.01(b)
attached hereto, or (iii) subject to the governmental filings and other matters
referred to in the following sentence, contravene any law, rule or regulation of
any state or of the United States or any political subdivision or agency thereof
or therein (collectively, "Laws"), or any order, writ, judgment, injunction,
decree, determination or award (collectively, "Orders") currently in effect and
binding on
11
it or any of its Subsidiaries, the conflict, breach, default or contravention of
which, in the case of clauses (ii) and (iii) above, individually or in the
aggregate, would have, or is reasonably likely to have, a Material Adverse
Effect on the MLP. No consent, approval or authorization of, or declaration or
filing with, or notice to, any governmental agency, regulatory authority or
court (a "Governmental Entity") that has not been received or made as of the
date hereof is required by it or any of its Subsidiaries in connection with the
execution and delivery by it of this Agreement or the consummation by it of the
transactions contemplated hereby, except for (A) the filing with the Securities
and Exchange Commission (the "SEC") of such reports and statements under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may be
required in connection with this Agreement and the transactions contemplated by
this Agreement, (B) the filings of any amendments to the Certificate of Limited
Partnership of the MLP and the Certificate of Limited Partnership of the
Operating Partnership under the Delaware LP Act in connection with this
Agreement and the transactions contemplated by this Agreement, (C) such other
consents, approvals, authorizations, filings or notices as are set forth in
Schedule 4.01(b) attached hereto and (D) any filings, authorizations, consents
or approvals the failure to make or obtain which, individually or in the
aggregate, would not have a Material Adverse Effect on the MLP.
(c) Brokers. No broker, investment banker, financial advisor
or other Person is entitled to receive from the MLP or the Operating Partnership
any broker's, finder's, financial advisor's or other similar fee or commission
in connection with the transactions contemplated by this Agreement, other than
Rothschild Inc., financial advisor to the Special Committee. The fees and
expenses of Rothschild Inc. shall be paid by the MLP. The MLP and the Operating
Partnership jointly and severally shall indemnify and hold harmless the other
parties to this Agreement from and against any liability incurred by such
parties (including the fees, disbursements and related charges of counsel)
arising out of any claim by a broker, finder, financial advisor or similar
intermediary for any fee, commission or other compensation as a result of the
MLP or the Operating Partnership entering into this Agreement and/or
consummating the transactions contemplated by this Agreement.
12
(d) Litigation. As of the date hereof, there is no suit,
claim, action, Order or proceeding (at law or in equity) or, to the knowledge of
the MLP or the Operating Partnership, investigation pending or, to the knowledge
of the MLP or the Operating Partnership, threatened against the MLP or the
Operating Partnership or any of their Subsidiaries before any Governmental
Entity seeking to prevent or challenging the transactions contemplated by this
Agreement.
(e) Capitalization. As of the date hereof, there are (i)
21,562,500 Common Units issued and outstanding, (ii) 7,163,759 Subordinated
Units issued and outstanding, all of which are held of record by the General
Partner, and (iii) 220,000 APUs issued and outstanding, all of which are held of
record by the General Partner. As of the date hereof, the capitalization of the
Operating Partnership consists of (i) a 1.0101% general partner interest held of
record by the General Partner, (ii) a 98.9899% limited partner interest, all
right, title and interest to and in which is held by the MLP and (iii) the
Incentive Distribution Rights, all of which are held of record by the General
Partner. Except as set forth above in this Section 4.01(e) and except for the
rights to receive Common Units and the Common Units issued and issuable pursuant
to the Suburban Propane Partners, L.P. 1996 Restricted Unit Plan (collectively,
the "Plan Units"), as of the date hereof there are not any, and immediately
prior to the Closing there will not be any, (i) equity securities or other
equity interests of the Partnerships issued by the Partnerships and (ii) other
securities of the Partnerships issued by the Partnerships that are convertible
into or exchangeable or exercisable for any such equity securities or other
equity interests of the Partnerships. Except for the Plan Units, there are no
outstanding options, warrants, subscriptions or other rights of any kind issued
or issuable by the Partnerships giving the holder thereof the right to acquire,
and the Partnerships are not obligated to issue, transfer or sell, any equity
securities or other equity interests of the Partnerships or other securities of
the Partnerships convertible into or exchangeable or exercisable for any such
equity securities or other equity interests of the Partnerships. The
Partnerships are not party to any agreement or understanding with respect to the
voting of any securities or other equity interests of the Partnerships, other
than the Partnership Agreements. Schedule 4.01(e) attached hereto lists the
number and the owners of the issued and outstanding Plan Units as of the date
hereof.
13
(f) Proxy Statement. None of the information relating to it
and its Affiliates provided by it (other than any provided by the General
Partner and Millennium) for inclusion in the Proxy Statement on Schedule 14A
under the Exchange Act to be filed by the MLP with the SEC and to be used in
soliciting proxies from the holders of Common Units with respect to the
Recapitalization (together with the letter to holders, notice of meeting and
form of proxy or other related materials, the "Proxy Statement"), at the time it
is filed with the SEC, at any time it is amended or supplemented, at the time it
is mailed and at the time of the Meeting, will contain any untrue statement of a
material fact, or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
(g) Financing. The Operating Partnership has entered into the
Commitment Letter with the Lender.
(h) Fairness Opinion. The Special Committee has received the
written opinion of Rothschild Inc. to the effect that, as of the date thereof,
the Recapitalization is fair, from a financial point of view, to the holders of
the Public Common Units (the "Fairness Opinion").
4.02 Representations and Warranties of Each of Millennium and the
General Partner. Each of Millennium and the General Partner, jointly and
severally, hereby represents and warrants to each of the MLP, the Operating
Partnership and the Successor General Partner that:
(a) Organization, Standing and Power. It is a corporation duly
organized, validly existing and in good standing under its jurisdiction of
incorporation and has the requisite corporate power and authority to carry on
its business as now being conducted.
(b) Authority; Noncontravention. It has all requisite
corporate power and authority to enter into this Agreement and, subject to the
approval of a Unit Majority, to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on its part and on the part of its
stockholders. This Agreement has been duly executed and delivered by it and,
assuming this Agreement constitutes the valid and binding agreement of each of
the other parties
14
hereto, constitutes a valid and binding obligation of it, enforceable against it
in accordance with its terms, except to the extent enforceability may be limited
by bankruptcy, insolvency, moratorium or other similar laws relating to or
affecting creditors' rights and remedies generally. The execution and delivery
by it of this Agreement do not, and the consummation by it of the transactions
contemplated by this Agreement and compliance by it with the provisions hereof
as of the Closing will not, (i) conflict with any of the provisions of its
certificate of incorporation or by-laws, (ii) subject to the governmental
filings and other matters referred to in the following sentence, conflict with
or require the consent of any Person under any indenture or other agreement,
permit, concession, franchise, license or similar instrument or undertaking to
which it or any of its Affiliates is a party or by which it or any of its
Affiliates or any of its or their assets are bound, except any such indenture or
other agreement, permit, concession, franchise, license or similar instrument or
undertaking entered into by the General Partner on behalf of either of the
Partnerships acting in its capacity as general partner thereof and except as set
forth in Schedule 4.02(b) attached hereto, or (iii) subject to the governmental
filings and other matters referred to in the following sentence, contravene any
Law or any Order currently in effect and binding on it or any of its Affiliates,
the conflict, breach, default or contravention of which, in the case of clauses
(ii) and (iii) above, individually or in the aggregate, would have, or is
reasonably likely to have, a Material Adverse Effect on it. No consent, approval
or authorization of, or declaration or filing with, or notice to, any
Governmental Entity that has not been received or made as of the date hereof is
required by or with respect to it or any of its Affiliates in connection with
the execution and delivery by it of this Agreement or the consummation by it of
the transactions contemplated hereby, except for (A) such consents, approvals,
authorizations, filings or notices as are set forth in Schedule 4.02(b) attached
hereto and (B) any filings, authorizations, consents or approvals the failure to
make or obtain which, individually or in the aggregate, would not have a
Material Adverse Effect on the General Partner.
(c) Brokers. No broker, investment banker, financial advisor
or other Person is entitled to receive from Millennium, the General Partner or
any of their respective Affiliates any broker's, finder's, financial advisor's
or other similar fee or commission in connection
15
with the transactions contemplated by this Agreement. Millennium and the General
Partner jointly and severally shall indemnify and hold harmless the other
parties to this Agreement from and against any liability incurred by such
parties (including the fees, disbursements and related charges of counsel)
arising out of any claim by a broker, finder, financial advisor or similar
intermediary for any fee, commission or other compensation as a result of
Millennium and/or the General Partner entering into this Agreement and/or
consummating the transactions contemplated by this Agreement.
(d) Litigation. As of the date hereof, there is no suit,
claim, action, Order or proceeding (at law or in equity) or, to the knowledge of
Millennium or the General Partner, investigation pending or, to the knowledge of
Millennium or the General Partner, threatened against the General Partner or any
of its Affiliates before any Governmental Entity seeking to prevent or
challenging the transactions contemplated by this Agreement.
(e) Ownership of Redeemed Securities. The General Partner is,
and as of the Closing will be, the sole record and beneficial owner of the
Redeemed Securities, free and clear of any Liens, other than pursuant to the
Partnership Agreements and, immediately prior to the Closing but not upon the
Closing, the Distribution Support Agreement. At the Closing, the MLP will
receive good and valid title to the Redeemed Securities, free and clear of all
Liens.
(f) Proxy Statement. None of the information relating to the
General Partner, Millennium or their respective Affiliates provided in writing
by Millennium or the General Partner for inclusion in the Proxy Statement, at
the time it is filed with the SEC, at any time it is amended or supplemented, at
the time it is mailed and at the time of the Meeting, will contain any untrue
statement of a material fact, or omit to state a material fact necessary in
order to make the statements made therein, in light of the circumstances under
which they were made, not misleading.
16
4.03 Representations and Warranties of the Successor General
Partner. The Successor General Partner hereby represents and warrants to each of
the MLP, the Operating Partnership, Millennium and the General Partner
that:
(a) Organization, Standing and Power. It is a limited
liability company duly organized, validly existing and in good standing under
the Delaware Limited Liability Company Act and has the requisite limited
liability company power and authority to carry on its business as now being
conducted.
(b) Authority; Noncontravention. It has all requisite limited
liability company power and authority to enter into this Agreement and, subject
to the approval of a Unit Majority, to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement by it and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on its part and on the part of its members.
This Agreement has been duly executed and delivered by it and, assuming this
Agreement constitutes the valid and binding agreement of each of the other
parties hereto, constitutes a valid and binding obligation of it, enforceable
against it in accordance with its terms, except to the extent enforceability may
be limited by bankruptcy, insolvency, moratorium or other similar laws relating
to or affecting creditors' rights and remedies generally. The execution and
delivery by it of this Agreement do not, and the consummation by it of the
transactions contemplated by this Agreement and compliance by it with the
provisions hereof as of the Closing will not, (i) conflict with any of the
provisions of its certificate of formation or limited liability company or
operating agreement, (ii) subject to the governmental filings and other matters
referred to in the following sentence and subject to the approval of a Unit
Majority, conflict with or require the consent of any Person under any indenture
or other agreement, permit, concession, franchise, license or similar instrument
or undertaking to which it or any of its Affiliates is a party or by which it or
any of its Affiliates or any of its or their assets are bound, except as set
forth in Schedule 4.03(b) attached hereto, or (iii) subject to the governmental
filings and other matters referred to in the following sentence, contravene any
Law or any Order currently in effect and binding on it or any of its Affiliates,
the conflict, breach, default or contravention of which, in the case of
17
clauses (ii) and (iii) above, individually or in the aggregate, would have, or
is reasonably likely to have, a Material Adverse Effect on it. No consent,
approval or authorization of, or declaration or filing with, or notice to, any
Governmental Entity that has not been received or made as of the date hereof is
required by or with respect to it or any of its Affiliates in connection with
the execution and delivery by it of this Agreement or the consummation by it of
the transactions contemplated hereby, except for (A) such consents, approvals,
authorizations, filings or notices as are set forth in Schedule 4.03(b) attached
hereto and (B) any filings, authorizations, consents or approvals the failure to
make or obtain which, individually or in the aggregate, would not have a
Material Adverse Effect on it.
