EXHIBIT 10.28
AGREEMENT FOR CONTRIBUTION OF ASSETS
IN EXCHANGE FOR PARTNERSHIP INTERESTS
THIS AGREEMENT is made this _____ day of December, 2002, by and between
V-1 OIL CO., an Idaho corporation ("Transferor") and Heritage Operating, L.P., a
Delaware limited partnership ("Operating"), Heritage Propane Partners, L.P., a
Delaware limited partnership (the "Partnership"), and each of Xxxxxx X. Xxxxx,
Xxxxxxx X. Xxxxxxxx, Xxxx X. Xxxxxxx, Xxxxx X. Xxxxxxxx and Xxxxx X. Xxxxx (each
an "Owner" and collectively these individuals are the "Owners") for purposes of
Sections 8.5, 8.20, 8.23, 12.4, 12.5, 12.6, 12.7 and 12.9.
RECITALS:
A. Transferor owns and operates a business engaged in the retail sales
of propane gas and related products and services, and all activities associated
with that business (the "Operations") in those cities and areas set forth on
Annex I attached hereto and incorporated herein by reference (the "Plant
Facilities"). Transferor uses the Plant Facilities to sell and distribute LP-gas
products and related services in the areas surrounding the Plant Facilities to a
number of individuals and entities (the "Customers"). Transferor desires to
either contribute or sell, as the case may be, all of the assets used in the
Operations other than the "Excluded Assets".
B. Transferor has agreed to contribute to the Partnership, as a capital
contribution thereto, all of the assets of the Transferor described in Section
1.1 as the "Contributed Property" in exchange for the HPP Units (hereinafter
defined).
C. Transferor has agreed to sell to Operating, for the consideration
described in Section 1.2, all of the assets of the Transferor described in
Section 1.2 (the "Additional Property").
D. The Partnership has agreed to contribute to Operating, as a capital
contribution thereto, all of the Contributed Property (hereinafter defined).
E. The Partnership wishes to acquire the Contributed Property used in
the Operations from the Transferor and, thereafter, contribute the same to
Operating upon the terms and conditions set forth herein.
F. Operating wishes to acquire the Additional Property used in the
Operations from the Transferor and the Contributed Property used in the
Operations from the Partnership upon the terms and conditions set forth herein.
H. At the time of the Closing, Operating will assume all obligations of
the Partnership to the Transferor arising hereunder (other than the obligations
to issue HPP Units as hereinafter defined) and issue to the Partnership
additional limited partnership interests in Operating in exchange for the
Partnership's contribution to Operating of the Contributed Property, and as an
accommodation to the Partnership and Operating the Transferor will assign the
Contributed Property directly to Operating.
DEFINITIONS
The following definitions are used in this Agreement as defined in the
Sections set forth opposite such terms:
Defined Term Section Reference
------------ -----------------
Accounts Receivable 3
Additional Property 1.2
Agreed Value 2
Assets 1.2
Assumed Obligations 6
Average Price 2.4
Billings Fire 2.5
Cash Portion of the Value 1.2
CERCLA 7.5
Certification 7.13
Claims Fund 4.2
Closing 11.1
Code 7.9
Collection Period 3
commercially reasonable best efforts 8.11
Consents 7.2
Contracts 1.2
Contributed Customer Tanks 1.1
Contributed Property 1.1
Count 5.1
Credits 2.2
Customers Recitals
Customer Deposits 2.2
Customer Leases 1.2
Customer Tanks 1.2
Damage 10.1
Deeds 8.2
Delivery Credit 2.2
Disclosure Letters 8.15
Environmental Condition 7.5(b)
Environmental Fund 4.2
ERISA 7.9
Exchange Act 8.16
Exchange Number 1.3
Excluded Assets 1.2
Final Count 5.1
Formula Price 2.4
Hardware 1.2
HPP Unit 1.1
HPP Unit Value 1.3
Defined Term Section Reference
------------ -----------------
HPP Units 1.1
Indemnified Party 10.3
Indemnifying Party 10.3
Interest Factor 9.7(a)
Leased Real Property Schedule 1.2(v)
Lease and Option 8.2
Operations Recitals
Operating Recitals
Owned Real Property Schedule 1.1(ii) and 1.2(v)
Partnership Recitals
Partnership Agreement 7.12
Permitted Encumbrances 7.2
Plant Facilities Recitals
Processing Fee 3
Propane Inventory 1.2
Real Property 1.2
Relocation Cost 8.22
Restricted Area 8.5(a)(1)
Restricted Party 8.5(a)
Restricted Parties 8.5(a)
Sale Customer Tanks 1.2
SEC Documents 9.4
Securities Act 7.12
Security Agreement 4.2
Tank Bucket 5.2
Tax Payment 9.7(a)
Title Commitments 12.1
Transferred Employee 8.3(a)
Transferor Recitals
Transition Services Agreement 8.23
Wyoming Property 8.21
NOW, THEREFORE, the parties hereto agree as follows:
1.0 CONTRIBUTION AND SALE OF ASSETS.
1.1 Contribution. Transferor will contribute, in exchange for the
Exchange Number of the Common Units in the Partnership listed for trading on the
New York Stock Exchange (collectively, the "HPP Units" and individually an "HPP
Unit"), and the Partnership will thereby acquire, effective upon the Closing,
the following property and rights which are used in the Operations (the
"Contributed Property") consisting of (i) certain customer storage tanks,
together with pigtails, regulators and other related equipment ("Contributed
Customer Tanks") which are listed on the attached Schedule 1.1(i).
1.2 Sale. Transferor will sell to Operating for FIFTEEN MILLION
AND NO/100 DOLLARS ($15,000,000.00) in cash, plus the payments for the (i)
Propane Inventory (defined below) and (ii) the Hardware (defined below), each as
provided in Section 2.1, the payment for the Accounts Receivable as provided in
Section 3, and adjustments pursuant to Section 2.2 (collectively, the "Cash
Portion of the Value"), and Operating will thereby acquire effective upon the
Closing the following property and rights which are used in the Operations (the
"Additional Property") consisting of (i) customer storage tanks, together with
pigtails, regulators and other related equipment not otherwise included in the
Contributed Customer Tanks ("Sale Customer Tanks"), (ii) bulk plant storage
tanks with pumps, motors, piping, piers, fencing and other related equipment,
(iii) motor vehicles, (iv) miscellaneous office equipment, tools and other
related equipment, (v) rights in real estate directly related to Transferor's
Operations (the "Real Property"), (vi) customer tank leases ("Customer Leases"),
(vii) contracts with Customers and suppliers ("Contracts"), (viii) the telephone
number(s) and post office box numbers of the Transferor, (ix) Customer lists and
records, goodwill, trade names (including "V-1 Propane," "V-1," and "V-1 Oil")
including the Registered Trademark No. 2,617,855 for V-1 Oil, and (x) all
inventories of propane gas ("Propane Inventory") and of new and saleable
hardware, appliances, fittings, and related items held for sale to Customers
(the "Hardware"), the Transferor's Accounts Receivable (the "Accounts
Receivable"), and all other tangible property used in the Operations not
otherwise included in the Contributed Property, most of which are described on
Schedules 1.2(i) through 1.2(ix), excluding therefrom the property described on
Schedules 1.2(xi) (the "Excluded Assets"). (The Contributed Property and the
Additional Property acquired hereby are collectively referred to as the
"Assets." (The Contributed Customer Tanks and the Sale Customer Tanks are
collectively the "Customer Tanks.")
1.3 Exchange Number. The "Exchange Number" shall be that number
of HPP Units rounded to the nearest whole unit that is equal to the number
derived by dividing $15,000,000 (the "HPP Unit Value") by the Formula Price.
(For example, if the Average Price is $27.50, then the Formula Price is $27.50 x
..97 = $26.675 and the Exchange Number is $15,000,000 / $26.675 or 562,324 HPP
Units.)
2. AGREED VALUE AND ADJUSTMENTS. The Agreed Value for all of the Assets
other than the Hardware (valued pursuant to Section 2.1(b)), the Propane
Inventory (valued pursuant to Section 2.1(a)) and the Accounts Receivable
(valued pursuant to Section 3) (the "Agreed Value") shall be THIRTY MILLION AND
NO/100 DOLLARS ($30,000,000.00) in the form of the Cash Portion of the Value for
the Additional Property and the HPP Unit Value for the Contributed Property,
subject to adjustment as provided in this Sections 2.2 and 2.5.
2.1 Inventory.
(a) Propane Inventory. As of Closing, an inventory of Propane
Inventory shall be conducted jointly by the parties and the value of such
Propane Inventory shall be computed utilizing Transferor's laid-in cost for the
Propane Inventory, which includes freight. The value of such Propane Inventory
shall be paid by Operating to Transferor by check within thirty (30) days
following Closing.
(b) Hardware Inventory. An inventory of the Hardware shall be
conducted jointly by the parties as of Closing and the value of such Hardware,
as agreed, shall be paid by Operating to Transferor by check within thirty (30)
days following the Closing. The inventory of new and saleable hardware,
appliances, fittings, and related items held for sale to Customers will be
valued at Transferor's cost. Obsolete and/or used equipment and parts will be
excluded from the sale and retained by the Transferor.
2.2 Adjustment to Cash Portion of the Value for Taxes, Tank Rent,
Utilities, Rents, Customer Deposits, Credit Balances and Other Prorations. The
parties will calculate and prorate, as of the day of the Closing, all taxes
(other than taxes measured by revenues or income) with property taxes, if not
assessed for the current year, calculated on a calendar basis based on the prior
year's assessment, which are attributable to the Assets acquired hereunder.
Transferor shall be responsible for the charges attributable to the period
through Closing and Operating for periods thereafter. All sales, use or other
transactional taxes imposed on the transfer of any of the Assets shall be
charged fifty percent (50%) to the Transferor and fifty percent (50%) to
Operating. Operating will give the Transferor credit for any transferred utility
deposits. If utility charges are not available as of the day of the Closing,
they shall be prorated and paid upon their receipt, and each party shall
cooperate in the transfer of ownership and contracting for such services.
Rentals on all Leased Real Property will be prorated to the date of Closing. Any
tank rents received or invoiced by Transferor prior to Closing for property
transferred hereunder shall be prorated as of the day of Closing. Transferor's
credit balances shall be identified on Schedule 2.2 (the "Delivery Credit") and
shall be deducted from the Cash Portion of the Value and Operating shall assume
responsibility for such future delivery or other credit. All of Transferor's
outstanding customer deposits are identified on Schedule 2.2 (the "Customer
Deposits"), and Operating will be given credit by reduction of the Cash Portion
of the Value and Operating will assume the obligation for such Customer
Deposits. Any customer credit balances ("Credits") not otherwise identified
herein are also identified on Schedule 2.2 and Operating will be given credit
therefor. The Payment in cash at Closing pursuant to Section 4.1 shall be
increased or decreased, as the case may be, to reflect any amounts due on
account of prorations and adjustment of Section 2.2.
2.3 Exchange Issue Price. The HPP Units will be exchanged at the
per unit price equal to the Formula Price.
2.4 Formula Price/Average Price. The "Formula Price" shall be the
Average Price times 0.97. The "Average Price" means the average of the closing
sales prices of a HPP Unit as reported in The Wall Street Journal - Composite
Transactions for the 20 consecutive trading days commencing on the tenth trading
day prior to the day that the transaction contemplated by this
Agreement is
publicly announced.
2.5 Adjustment for Impairment of Assets. Should any portion of
the Assets be materially impaired in value by any casualty between the date of
this
Agreement and the Closing, the parties shall adjust the Cash Portion of the
Value by reducing the Cash Portion by the amount of the reduction of the fair
market value of the property injured caused by such loss. In addition, the Cash
Portion shall be reduced by the (i) value of the supplies, tools, equipment and
miscellaneous items lost or injured by reason of the Billings, Montana District
fire at this location that occurred on or about October 29, 2002 (the "Billings
Fire"); (ii) amount of the insurance proceeds received by Transferor plus the
amount of Transferor's deductible relating to the bobtail delivery vehicle lost
or
injured by reason of the Billings Fire; and (iii) amount of the insurance
proceeds received by Transferor plus the amount of Transferor's deductible
relating to bobtail delivery vehicle #9740 lost or injured by reason of the
accident occurring near Dubois, Wyoming on or about December 5, 2002.
3. ACCOUNTS RECEIVABLE. At the Closing Operating shall acquire the
Transferor's Accounts Receivable arising from the Operations on the following
basis:
(a) Current accounts (less than 31 days old) at 92% of
face value;
(b) Accounts 31-60 days old at 87% of face value;
(c) Accounts 61-90 days old at 80% of face value;
(d) Accounts 91-365 days old at 50% of face value; and
(e) All other accounts at 0% of face value;
provided, however, (i) if any single account is in excess of 4.9% of the total
Accounts Receivable, (ii) the account is owned by an affiliate of the
transferor, (iii) the account debtor is in any bankruptcy or receivership
proceeding, or (iv) the account is subject to a Conditional Sale Security
Agreement, then in any such case the parties shall enter into a mutual
agreement
as to its value, and if they fail to reach agreement, it shall be excluded from
the sale.
The total of the payment for the Accounts Receivable shall be
determined and paid within three (3) business days following the Transferor's
delivery of a listing of such accounts verified by an officer of Transferor as
being true and correct in all material respects.
4. PAYMENT OF AGREED VALUE, INVENTORIES, AND ACCOUNTS RECEIVABLE. The
Agreed Value shall be paid at the time and in the following manner:
4.1 Transfers at Closing. The Cash Portion of the Value, plus
such additions and credits as provided in this Agreement and less such
deductions and credits as provided in this Agreement, shall be paid by wire
transfer at Closing to an account designated by the Transferor at least three
(3) business days prior to the Closing, and the HPP Unit Value will be exchanged
by delivery to the Transferor of the certificates representing the HPP Units at
or within three (3) business days following the Closing.
4.2 Segregation of Cash Portion of Value Into Secured Funds. The
sum of FIVE MILLION FIVE HUNDRED THOUSAND DOLLARS ($5,500,000.00) shall be
deducted from the Cash Portion of the Value and shall be paid by Operating to a
separate account of the Transferor to be held subject to a first security
interest in favor of Operating and subject to claims hereunder, to be held
pursuant to the terms of the Security Agreement attached as Exhibit 4.2 (the
"Security Agreement"). (The Security Agreement provides for two (2) accounts:
(i) $2,000,000 for any claims (other than those in subsection (ii) which
follows), which account will not be reduced except for any claims under this
Agreement held for a period of two (2) years (the "Claims Fund"), and (ii)
$3,500,000 that will be held for five (5) years for (a) claims arising pursuant
to Section 7.5,
(b) costs of remediation payable pursuant to the terms of the Security Agreement
(the "Environmental Fund"), (c) any payment of a Relocation Cost under Section
8.22, and (d) payments under Section 8.21.)
4.3 Inventories and Accounts Receivable. Operating and the
Partnership shall pay for the Propane Inventories and Hardware Inventory within
thirty (30) days following the Closing, and the Accounts Receivable shall be
paid within three (3) business days of the receipt of and the agreement to the
Accounts Receivable listing.
5. VERIFICATION OF CUSTOMER STORAGE TANKS.
5.1 Count of Customer Storage Tanks. After the Closing, Operating
will diligently proceed to physically count and otherwise verify the number of
Customer Tanks actually existing and will deliver its report of that number (the
"Count") to Transferor not later than six (6) months after the day of the
Closing. The notice supplied to Transferor shall identify those Customer Tanks
not verified to the Customer Listing set forth on Schedule 1.2(vi) and/or
Schedule 1.2(vii). Upon receipt of such notice, Transferor (at its effort and
expense) shall have one (1) month to verify those storage tanks not verified by
Operating. The Count, subject to any adjustment by Transferor by providing
verification of missing tanks, shall become the "Final Count" at the end of the
two hundred ten (210) day period.
5.2 Shortage of Tanks. In the event the Final Count discloses a
number of Customer Tanks that is lower than that shown on Schedules 1.1(i) and
1.2(i), the Agreed Value shall be reduced by an amount equal to the product of
multiplying the number of each type of tank that is short by the value of that
type of tank listed on Schedule 5.2, and the value of any overage of tanks in
one category may be offset against a shortage in another category. If the amount
of such reduction exceeds five percent (5%) of the total value of all Customer
Tanks (using Schedule 5.2) (the "Tank Bucket"), then the amount of the payment
in excess of the Tank Bucket shall be refunded to Operating (with interest at
six percent (6%) per annum) from the funds held subject to the Security
Agreement within ten (10) days of receiving written request for such payment.
5.3 Proof of Ownership. For the purpose of verification of the
number of Customer Tanks pursuant to Section 5.1 hereof, only the following
Customer Tanks physically verified and with one of the following proofs of
ownership shall be included in the Count and the Final Count:
(a) Those Customer Tanks for which Transferor has a valid
executed lease agreement between Transferor (or any predecessor in interest) and
a Customer or a valid contract that recognizes the Transferor's ownership of
such tank; or
(b) Those Customer Tanks for which Transferor, with, if
necessary, the cooperation and assistance of Operating's representatives, is
able to secure a new lease agreement after Operating shall have furnished the
Transferor a listing of unverified tanks; or
(c) Those Customer Tanks for which Transferor is receiving
tank rental incomes; or
(d) All Customer Tanks stored at the Plant Facilities as of
the day of the Closing.
6. NO ASSUMPTION OF LIABILITIES. Neither the Partnership nor Operating
shall assume any liabilities of Transferor, except those for which the
Partnership or Operating has received credit as an adjustment at Closing and
those described in Schedule 6 hereto (the "Assumed Obligations").
7. REPRESENTATIONS AND WARRANTIES OF TRANSFEROR. As additional
consideration for the transactions contemplated herein, Transferor makes the
following representations, warranties, and covenants as of the date hereof and
(except as may be set forth in a Disclosure Letter as provided by Section 8.15,
if any, and specifically waived by Operating at Closing) as of the Closing, each
of which is deemed by the parties to be material and shall survive the Closing:
7.1 Corporate Standing, Powers, Authorizations and
Non-Violations. Transferor is a corporation duly organized, validly existing,
and in good standing under the laws of the state of
Idaho, has full corporate
power to own its properties and to carry on the Operations as now being
conducted, and has full corporate power to execute, deliver, and perform this
Agreement, and has obtained all corporate authorizations and any other approvals
or consents necessary for the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereunder without violation of any
agreement or order to which the Transferor or its property is subject,
including, without limitation, the approval of its board of directors and its
stockholders.
7.2 Marketable Title/Condition. Transferor has good and
marketable title to all of the Assets to be acquired by Operating hereunder,
free and clear of any mortgage, pledge, lien, conditional sales agreement, lease
(except leases on Customer Tanks, provided that the same do not contain any
purchase option for said tank at less than the fair market value at the time of
purchase), judgment, or other claim, charge, or encumbrance of any kind or
character, except for liens for current property taxes not delinquent, the
materiality of which does not impair marketability ("Permitted Encumbrances").