(c) Brokers. No broker, investment banker, financial advisor
or other Person is entitled to receive from the Successor General Partner any
broker's, finder's, financial advisor's or other similar fee or commission in
connection with the transactions contemplated by this Agreement. The Successor
General Partner shall indemnify and hold harmless the other parties to this
Agreement from and against any liability incurred by such parties (including the
fees, disbursements and related charges of counsel) arising out of any claim by
a broker, finder, financial advisor or similar intermediary for any fee,
commission or other compensation as a result of the Successor General Partner
entering into this Agreement and/or consummating the transactions contemplated
by this Agreement.
(d) Litigation. As of the date hereof, there is no suit,
claim, action, Order or proceeding (at law or in equity) or, to the knowledge of
the Successor General Partner, investigation pending or, to the knowledge of the
Successor General Partner, threatened against the Successor General Partner or
any of its Affiliates before any court or governmental or regulatory authority
or body seeking to prevent or challenging the transactions contemplated by this
Agreement.
(e) Contemplated Ownership of Successor General Partner.
Schedule 4.03(e) attached hereto sets forth a list of the Persons who, as of the
date hereof, are contemplated to be the owners of a majority of its membership
interests as of the Closing.
18
(f) Proxy Statement. None of the information relating to the
Successor General Partner or its Affiliates provided in writing by the Successor
General Partner for inclusion in the Proxy Statement, at the time it is filed
with the SEC, at any time it is amended or supplemented, at the time it is
mailed and at the time of the Meeting, will contain any untrue statement of a
material fact, or omit to state a material fact necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
ARTICLE V.
ADDITIONAL COVENANTS
5.01 No Sale, Solicitation or Pledge; Voting of Subordinated Units.
(a) From the date hereof until the earlier of the Closing and the termination of
this Agreement pursuant to Section 7.01, Millennium shall cause the General
Partner to, and the General Partner shall, (i) keep the Redeemed Securities
registered in the General Partner's name and not sell, lease, transfer, pledge,
grant any right of any kind with respect to, cause to be suffered any Lien on or
otherwise encumber or dispose of, directly or indirectly, all or any portion of
any of the Redeemed Securities or the Assets, and (ii) not merge, consolidate or
enter into any share exchange, recapitalization, business combination or similar
transaction with any other Person (any of the transactions referred to in the
foregoing clauses (i) and (ii), other than the transactions contemplated by this
Agreement, an "Acquisition Proposal"). In addition, from the date hereof until
the earlier of the Closing and the termination of this Agreement pursuant to
Section 7.01, Millennium shall cause the General Partner not to, and the General
Partner shall not, and each of Millennium and the General Partner shall not
permit or authorize any of its Affiliates or its or any of its Affiliates'
respective directors, officers, employees, agents or other representatives
(including legal and financial advisors) to, directly or indirectly, (i)
solicit, initiate or encourage the submission of any Acquisition Proposal or
(ii) participate in any discussions or negotiations regarding, or furnish to any
Person any information with respect to, or take any other action to facilitate,
any Acquisition Proposal or any inquiries or the making of any proposal that
constitutes, or may reasonably be expected to lead to, any Acquisition Proposal;
provided, however, that nothing
19
contained in this Section 5.01(a) shall prohibit the General Partner's Board of
Directors from furnishing information to, or entering into discussions or
negotiations with, any Person that makes an unsolicited bona fide written
Acquisition Proposal (which shall be for cash only and, if such proposal is
subject to a financing condition, shall be accompanied by a commitment letter
from a reputable bank or other financial institution to provide such financing
which contains conditions no less favorable to the borrower in all material
respects as those set forth in the Commitment Letter) if, and only to the extent
that, (A) the mailing of the Proxy Statement shall not have occurred, (B) the
General Partner's Board of Directors determines in good faith that such
Acquisition Proposal, if accepted, is reasonably likely to be consummated taking
into account all legal, financial, regulatory and other aspects of the proposal
and the Person making the proposal, and has determined in good faith that such
unsolicited bona fide written Acquisition Proposal would, if consummated, result
in a transaction more favorable to Millennium and the General Partner from a
financial point of view, after taking into account the termination fee required
to be paid by Millennium to the MLP pursuant to Section 7.06(b) and after taking
into account the termination of the General Partner's and Millennium's
obligations under the Distribution Support Agreement, than the Recapitalization
(any such more favorable Acquisition Proposal being referred to herein as a
"Superior Proposal"), and (C) prior to taking such action, the General Partner
(x) provides reasonable notice to the Elected Supervisors and the Successor
General Partner to the effect that it is taking such action and (y) receives
from such Person an executed confidentiality agreement in reasonably customary
form and in any event containing terms in all material respects at least as
stringent as those contained in any confidentiality agreement between the
General Partner and any Person which made an Acquisition Proposal in the year of
the date of this Agreement. Prior to providing any information to or entering
into discussions or negotiations with any Person to pursue an Acquisition
Proposal as permitted pursuant to the proviso of the immediately preceding
sentence, the General Partner shall notify the Elected Supervisors and the
Successor General Partner of such Acquisition Proposal (including, without
limitation, the material terms and conditions thereof and the identity of the
Person making it) as promptly as practicable (but in no case later than 3
business days) after its receipt thereof, and shall provide the Elected
Supervisors and the Successor General Partner with a copy of any written
20
Acquisition Proposal or amendments or supplements thereto, and shall thereafter
inform each of the Elected Supervisors and the Successor General Partner on a
prompt basis of the status of any discussions or negotiations with such a third
party, and any material changes to the terms and conditions of such Acquisition
Proposal, and shall promptly give the Elected Supervisors and the Successor
General Partner a copy of any information delivered to such Person which has not
previously been reviewed by the Elected Supervisors and the Successor General
Partner. Immediately after the execution and delivery of this Agreement, each of
Millennium and the General Partner shall, and shall cause their Affiliates and
the respective officers, directors, employees, investment bankers, attorneys,
accountants and other agents of either of them and their Affiliates to, cease
and terminate any existing activities, discussions or negotiations with any
parties conducted heretofore with respect to any possible Acquisition Proposal.
(b) At the Meeting, Millennium shall cause the General Partner to,
and the General Partner shall, vote all Subordinated Units entitled to vote in
favor of the Recapitalization and all of the other transactions contemplated by
this Agreement.
5.02 Meeting of Holders; Proxy Statement. (a) The MLP shall take
all action necessary in accordance with applicable Law, the rules of any
applicable stock exchange and the Partnership Agreement to convene a meeting of
the holders of Common Units and, to the extent entitled to vote, the holders of
the Subordinated Units to consider and vote upon the approval of the
Recapitalization and such other matters as may be necessary to effectuate the
transactions contemplated by this Agreement (the "Meeting"). The Board of
Supervisors shall, subject to the fiduciary duties of the members thereof to the
MLP and the limited partners of the MLP, recommend such approval in the Proxy
Statement and take all lawful action to solicit such approval.
(b) As soon as practicable after the date hereof, the MLP shall (i)
cause to be prepared and filed with the SEC the Proxy Statement and any
amendments or supplements thereto as required under the Exchange Act, (ii)
obtain and furnish the information required to be included therein under the
Exchange Act, (iii) after consultation with the General Partner and the
Successor General Partner, furnish copies of and respond promptly to any
comments made by the SEC with respect to the Proxy Statement, and (iv) cause the
21
Proxy Statement to be cleared for mailing by the SEC and to be mailed to the
holders of Common Units at the earliest practicable date. The Proxy Statement
shall comply as to form in all material respects with the applicable provisions
of the Exchange Act. The General Partner and the Successor General Partner each
shall furnish to the MLP in connection with the preparation of the Proxy
Statement any and all information reasonably requested concerning it or its
officers, directors, members or stockholders, as applicable. The MLP shall
provide to the General Partner and the Successor General Partner upon request a
reasonable number of copies of drafts and any preliminary or definitive copies
of the Proxy Statement or any amendments or supplements thereto.
5.03 Commercially Reasonable Efforts. (a) Upon the terms and
subject to the conditions and other agreements set forth in this Agreement, each
of the parties agrees to use its commercially reasonable efforts to take, or
cause to be taken, all actions, and to do, or cause to be done, and to assist
and cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
practicable, the transactions contemplated by this Agreement, including the
satisfaction of the conditions set forth in Article VI.
(b) The parties shall not, and shall not permit any of their
respective Subsidiaries to, take any action that would, or that would reasonably
be expected to, result in (i) any of the representations and warranties of such
party set forth in this Agreement becoming untrue in any material respect or
(ii) any of the conditions of the other parties to the consummation of the
transactions contemplated by this Agreement and set forth in Article VI not
being satisfied.
5.04 Consents, Approvals and Filings; Cooperation. (a) The parties
shall make and cause any Subsidiaries to make all necessary filings, as soon as
practicable, including, without limitation, those required under applicable
antitrust Laws, the Securities Act of 1933, as amended, if any, the Exchange Act
and the Delaware LP Act in order to facilitate the prompt consummation of the
transactions contemplated by this Agreement. In addition, the parties each shall
use its commercially reasonable efforts and shall cooperate fully with each
other (i) to comply as promptly as practicable with all governmental
requirements applicable to the transactions contemplated by
22
this Agreement and (ii) to obtain as promptly as practicable all necessary
permits, orders or other consents of Governmental Entities and consents of all
third parties necessary for the consummation of the transactions contemplated by
this Agreement. Each of the parties shall use commercially reasonable efforts to
provide such information and communications to Governmental Entities as such
Governmental Entities may reasonably request.
(b) Each of the parties shall provide to the other party copies of
all applications in advance of filing or submission of such applications to
Governmental Entities in connection with this Agreement.
5.05 Updating of Information. (a) The parties shall, and shall
cause each of its Affiliates to, promptly deliver to the MLP any information
concerning material events subsequent to the date of this Agreement which is
necessary to supplement the information contained in or made a part of the
representations and warranties made by such party contained herein, including
any schedule hereto, or delivered by the MLP or any of its Subsidiaries,
pursuant to any of the covenants or agreements contained herein, in order for
the information contained herein or so delivered to be complete and accurate in
all material respects, it being understood and agreed that the delivery of such
information shall not in any manner constitute a waiver by any of the parties of
any of the conditions precedent to the Closing hereunder or cure any breach of
any provision hereof.
(b) In addition, if, at any time prior to the time when the SEC
clears the Proxy Statement for mailing, any of the parties should discover that
any information contained in the Proxy Statement concerning such party or its
Affiliates contains any untrue statement of a material fact, or omits to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading, or if, at any
such time, any of the parties should discover any event or information which
should be set forth in an amendment or supplement to the Proxy Statement, such
party, promptly after such discovery, shall inform the MLP in writing of such
discovery and furnish to the MLP a written correction of any material
misstatement or material omission or a written description of such event or
information, as the case may be.
23
5.06 Resignation of Appointed Supervisors. At the Closing, the two
Appointed Supervisors shall resign from the Board of Supervisors.
ARTICLE VI.
CONDITIONS PRECEDENT
6.01 Conditions to Obligations of Each Party. The obligations of
each party to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver (by the party entitled to the benefits
thereof subject, in the cases of the MLP and the Operating Partnership, to
Section 7.05) prior to the Closing of the following conditions:
(a) Approval by Unitholders. The MLP shall have obtained the
approval of a Unit Majority and the approval of the holders of a majority of the
Public Common Units with respect to the Recapitalization and the other
transactions contemplated by this Agreement.
(b) Approval by Note Majority; Amendment of Note Agreement.