The Real Property, except as may be specifically disclosed in the Title
Commitments, (i) has all necessary access to public roads, electricity, water
and other utilities used and necessary in the Operations, (ii) is not subject to
any special assessment, condemnation or eminent domain proceeding, (iii) is not
subject to any agreement that would preclude the transfer to Operating or the
continued Operations by Operating thereon, (iv) and all improvements constructed
thereon are within the boundaries thereof, do not encroach on any other parcel
of adjacent real estate and, where appropriate, are set back from the boundaries
to comply with all applicable codes and regulations covering the Operations, and
(v) no structure primarily located on another parcel of real property encroaches
thereon. Except for the consents listed on Schedule 7.2 (the "Consents"), each
lease that constitutes a part of the Assets is freely assignable to Operating at
no additional consideration.
7.3 Tangible Personal Property. All tangible property being
transferred to Operating hereunder is in good operating condition and is
suitable for its current use and, where appropriate, such property is in
compliance with (i) the rules and regulations of the applicable authorities for
the storage and handling of propane, (ii) the current National Fire Protection
Association Pamphlet No. 58 (including, but not limited to, bona fide valid data
plates affixed to all
bulk storage tanks, and location and placement of all tanks on the Real Property
in relation to the property lines and the surrounding areas), and (iii) the
requirements and standards as promulgated by the United States Department of
Transportation for LP gas products. All the property being transferred
(including, without limitation, bulk and Customer Tanks and vehicles and their
installation) complies with all relevant governmental codes and good operating
practices and safety standards in the propane business and the state of location
of such asset.
7.4 Legal or Administrative Liability. There is no suit, action,
arbitration, or legal, administrative, or other proceeding, or governmental
investigation pending or to the knowledge of Transferor threatened against
Transferor or affecting Transferor or any of its assets which relates to the
Operations, except as set forth in Schedule 7.4 attached hereto, all of which
litigations or claims will be defended by Transferor, or its insurance
companies, and liability in respect of which is expressly not assumed by
Operating and against which Transferor indemnifies and holds harmless Operating
and the Partnership. Transferor has not received any notice that it is under
investigation with respect to any alleged violation of any provision of federal,
state, local law or administrative regulations with respect to the Operations.
Transferor is not in default with respect to any order, writ, injunction, or
decree of any federal, state, local, or foreign court, department, agent, or
instrumentality.
7.5 No Violation of Governmental Regulations.
(a) General Operations. The Operations and the Assets have not
been, and were not prior to the day of the Closing, conducted in any material
violation of any statute, law, ordinance, or regulation of any governmental
entity. The Real Property is zoned and permitted for its current use and the
Transferor is in compliance with all zoning laws and any applicable permit. The
current uses of the real estate upon which the Plant Facilities are located are
not nonconforming or special uses or special exceptions, which uses could be
terminated upon the sale of the Operations to Operating; the current uses and
improvements at the Plant Facilities are not "grandfathered" under any previous
zoning laws or ordinances; and Transferor has no knowledge of any contemplated
changes under current zoning classification which would adversely affect the
Operations.
(b) Environmental Conditions. Except as set forth on Schedule
7.5(b) (the "Environmental Conditions"), the Transferor is not and has not in
the past been, in violation of, or charged with, convicted of or investigated
for any violation of any federal, state or local environmental law or regulation
by any court, governmental body or agency with respect to the Real Property or
in its Operations, nor does any environmental condition exist on any portion of
the Real Property that would likely give rise to a claim that Transferor is in
violation of any such federal, state or local law, rule or regulation; there
have been no disposals, releases of hazardous substances, materials or wastes,
or pollutants or contaminants, from, in or under any of the Real Property. For
purposes of this Agreement, the terms "release" and "hazardous substances" shall
have the definitions assigned thereto by the Federal Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. Section 9601, et
seq., as amended ("CERCLA"). Except as set forth on Schedule 7.5(b) (the
"Environmental Conditions"), there (i) are presently no tanks for storage of
petroleum products or other material (other than propane inventory) located on
the Real Property; (ii) have been no, nor are there now any, electrical
transformers or other equipment containing PCBs located on or under the Real
Property; (iii) have been no, nor are there
now any drums, cans, canisters, or containers buried underground located on the
Real Property; (iv) have been no, nor are there now any, wastes buried
underground on the Real Property; (v) have been no, nor is there now any,
asbestos of any type or character located on the Real Property; (vi) is no
contamination of soil, ground water or surface water on or under the Real
Property; (vii) is no portion of the Real Property that is or has been on any
list prepared by any federal, state or local governmental body or agency as
requiring remedial environmental action; and (viii) has been no release of any
hazardous substance, material or waste, or pollutants or contaminants on, in,
from or under any property adjacent to the Real Property. Transferor has
furnished Operating with copies of all environmental studies or reports
referring to or relating to the Real Property. Schedule 7.5(b) contains an
accurate summary of the state of all remediation actions at each parcel of Real
Property and the Transferor's plan of action with respect thereto.
7.6 Insurance and Workers' Compensation. With respect to the
Operations, Transferor has had continuously in force policies of liability
insurance for the 3-year period prior to the Closing, in the amount of at least
$1,000,000 and workers' compensation insurance coverage in compliance with the
minimum standards of the state(s) where the Operations are conducted. True and
complete copies of such policies and a listing of all claims Transferor has made
over the past three (3) years and all workers' claims made or being paid during
the past three (3) years have been supplied to Operating and certificates
reflecting such coverages are attached hereto as Schedule 7.6. All of such
liability policies provide insurance on an "occurrence" basis with respect to
all risks normally insured against by companies similarly situated. There are
presently no existing conditions, claims or injuries to any current employee
that will rise to any claims under the workers' compensation laws.
7.7 Ordinary Course of Business. The Operations have been
conducted and the Assets have been operated and maintained by Transferor in
accordance with standards of operation and maintenance generally recommended in
the propane industry.
7.8 Taxes and Employee Pension and Profit Sharing Plans. The
Transferor's Operations have been conducted in conformity with all applicable
tax laws and all necessary returns and filings have been or will be made and the
related taxes paid such that there is and will not be any liability to Operating
for any taxes, penalties or interest for any Operations that occurred prior to
the Closing.
7.9 Benefit Plans.
(a) Schedule 7.9 contains an accurate and complete list of all
Benefit Plans and any employment contracts (whether individually or with any
union or labor organization) existing with or maintained or sponsored by the
Transferor or covering any employees of the Transferor to which the Transferor
is obligated to contribute or with respect to which the Transferor has any
material liability. For purposes of the Agreement, the term "Benefit Plans"
shall mean: (i) employee benefit plans as defined in Section 3(3) of the
Employment Retirement Security Act of 1974, as amended ("ERISA"), (ii)
employment agreements, and (iii) fringe benefit plans, policies, programs and
arrangements, whether or not subject to ERISA, and whether or not funded. Except
as set forth on Schedule 7.9, the Transferor has no obligations to contribute to
any "multiemployer pension plan," as such term is defined in section 3(37) of
ERISA, or with respect to any employee benefit plan of the type
described in Sections 4063 and 4064 of ERISA or in Section 413(c) of the Code
(and regulations promulgated thereunder).
(b) Except as set forth on Schedule 7.9, the Transferor does
not contribute to or have any liability with respect to any Benefit Plan which
provides health, life insurance, accident or other "welfare-type" benefits to
current or future retirees or current or future former employees, their spouses
or dependents, other than in accordance with Section 4980B of the Code or
applicable state continuation coverage law.
(c) Except as set forth on Schedule 7.9, each Benefit Plan and
all related trusts, insurance contracts and funds have been maintained, funded
and administered in compliance with the terms of such Benefit Plan and with all
reporting and disclosure requirements and applicable laws and regulations,
including, but not limited to, ERISA and the Internal Revenue Code of 1986, as
amended (the "Code"). As of the date hereof, no actions, suits, claims (other
than routine claims for benefits), taxes, penalties or liens with respect or
relating to the Benefit Plans are pending or, to the knowledge of the
Transferor, threatened, or have been assessed or incurred. There have been no
"prohibited transactions" as defined in Section 4975 of the Code with respect to
each Benefit Plan, and, to the knowledge of the Transferor, no employee of the
Transferor who acts as a fiduciary for any Benefit Plan has any liability for
breach of a fiduciary duty or any failure to act or comply in connection with
the administration or investment of the assets of any Benefit Plan.
(d) Except as set forth on Schedule 7.9, each Benefit Plan
that is intended to be qualified under Section 401(a) of the Code, and each
trust (if any) forming a part thereof, if requested has received a favorable
determination letter from the IRS as to the qualification under the Code of such
Benefit Plan and the tax-exempt status of such related trust, and, to the
knowledge of the Transferor, nothing has occurred since the date of such
determination through the date hereof, that could adversely affect the
qualification of such Benefit Plan or the tax-exempt status of such related
trust.
7.10 Disclosure. Neither this Agreement nor any Schedule or
Exhibit hereto nor any other document, certificate of instrument delivered to
Operating by or on behalf of Transferor in connection with the transactions
contemplated by this Agreement contains any untrue statement of a material fact
or omits to state a material fact necessary in order to make the statements
contained herein and therein not misleading. There is no fact known to
Transferor that is not set forth in the Schedules of this Agreement that
materially and adversely affects, nor so far as Transferor can now foresee will
materially and adversely affect the Property.
7.11 Written Material. All written materials heretofore supplied
to Operating, including, without limitation, the 2000 and 2001 financial
statements and revenue and expense computations are correct, complete and
accurate in all material respects and none of such financial computations omits
any item of material cost which should have been included under proper
accounting practice.
7.12 Securities Representation, Application for Admission as
Limited Partner and Acceptance of Partnership Agreement. Transferor hereby
represents that (i) Transferor has such knowledge and experience in financial
and business matters that it, with its advisors, are capable of
evaluating the merits and risks of the investment in the Limited Partner
Interests and the HPP Units and (ii) it understands and agrees that if it
desires to avail itself of the exemption from underwriter liability under the
Securities Act of 1933, as amended (the "Securities Act"), it may only resale
the HPP Units in compliance with Rule 145 of the Securities Act. Transferor
represents that it has reviewed the SEC Documents and Partnership Agreement
described in Section 9.4 and has had such opportunity as it deems necessary to
ask questions of the Partnership and its affiliates, officers and employees to
enable the Transferor, to make an investment decision concerning the receipt of
the HPP Units and the operation of the Partnership. The Transferor, by entering
into this Agreement, requests admission as a Limited Partner of the Partnership
and agrees to comply with, and be bound by, and hereby executes, the Amended and
Restated Agreement of Limited Partnership of the Partnership, as amended,
supplemented or restated to the date hereof (the "Partnership Agreement"), (b)
represents and warrants that the Transferor has all right power and authority
and, if an individual, the capacity necessary to enter into the Partnership
Agreement, (c) appoints the General Partner of the Partnership and, if a
Liquidator shall be appointed, the Liquidator of the Partnership as the
Transferor attorney-in-fact to execute, swear to, acknowledge and file any
document, including, without limitation, the Partnership Agreement and any
amendment thereto, necessary or appropriate for the Transferor admission as a
Additional Limited Partner and as a party to the Partnership Agreement, (d)
gives the power of attorney provided for in the Partnership Agreement and (e)
makes the waivers and gives the consents and approvals contained in the
Partnership Agreement. Capitalized terms not defined in this paragraph have the
meanings assigned to such terms in the Partnership Agreement
7.13 Admission to Partnership. At the Closing Transferor will
deliver the completed form of Certification To Partnership attached as Exhibit
7.13 qualifying the Transferor to be a limited partner in the Partnership (the
"Certification").
8. COVENANTS OF OWNERS, TRANSFEROR, OPERATING AND THE PARTNERSHIP.
8.1 Records. Transferor agrees to transfer and convey to
Operating on the day of the Closing the following items, including all rights
associated therewith as they relate to the Operations. Transferor, after Closing
if necessary for business purposes, may have access to these records if it
provides reasonable notice to Operating of its need to review such documents:
(a) All Customer files, including, without limitation, credit,
sales, tank leases, and other records in regard to the Operations.
(b) All other records in the possession of Transferor relating
to the Operations, all such records shall be available to the Transferor during
normal business hours.
8.2 Transfer of Real Property. At the Closing Transferor will
convey to Operating all of its right, title, and interest in and to the Real
Property, other than that listed on Schedule 8.22(A), by (i) General Warranty
Deeds (the "Deeds"), (ii) any leased property utilized in the Operations
described on Schedule 1(v) by a properly approved assignment of lease in form
satisfactory to Operating, and (iii) grant to Operating the Lease and Option to
purchase in the form of Exhibit 8.2(iii) (a "Lease and Option") for each parcel
of Real Property owned in fee and subject
as of Closing to an Environmental Condition and set forth on Schedule 8.22(A) as
a Lease and Option Property.
8.3 Employee Matters.
(a) Services of Transferor Employees. It is the intent of
Operating to offer employment to substantially all of those employees of
Transferor who are employed by Transferor on January 1, 2003 and engaged in the
Operations (a "Transferred Employee") in substantially similar positions and
wage levels as the wage levels of Operating's or its affiliates' current
employees in similar positions, and with the same employee benefits that are
otherwise provided by Operating, or a parent or affiliate of Operating, to its
other employees. Transferor will terminate the employment of the Transferred
Employees immediately prior to the Closing. Offers of employment shall be
effective as of the Closing Date; provided however, such employment shall be on
an "at-will" basis, and Operating, or a parent or affiliate of Operating, shall
not be obligated hereunder to employ any Transferred Employee in a position, pay
or benefits that are the same, or substantially the same, as those with the
Transferor.
(b) Employee Benefits.
(i) Operating Benefit Plans. All Transferred
Employees shall be eligible to participate in the Benefit Plans
sponsored by Operating, or a parent or affiliate of Operating, as
applicable, pursuant to the terms of those plans.
(A) With respect to the Heritage Propane
Partners Profit Sharing and 401(k) Savings Plan ("Heritage 401(k)
Plan") described on Schedule 8.3(b), each Transferred Employee
age 21 or older shall be eligible to participate in such plan as
of the Closing Date. The Heritage 401(k) Plan will accept any and
all eligible rollover distributions of Transferred Employees from
any "employee pension benefit plan" of Transferor pursuant to the
terms of the Heritage 401(k) Plan.
(B) With respect to any "employee
welfare benefit plan" described on Schedule 8.3(b), each
Transferred Employee who is employed by Operating, or a parent or
affiliate of Operating, on a "full-time basis", not including
seasonal or temporary employees, who work thirty (30) hours or
more per week, shall be eligible to participate in those plans
and any waiting period for eligibility shall be prorated for each
Transferred Employee to the extent such employee was covered
under a similar Transferor Benefit Plan on the Closing Date.
(ii) Transferor Benefit Plans. Except as set forth
herein, participation in all employee Benefit Plans of Transferor
listed on Schedule 7.9 shall be terminated as of the Closing Date
for each Transferred Employee.
(A) With respect to any "employee
pension benefit plan," all contributions (including the
Transferor contributions and Transferred Employee contributions)
shall have been paid or accrued for any period ending on or
before the Closing Date, and as soon as administratively feasible
after the Closing Date, the employer
sponsoring such plan will cause the accrued benefit of each
Transferred Employee who so elects to be transferred to the
Heritage 401(k) Plan.
(B) With respect to any "welfare
benefit plan", all premiums shall have been paid for any period
ending on or before the Closing Date; provided, however, with
respect to any "group health plan", V-1 will pay the entire
(non-prorated) cost for the month of January 2003 and maintain
that coverage through January 31, 2003.
(C) Transferor will pay the cost of and
obtain endorsements of its group disability and life insurance
coverages such that such coverages remain in effect through
January 31, 2003 for all of its employees who become employees of
Operating or any affiliate.
(iii) Other Employee Benefit Matters. No other
Transferred Employee liability or Transferor Benefit Plan
liability or related liability, including, without limitation,
any liability for accrued vacation time, any liability under
COBRA (except to the extent required by law), ERISA, or the Code,
is being assumed by Operating, or a parent or affiliate of
Operating.
8.4 Customer Deposits and Credit Balances. If the amount of
Customer Deposits, customer Credits and/or the Delivery Credit utilized to
adjust the Cash Portion of the Value at Closing proves to be incorrect, the
amount of any over or under credit will be paid promptly to the party benefiting
from such under or over calculation.
8.5 Transferor and Owners Covenant Not to Compete.
(a) Prohibited Conduct. In consideration of the acquisition of
the Operations (including the goodwill of the Transferor being transferred to
Operating), the Transferor and each of the Owners (individually, a "Restricted
Party" and collectively, the "Restricted Parties") agree that for a period of
ten (10) years after the Closing no Restricted Party will, directly or
indirectly, and any entity in which it, he or she has any interest will not:
(1) Engage in the business of the sale of propane or
propane-related products, or natural gas within the States of Colorado,
Idaho,
Montana, Oregon, Utah, Washington, or Wyoming, in any state directly adjacent to
any such state where the Plant Facilities transferred by Transferor to Operating
or any state in which Operating or any affiliate of Operating has a plant as of
the date hereof (the "Restricted Area").
(2) Solicit, service, or sell propane, propane related
products, natural gas, fuel oil or electrical distribution to any present or
future propane related customer or account in the Restricted Area.
(3) Directly or indirectly solicit or hire any of the
employees of Transferor or Operating or its affiliates to become employees of
any entity in which any Restricted Party is the holder of any ownership interest
or to which any Restricted Party renders any service.
(4) Furnish, divulge, or make accessible to anyone any
confidential or proprietary information or trade secrets concerning the
Operations including, but not limited to, customer identification, customer
lists, business records and supply cost and pricing data.
(5) Provide to, arrange for, guarantee funds, or
arrange for product supply or consumer tank purchases to any person who engages
in the retail sale of propane or propane related products in the Restricted
Area.
(6) Be a member of a partnership or a stockholder,
investor, officer, director, employee, agent, associate, or consultant, of any
person, partnership, or corporation which does any of the acts described in the
foregoing subparagraphs (1), (2), (3), (4) or (5). Neither ownership by any of
the Restricted Parties of (i) less than five percent (5%) of the outstanding
shares of the capital stock of any entity traded on a national stock exchange
engaged in the LP-gas business nor (ii) ownership of interests in the
Partnership shall constitute a breach of this Section 8.5.
(b) Equitable Relief. The Restricted Party agrees that the
covenants contained in this section relate to matters which are of special and
unique character which give Operating peculiar value impossible of replacement,
and for the lack of which Operating cannot be reasonably or adequately
compensated in damages. Operating would not enter into this Agreement except for
the covenant of the Restricted Parties as contained herein, and if any
Restricted Party should breach this Section 8.5, Operating's damages will be
difficult to determine, if not impossible to determine. Therefore, each
Restricted Party expressly agrees that in addition to the right to recover
damages, Operating shall be entitled to injunctive and/or equitable relief to
prevent a breach hereof, and to secure the enforcement hereof. Each Restricted
Party acknowledges that the covenants contained in this subsection 8.5 are
reasonably necessary for the protection of Operating's business.
(c) Severability. If the terms of this Section 8.5 are held by
any court or agency to be unenforceable because of the period of time in which
those terms remain in effect, the breadth of the activities restricted, or the
breadth of the geographical area of the limitations, then, nevertheless, this
section shall be deemed to have been amended to limit that time period, those
activities, or that area to the longest time period, the broadest activities and
the largest geographical area (not to exceed those set forth in this section) as
will be enforceable.
8.6 Change of Name. Immediately following the Closing, the
Transferor will change its name to "Blue Xxxx Group, Inc." and furnish evidence
thereof to Operating. Transferor hereby instructs the issuance of the HPP Units
at Closing to be in the name of Blue Xxxx Group, Inc., tax identification number
00-0000000.