The Operating Partnership shall have obtained the approval of the Note Majority
with respect to the Loan and the Amended Agreements and any other transactions
contemplated by this Agreement requiring such approval and the Note Agreement
shall have been amended to the extent necessary to permit and effect the
Recapitalization and the other transactions contemplated by this Agreement.
(c) Required Consents. All filings, consents, approvals,
permits and authorizations set forth on Schedule 6.01(c) shall have been made or
obtained, as the case may be, and shall be in full force and effect at the
Closing; provided that this condition may not be invoked by any party whose
failure to fulfill its obligations pursuant to Section 5.03 or 5.04 shall have
been the cause of, or shall have resulted in, the failure of this condition.
(d) No Injunctions or Restraints; Actions. No temporary
restraining order, preliminary or permanent injunction or other similar order or
decree of any Governmental Entity of competent jurisdiction shall have been
issued and be in effect, and no action, proceeding or investigation (in the case
of any investigation, of which
24
the parties hereto have written notice) by any Governmental Entity or any other
Person shall be pending or threatened in writing which, if adversely determined,
would (i) prevent or impair in any material respect the consummation of the
transactions contemplated by this Agreement, (ii) impose on the MLP or the
Operating Partnership any material restrictions or requirements or (iii) cause
any of the parties or their respective Affiliates to owe material damages to any
third party as result of the transactions contemplated hereby; provided,
however, that the party invoking this condition shall use its commercially
reasonable efforts to have any such order, injunction, action or proceeding
vacated or otherwise resolved, and this condition may not be invoked by any
party by reason of its failure to fulfill (and may not be invoked by any of the
Partnerships by reason of the failure of the other to fulfill or by the General
Partner or Millennium by reason of the failure of the other to fulfill) its
obligations pursuant to Section 5.03 or 5.04 if such failure shall have been the
cause of, or shall have resulted in, the failure of this condition.
(e) Payment of Special Distribution. The Operating Partnership
shall have paid to the MLP the Special Distribution contemplated in Section
2.02.
(f) Concurrent Consummation of the Asset Purchase.
Concurrently with the Closing, the Asset Purchase shall be consummated in
accordance with the Purchase Agreement and the Partnership Agreements.
(g) Amended Agreements. The Amended Agreements shall have been
executed and delivered by the parties thereto.
(h) Termination Agreement. The Termination Agreement shall
have been executed and delivered by the parties thereto.
(i) Opinion of Counsel. Xxxxx & Xxxxx, L.L.P. shall have
delivered to the MLP, the Operating Partnership, the General Partner and the
Successor General Partner the written opinion contemplated by Sections 4.6 and
13.3(d) of the Partnership Agreement.
(j) Resignations of Appointed Supervisors. The Appointed
Supervisors shall have tendered their resignations from the Board of
Supervisors.
25
6.02 Additional Conditions to Obligations of the MLP and the
Operating Partnership. The obligations of the MLP and of the Operating
Partnership to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver (subject to Section 7.05) prior to the
Closing of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of each of Millennium and the General Partner set forth in Section
4.02, and the representations and warranties of the Successor General Partner
set forth in Section 4.03, each (i) shall be true and correct in all respects in
the case of the representations and warranties of the General Partner set forth
in Section 4.02(e) and in the case of any representation or warranty that is
qualified as to materiality or "Material Adverse Effect" and (ii) shall be true
and correct in all material respects in the case of any representation or
warranty not so qualified, in all cases as of the date of this Agreement and as
of the Closing Date as though made on and as of the Closing Date, except to the
extent such representations and warranties speak as of a specified date.
(b) Performance of Obligations. Millennium, the General
Partner and the Successor General Partner each shall have performed in all
material respects all of its obligations required to be performed by it under
this Agreement at or prior to the Closing.
(c) Officer's Certificates. The MLP shall have received a
certificate signed on behalf of each of Millennium, the General Partner and the
Successor General Partner by its duly authorized senior executive officer to the
effect set forth in the foregoing paragraphs (a) and (b)
of this Section 6.02.
(d) Receipt of Proceeds of the Loan. The Operating Partnership
shall have received the Loan pursuant to the Commitment Letter or otherwise
shall have received the proceeds of a loan in the amount of the Loan on terms
and conditions no less favorable in all material respects to the Operating
Partnership and the MLP than those set forth in the Commitment Letter.
26
(e) Delivery of Redeemed Securities. The General Partner shall
have delivered to the MLP and the Operating Partnership the Certificates as
contemplated in Section 2.03(b).
(f) Millennium, General Partner and Successor General Partner
Certified Resolutions and Incumbency Certificates. Millennium, the General
Partner and the Successor General Partner each shall have delivered to the MLP
and the Operating Partnership a copy of the resolutions of its Board of
Directors or similar governing body and its stockholders or members (if, in the
latter case, any are required) authorizing this Agreement, the Recapitalization
and the consummation of the transactions contemplated hereby and thereby, in
each case certified by a Secretary, Assistant Secretary or other similar officer
of the delivering party, together with an appropriate incumbency certificate of
the delivering party.
(g) Fairness Opinion. Rothschild Inc. shall not have withdrawn
the Fairness Opinion.
(h) No Withdrawal of Recommendation by Special Committee. The
Special Committee shall not have withdrawn its recommendation to the Board of
Supervisors to approve the Recapitalization and the other transactions
contemplated by this Agreement at any time prior to the mailing of the Proxy
Statement.
6.03 Additional Conditions to Obligations of Each of Millennium and
the General Partner. The obligations of each of Millennium and the General
Partner to consummate the transactions contemplated by this Agreement are
subject to the satisfaction or waiver prior to the Closing of the following
additional conditions:
(a) Representations and Warranties. The representations and
warranties of each of the MLP and the Operating Partnership set forth in Section
4.01, and the representations and warranties of the Successor General Partner
set forth in Section 4.03, each (i) shall be true and correct in all respects in
the case of any representation or warranty that is qualified as to materiality
or "Material Adverse Effect" and (ii) shall be true and correct in all material
respects in the case of any representation or warranty not so qualified, in all
cases as of the date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date, except to the
27
extent such representations and warranties speak as of a specified date.
(b) Performance of Obligations. The MLP, the Operating
Partnership and the Successor General Partner each shall have performed in all
material respects all of its obligations required to be performed by it under
this Agreement at or prior to the Closing.
(c) Officer's Certificates. The General Partner shall have
received a certificate signed on behalf of each of the MLP, the Operating
Partnership and the Successor General Partner by its duly authorized senior
executive officer to the effect set forth in the foregoing paragraphs (a) and
(b) of this Section 6.03.
(d) Redemption Price. The General Partner shall have received
the Redemption Price as contemplated in Section 2.03(b).
(e) MLP, Operating Partnership and Successor General Partner
Certified Resolutions and Incumbency Certificates. The following shall have been
delivered to the General Partner: (i) a copy of the resolutions of the Board of
Supervisors, the Elected Supervisors and holders of Common Units; and (ii) a
copy of the resolutions of the governing body of the Successor General Partner
and its members (if member approval is required), in each case authorizing this
Agreement, the Recapitalization and the consummation of the transactions
contemplated hereby and thereby and certified by a Secretary, Assistant
Secretary or other similar officer of the delivering party, together with an
appropriate incumbency certificate of the MLP, the Operating Partnership and the
Successor General Partner.
6.04 Additional Conditions to Obligations of the Successor General
Partner. The obligations of the Successor General Partner to consummate the
transactions contemplated by this Agreement are subject to the satisfaction or
waiver prior to the Closing of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of each of the MLP and the Operating Partnership set forth in Section
4.01, and the representations and warranties of each of Millennium and the
General Partner set forth in Section 4.02, each (i) shall be true and correct in
all respects in the case of any representation or warranty that is qualified as
to
28
materiality or "Material Adverse Effect" and (ii) shall be true and correct in
all material respects in the case of any representation or warranty not so
qualified, in all cases as of the date of this Agreement and as of the Closing
Date as though made on and as of the Closing Date, except to the extent such
representations and warranties speak as of a specified date.
(b) Performance of Obligations. The MLP, the Operating
Partnership, Millennium and the General Partner each shall have performed in all
material respects all of its obligations required to be performed by it under
this Agreement at or prior to the Closing.
(c) Officer's Certificates. The Successor General Partner
shall have received a certificate signed on behalf of each of the MLP, the
Operating Partnership, Millennium and the General Partner by its duly authorized
senior executive officer to the effect set forth in the foregoing paragraphs (a)
and (b) of this Section 6.04.
(d) MLP, Operating Partnership, Millennium and General Partner
Certified Resolutions and Incumbency Certificates. The following shall have been
delivered to the Successor General Partner: (i) a copy of the resolutions of the
Board of Supervisors, the Elected Supervisors and holders of Common Units; and
(ii) a copy of the resolutions of the Board of Directors of each of Millennium
and the General Partner and its stockholders (if stockholder approval is
required), in each case authorizing this Agreement, the Recapitalization and the
consummation of the transactions contemplated hereby and thereby and certified
by a Secretary, Assistant Secretary or other similar officer of the delivering
party, together with an appropriate incumbency certificate of the MLP, the
Operating Partnership, Millennium and the General Partner.
29
ARTICLE VII.
TERMINATION, AMENDMENT AND WAIVER
7.01 Termination. This Agreement may be terminated and abandoned at
any time prior to the Closing (except in the case of clauses (c) and (d)):
(a) by written consent of the parties; or
(b) by any of the parties, if the Closing shall not have been
consummated on or before May 15, 1999, unless extended pursuant to Section 7.07
or unless otherwise extended by written consent of the parties; or
(c) subject to the conditions set forth in Section 7.06(a),
(i) by the MLP or the Successor General Partner at any time prior to the mailing
of the Proxy Statement and (ii) by Millennium or the General Partner at any time
prior to the Meeting, if the Special Committee shall have withdrawn its
recommendation to the Board of Supervisors to approve the Recapitalization; or
(d) subject to the conditions set forth in Section 7.06(b), by
Millennium or the General Partner at any time prior to the mailing of the Proxy
Statement, if Millennium, the General Partner or any of their Affiliates is
concurrently entering into a definitive written agreement for a Superior
Proposal; or
(e) by any of the parties, if any Governmental Entity shall
have issued an order, decree or ruling or taken any other action permanently
enjoining, restraining or otherwise prohibiting the transactions contemplated by
this Agreement and such order, decree, ruling or other action shall have become
final and nonappealable; or
(f) by any of the parties, if (i) any of the other parties
shall have materially breached its agreements and covenants under this Agreement
or any other agreement entered into in connection with the Recapitalization or
(ii) any representation or warranty that is qualified as to materiality or
"Material Adverse Effect" shall fail to be true and correct in all respects or
any representation or warranty not so qualified shall fail to be true and
correct in all material respects, as the case may be, and such breach or failure
shall continue for 30 days without cure
30
after notice thereof and such breach or failure would have, or would reasonably
be expected to have, a Material Adverse Effect on the party invoking its
termination right under this paragraph or such breach or failure would
materially impair the transactions contemplated by this Agreement or any other
agreement entered into in connection with the Recapitalization.
Notwithstanding anything to the contrary contained in this
Agreement, the right of a party to terminate this Agreement under this Section
7.01 shall not be available to any party (i) which is in material breach of its
obligations hereunder or (ii) whose failure to fulfill its obligations hereunder
has been the cause of, or resulted in, the failure to satisfy any of the
conditions to the consummation of the Closing set forth in Article VI (and such
right to terminate also shall not be available to either of the Partnerships if
the other, or to the General Partner or Millennium if the other, is in such
breach or if such other's failure to fulfill its obligations hereunder has been
the cause of, or resulted in, the failure to satisfy any of the conditions to
the consummation of the Closing set forth in Article VI).
7.02 Effect of Termination. In the event of a termination of this
Agreement by either the MLP, the General Partner or the Successor General
Partner as provided in Section 7.01, this Agreement, other than Sections
4.01(c), 4.02(c) and 4.03(c), this Section 7.02, Sections 7.03, 7.04, 7.05 and
Article VIII (each of which shall remain in full force and effect despite such
termination), shall forthwith become void and have no effect, without any
liability or obligation on the part of any party to any other party under this
Agreement. Nothing contained in this Section 7.02 shall be construed so as to
relieve any party from any liability resulting from any willful breach of this
Agreement by such party prior to any termination of this Agreement as provided
in Section 7.01.