8.7 Conduct and Preservation of the Business of the Transferor.
Except as expressly provided in this Agreement, during the period from the date
hereof to the Closing Date, the Transferor shall (a) conduct the Operations
substantially as they are being conducted on the date hereof; (b) use its
commercially reasonable best efforts to preserve, maintain and protect the
Assets and the Operations consistent with past practices; (c) use its
commercially reasonable best efforts to preserve intact the business
organization of the Operations, consistent with past practices, and to maintain
existing relationships with suppliers, contractors, distributors, customers and
others having
business relationships with the Transferor or the Operations; and (d) permit
Operating to meet with employees of the Transferor to describe the proposed
transaction and Operating's benefit programs.
8.8 Restrictions on Certain Actions of the Transferor. Without
limiting the generality of Section 8.7, except as set forth on Schedule 8.8 or
as otherwise expressly contemplated by this Agreement, from and after the date
hereof and until the Closing Date, the Transferor, without the approval of
Operating, with respect to the Operations and the Assets shall not:
(a) Make any material change in the ongoing Operations of the
Transferor;
(b) Mortgage or pledge any of the Assets or create or suffer
to exist any encumbrance thereupon, other than Permitted Encumbrances;
(c) Sell, lease, transfer or otherwise dispose of, directly or
indirectly, any of the Property, except in the ordinary course of business
consistent with past practice; provided that any asset so sold shall be replaced
with a comparable asset, or sell, lease, transfer, or otherwise dispose of any
fixed assets, whether or not in the ordinary course of business, which have a
value, individually or in the aggregate, in excess of $50,000;
(d) Enter into any lease, contract, agreement, commitment,
arrangement, or transaction relation to the Assets or the Operations other than
in the ordinary course of business;
(e) Amend, modify or change any existing lease or contract
relating to the Operations or the Assets, other than in the ordinary course of
the business consistent with past practice;
(f) Waive, release, grant or transfer any rights of value
relating to the Operations, other than in the ordinary course of the business
consistent with past practice;
(g) Except in the ordinary course of business, hire any new
employees or recall any laid-off employees;
(h) Delay payment of any account payable or other liability
relating to the Operations beyond the later of its due date or the date when
such liability would have been paid in the ordinary course of business
consistent with past practice, unless such delay is due to a good faith dispute
as to liability or amount;
(i) Permit any current insurance or reinsurance or
continuation coverage to lapse if such policy insures risks, contingencies or
liabilities (including product liability) related to the Property or the
Operations;
(j) Except as set forth in this Section 8.8, take any action
which would make any of the representations or warranties of the Transferor
untrue as of any time from the date of this Agreement to the date of the
Closing, or would result in any of the conditions set forth in this Agreement
not being satisfied;
(k) Authorize or propose, or agree in writing or otherwise
take, any of the actions described in this Section 8.8;
(l) Merge into or with or consolidate with any other
corporation or acquire all or substantially all of the business or assets of any
corporation or other entity;
(m) Purchase any securities of any corporation or other Person
that would constitute a part of the Operations;
(n) Take any action or enter into any commitment with respect
to or in contemplation of any liquidation, dissolution, recapitalization,
reorganization, or other winding up of the Operations; or
(o) Create or terminate any employee benefit plans (within the
meaning of Section 3(3) of ERISA) or any other employee benefit plan or program
not subject to ERISA, except as required by law.
8.9 Services of Employees. Between the date hereof and the
Closing, the Transferor shall use its reasonable best efforts to keep available
the services of its employees, and shall not, except as necessary to accommodate
Operating's employment of some of Transferor's employees or in accordance with
past practice and existing business policy, terminate any such employees.
8.10 (a) Access to Information Confidentiality. Between the date
hereof and the Closing, the Transferor (i) shall give Operating and its
respective authorized representatives reasonable access to all employees and all
facilities and all books and records relating to the Operations and the Assets,
(ii) shall permit the Transferor and its respective authorized representatives
to make such inspections of the Assets as they may reasonably require to verify
the accuracy of any representation or warranty contained in Section 7 and (iii)
shall furnish Operating and its respective authorized representatives with such
financial and operating data and other information with respect to the Assets
and Operations as any such party may from time to time reasonably request;
provided, however, that Transferor shall have the right to have a representative
present at all times of any such inspections or examinations conducted at the
offices or other facilities of the Transferor.
(b) The Confidentiality Agreement dated May 25, 2001 by and
between the Transferor and Operating shall remain in full force and effect as
set out therein until the Closing.
8.11 Third Party Consents. Between the date hereof and the
Closing, the Transferor shall use its commercially reasonable best efforts to
obtain all of the Consents. "Commercially reasonable best efforts" or any phrase
of similar tenor as used in this Agreement or any Ancillary Agreement shall mean
such good faith efforts as are commercially reasonable, comparing the cost and
expense of the efforts to the benefit to be gained (without regard to the
identity of the beneficiary). If the Transferor determines that obtaining a
required Consent is not commercially reasonable, it will immediately advise
Operating and the Partnership.
8.12 Release of Liens. Between the date hereof and the Closing,
the Transferor shall obtain full releases of any encumbrances on the Assets
other than Permitted Encumbrances.
8.13 Public Announcements. Between the date hereof and the
Closing, except for the form of press release set forth as Annex III and as may
be required by applicable law or stock exchange rule, none of the parties or any
of their respective affiliates or representatives shall issue any press release
or otherwise make any public statement with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of each of
the other parties.
8.14 Access to Records After Closing. For a period of six (6)
years from and after the Closing Date, the Transferor and its affiliates and
representatives shall have reasonable access to inspect and copy all books and
records relating to the Operations and Property to the extent that such access
may reasonably be required in connection with matters relating to or affected by
the Operations prior to the Closing Date. The Partnership and Operating shall
afford such access upon receipt of reasonable advance notice and during normal
business hours. If the Partnership and Operating desire to dispose of any of
such books and records prior to the expiration of such period, they shall, prior
to such disposition, give the Transferor a reasonable opportunity, at its
expense, to segregate and remove such books and records as it may select. The
Transferor shall be solely responsible for any costs or expenses incurred by it
pursuant to this Section 8.14.
8.15 Amendment of Schedules. The parties shall have the
continuing obligation until the Closing to amend or supplement promptly the
Schedules with respect to any matter hereafter arising or discovered that, if
existing or known at the date of this Agreement, would have been required to be
(i) disclosed to make any representation herein correct in all material respects
or (ii) set forth or described in the Schedules, each a "Disclosure Letter" and
collectively the "Disclosure Letters." For all purposes of this Agreement,
including for purposes of determining whether the conditions set forth in
Section 11.2 and Section 11.3 have been fulfilled, the Schedules shall be deemed
to include only that information contained therein on the date of this Agreement
and shall be deemed to exclude all information contained in any Disclosure
Letter thereto. If the Closing shall occur, then all matters disclosed pursuant
to any such Disclosure Letter at or prior to the Closing shall be waived, and
the Agreement and Schedules, as so supplemented or amended at the time of the
Closing, shall thereafter constitute the Schedules for purposes of this
Agreement.
8.16 Financial Statements. Commencing with the signing hereof,
the Transferor will cooperate with Operating so that within sixty (60) days
after the Closing Date, the Transferor's financial statements that are required
to be filed in accordance with the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Exchange Act Regulations, and the Securities Act may
be audited and prepared to file with a Form 8-K(A) with the SEC. All cost and
expense of the preparation of such financial statements shall be borne by the
Partnership subject, however, to the allocation of the cost of any employee who
is subject to the Transition Services Agreement.
8.17 Transport Assets. Prior to the Closing the Transferor will
acquire legal title to those transports listed on Schedule 8.17 which will
become part of the motor vehicles transferred to Operating at the Closing.
8.18 Actions by Transferor, Operating, and the Partnership. Each
of the Transferor, Operating, and the Partnership agrees to use commercially
reasonable best efforts to
satisfy the conditions to Closing set forth in Section 11 and to use its
commercially reasonable best efforts to refrain from taking any action within
its control that would cause a breach of a representation, warranty, covenant or
agreement as set forth in this Agreement.
8.19 Listing. The Partnership shall use its best efforts to list
the HPP Units on the New York Stock Exchange, prior to the Closing Date, subject
to official notice of issuance.
8.20 Owners' Efforts. The Owners agree that (i) they will vote
their shares of the Transferor in such a manner as to approve the transaction
contemplated by this Agreement and (ii) from and after Closing they will cause
the Transferor to fulfill its obligations under the Security Agreement.
8.21 Wyoming Property. To the extent that Operating acquires
either (i) a leasehold interest in any Real Property located in the state of
Wyoming or (ii) a fee interest in any property located in the state of Wyoming,
either of which is listed on Schedule 7.5(b) as having existing or potential
underground petroleum tanks (each a "Wyoming Property" and collectively, the
"Wyoming Properties"), Transferor agrees that it will institute and continue to
pay the enrollment fees for the Wyoming Leaking Aboveground/Underground Storage
Tank Remediation Program applicable to each such Wyoming Property for the term
of Operating's Lease and Option with respect thereto or, with respect to any
such property that is acquired in fee by Operating or an affiliate, until the
shorter of (i) five (5) years following the Closing or (ii) until remediation of
such property has been completed in accordance with the laws and regulations of
the state of Wyoming and the EPA and the state of Wyoming shall have given its
final release of the property concerned. Transferor will furnish Operating at
Closing a listing of each such site identifying the annual payment date for
registration of each site with the Wyoming Fund and, following Closing, furnish
to Operating at least thirty (30) days prior to the due date of the required
registration payment proof of payment of the fee for each such property.
8.22 Environmental Remediation.
(A) The Transferor agrees to continue in a diligent manner the
remediation of each parcel of Lease and Option Properties listed on Schedule
8.22(A) in accordance with the proposed remedial action set forth on Schedule
7.5(b) until (i) such parcel has reached a status such that the applicable
environmental authority has finally determined that no further remedial action
is required with respect to such parcel, (ii) Transferor determines that further
remediation is not commercially reasonable, (iii) Operating determines that the
prospects for the continued use of any such parcel is an unacceptable risk for
Operating's further involvement with such parcel, or (iv) a term of four and
one-half years has passed since the Closing and no final resolution of the
Environmental Condition on such parcel has been achieved and Operating
determines to relocate its operations to a new location. The determination of
any party as set forth above shall be in such party's absolute discretion.
In any such event, Operating shall, in its sole discretion, be entitled
to (i) terminate the Lease and Option of such parcel from the Transferor and
receive from the Transferor the cost to establish an alternative service
facility (in the area of the parcel in question) up to the value assigned to
such parcel on Schedule 8.22(A) (the "Relocation Cost") or (ii) exercise its
purchase
option in the Lease and Option. Any cost of relocation over and above that set
forth on Schedule 8.22(A) shall be borne by Operating.
(B) Ongoing Remediation Properties. With respect to each of
the "Ongoing Remediation Properties" listed on Schedule 8.22(B), the Transferor
agrees to continue in a diligent manner the remediation of each parcel of
Ongoing Remediation Property in accordance with the proposed remediation action
set forth on Schedule 8.22(B) until such parcel has reached a status such that
the applicable environmental authority has finally determined that no further
remedial action is required with respect to such parcel. All cost of remediation
or state fees or expenses on these parcels shall be borne by Transferor.
(C) Minor Remediation Prior to Closing. Between the date
hereof and the Closing, the Transferor shall have caused the proper testing,
removal, or other remediation of the conditions listed on Schedule 8.22(C) to
occur to the reasonable satisfaction of Operating and furnish to Operating
written documentation of the accomplishment of each such task to those
properties listed.
8.23 No Shop. Between the date hereof and January 31, 2003,
Transferor and Owners agree not to solicit, initiate or encourage the submission
of inquiries, proposals or offers from any person or entity relating to the sale
of assets of the Transferor or respond to any offer or inquiry.
8.24 Xxxxxxxx Fire Restoration. Transferor will proceed and
diligently complete, in accordance with the applicable rules and regulations,
the construction of a replacement facility to replace with a substantially
similar facility the structure and other improvements that were destroyed by the
Xxxxxxxx Fire. The replacement facility shall be designed and constructed in a
manner that is mutually approved by the Transferor and Operating, and no consent
or authorization shall be unreasonably withheld.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF OPERATING AND THE
PARTNERSHIP. As additional consideration for the transactions contemplated
herein, Operating and the Partnership make the following representations,
warranties and covenants, each of which is deemed by the parties to be material
and shall survive the Closing:
9.1 Organized and Good Standing. Each of the Partnership and
Operating is a limited partnership duly organized and validly existing in good
standing under the laws of Delaware, qualified to transact business in such
states as the nature of its business so requires, has full power to own its
property and to carry on its business as now being conducted, is licensed and
qualified and has full power to execute, deliver, and perform this Agreement.
9.2 Authorizations. Each of the Partnership and Operating has
obtained all necessary partnership authorizations and approvals (including,
without limitation, the approval of the Board of Directors of the general
partner of its general partner, U.S. Propane, L.L.C.), for the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereunder.
9.3 Securities Law Compliance. The Partnership has filed all
required reports under the Exchange Act and will continue to make all required
filings on a timely basis until the second anniversary of the Closing.
9.4 SEC Documents and Partnership Documents. The Partnership has
provided to Transferor the Partnership's Registration Statement No. 333-40407 as
filed with the Securities and Exchange Commission November 17, 1997 and the
Prospectus included therein, Form 10-K for the year ended August 31, 2002 (such
documents collectively referred to herein as the "SEC Documents"). As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Securities Act and the Exchange Act, and the rules and
regulations of the Commission promulgated thereunder applicable to such SEC
Documents, and none of the SEC Documents contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. The consolidated
financial statements of the Partnership included in the SEC Documents comply as
to form in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly present the consolidated financial position of the
Partnership and its subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended. Since
November 17, 1997, other than as discussed by the SEC Documents, there has been
no material adverse change in the business of the Partnership and its
subsidiaries, taken as a whole. The Partnership has also provided to Transferor
the Partnership's Amended and Restated Agreement of Limited Partnership of
Heritage Propane Partners, L.P. in the form entered into on June 27, 1996 in
connection with is offer of Common Units to the public, and amendments No. 1
through No. 4 that are all the amendments to date (collectively, the
"Partnership Agreement").
9.5 Authorization for HPP Units. The Partnership has taken all
necessary partnership action to permit it to authorize the issuance of the
number of HPP Units required to be issued pursuant to the terms of this
Agreement. The HPP Units to be issued pursuant to the terms of this Agreement
will, when issued, be validly issued, fully paid and nonassessable (except as
provided in Section 17-607 of Delaware Revised Uniform Limited Partnership Act)
and not subject to preemptive rights. The HPP Units issuable in the exchange
will, when issued, be listed on the New York Stock Exchange subject to official
notice of issuance. At the Closing the Partnership will accept the Transferor as
an additional Limited Partner as defined in the Partnership's Partnership
Agreement as in effect on the date hereof.
9.6 Tax Matters. Both Operating and the Partnership are
partnerships for federal income tax purposes, subject to the provisions of
subchapter K of the Internal Revenue Code.
9.7 Tax Under Code Section 7.04(c).
(a) Operating covenants that it will not cause or permit the
sale or disposition of Contributed Assets, the disposition of which would result
in gain being allocated to Transferor under Section 704(c) of the Code prior to
December 31, 2003. If any Contributed Assets are sold or disposed of prior to
December 31, 2003, Operating will, at the latter of (i) thirty (30) days after
the occurrence of the event that cause such breach or (ii) fifteen (15) days
prior to the due date of the tax return to report any such taxable event, tender
to the Transferor the amount of actual built-in gains tax federal and state if
applicable incurred by the Transferor by reason of the recognition of income
attributable to the sale of any of the Contributed Assets by Operating prior to
December 31, 2003 in violation of this subparagraph.
10. INDEMNIFICATION. The parties hereto agree as follows regarding
indemnification of each other concerning claims, actions, or proceedings arising
from this Agreement.
10.1 Indemnification of the Partnership and Operating. Transferor
shall indemnify and hold Operating and the Partnership harmless from and against
any loss, cost, expense, or other damage (including, without limitation,
reasonable attorneys' fees and expenses) (collectively, "Damage") resulting
from, arising out of, or incurred with respect to, or (in the case of claims
asserted against the Partnership or Operating by a third party) alleged to
result from, arise out of, or have been incurred with respect to:
(i) the falsity or the breach of any representation or
warranty made by Transferor herein or in any
Schedule hereto;
(ii) the breach of any covenant or agreement made by
Transferor herein;
(iii) any debt, obligation, contract, or liability of
Transferor satisfied by Operating or the
Partnership which is not expressly assumed by
Operating or the Partnership;
(iv) the Transferor's conduct of its business and the
Operations prior to the time of Closing, other
than the Assumed Obligations; and
(v) any claim or litigation listed on Schedule 7.4.
10.2 Indemnification of Transferor. Operating shall indemnify and
hold Transferor harmless from and against any Damage resulting from, arising out
of, or incurred with respect to, or (in the case of claims asserted against
Transferor by a third party) alleged to result from, arise out of, or have been
incurred with respect to:
(i) the falsity or the breach of any representation or
warranty made by Operating or the Partnership
herein or in any Schedule hereto;
(ii) the breach of any covenant or agreement made by
Operating or the Partnership herein;
(iii) any debt, obligation, contract, or liability of
Transferor satisfied by Transferor which is
expressly assumed by the Partnership or Operating
hereunder; and
(iv) the conduct of business by Operating using the
Property after the time of the Closing.
10.3 Notice of Claims. The party seeking indemnification (the
"Indemnified Party") agrees to give the party from whom indemnification is
sought (the "Indemnifying Party") timely notice of any claim with respect to
which the Indemnifying Party has agreed to indemnify the Indemnified Party under
this Section 10. Upon request, the Indemnified Party shall give the Indemnifying
Party access to such information possessed by the Indemnified Party as the
Indemnifying Party reasonably requests relating to such claim. The Indemnified
Party may initially undertake the defense of any third party claim until the
Indemnifying Party has acknowledged in writing that the Indemnifying Party is
indemnifying the Indemnified Party with respect to any third party claim,
whether or not involving litigation, at which point the Indemnifying Party will
be entitled to assume the defense of any such claim; provided that the
Indemnified Party may, at its election, participate (at its own expense) in such
defense. At the Indemnifying Party's reasonable request, the Indemnified Party
will cooperate with the Indemnifying Party in the preparation of any such
defense if the Indemnifying Party reimburses the Indemnified Party for any
expenses incurred in connection with such request. The Indemnifying Party will
not settle any such claim for consideration other than money without the prior
written consent of the Indemnified Party, which consent shall not be
unreasonably withheld.
10.4 Survival of Representations and Warranties and Agreements.
The respective representations, warranties, covenants and agreements of the
parties contained herein or in any certificate or other document delivered prior
to or at the Closing shall survive the Closing, and those in Sections 7.2 and
7.3 shall expire and terminate twenty-four (24) months thereafter, and the
remainder shall expire and terminate sixty (60) months thereafter, except for
(a) claims made on or prior to the expiration date made pursuant to Section
10.3, which claims and the provisions of Sections 10.1 through 10.5 shall
survive until the liability is finally determined, (b) the obligations of the
parties under Sections 8.1, 8.5 and 8.14, which obligations shall survive until
the end of the relevant limitations period, and (c) the representations and
warranties of the Transferor in Sections 8.1, 8.5 and 8.14, which
representations and warranties shall survive until the end of the relevant
limitations period. Thereafter, no party shall be under any liability whatsoever
with respect to any such representation, warranty, covenant or agreement or any
certificate with respect thereto.