7.03 Amendment. Subject to Section 7.05 in the cases of the
Partnerships and except as provided in Schedule 2.01(a) attached hereto with
respect to the matters set forth in such schedule, this Agreement may be amended
by written agreement of all the parties hereto at any time prior to or after the
approval of this Agreement and the Recapitalization by a Unit Majority and the
holders of a majority of the Public Common Units but, after any such approval,
no amendment may be made without the approval of a Unit Majority and the holders
of a majority of the Public
31
Common Units if such approvals are required by Law or by the Partnership
Agreement or if such amendment shall materially and adversely affect the rights
of the holders of the Common Units.
7.04 Extension; Waiver. At any time prior to the Closing, any of
the parties may, to the extent permitted by Law, (i) extend the time for
performance of any of the obligations or other acts of the other parties, (ii)
waive any inaccuracies in the representations and warranties of the other
parties contained in this Agreement or in any document delivered pursuant to
this Agreement or (iii) waive compliance with any of the agreements or
conditions applicable to such party contained in this Agreement. Any agreement
on the part of a party to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party. The
failure of any party to this Agreement to assert any of its rights under this
Agreement or otherwise shall not constitute a waiver of such rights nor shall
any single or partial exercise thereof include any other or further exercise
thereof or the exercise of any other right or privilege.
7.05 Procedure for Termination, Amendment, Extension or Waiver by
the MLP. A termination by the MLP or the Operating Partnership of this Agreement
pursuant to Section 7.01, an amendment by the MLP or the Operating Partnership
of this Agreement pursuant to Section 7.03 or an extension or waiver by the MLP
or the Operating Partnership pursuant to Section 7.04 shall, in order to be
effective, require the approval of a majority of the Elected Supervisors.
7.06 Termination Fees; Expense Reimbursement.
(a) Section 7.01(c) Termination Fee or Expense Reimbursement.
Upon (and as a condition to) the termination of this Agreement by the MLP or the
Successor General Partner pursuant to Section 7.01(c), the MLP shall pay to
Millennium $2 million in cash by wire transfer of immediately available funds on
the date of such termination. If there shall be a termination of this Agreement
by Millennium or the General Partner pursuant to Section 7.01(c), the MLP shall
pay or reimburse Millennium and the General Partner for all of their
out-of-pocket expenses incident to the preparation, negotiation, execution and
delivery by Millennium and the General Partner of this Agreement and the
documents to be delivered by them pursuant
32
to this Agreement and the performance by them hereof and thereof through the
date of termination of this Agreement. Such payment or reimbursement shall be
made within two business days of the presentation by Millennium or the General
Partner of written invoices or other evidence of such expenses from the party
entitled to payment thereof.
(b) Section 7.01(d) Termination Fee. Upon (and as a condition
to) the termination of this Agreement by Millennium or the General Partner
pursuant to Section 7.01(d), the General Partner shall, and Millennium shall
cause the General Partner to, pay to the MLP $3 million in cash by wire transfer
of immediately available funds on the date of such termination.
(c) Liquidated Damages. The parties hereto each agree that the
payments required by this Section 7.06 shall constitute liquidated damages in
full and complete satisfaction of, and shall be the sole and exclusive remedy of
the party entitled to such payments and of such party's Affiliates against any
of the other parties to this Agreement, such other parties' Affiliates and the
respective directors, officers, employees, advisors or agents of any of them
for, any loss, liability, damage or claim arising out of or in connection with
any termination and abandonment of this Agreement requiring the payment pursuant
to this Section 7.06 or the facts and circumstances resulting in such
termination or otherwise arising out of or in connection with this Agreement or
any document to be delivered pursuant this Agreement or the transactions
contemplated hereby or thereby.
7.07 Extension Fee. If the Elected Supervisors wish to extend the
automatic termination date of this Agreement set forth in Section 7.01(b) for
the purpose of allowing either (i) an extension beyond such date of the
solicitation period under the Proxy Statement with respect to the vote of the
holders of the Common Units at the Meeting or (ii) a resolicitation of the vote
of the holders of the Common Units, then the Elected Supervisors shall have the
right to extend such date until the close of business on June 15, 1999 by
written notice from the Elected Supervisors to Millennium and the General
Partner given prior to the close of business on May 15, 1999 and upon the
payment by or on behalf of the MLP to Millennium of an extension fee of $1
million in cash, payable by wire transfer of immediately available funds
concurrently with the giving of such notice. If the automatic termination date
of this Agreement set
33
forth in Section 7.01(b) is extended pursuant to this Section 7.07 or otherwise
by written consent of the parties, the automatic termination date of the
Purchase Agreement set forth in Section 7.1(b) thereof also shall be deemed to
be extended to the same date.
ARTICLE VIII.
GENERAL PROVISIONS
8.01 Survival of Representations and Warranties. The
representations and warranties of the parties in Article IV of this Agreement or
in any instrument delivered pursuant to this Agreement shall survive the Closing
for a period of one year, other than the representations and warranties
contained in Sections 4.01(f), 4.02(f) and 4.03(f), which shall survive the
Closing for a period of three years, and the representations and warranties
contained in Section 4.02(e), which shall survive the Closing indefinitely. This
Section 8.01 does not apply to and shall not limit any covenant or agreement of
the parties which by its terms contemplates performance after the Closing.
8.02 Fees and Expenses. Except as provided in the second sentence
of Section 7.06(a), whether or not the transactions contemplated by this
Agreement shall be consummated, each party hereto shall pay its own expenses
incident to preparing for, entering into and carrying out this Agreement and the
consummation of the transactions contemplated hereby.
8.03 Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given when delivered personally, when telecopied, the next business day when
deposited with Federal Express or other overnight courier (with proof of
delivery) or three days after deposit in the U.S. mail when mailed (certified,
return receipt requested) to the parties at the following addresses (or at such
other address for a party as shall be specified by like notice):
34
(a) if to the MLP, the Operating Partnership
or the Elected Supervisors, to
Suburban Propane Partners, L.P.
Xxx Xxxxxxxx Xxxxx
000 Xxxxx 00 Xxxx
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
(b) if to the General Partner or Millennium, to:
Suburban Propane GP, Inc.
000 Xxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
Attn: General Counsel
Fax: (000) 000-0000
(c) if to the Successor General Partner, to:
SUBURBAN ENERGY RESOURCES GROUP LLC
c/o Suburban Propane Partners, L.P.
Xxx Xxxxxxxx Xxxxx
000 Xxxxx 00 Xxxx
Xxxxxxxx, XX 00000-0000
Attn: General Counsel
Fax: (000) 000-0000
8.04 Interpretation. When a reference is made in this Agreement to
a Section or Schedule, such reference shall be to a Section of or a Schedule to
this Agreement, unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include", "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation".
8.05 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same Agreement.
8.06 Entire Agreement; No Third-Party Beneficiaries; Contribution,
Conveyance and Assumption Agreement. This Agreement, the Amended Agreements, the
35
Termination Agreement and the Purchase Agreement constitute the entire
agreement, and supersede all prior agreements and understandings, both written
and oral, among the parties with respect to the subject matter of this
Agreement. This Agreement is not intended to confer any rights or remedies upon
any Person, other than the parties hereto. The Contribution, Conveyance and
Assumption Agreement and the rights and obligations of the parties thereto shall
remain in full force and effect in accordance with the terms and conditions
thereof.
8.07 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the law of the State of Delaware, without regard
to the principles or policies of conflicts of law of such state.
8.08 Assignment. Neither this Agreement nor any of the rights,
interests or obligations under this Agreement shall be assigned, in whole or in
part, by any of the parties without the prior written consent all of the other
parties, and any such assignment that is not so consented to shall be null and
void. This Agreement shall be binding upon, inure to the benefit of, and be
enforceable by, the parties and their respective successors and permitted
assigns.
8.09 Enforcement; Severability. The parties agree that irreparable
damage would occur in the event that any provision of this Agreement was not
performed in accordance with its specific terms or was otherwise breached. It is
accordingly agreed that the parties shall be entitled to seek an injunction or
injunctions to prevent breaches of this Agreement and to seek to enforce
specifically the terms and provisions of this Agreement in any federal or state
court, this being in addition to any other remedy to which they are entitled at
law or in equity.
The invalidity or unenforceability of any term or provision of this
Agreement shall not affect the validity or enforceability of this Agreement or
any other term hereof, which shall remain in full force and effect and shall be
enforced and enforceable to the fullest extent possible without regard to the
invalid or unenforceable term or provision.
8.10 Further Assurances. From time to time after the Closing,
without additional consideration, each of the parties shall execute and deliver
to each other such
36
further documents and instruments, and shall take such other action, as may be
necessary to effectuate the transactions contemplated by this Agreement and the
agreements entered into in connection with such transactions.
8.11 Public Announcements. None of the parties to this Agreement
shall issue any press release or make any public statement or announcement with
respect to this Agreement or the transactions contemplated hereby without the
approval of the other parties hereto, except as is required by Law or the rules
of any applicable stock exchange and, in such event, such party, to the extent
practicable, shall consult with the other parties and permit the other parties a
reasonable opportunity to review any such release, statement or announcement
prior to dissemination.
37
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be signed by their respective officers thereunto duly authorized, all as of the
date first written above.
SUBURBAN PROPANE PARTNERS, L.P.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
SUBURBAN PROPANE, L.P.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------------------------
Xxxx X. Xxxxxxxxx
President and Chief Executive Officer
SUBURBAN PROPANE GP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxx, III
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx, III
Title: Senior Vice President
MILLENNIUM PETROCHEMICALS INC.
By: /s/ Xxxxxx X. Xxxxxxxxx, III
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxxx, III
Title: Senior Vice President
SUBURBAN ENERGY SERVICES GROUP LLC
By: /s/ Xxxxx XxXxxx
-------------------------------------------
Xxxxx XxXxxx
Authorized Person
38
EXHIBIT A
Form of Purchase Agreement
--------------------------
39
EXECUTION COPY
================================================================================
PURCHASE AGREEMENT
By and Among
SUBURBAN ENERGY SERVICES GROUP LLC
MILLENNIUM PETROCHEMICALS INC.
AND
SUBURBAN PROPANE GP, INC.
Dated as of November 27, 1998
================================================================================
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS........................................................................................1
Section 1.1 Definitions.......................................................................................1
ARTICLE II SALE AND PURCHASE OF ASSETS.......................................................................2
Section 2.1 Transfer of Assets; Retained Assets...............................................................2
Section 2.2 Assumption of Specified Liabilities; Retained Liabilities.........................................3
Section 2.3 Purchase Price....................................................................................3
Section 2.4 Closing...........................................................................................4
Section 2.5 Deliveries at Closing.............................................................................4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE SELLERS....................................................5
Section 3.1 Organization......................................................................................5
Section 3.2 Authority Relative to this Agreement..............................................................5
Section 3.3 Consents and Approvals; No Violations.............................................................6
Section 3.4 Financial Statements..............................................................................7
Section 3.5 Litigation........................................................................................7
Section 3.6 Transactions with Affiliates......................................................................8
Section 3.7 Title to Assets...................................................................................8
Section 3.8 Brokers and Finders...............................................................................8
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SUCCESSOR GENERAL PARTNER...................................8
Section 4.1 Organization......................................................................................9
Section 4.2 Authority Relative to this Agreement..............................................................9
Section 4.3 Consents and Approvals; No Violations.............................................................9
Section 4.4 Brokers or Finders...............................................................................10
Section 4.5 Successor General Partner........................................................................10
ARTICLE V ADDITIONAL AGREEMENTS.............................................................................10
Section 5.1 Access to Information............................................................................10
Section 5.2 Efforts to Close.................................................................................11
Section 5.3 Further Assurances...............................................................................11
i
Section 5.4 Publicity........................................................................................12
Section 5.5 Name Change......................................................................................12
Section 5.6 Fees and Expenses................................................................................12
Section 5.7 Certain Tax Matters..............................................................................12
ARTICLE VI CONDITIONS.......................................................................................14
Section 6.1 Conditions to Successor General Partner's Obligations............................................14
Section 6.2 Conditions to Obligation of the Sellers..........................................................15
ARTICLE VII TERMINATION.....................................................................................17
Section 7.1 Termination......................................................................................17
Section 7.2 Effect of Termination............................................................................17
Section 7.3 Extension; Waiver................................................................................17
ARTICLE VIII SURVIVAL.......................................................................................18
Section 8.1 Survival.........................................................................................18
ARTICLE IX MISCELLANEOUS....................................................................................18
Section 9.1 Notices..........................................................................................18
Section 9.2 Amendments and Waivers...........................................................................19
Section 9.3 Headings.........................................................................................19
Section 9.4 Counterparts.....................................................................................19
Section 9.5 Entire Agreement.................................................................................20
Section 9.6 Governing Law....................................................................................20
Section 9.7 Assignment.......................................................................................20
Section 9.8 Binding Nature...................................................................................20
Section 9.9 Severability.....................................................................................20
Section 9.10 Specific Performance...........................................................................21
Section 9.11 Accounting and Financial Terms.................................................................21
Section 9.12 Construction...................................................................................21
Section 9.13 Incorporation of Appendices, Exhibits and Schedules............................................21
ii
APPENDICES
Appendix A - Definitions
EXHIBITS
Exhibit A - Form of Xxxx of Sale, Assignment and Assumption
iii
PURCHASE AGREEMENT (this "Agreement"), dated as of November
27, 1998, by and among Suburban Energy Services Group LLC, a Delaware limited
liability company (the "Successor General Partner"), Millennium Petrochemicals
Inc., a Virginia corporation ("Millennium"), and Suburban Propane GP, Inc., a
Delaware corporation (the "General Partner", and together with Millennium, the
"Sellers").
WHEREAS, the Successor General Partner desires to acquire from
the Sellers, and the Sellers desire to sell to the Successor General Partner,
the Assets (as defined herein), on the terms and subject to the conditions set
forth herein;
WHEREAS, simultaneously herewith the General Partner and the
MLP and the Operating Partnership are entering into a Recapitalization
Agreement, dated the date hereof (as amended, modified or supplemented, the
"Recap Agreement") pursuant to which the MLP will redeem all outstanding
Subordinated Units and all outstanding APUs from the General Partner
simultaneously with and as a condition to the Closing under this Agreement, upon
the terms and subject to the conditions set forth therein; and
WHEREAS, the Sellers and the Successor General Partner have
agreed that the aggregate consideration to be paid by the Successor General
Partner for the purchase and sale of Assets under this Agreement and for the
redemption of all outstanding Subordinated Units and all outstanding APUs from
the General Partner pursuant to the Recap Agreement will total $75 million.
NOW, THEREFORE, in consideration of the foregoing premises and
the representations, warranties, covenants and agreements contained herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, and intending to be legally bound hereby, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 DEFINITIONS. As used in this Agreement,
capitalized terms, unless otherwise defined herein, shall have the meanings
ascribed to such terms in the Recap Agreement or in Appendix A hereto.
ARTICLE II
SALE AND PURCHASE OF ASSETS
SECTION 2.1 TRANSFER OF ASSETS; RETAINED ASSETS. (a) On the
terms and subject to the conditions of this Agreement, at the Closing, the
General Partner shall sell, convey, assign, transfer and deliver to the
Successor General Partner, and the Successor General Partner shall purchase,
acquire and accept from the General Partner, free and clear of any Liens, all of
the General Partner's right, title and interest in and to the following assets
(collectively, the "Assets"):
(i) the entire general partner interest in the MLP;
(ii) the entire general partner interest in the Operating
Partnership; and
(iii) the Incentive Distribution Rights.
(b) Notwithstanding Section 2.1(a), all of the Sellers' right,
title and interest in the following assets and rights shall be excluded from the
Assets (collectively, the "Retained Assets"):
(i) the insurance policies and any rights thereunder set forth in
Section 2.1(b) of the Disclosure Schedule;
(ii) the prepaid expenses, advances, deposits or rights relating to
or arising out of any of the Retained Assets or Retained Liabilities set forth
on Section 2.1(b) of the Disclosure Schedule;
(iii) all Books and Records;
(iv) all refunds, credits or overpayments with respect to Taxes paid
or accrued by Sellers or their Affiliates and all other payments or deposits
made by Sellers or their Affiliates in respect of Taxes in excess of the amount
of Seller's liability therefor; and
(v) all distributions, other than the Special Distribution, paid or
to be paid to the General Partner with respect to any of the Assets with a
record date prior to the Closing; and
(vi) the Note issued by Millennium America Inc. in favor of the
General Partner dated as of March 5, 1996.
SECTION 2.2 ASSUMPTION OF SPECIFIED LIABILITIES; RETAINED
LIABILITIES. (a) At the Closing, the Successor General Partner shall assume,
and, following the Closing, the Successor General Partner shall be solely liable
for and shall fully pay, perform and discharge when due all Liabilities of the
General Partner as general partner under the Partnership Agreement, the
Operating Partnership Agreement, and applicable law (including, without
limitation, Liabilities of the Partnerships for which the General Partner may
have Liability in its capacity as a general partner under the Partnership Law),
excluding any Liabilities arising out of the Sellers' breach or default as
general partner under such agreements at or prior to the Closing (collectively,
the "Assumed Liabilities"). At the Closing, the Successor General Partner will
assume the rights and duties of the General Partner under the Partnership
Agreement and the Operating Partnership Agreement and will agree to be bound by
the provisions of the Partnership Agreement and the Operating Partnership
Agreement, all in accordance with Section 4.6 of the Partnership Agreement.
(b) Notwithstanding anything in this Agreement to the
contrary, the Successor General Partner shall not assume, and shall be deemed
not to have assumed, any Liabilities of the Sellers except the Assumed
Liabilities, and the Sellers shall be liable with respect to, and shall fully
pay, perform or discharge when due, all Liabilities of the Sellers other than
the Assumed Liabilities, including, without limitation, those Liabilities set
forth below (collectively, the "Retained Liabilities"):
(i) all Liabilities arising out of or in connection with the
Retained Assets;
(ii) except as otherwise expressly provided under this Agreement or
in the Recap Agreement, all Liabilities of the Sellers arising under or in
connection with the consummation of the transactions contemplated by this
Agreement, including all expenses of the Sellers incurred in connection with the
negotiation, preparation, approval or authorization of this Agreement; and
(iii) the General Partner's liability for Taxes relating to income
of the MLP and the Operating Partnership allocated to the General Partner by
virtue of the General Partner being a partner in the MLP and the Operating
Partnership as contemplated pursuant to Section 5.7(a).
SECTION 2.3 PURCHASE PRICE. In consideration of the sale and
transfer of the Assets and the agreement of the Sellers to enter into this
Agreement, the Successor General Partner shall pay or cause to be paid to the
General Partner at the Closing, in immediately available funds, an aggregate
purchase price (the "Purchase Price") of $6,000,000. The Purchase Price shall be
allocated among the Assets in accordance with the Allocation Schedule (as
defined below).
3
SECTION 2.4 CLOSING. Upon the terms and subject to the
conditions of this Agreement, the closing of the transactions contemplated by
this Agreement (the "Closing") will take place the first business day following
satisfaction or waiver of the conditions set forth in Article VI hereof, at
10:00 a.m., at the offices of Weil, Gotshal & Xxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or at such other time and place as shall be agreed upon by
the parties. The date on which the Closing occurs is herein referred to as the
"Closing Date."
SECTION 2.5 DELIVERIES AT CLOSING. (a) At the Closing, the
Sellers shall deliver or cause to be delivered to the Successor General Partner
(unless previously delivered), the following:
(i) a xxxx of sale, assignment and assumption with respect to the
Assets and the Assumed Liabilities duly executed by the General Partner,
substantially in the form of Exhibit A hereto (the "Assignment and Assumption");
and
(ii) a certificate of a duly authorized officer of the Sellers
certifying to the satisfaction of the conditions set forth in Sections 6.1(d)
and (e); and
(iii) such other documents of title, assignments, instruments of
sale, conveyance or transfer and other documents and certificates duly executed,
as the Successor General Partner may reasonably request prior to the Closing
Date in order to effect the transactions contemplated by this Agreement.
(b) At the Closing, the Successor General Partner shall
deliver or cause to be delivered to the Sellers (unless previously delivered),
the following:
(i) the Purchase Price in accordance with the provisions of Section
2.3 hereof;
(ii) a signed counterpart copy of the Assignment and Assumption duly
executed by the Successor General Partner;
(iii) a certificate of a duly authorized officer of the Successor
General Partner certifying to the satisfaction of the conditions set forth in
Sections 6.1(a) and (b); and
(iv) such other documents and certificates as the Sellers may
reasonably request prior to the Closing Date in order to effect the transactions
contemplated by this Agreement.
4
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers jointly and severally represents and warrants to
the Successor General Partner:
SECTION 3.1 ORGANIZATION. Each of the Sellers is a corporation
duly organized, validly existing and in good standing under the laws of the
States of Delaware and Virginia, as applicable. Each of the Sellers has all
requisite corporate power and authority to own, lease and operate its assets and
properties and to carry on its business as currently conducted. The General
Partner is duly qualified and in good standing to do business in each
jurisdiction in which the property owned, leased or operated by it makes such
qualification or licensing necessary, except in such jurisdictions in which
applicable law does not provide for such qualification, and except in such
jurisdictions where the failure to be so duly qualified and in good standing
would not have a Material Adverse Effect (as defined below) on the General
Partner. Each of the Sellers has heretofore made available to the Successor
General Partner complete and correct copies of its certificate of incorporation
and by-laws, as the case may be, in each case as currently in effect. All of the
outstanding shares of capital stock of the General Partner are owned of record
and beneficially by Millennium and all of the Assets are owned by the General
Partner. The Assets (together with the assets that are the subject of the Recap
Agreement) constitute all of the interests in the Partnerships owned
beneficially and of record by the Sellers and their Affiliates, except with
respect to Common Units held by officers and directors of the Sellers and
Affiliates of the Sellers, and constitute all or substantially all of the assets
of the General Partner. All of the Assets are owned beneficially and of record
by the General Partner and no Affiliate of the General Partner or any other
Person has any interest therein.
SECTION 3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of the
Sellers has full corporate power and authority to execute and deliver this
Agreement and, subject to the approval of a Unit Majority, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement by the Sellers and the consummation by the Sellers of the transactions
contemplated by this Agreement have been duly and validly authorized by the
board of directors of each of the Sellers, and no other corporate proceedings on
the part of the Sellers or their respective stockholders are necessary for the
Sellers to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by the Sellers and constitutes, assuming the due
execution and delivery of this Agreement by the Successor General Partner, a
valid and binding agreement of the Sellers, enforceable against the Sellers in
accordance with its terms.