10.5 Limitations of Liability. In consideration of the covenants
and agreements set forth herein, the maximum liability of the Transferor to the
Partnership and Operating shall be (i) $3,500,000 represented by those monies
deposited into the Environmental Fund as defined in and subject to the Security
Agreement for claims arising under Section 7.5(b), 8.21 and 8.22 and (ii)
$2,000,000 represented by those monies deposited into the Claims Fund as defined
in the Security Agreement with respect to all claims other than those covered by
Section 10.5 subsection (i) above; and the maximum liability of Operating and
the Partnership to the Transferor and the Owners shall be $5,500,000.
10.6 Payment. The party seeking indemnification shall be entitled
to immediate payment in cash upon final resolution of the claim.
11. CONDITIONS TO CLOSING, DAY OF THE CLOSING, AND CLOSING PROCEDURE.
11.1 Closing Date. Consummation of the purchase and sale
contemplated by this Agreement (the "Closing") shall occur in the offices of
Anderson, Nelson, Hall & Xxxxx, P.A. in
Idaho Falls,
Idaho, on January 2, 2003,
at 9:00 a.m. local time, or at such later date, time, or place as the
Partnership, Operating and Transferor shall mutually agree.
11.2 Conditions to Closing of the Transferor. The obligations of
the Transferor to consummate the transactions contemplated by this Agreement at
the Closing shall be subject to the fulfillment by Operating and/or the
Partnership on or prior to the Closing Date of each of the following conditions:
(a) Representations and Warranties True. All the
representations and warranties of Operating and/or the Partnership contained in
this Agreement, and in any agreement, instrument or document delivered by either
of Operating or the Partnership pursuant to this Agreement on or prior to the
Closing Date shall be true and correct, individually and in the aggregate, in
all material respects as of the date of this Agreement and as of the Closing
Date.
(b) Covenants and Agreements Performed. Each of Operating and
the Partnership shall have performed and complied with, in all material
respects, all covenants and agreements required by this Agreement to be
performed or complied with by it.
(c) Certificates. The Transferor shall have received a
certificate from each of the Partnership and Operating, in substantially the
form set forth in Exhibit 11.2(c), dated the Closing Date, representing and
certifying that the conditions set forth in Sections 11.2(a) and 11.2(b) have
been fulfilled.
(d) Legal Proceedings. No preliminary or permanent injunction
or other order, decree or ruling issued by a governmental authority, and no
statute, rule, regulation or executive order promulgated or enacted by a
governmental authority, shall be in effect that restrains, enjoins, prohibits or
otherwise makes illegal the consummation of the transactions contemplated
hereby. No proceeding before a governmental authority shall be pending (A)
seeking to restrain or prohibit the consummation of the transactions
contemplated hereby or (B) that could reasonably be expected, if adversely
determined, to impose any material limitation on the ability of the Transferor
to convey the Assets or to receive full payment therefor.
(e) Consents. All Consents set forth on Schedule 7.2 shall
have been obtained or made and shall be in full force and effect as to Operating
at the time of the Closing.
(f) Listing. The HPP Units issuable to the Transferor pursuant
to this Agreement shall have been approved for listing on the New York Stock
Exchange subject to official notice of issuance.
(g) No Material Adverse Effect. Since the date of this
Agreement, there shall not have been any event or condition having a material
adverse effect on the condition, financial or otherwise, of business prospects,
properties, net worth, or results of operations of the Partnership and Operating
taken together as a whole.
(h) Deliveries. Operating and the Partnership shall have
delivered the following:
(i) Legal Opinions. The Transferor shall have
received an opinion of counsel to Operating and the Partnership
in a reasonable and customary form to be agreed by the parties.
(ii) The documents and payments listed in Section
12.2.
11.3 Conditions to Closing of Operating and the Partnership. The
obligations of each of the Partnership and Operating to consummate the
transactions contemplated by this Agreement at the Closing shall be subject to
the fulfillment by the Transferor on or prior to the Closing Date of each of the
following conditions:
(a) Representations and Warranties True. All of the
representations and warranties of the Transferor contained in this Agreement,
and in any agreement, instrument or document delivered by the Transferor
pursuant to this Agreement on or prior to the Closing Date shall be true and
correct, individually and in the aggregate, in all material respects as of the
date of this Agreement and as of the Closing Date.
(b) Covenants and Agreements Performed. The Transferor shall
have performed and complied with, in all material respects, all covenants and
agreements required by this Agreement to be performed or complied with by it.
(c) Certificates. The Partnership and Operating shall have
received a certificate from the Transferor, in substantially the form set forth
in Exhibit 11.3(c), executed by the Transferor, dated the Closing Date,
representing and certifying that the conditions set forth in Sections 11.3(a)
and 11.3(b) have been fulfilled.
(d) Legal Proceedings. No preliminary or permanent injunction
or other order, decree, or ruling issued by a governmental authority, and no
statute, rule, regulation or executive order promulgated or enacted by a
governmental authority, shall be in effect (i) that restrains, enjoins,
prohibits or otherwise makes illegal the consummation of the transactions
contemplated hereby or (ii) that would impose any material limitation on the
ability of Operating effectively to exercise full rights of ownership of the
Assets and the Operations to be acquired by Operating under this Agreement. No
proceeding before a governmental authority shall be pending (A) seeking to
restrain or prohibit the consummation of the transactions contemplated hereby or
(B) that could reasonably be expected, if adversely determined, to impose any
material limitation on the ability of Operating effectively to exercise full
rights of ownership of the Assets and the Operations to be acquired by Operating
under this Agreement.
(e) Consents. All Consents set forth on Schedule 7.2 shall
have been obtained or made and shall be in full force and effect as to the
Transferor at the time of the Closing.
(f) No Material Adverse Effect. Since the date of this
Agreement there shall not have been any event or condition having a material
adverse effect on the condition
(financial or otherwise), business, prospects, properties, net worth or results
of operations of the Transferor, taken as a whole.
(g) Deliveries. The Transferor and its affiliates shall have
delivered the following:
(i) Release of Encumbrances. All encumbrances on the Assets,
other than the Permitted Encumbrances, shall have been fully released.
(ii) Legal Opinions. The Partnership and Operating shall
have received an opinion of counsel to the Transferor in a reasonable and
customary form to be agreed by the parties.
(iii) Leases. Assignments of lease shall have been executed
and delivered by the Transferor with respect to the properties identified in
Schedule 11.3(g)(iii), with such assignments on commercially reasonable terms
with representations, warranties and covenants consistent with this Agreement,
and Lease and Option in the form of Exhibit 8.2(iii) for the properties listed
on Schedule 8.22(A).
(iv) Application for Issuance. At the Closing, the
Transferor will deliver the Application for Issuance of Common Units,
substantially in the form attached as Exhibit 7.13.
(v) Title Commitments. At least twenty (20) days prior to
the Closing the Title Commitments contemplated by Section 12.1(c) with copies of
the exception documents thereto.
(vi) The documents listed in Section 12.1.
11.4 (a) Termination. This Agreement may be terminated and the
transactions contemplated hereby abandoned by written notice at any time prior
to the Closing in any of the following manners:
(i) by written consent of each of the parties;
(ii) by any party if the Closing has not occurred on or
before January 31, 2003, unless such failure to close resulted from a breach of
this Agreement by the party or its affiliate seeking to terminate this Agreement
pursuant to this Section 11.4(a)(ii).
(iii) by any parties if (i) there is any statute, rule or
regulation that makes consummation of the transactions contemplated hereby or
the Operations illegal or otherwise prohibited or (ii) a governmental authority
(A) has issued an order, decree or ruling or taken any other action restraining,
enjoining or otherwise prohibiting the consummation of the transactions
contemplated hereby, and such order, decree, ruling or other action shall have
become final and nonappealable or (B) has made any order, decree, ruling or
other action consenting to or approving consummation of the transactions
contemplated hereby contingent or conditional in any manner that
has a material adverse effect on either the contemplated operations of
Transferor on the one hand or the Partnership or Operating on the other hand
upon consummation of this Agreement;
(iv) by any party, if there has been any violation or breach
by any other party (other than an affiliate or related party of the first party)
of any representation, warranty, covenant or agreement contained in this
Agreement that has rendered impossible the satisfaction of any condition to the
obligations of such other party set forth in Section 11.2 or Section 11.3 and
such violation or breach has neither been cured within thirty (30) days after
notice by such first party to the other party nor waived by the first party;
(v) by any party, if any other event shall occur that shall
render the satisfaction of any such condition to the obligations of any other
party (other than an affiliate or related party of the first party) impossible
and such condition has not been waived by the other parties;
(vi) by the Partnership and Operating, if any material
amendment is made to the Schedules to Section 7 in accordance with Section 8.15.
For purposes of this section only, a material amendment shall be an event or
cost that is reasonably anticipated to result in a cost or expense in excess of
$100,000;
(vii) by the Transferor, if any material amendment is made
to the representations in and the Schedules to Section 9 in accordance with
Section 8.15. For purposes of this section only, a material amendment shall be
an event or cost that is reasonably anticipated to result in a cost or expense
in excess of $100,000;
(viii) by the Transferor, if the Average Price meets or
exceeds $29.00;
(ix) by Operating and the Partnership, if the Average Price
is $25.00 or less.