5
SECTION 3.3 CONSENTS AND APPROVALS; NO VIOLATIONS. Except as
set forth in Section 3.3 of the Disclosure Schedule, no filing with, and no
permit, authorization, consent, registration, notice, approval or other action
of, any Governmental Entity or any other Person is required to be made, obtained
or given by any of the Sellers or any of their Affiliates on or prior to the
Closing Date in connection with the execution, delivery and performance of this
Agreement, and the consummation of the transactions contemplated hereby, by the
Sellers, assuming the satisfaction of the condition precedent in Section 6.2(f),
except where failure to make such filing, or obtain such permit, authorization,
consent, registration, notice, approval or other action would not result in a
Material Adverse Effect on the Business or the Assets. Except as set forth in
Section 3.3 of the Disclosure Schedule, neither the execution and delivery of
this Agreement by the Sellers nor the consummation by the Sellers of the
transactions contemplated by this Agreement nor compliance by the Sellers with
any of the provisions hereof will (i) conflict with or result in any breach of
any provision of the certificate of incorporation or by-laws, as the case may
be, of either Seller, (ii), subject to the approval of a Unit Majority and the
Approval of a Note Majority, result in a violation or breach of, or constitute
(with or without due notice or the lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration) under, any of
the terms, conditions or provisions of any note, bond, mortgage, indenture,
contract, agreement, permit, license, lease, arrangement or other commitment or
obligation (any of the foregoing, a "Contract") to which any of the Sellers is a
party or by which any of the Assets or the Business may be bound, except any of
the foregoing that arise out of or in connection with any Contract entered into
by the General Partner on behalf of the Partnerships acting in its capacity as
general partner thereof, (iii) violate any order, writ, injunction, decree,
statute, treaty, rule or regulation applicable to any of the Sellers, the
Assets, or the Business, (iv) result in the creation of any Lien, directly or
indirectly, on the Assets or with respect to the Business, or (v) conflict with
or result in a breach of any provision of the Partnership Agreement, the
Operating Partnership Agreement, the Contribution, Conveyance and Assumption
Agreement, the Distribution Support Agreement or any other agreement entered
into by either of the Sellers with the Partnerships, except in the case of
clause (ii), (iii) or (iv) for violations, breaches or defaults which would not
have a Material Adverse Effect on the Business or the Assets and which would not
prevent or materially delay the consummation of the transactions contemplated by
this Agreement.
SECTION 3.4 FINANCIAL STATEMENTS. (a) Section 3.4 of the
Disclosure Schedule contains true and complete copies of the balance sheets (the
"Year End Balance Sheets") of the General Partner at December 31, 1997 and 1996
and the related statements of income for the fiscal years then ended, all of
which have been prepared in accordance with GAAP (except that all footnote
disclosure is omitted) consistently applied during the periods involved. Such
balance sheets present fairly in all material respects the financial position of
the General Partner as of the respective dates thereof, such statements of
6
income present fairly the results of operations of the General Partner for the
respective periods then ended, and such balance sheets and statements of income
are consistent with books and records of the Sellers (which books and records
are true and complete in all material respects).
(b) Section 3.4 of the Disclosure Schedule contains true and
complete copies of the September 30, 1998 balance sheet ("Interim Balance
Sheet") of the General Partner and the related statements of income for the six
months ended September 30, 1998. Such financial statements have been prepared in
accordance with GAAP (except that all footnote disclosure is omitted)
consistently applied during the periods involved, present fairly in all material
respects the financial position of the General Partner as of such date and the
results of operations of the General Partner for such period, and are consistent
with books and records of the General Partner (which books and records are
complete in all material respects) and such financial statements have been
prepared on a basis consistent with the year-end financial statements referred
to in Section 3.4(a).
(c) Since September 30, 1998, there has not been a change or
event (other than with respect to the Partnerships and their Subsidiaries) with
respect to the Assets or the Business which has had or would be reasonably
expected to have a Material Adverse Effect on the Assets or the Business.
SECTION 3.5 LITIGATION. (a) Except as set forth in Section
3.5(a) of the Disclosure Schedule, as of the date hereof, there is no claim,
action, suit, charge, proceeding, audit or investigation before or involving any
Governmental Entity or private arbitration tribunal (collectively, a
"Proceeding") pending or, to the knowledge of the Sellers, threatened in writing
(i) against or related to the Sellers in respect of the Assets or the Business
or (ii) to which the Assets or the Business would otherwise be subject except in
either case for Proceedings that arise out of or in connection with (or are
alleged to arise out of or in connection with) the conduct of MLP or the
Operating Partnership or their respective subsidiaries or their predecessors for
which the General Partner is indemnified pursuant to the Partnership Agreement.
(b) Except as set forth in Section 3.5(b) of the Disclosure
Schedule, there are no outstanding orders, writs, judgments, injunctions,
decrees, agreements or settlements of or with any Governmental Entity to which
either of the Sellers is a party or bound that apply, in whole or in part, to
the Assets or the Business that restrict the ownership, disposition or use of
the Assets or the conduct of the Business in any material respect.
SECTION 3.6 TRANSACTIONS WITH AFFILIATES. Except as set forth
in Section 3.6 of the Disclosure Schedule, none of the General Partner's
stockholders, directors, partners, officers, employees or other Affiliates (i)
has been involved in any business arrangement or relationship with the Sellers
7
or the Business within the past two years other than as employees of Millennium,
(ii) owns any asset, tangible or intangible, which is used in the Business or
(iii) will have any continuing arrangement with respect to, or the right to
receive, any income, profits or other distributions of the Business or relating
to the Assets following the Closing, except as expressly provided in this
Agreement. The General Partner has no full-time employees.
SECTION 3.7 TITLE TO ASSETS. The Sellers have and at the
Closing will have, and at the Closing the Successor General Partner will
receive, good, valid and marketable title to the Assets, free and clear of all
Liens.
SECTION 3.8 BROKERS AND FINDERS. Neither the Sellers nor any
Affiliate thereof has employed any broker, financial advisor or finder or
incurred any Liability for any broker, financial advisory or finders' fees in
connection with this Agreement or the transactions contemplated hereby. The
Sellers jointly and severally shall indemnify and hold harmless the Successor
General Partner and its Affiliates from and against any Liability incurred by
such Persons (including the fees, disbursements and related charges of counsel)
arising out of any claim by a broker, finder, financial advisor or similar
intermediary for any fee, commission or other compensation as a result of the
Sellers entering into this Agreement and/or consummating the transactions
contemplated by this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SUCCESSOR GENERAL PARTNER
The Successor General Partner represents and warrants to the
Sellers as follows:
SECTION 4.1 ORGANIZATION. The Successor General Partner is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all requisite power and
authority to own, lease and operate its properties and to conduct its business
as now being conducted.
SECTION 4.2 AUTHORITY RELATIVE TO THIS AGREEMENT. The
Successor General Partner has full limited liability company power and authority
to execute and deliver this Agreement and, subject to the approval of a Unit
Majority, to consummate the transactions contemplated by this Agreement. The
execution and delivery of this Agreement by the Successor General Partner and
the consummation by the Successor General Partner of the transactions
contemplated by this Agreement have been duly and validly authorized by the
managers and members of the Successor General Partner, as applicable, and no
8
other limited liability company proceedings on the part of the Successor General
Partner, as applicable, or its managers or members are necessary for Successor
General Partner to authorize this Agreement or to consummate the transactions
contemplated by this Agreement. This Agreement has been duly and validly
executed and delivered by the Successor General Partner and, assuming the due
execution and delivery of this Agreement by the Sellers, constitutes a valid and
binding agreement of the Successor General Partner, enforceable against the
Successor General Partner in accordance with its terms.
SECTION 4.3 CONSENTS AND APPROVALS; NO VIOLATIONS. No filing
with, and no permit, authorization, consent, registration, notice, approval or
other action of any Governmental Entity or any other Person is required to be
made, obtained or given by the Successor General Partner or any Affiliate of the
Successor General Partner on or prior to the Closing Date in connection with the
execution, delivery and performance of this Agreement, and the consummation of
the transactions contemplated hereby, by the Successor General Partner, assuming
the satisfaction of the condition precedent in Section 6.1(i) except where
failure to make such filing, or obtain such permit, authorization, consent,
registration, notice, approval or other action would not result in a Material
Adverse Effect on the Business or the Assets. Neither the execution and delivery
of this Agreement by the Successor General Partner nor the consummation by the
Successor General Partner of the transactions contemplated by this Agreement nor
compliance by the Successor General Partner with any of the provisions hereof
will (i) conflict with or result in any breach of any provision of the operating
agreement of the Successor General Partner, (ii) result in a violation or breach
of, or constitute (with or without due notice or lapse of time or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any Contract pursuant to
which the Successor General Partner is a party or by which the Successor General
Partner or its assets may be bound or (iii) violate any order, writ, injunction,
decree, statute, treaty, rule or regulation applicable to the Successor General
Partner, except in the case of clause (ii) or (iii) for violations, breaches or
defaults which would not have a Material Adverse Effect on the Successor General
Partner or would not, individually or in the aggregate, prevent or materially
delay the consummation of the transactions contemplated by this Agreement.
SECTION 4.4 BROKERS OR FINDERS. The Successor General Partner
has not retained any agent, broker, investment banker, financial advisor or
other firm or person that is or will be entitled to any brokers' or finder's fee
or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement. The Successor General Partner shall
indemnify and hold harmless each of the Sellers and their Affiliates from and
against any Liability incurred by such Persons (including the fees,
disbursements and related charges of counsel) arising out of any claim by a
broker, finder, financial advisor or similar intermediary for any fee,
commission or other compensation as a result of the Successor General Partner
9
entering into this Agreement and the transactions contemplated by this
Agreement.
SECTION 4.5 SUCCESSOR GENERAL PARTNER. The Successor General
Partner was recently formed solely for the purpose of engaging in the
transactions contemplated hereby and the Successor General Partner has not
engaged in any other activities.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 ACCESS TO INFORMATION. Prior to the Closing, the
Sellers shall permit the Successor General Partner, and any of its
representatives, advisors and consultants, to have reasonable access during
normal business hours to the General Partner and the Sellers shall cooperate
with the Successor General Partner and furnish promptly to the Successor General
Partner all available information concerning the Assets and the Business the
Successor General Partner may reasonably request.
SECTION 5.2 EFFORTS TO CLOSE. (a) Upon the terms and subject
to the conditions of this Agreement, each of the parties hereto shall use its
commercially reasonable efforts, to take, or cause to be taken, all actions, and
to do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement as promptly as practicable
including, without limitation, (i) the preparation and execution of all
agreements necessary to effect the transactions contemplated hereby, including
the admission of the Successor General Partner as general partner of the
Partnerships, (ii) the preparation and filing of all forms, registrations and
notices required to be filed to consummate the transactions contemplated by this
Agreement and the taking of such actions as are necessary to obtain any
requisite approvals, consents, orders, exemptions or waivers by any third party
or Governmental Entity and (iii) using commercially reasonable efforts to cause
the satisfaction of all conditions to Closing.
Each party shall promptly consult with the other with respect
to, and provide any necessary information with respect to, all filings made by
such party with any Governmental Entity or any other information supplied by
such party to a Governmental Entity in connection with this Agreement and the
transactions contemplated by this Agreement. The Sellers and the Successor
General Partner shall, with respect to a threatened or pending preliminary or
permanent injunction or other order, decree or ruling or statute, rule,
regulation or executive order that would adversely affect the ability of the
parties hereto to consummate the transactions contemplated by this Agreement,
use their respective commercially reasonable efforts to prevent the entry,
enactment or promulgation thereof, as the case may be.
10
(b) Prior to the Closing, each of the Sellers and the
Successor General Partner shall promptly notify the other in writing of the
occurrence (or non-occurrence) of any event or the existence of any circumstance
of which any of the parties has knowledge, the occurrence (or non-occurrence) or
the existence of which would be likely to cause any representation or warranty
contained in Article III or Article IV hereof, as the case may be, to be untrue
or inaccurate in any material respect and of any material failure of any Seller
or the Successor General Partner to comply with or satisfy any covenant,
condition or agreement to be complied with or satisfied by it hereunder;
provided, however, that delivery of any notice pursuant to this Section 5.2(b)
shall not affect the conditions set forth in Article VI and shall not limit or
otherwise affect any remedies available to the Successor General Partner or
Sellers, as the case may be.
SECTION 5.3 FURTHER ASSURANCES. From time to time after the
Closing, without additional consideration, each of the Sellers and the Successor
General Partner will execute and deliver such further instruments and take such
other action as may be necessary to make effective the transactions contemplated
by this Agreement.
SECTION 5.4 PUBLICITY. Except as otherwise required by law or
the rules and regulations of the New York Stock Exchange or any other exchange
on which shares of Affiliates of the Sellers are traded, for so long as this
Agreement is in effect, the Successor General Partner and the Sellers shall not,
and each of them shall cause their respective officers, directors, partners,
Affiliates, representatives and agents not to, disclose or cause the disclosure
of information, or issue or cause the publication of any press release or public
announcement, with respect to the transactions contemplated by this Agreement,
without the prior review and approval thereof (which approval shall not be
unreasonably delayed or withheld) by the other parties hereto.
SECTION 5.5 NAME CHANGE. Effective as of the Closing, Sellers
shall cause the General Partner and any of Millennium's or the General Partner's
Affiliates to delete "Suburban Propane" from their respective names (to the
extent such names include "Suburban Propane") and initiate any necessary legal
filings with the appropriate governmental authority to effectuate a name change
to a new name that does not contain "Suburban Propane" or a name confusingly
similar to "Suburban Propane." Within 30 days of the Closing (and, as of the
Closing, with respect to clause (i)), Sellers will cause each such entity to (i)
complete any actions or filings required to delete "Suburban Propane" as
contemplated in the foregoing sentence and (ii) replace their current names (to
the extent such current names include "Suburban Propane") to their new company
name on all stationery, business cards, real and personal property, directories,
labels, advertising and promotional material, and any and all applications,
registrations or other documents filed or to be filed with international,
national and local governmental offices, agencies or authorities in any country.
SECTION 5.6 FEES AND EXPENSES. Except as otherwise provided in
the Recap Agreement or in Section 5.7(b) of this Agreement, whether or not the
transactions contemplated by this Agreement are consummated, each party shall
bear its own fees and expenses incident to preparing for, entering into and
11
carrying out this Agreement and consummation of the transactions contemplated by
this Agreement.
SECTION 5.7 CERTAIN TAX MATTERS.
(a) The General Partner shall be responsible for the payment
of any Taxes relating to income of the MLP and the Operating Partnership
allocated to the General Partner by virtue of being a partner in the MLP and the
Operating Partnership for periods prior to the Closing. The Successor General
Partner shall be responsible for the payment of any Taxes relating to income of
the MLP and the Operating Partnership allocated to the Successor General Partner
by virtue of being a partner in the MLP and the Operating Partnership for
periods on or after the Closing.
(b) The Successor General Partner and the Sellers shall each
pay one-half of all transfer, recording, sales, use (including all bulk sales
taxes) and other similar taxes and fees (collectively, the "Transfer Taxes")
arising out of or in connection with the transactions effected pursuant to this
Agreement. The party which has the primary obligation to do so under applicable
law shall file any Tax Return that is required to be filed in respect of Taxes
described in this section. Such party shall pay the Taxes shown on such Tax
Return and notify the other party in writing of the other party's share of Taxes
for which it is responsible, if any, of the Taxes shown on such Tax Return and
how such Taxes and share were calculated, which the other party shall reimburse
by wire transfer of immediately available funds no later than ten days after
receipt of such notice.
(c) The Sellers and the Successor General Partner shall
provide each other with such assistance as reasonably may be requested by either
of them (and the Successor General Partner shall cause the MLP and the Operating
Partnership to provide the Seller with such assistance as reasonably may be
requested by the Seller) in connection with (i) the preparation of any Tax
Return, or (ii) any audit or other examination by any taxing authority, or any
judicial or administrative proceedings relating to liability for Taxes, and each
will retain and provide the requesting party with any records or information
which may be relevant to such return, audit or examination, proceeding or
determination. Any information obtained pursuant to this Section 5.8(c) or
pursuant to any other section hereof providing for the sharing of information or
the review of any Tax Return or other schedule relating to Taxes shall be kept
12
confidential by the parties hereto. For avoidance of doubt, reflecting on a Tax
Return any information referred to in the preceding sentence does not violate
the confidentiality requirement of the preceding sentence or of the
Confidentiality Agreement.
(d) The Sellers shall deliver to the Successor General Partner
at the Closing an affidavit of the General Partner which meets the requirements
of Treasury Regulation Section 1.1445-2(b)(2) and which attests to General
Partner's non-foreign status (the "FIRPTA Affidavit"). If the Successor General
Partner receives the FIRPTA Affidavit at the Closing, the Successor General
Partner shall not withhold any of the consideration paid to the Sellers under
this agreement pursuant to Section 1445 of the Code (and regulations
thereunder). If the Sellers shall fail to provide such certificate, the
Successor General Partner shall withhold or, where appropriate, escrow such
amount as necessary based on the Successor General Partner's reasonable estimate
of the amount of such potential liability, or as determined by the appropriate
taxing authority, to cover such Taxes until such time as certificates are
provided.
ARTICLE VI
CONDITIONS
SECTION 6.1 CONDITIONS TO SUCCESSOR GENERAL PARTNER'S
OBLIGATIONS. The obligation of the Successor General Partner to effect the
transactions contemplated by this Agreement shall be subject to the satisfaction
or waiver at or prior to the Closing of the following conditions which are for
the benefit of the Successor General Partner only and may only be waived by the
Successor General Partner at or prior to the Closing in its sole discretion:
(a) Any applicable waiting period under the HSR Act in
connection with the transactions contemplated by this Agreement shall have
expired or been terminated.
(b) No temporary restraining order, preliminary or permanent
injunction or other similar order or decree of any Governmental Entity of
competent jurisdiction shall have been issued and be in effect, and no action,
proceeding or investigation (in the case of any investigation, of which the
parties hereto have written notice) by any Governmental Entity or any other
Person shall be pending or threatened in writing which, if adversely determined,
would (i) prevent or impair in any material respect the consummation of the
transactions contemplated by this Agreement, (ii) impose on the MLP or the
Operating Partnership any material restrictions or requirements or (iii) cause
any of the parties or their respective Affiliates to owe material damages to any
third party as a result of the transactions contemplated hereby; provided,
however, that the party invoking this condition shall use its commercially
reasonably efforts to have any such order, injunction, action or proceeding
vacated or otherwise resolved and this condition may not be invoked by any party
13
whose failure to fulfill its obligations pursuant to Section 5.2 hereof shall
have been the cause of, or shall have resulted in, the failure of this
condition.
(c) No statute, rule, or regulation of any nature shall have
been enacted, entered, promulgated or enforced by any Governmental Entity, and
shall be in effect, which restrains, prohibits or materially changes the
transactions contemplated by this Agreement or the tax status of the
Partnerships.
(d) The representations and warranties of the Sellers in this
Agreement qualified as to materiality or Material Adverse Effect shall be true
and correct in all respects, in each case as of the date hereof and as of the
Closing Date with the same effect as though such representations and warranties
had been made at and as of the Closing Date, other than any such representations
and warranties that expressly speak as of a specific date or time (which need
only be true and correct as of such date or time), and the representations and
warranties of the Sellers in this Agreement not so qualified shall be true and
correct in all material respects, in each case as of the date hereof and as of
the Closing Date with the same effect as though such representations and
warranties had been made at and as of the Closing Date, other than
representations and warranties that expressly speak as of a specific date or
time (which need only be true and correct as of such date or time).
(e) The Sellers shall have performed and complied with in all
material respects all of their respective covenants and agreements required by
this Agreement to be performed or complied with by them at or prior to the
Closing.
(f) Except for the transactions contemplated by this
Agreement, there shall not have been any changes in the Assets or the Business
since the date of this Agreement that have had, or are reasonably likely to
have, a Material Adverse Effect on the Assets or Business.
(g) The Sellers shall have delivered or caused to be delivered
to the Successor General Partner each of the documents specified in Section
2.5(a) hereof.
(h) The Purchaser shall have received financing in an amount
sufficient to pay the Purchase Price.
(i) The Recap Agreement shall be in full force and effect; all
conditions precedent to the obligations of the Successor General Partner
thereunder shall have been satisfied or waived as permitted thereunder, or will
be satisfied concurrently with the Closing; and the transactions contemplated to
occur at the Closing thereunder shall have occurred or will occur concurrently
with the Closing.
14
SECTION 6.2 CONDITIONS TO OBLIGATION OF THE SELLERS. The
obligation of the Sellers to effect the transactions contemplated by this
Agreement shall be subject to the satisfaction at or prior to the Closing of the
following conditions, which are for the benefit of the Sellers only and may only
be waived by the Sellers at or prior to the Closing in their sole discretion:
(a) Any applicable waiting period under the HSR Act in
connection with the transactions contemplated by this Agreement shall have
expired or been terminated.
(b) No temporary restraining order, preliminary or permanent
injunction or other similar order or decree of any Governmental Entity of
competent jurisdiction shall have been issued and be in effect, and no action,
proceeding or investigation (in the case of any investigation, of which the
parties hereto have written notice) by any Governmental Entity or any other
Person shall be pending or threatened in writing which, if adversely determined,
would (i) prevent or impair in any material respect the consummation of the
transactions contemplated by this Agreement, (ii) impose on the MLP or the
Operating Partnership any material restrictions or requirements or (iii) cause
any of the parties or their respective Affiliates to owe material damages to any
third party as a result of the transactions contemplated hereby; provided,
however, that the party invoking this condition shall use its commercially
reasonably efforts to have any such order, injunction, action or proceeding
vacated or otherwise resolved and this condition may not be invoked by any of
the Sellers if the failure of any Seller to fulfill its obligations pursuant to
Section 5.2 hereof shall have been the cause of, or shall have resulted in, the
failure of this condition.
(c) No statute, rule, or regulation of any nature shall have
been enacted, entered, promulgated or enforced by any Governmental Entity, and
shall be in effect, which restrains, prohibits or materially changes the
transactions contemplated by this Agreement.
(d) The representations and warranties of the Successor
General Partner in this Agreement qualified as to materiality or Material
Adverse Effect shall be true and correct in all respects, in each case as of the
date hereof and as of the Closing Date with the same effect as though such
representations and warranties had been made at and as of the Closing Date,
other than any such representations and warranties that expressly speak as of a
specific date or time (which need only be true and correct as of such date or
time), and the representations and warranties of the Successor General Partner
in this Agreement not so qualified shall be true and correct in all material
respects as of the date hereof and as of the Closing Date with the same effect
as though such representations and warranties had been made at and as of such
time, other than representations and warranties that speak as of a specific date
or time (which need only be true and correct in all material respects as of such
date or time).
15
(e) The Successor General Partner shall have performed and
complied with in all material respects all of its respective covenants and
agreements required by this Agreement to be performed or complied with by it at
or prior to the Closing.
(f) The Recap Agreement shall be in full force and effect; all
conditions precedent to the obligations of the General Partner thereunder shall
have been satisfied or waived as permitted thereunder, or will be satisfied
concurrently with the Closing; and the transactions contemplated to occur at the
closing thereunder shall have occurred or will occur concurrently with the
Closing.
16
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION. This Agreement may be terminated at
any time prior to the Closing by:
(a) Consent of the Sellers and the Successor General Partner.
(b) Either the Sellers or the Successor General Partner, if
the Closing shall not have occurred on or before May 15, 1999, unless the
failure to consummate the Closing by such date shall be due to the willful
failure of the party seeking to terminate this Agreement to have fulfilled any
of its obligations under this Agreement.
(c) Either the Sellers or the Successor General Partner if any
court of competent jurisdiction or other competent Governmental Entity shall
have issued a statute, rule, regulation, order, decree or injunction or taken
any other action permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement and such statute, rule, regulation,
order, decree or injunction or other action shall have become final and
non-appealable.
(d) Either the Sellers or the Successor General Partner if the
Recap Agreement is terminated under the terms therein.
If the automatic termination date of the Recap Agreement set forth
in Section 7.01(b) therein is extended pursuant to Section 7.07 of the Recap
Agreement or otherwise by the written consent of the parties, the automatic
termination date of this Agreement set forth in Section 7.1(b) above also shall
be deemed to be extended to the same date.