(b) Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 11.4(a) by any party, written notice thereof
shall forthwith be given to the other parties specifying the provision hereof
pursuant to which such termination is made. In the event of termination of this
Agreement for any reason, this Agreement shall become void and have no effect,
except that the agreements contained in this Section 11.4 and in Section 8.10(b)
and Sections 12.3, 12.4, 12.5, 12.6, 12.7 and 12.9 shall survive the termination
hereof. Nothing contained in this Section 11.4 shall relieve any party from
liability for any willful breach of this Agreement.
(c) Amendment. This Agreement may not be amended except by an
instrument in writing signed by each of the parties.
(d) Waiver. Any party may, on behalf of itself only and not on
behalf of any other party, (a) waive any inaccuracies in the representations and
warranties of any other party contained herein or in any document, certificate
or writing delivered pursuant hereto, (b) waive compliance by any other party
with any of its agreements contained herein, and (c) waive
fulfillment of any conditions to its obligations contained herein. Any agreement
on the part of a party to any such waiver shall be valid only if set forth in an
instrument in writing signed by or on behalf of such party. No failure or delay
by a party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof nor shall any single or partial exercise thereof preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.
11.5 Delivery of Assets; Risk of Loss and Business Transfer.
Delivery of possession of the Property purchased hereunder and the Closing shall
be deemed to have occurred for all purposes at the time of Transferor's receipt
of the wire transfer of funds called for under Section 4 on the day of the
Closing and all risks of loss, whether or not covered by insurance, shall be on
Transferor until such time and on Operating and the Partnership from and after
such time. The delivery or possession of the Assets to be transferred hereunder
shall be so arranged between Transferor, Operating and the Partnership as to
permit Operating to take over the Operations without interruption. Operating
will be given credit for the business activity on the day of the Closing. In the
event that the funds transfer is made after the time for overnight investment,
then Operating will pay to Transferor interest on the amount of the wire
transfer at the local overnight rate for sums of similar size.
11.6 Assignment and Assumption. Immediately upon the Closing
the Partnership will assign and contribute to Operating all of the Contributed
Property, and Operating will assume all of the Partnership's obligations arising
under this Agreement or any exhibit hereto, other than the obligation to deliver
HPP Units or pursuant to Section 2.3
12. INSTRUMENTS OF CONVEYANCE AND CLOSING DOCUMENTS.
12.1 Transferor's Documents. Transferor shall deliver to the
Partnership and Operating at the time of Closing on the day of the Closing the
following documents:
(a) An Assignment of Interests or other instruments of
transfer to Operating (as the assignee of the Partnership) for the (i)
Contributed Property and a Xxxx of Sale for the (ii) Additional Property
described in this Agreement in substantially the forms of Exhibit 12.1(a)(i) and
12.1(a)(ii).
(b) Vehicle title certificates or other evidence of
ownership of motor vehicle equipment described in Section 1 duly assigned to
Operating (as the assignee of the Partnership) together with such additional
transfer documents as the laws of the state of the location of the Operations
may require.
(c) Commitments for policies of title insurance for each
parcel of the Owned Real Property, in form and substance of any exceptions to
title reasonably satisfactory to Operating's counsel committing to insure the
title to the Owned Real Property in the amounts set forth on Annex II (the
"Title Commitments"), with the premium for the title policy and such commitment
and all other expense thereof paid by Transferor.
(d) Certified copies of corporate resolutions of Directors
and Stockholders authorizing the entry into this Agreement by Transferor and the
consummation of the transactions contemplated hereby.
(e) The Deeds for all the Real Property set forth as Owned
Property, other than those properties subject to a Lease and Option.
(f) Lease and Option Agreements for those properties listed
on Schedule 8.22.
(g) A certificate of good standing for Transferor from the
Secretaries of State of the states of
Idaho, Montana, Oregon, Utah, Washington,
and Wyoming.
(h) Termination Statement(s). (Mtg. Release) (Lien
Releases).
(i) The Security Agreement.
(j) The Transition Services Agreement in the form of Exhibit
12.1(j) (the "Transition Services Agreement").
(k) Such other documents as are reasonably requested by
Operating or the Partnership.
12.2 Operating's and Partnership's Documents. At the time of
Closing on the day of the Closing, Operating or the Partnership, as the case may
be, shall deliver to Transferor the following:
(a) A certified copy of resolutions duly adopted by the
Board of Directors of Operating and the Partnership approving the execution and
delivery of this Agreement and authorizing all necessary or proper
organizational action to enable Operating and the Partnership to comply with the
terms of this Agreement.
(b) The wire transfer required under Section 4.1, adjusted
as provided in the Agreement.
(c) The Certificates for the HPP Units or facsimile copies
thereof (with the originals to be delivered within three (3) business days
following the Closing).
(d) The Security Agreement.
(e) The Transition Services Agreement.
(f) Such other documents as are reasonably requested by
Transferor.
12.3 Finder's or Broker's Fee. Operating, the Partnership, and
Transferor each represents that they or it has not dealt with and at Closing it
will not have any liability to nor owe any fee or compensation to any agent,
finder, or broker, either in the nature of a finder's fee or otherwise in
connection with the subject matter of this Agreement and each agrees to
indemnify and hold the other harmless against any liability, damages costs or
expense incurred by reason of its breach of the foregoing representation.
12.4 Severability. If any provision of this Agreement is
prohibited or unenforceable in any jurisdiction then the party that will be
adversely affected thereby if the transaction is completed may, but shall not be
obligated, as to such jurisdictions, such prohibitions, or such
unenforceability, to complete the transfers contemplated by this Agreement
without invalidating the remaining provisions hereof, and any such prohibition
of unenforceability in any jurisdiction as so waived shall not invalidate or
render unenforceable such provisions in any other jurisdiction.
12.5 Notices. Any notice or other communication required or
permitted hereunder shall be in writing, and shall be deemed to have been given
if (i) placed in the United States mail, certified, postage prepaid, (ii)
delivered to a recognized overnight courier service for next business day
delivery, (iii) if received by facsimile transmission, or (iv) personally
delivered addressed as follows:
Transferor: V-1 Oil Co.
c/o Xxx Xxxxxxx
X.X. Xxx 00000
Xxxxx Xxxxx, Xxxxx 00000-0000
Fax #:
------------------------------------------
Owners; Blue Xxxx Group, Inc.
c/o Xxx Xxxxxxx
X.X. Xxx 00000
Xxxxx Xxxxx, Xxxxx 00000-0000
Fax #:
------------------------------------------
with a copy (which shall not constitute notice) to:
Anderson, Nelson, Hall & Xxxxx, P.A.
Attn: Xxxxxxx X. Xxxxxx, Esq.
000 Xxxxxxxx Xxxxx
X.X. Xxx 00000
Xxxxx Xxxxx, Xxxxx 00000-0000
Fax No.: 000-000-0000
Operating and: Heritage Operating, L.P.
the Partnership: Heritage Propane Partners, L.P.
c/o U.S. Propane, L.P.
Attn: H. Xxxxxxx Xxxxxxxx
0000 X. Xxxx Xxxxxx, Xxxxx 000
Xxxxx, Xxxxxxxx 00000
Fax #: 000-000-0000
with a copy (which shall not constitute notice) to:
Doerner, Saunders, Xxxxxx & Xxxxxxxx, L.L.P.
Attn: Xxxxxxxx X. Xxxxxxxx, Xx.
000 Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxx, XX 00000-0000
Fax #: 000-000-0000
Each of the foregoing shall be entitled to specify a different address by giving
notice as aforesaid to the other.
12.6 Entire Agreement, Modification, Waiver, Headings. This
Agreement constitutes the entire agreement between the parties hereto pertaining
to the subject matter hereof, and supersedes all other prior agreements,
understandings, negotiations, and discussions, whether oral or written, of the
parties. There are no warranties, representations, or other agreements between
the parties in connection with the subject matter hereof, except as specifically
set forth herein. No supplement, modification, waiver, or termination of this
Agreement shall be binding unless executed in writing by the party to be bound
thereby. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provisions hereof (whether or not
similar), nor shall such waiver constitute a continuing waiver unless otherwise
expressly provided. Paragraph headings are not to be considered part of this
Agreement and are included solely for convenience and are not intended to be a
full or accurate description of contents thereof. The parties hereto may amend
or modify this Agreement in such manner as may be agreed upon by a written
instrument executed by such parties. The Exhibits and Schedules referred to in
this Agreement shall constitute a part of this Agreement and are incorporated as
though set forth in verbatim text by this reference thereto.
12.7 Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of Operating, the Partnership, and Transferor, and
their respective successors, assigns, personal representatives, and heirs.
12.8 Allocation of Agreed Value. The Agreed Value shall be
allocated in a manner agreed upon by the parties and among the Assets as set
forth in Schedule 12.8 and Section 2 hereof. The parties agree to report this
transaction for tax purposes on IRS Form 8594 consistent with, and in accordance
with the allocations set forth in Schedule 12.8 and Sections 2 and 3 hereof.
12.9 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the state of
Idaho.
12.10 Counterparts. This Agreement may be executed in any number
of counterparts and by original or facsimile signatures delivered by the parties
to the other, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have hereunto subscribed their
names on the day and year first above written.
"TRANSFEROR" "OWNERS"
V-1 OIL CO. As to Sections 8.5, 8.20, 8.23, 12.4, 12.5,
12.6, 12.7 and 12.9 Only
By:
--------------------------------------- ----------------------------------------------------
Xxxxxx X. Xxxxxxx, President
----------------------------------------------------
"OPERATING"
HERITAGE OPERATING, L.P.
----------------------------------------------------
By U.S. Propane, L.P., General Partner
By U.S. Propane, L.L.C., General Partner
----------------------------------------------------
By:
---------------------------------------
Title:
------------------------------------ ----------------------------------------------------
"PARTNERSHIP"
HERITAGE PROPANE PARTNERS, L.P.
By U.S. Propane, L.P., General Partner
By U.S. Propane, L.L.C., General Partner
By:
---------------------------------------
Title:
---------------------------------------