SECTION 7.2 EFFECT OF TERMINATION. In the event of the
termination of this Agreement pursuant to Section 7.1 hereof, this Agreement,
except for Sections 3.8, 4.4, 5.4, 5.6 and 9.6 hereof, which shall survive any
such termination, shall forthwith become void and have no effect, without any
liability on the part of any party hereto or its Affiliates, trustees,
directors, officers, partners or stockholders. Nothing contained in this Section
7.2 shall relieve any party from liability for any willful breach of this
Agreement prior to such termination.
SECTION 7.3 EXTENSION; WAIVER. At any time prior to the
Closing, each of the parties hereto may (i) extend the time for the performance
of any of the obligations or acts of the any other party hereto, (ii) waive any
inaccuracies in the representations and warranties of the other party contained
17
herein or in any document delivered pursuant hereto, (iii) waive compliance with
any of the agreements of the other party contained herein or (iv) waive any
condition to its obligations hereunder. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only if set forth in a
written instrument signed on behalf of such party.
ARTICLE VIII
SURVIVAL
SECTION 8.1 SURVIVAL. The representations and warranties
contained in Articles III and IV shall survive the Closing for a period of one
year after Closing (other than Section 3.7 which shall survive the Closing
indefinitely). Any claim arising from a breach of a representation or warranty
that survives the Closing must be asserted by written notice given in accordance
with Section 9.1 by the close of business of the date the survival period
terminates in order to be valid. If, prior to the close of business on the date
the survival period terminates with respect to any representation or warranty,
Sellers, on the one hand, or Successor General Partner, on the other hand, shall
have notified the other pursuant to Section 9.1 of a claim hereunder (asserted
in good faith and, to the extent known, with reasonable particularity as to the
factual basis therefor) and such claim shall not have been finally resolved or
disposed of at such date, then such representation or warranty that is the basis
for such claim shall continue to survive as to that claim until such claim is
finally resolved. All of the covenants of the parties set forth in this
Agreement shall survive the Closing and continue in full force and effect
according to their respective terms.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 NOTICES. All notices, requests, claims, demands
and other communications under this Agreement shall be in writing and shall be
deemed given when delivered personally, when telecopied (with receipt
confirmed), the next business day when deposited with Federal Express or other
overnight courier (with proof of delivery) or three days after deposit in the
U.S. mail when mailed (certified, return receipt requested) to the parties at
the following addresses (or at such other address for a party as shall be
specified by like notice):
18
(a) if to the Successor General Partner, to:
Suburban Energy Services Group LLC
x/x Xxxxxxxx Xxxxxxx, X.X.
Xxx Xxxxxxxx Xxxxx
000 Xxxxx 00 Xxxx
Xxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
and
(b) if to any Seller, to:
Millennium Petrochemicals Inc.
X.X. Xxx 0000
000 Xxxx Xxxx Xxxx
Xxx Xxxx, Xxx Xxxxxx 00000
Attention: General Counsel
Telecopy: (000) 000-0000
SECTION 9.2 AMENDMENTS AND WAIVERS. This Agreement may not be
modified or amended except by an instrument or instruments in writing signed by
the party against whom enforcement of any such modification or amendment is
sought. Except as otherwise provided in this Agreement, any failure of any of
the parties to comply with any obligation, covenant, agreement or condition
herein may be waived by the party or parties entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
SECTION 9.3 HEADINGS. The article, section, paragraph and
other headings contained in this Agreement are inserted for convenience of
reference only and shall not affect in any way the meaning or interpretation of
this Agreement.
SECTION 9.4 COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same agreement.
SECTION 9.5 ENTIRE AGREEMENT. This Agreement, the Disclosure
Schedule and the exhibits hereto, together with the Recap Agreement and the
documents to be delivered pursuant thereto, constitute the entire agreement
between the parties hereto with respect to the subject matter hereof, and
supersede and cancel all prior agreements, negotiations, correspondence,
undertakings, understandings and communications of the parties, oral and
written, with respect to the subject matter hereof.
19
SECTION 9.6 GOVERNING LAW. This Agreement, including all
matters of construction, validity and performance, shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to principles of conflicts or choice of laws.
SECTION 9.7 ASSIGNMENT. This Agreement may not be assigned by
any party hereto prior to Closing without the written consent of the other
parties.
SECTION 9.8 BINDING NATURE. This Agreement shall be binding
upon and inure solely to the benefit of the parties hereto and their respective
successors and permitted assigns. Except for the provisions of Article VIII
which are intended for the benefit of, and to be enforceable by, any indemnitee
and their respective successors, heirs and personal representatives, nothing in
this Agreement, express or implied, is intended to or shall confer upon any
other person or persons any rights, benefits or remedies of any nature
whatsoever under or by reason of this Agreement.
SECTION 9.9 SEVERABILITY. This Agreement shall be deemed
severable; the invalidity or unenforceability of any term or provision of this
Agreement shall not affect the validity or enforceability of this Agreement or
of any other term hereof, which shall remain in full force and effect. If it is
ever held that any restriction hereunder is too broad to permit enforcement of
such restriction to its fullest extent, each party agrees that such restriction
may be enforced to the maximum extent permitted by law, and each party hereby
consents and agrees that the scope of such restriction may be judicially
modified accordingly in any proceeding brought to enforce such restriction.
SECTION 9.10 SPECIFIC PERFORMANCE. The parties hereto agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement was not performed in accordance with its specified terms or was
otherwise breached. It is accordingly agreed that the parties shall be entitled
to seek an injunction or injunctions to prevent breaches of this Agreement and
to enforce specifically the terms and provisions hereof in any court of
competent jurisdiction, this being in addition to any other remedy to which they
are entitled at law or in equity.
SECTION 9.11 ACCOUNTING AND FINANCIAL TERMS. All references
herein to any financial or accounting terms shall be defined in accordance with
GAAP unless expressly stated to the contrary. All references to dollar amounts
shall mean U.S. dollars unless otherwise noted.
SECTION 9.12 CONSTRUCTION. For the purposes hereof, (i) words
in the singular shall be held to include the plural and vice versa and words of
one gender shall be held to include the other genders as the context requires,
(ii) the words "hereof", "herein", and "herewith" and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
20
whole (including the Disclosure Schedule and the exhibits hereto) and not to any
particular provision of this Agreement, and article, section, paragraph, exhibit
and schedule references are to the articles, sections, paragraphs, and exhibits
and schedules of this Agreement unless otherwise specified, and (iii) the words
"including" and words of similar import when used in this Agreement shall mean
"including, without limitation," unless otherwise specified.
SECTION 9.13 INCORPORATION OF APPENDICES, EXHIBITS AND
SCHEDULES. The appendices, exhibits and the Disclosure Schedule referred to in
this Agreement are incorporated herein and made a part hereof.
21
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
SUBURBAN ENERGY SERVICES
GROUP LLC
By:_____________________________
Name:
Title:
MILLENNIUM PETROCHEMICALS INC.
By:_____________________________
Name:
Title:
SUBURBAN PROPANE GP, INC.
By:_____________________________
Name:
Title:
22
Appendix A
DEFINITIONS
"Assets" shall have the meaning ascribed to such term in
Section 2.1(a).
"Assignment and Assumption" shall have the meaning ascribed to
such term in Section 2.5(a)(i).
"Assumed Liabilities" shall have the meaning ascribed to such
term in Section 2.2(a).
"Books and Records" shall mean originals or certified copies
of all books and records of, or maintained by, Sellers that are in substantial
part related to the Business.
"Business" shall mean the businesses conducted by the General
Partner on the date hereof and until the Closing, including, without limitation,
the ownership, operation and management of the Assets (but excluding the
business conducted by the Partnerships and their Subsidiaries).
"Closing" shall have the meaning ascribed to such term in
Section 2.4.
"Closing Date" shall have the meaning ascribed to such term in
Section 2.4.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and the Treasury Regulations thereunder.
"Contract" shall have the meaning ascribed to such term in
Section 3.3.
"Contribution, Conveyance and Assumption Agreement" shall mean
the Contribution, Conveyance and Assumption Agreement, dated as of March 4,
1996, by and among the MLP, the Operating Partnership, Quantum Chemical
Corporation, the General Partner and Suburban Propane Inc.
"Disclosure Schedule" shall mean the disclosure schedule
delivered concurrently with the execution of this Agreement.
"GAAP" shall mean United States generally accepted accounting
principles as in effect on the date hereof.
"HSR Act" shall mean the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended.
1
"Interim Balance Sheet" shall have the meaning ascribed to
such term in Section 3.4(b).
"Liabilities" shall mean any and all debts, liabilities,
commitments and obligations, whether fixed, contingent or absolute, matured or
unmatured, liquidated or unliquidated, accrued or unaccrued, known or unknown,
whether or not required by GAAP to be reflected in financial statements or
disclosed in the notes thereto.
"Partnership Law" shall mean the Delaware Revised Uniform
Limited Partnership Act, as in effect from time-to-time and other laws
(statutory, common law or otherwise) relating to the assets, liabilities, rights
and/or responsibilities of limited partnerships and/or their partners (in their
capacities as such).
"Proceeding" shall have the meaning ascribed to such term in
Section 3.5(a).
"Purchase Price" shall have the meaning ascribed to such term
in Section 2.3(a).
"Retained Assets" shall have the meaning ascribed to such term
in Section 2.1(b).
"Retained Liabilities" shall have the meaning ascribed to such
term in Section 2.2(b).
"Sellers" shall have the meaning ascribed to such term in the
preamble hereto.
"Successor General Partner" shall have the meaning ascribed to
such term in the preamble hereto.
"Taxes" shall mean any federal, state, local or foreign tax of
any kind whatsoever (and all related interest, additions to tax and penalties),
including, without limitation, income, transfer, gains, gross receipts, excise,
inventory, property (real, personal or intangible), custom duty, sales, use,
license, withholding, payroll, employment, capital stock and franchise taxes
imposed by any Governmental Entity, whether computed on a unitary, combined or
any other basis.
"Tax Return" shall mean any report, return, information
return, statement, declaration or other document (including any related or
supporting documentation) filed or required to be filed with any Governmental
Entity in connection with any determination, assessment or collection of any
Tax.
2
"Transfer Taxes" shall have the meaning ascribed to such term
in Section 5.7.
"Year Ended Balance Sheets" shall have the meaning ascribed to
such term in Section 3.4(a).
3
EXHIBIT B
Form of Termination Agreement
-----------------------------
Suburban Propane Partners, L.P.
Xxx Xxxxxxxx Xxxxx
000 Xxxxx 00 Xxxx
Xxxxxxxx, XX 00000-0000
_____________, 199_
Millennium America Inc. (formerly Xxxxxx America Inc.)
Suburban Propane GP, Inc.
000 Xxxx Xxxx Xxxx
Xxx Xxxx, XX 00000
Attention: ________________
RE: Termination of Distribution Support Agreement
Ladies and Gentlemen:
Reference is made to the Recapitalization Agreement dated as of
November __, 1998 by and among the undersigned, Suburban Propane, L.P., Suburban
Propane GP, Inc., Millennium Petrochemicals Inc. and Suburban Energy Services
Group LLC (the "Recapitalization Agreement"). Pursuant to Section 2.01(b) of the
Recapitalization Agreement, the Distribution Support Agreement dated as of March
5, 1996 by and among us (the "Distribution Support Agreement") is hereby
terminated effective upon the Closing. From and after the Closing, all of the
rights and obligations of the parties to the Distribution Support Agreement
applicable to any period from and after the Closing shall be terminated and
shall cease to have any further force or effect.
40
(Exhibit B - cont.)
Please indicate your agreement with the foregoing by executing and
delivering to the undersigned at the above address a counterpart of this letter.
Very truly yours,
SUBURBAN PROPANE PARTNERS, L.P.
By
-------------------------------------
Name:
Title:
Agreed to as of the date first written above:
MILLENNIUM AMERICA INC.
By
---------------------------------------
Name:
Title:
SUBURBAN PROPANE GP, INC.
By
---------------------------------------
Name:
Title:
41
