AGREEMENT AND PLAN OF MERGER
dated as of
December 19, 2001
among
INERGY HOLDINGS, LLC
IPCH ACQUISITION CORP.
IPCH MERGER CORP.
INERGY, L.P.
INDEPENDENT PROPANE COMPANY HOLDINGS
and
CERTAIN HOLDERS OF SERIES E PREFERRED STOCK OF
INDEPENDENT PROPANE COMPANY HOLDINGS
and joined in by
XXXXX X. XXXXX and XXXXXX X. XXXXXX
Table of Contents
-----------------
Page
----
ARTICLE I DEFINITIONS................................................................................... 2
ARTICLE II THE MERGER................................................................................... 2
Section 2.1. The Merger........................................................................ 2
Section 2.2. Dissenting Shares................................................................. 6
Section 2.3. Payment of Merger Consideration................................................... 7
Section 2.4. Escrow............................................................................ 8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF IPCH...................................................... 9
Section 3.1. Corporate Organization............................................................ 9
Section 3.2. Due Qualification................................................................. 10
Section 3.3. Authority; Binding Effect......................................................... 10
Section 3.4. No Creation of Violation, Default, Breach or Encumbrance.......................... 10
Section 3.5. No Present Default................................................................ 10
Section 3.6. Approvals, Licenses and Authorizations............................................ 11
Section 3.7. Compliance With Law............................................................... 11
Section 3.8. Capitalization; Financial Statements.............................................. 12
Section 3.9. Absence of Certain Events......................................................... 13
Section 3.10. Title to and Condition of Properties.............................................. 14
Section 3.11. Intangible Properties............................................................. 16
Section 3.12. Contracts and Commitments......................................................... 17
Section 3.13. Insurance......................................................................... 18
Section 3.14. Tax Returns and Tax Audits........................................................ 18
Section 3.15. Books and Records................................................................. 19
Section 3.16. Substantial Customers and Suppliers............................................... 19
Section 3.17. No Litigation or Adverse Events................................................... 20
Section 3.18. Employee Benefit Plans; Labor Matters............................................. 20
Section 3.19. Business Names.................................................................... 22
Section 3.20. Brokers and Finders............................................................... 22
Section 3.21. Environmental..................................................................... 22
Section 3.22. Disclosure........................................................................ 23
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF INERGY HOLDINGS............................................ 24
Section 4.1. Organization...................................................................... 24
Section 4.2. Authority; Binding Effect......................................................... 24
Section 4.3. No Creation of Violation, Default, Breach or Encumbrance.......................... 24
Section 4.4. Brokers and Finders............................................................... 25
Section 4.5. No Adverse Action................................................................. 25
Section 4.6. Approvals, Licenses and Authorizations............................................ 25
Section 4.7. Financing Commitment.............................................................. 25
Section 4.8. No Knowledge of Misrepresentation or Omission..................................... 25
i
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE V REPRESENTATIONS AND WARRANTIES OF MLP, IPCH ACQUISITION CORP. AND MERGER SUB............... 26
Section 5.1. MLP Representations and Warranties................................................ 26
Section 5.2. Merger Sub Representations and Warranties......................................... 28
Section 5.3. IPCH Acquisition Corp. Representations and Warranties............................. 29
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF IPCH STOCKHOLDERS....................................... 30
Section 6.1. Authorization..................................................................... 30
Section 6.2. Non-Contravention................................................................. 30
Section 6.3. Investment Representations........................................................ 30
ARTICLE VII ADDITIONAL COVENANTS OF THE PARTIES...................................................... 31
Section 7.1. Access to IPCH Information........................................................ 31
Section 7.2. Public Information................................................................ 32
Section 7.3. Confidentiality................................................................... 32
Section 7.4. IPCH Interim Operations........................................................... 32
Section 7.5. Acquisition Proposals............................................................. 34
Section 7.6. Employment Agreements............................................................. 34
Section 7.7. Nonsolicitation Agreements........................................................ 35
Section 7.8. Registration Rights Agreement..................................................... 35
Section 7.9. Reasonable Best Efforts........................................................... 35
Section 7.10. Further Assurances................................................................ 35
Section 7.11. IPCH Stockholder Approval......................................................... 35
Section 7.12. MLP Guaranty...................................................................... 35
Section 7.13. Supplemental Information.......................................................... 36
Section 7.14. Title Insurance................................................................... 36
Section 7.15. Required Consents and Agreements of Other IPCH Stockholders....................... 38
Section 7.16. Insurance......................................................................... 38
Section 7.17. Termination of 401(k) Plan........................................................ 38
ARTICLE VIII CONDITIONS TO INERGY PARTIES' OBLIGATION TO CONSUMMATE THE MERGER....................... 38
Section 8.1. Compliance with Agreement......................................................... 39
Section 8.2. Representations and Warranties.................................................... 39
Section 8.3. Certificate....................................................................... 39
Section 8.4. Corporate Authorization........................................................... 39
Section 8.5. Opinion of Counsel................................................................ 39
Section 8.6. Good Standing..................................................................... 39
Section 8.7. Additional Agreements............................................................. 39
Section 8.8. No Litigation..................................................................... 40
Section 8.9. Third Party Consents.............................................................. 40
Section 8.10. Financing......................................................................... 40
Section 8.11. No Adverse Event.................................................................. 40
Section 8.12. Proceedings Satisfactory.......................................................... 40
ii
TABLE OF CONTENTS
-----------------
PAGE
----
ARTICLE IX CONDITIONS TO OBLIGATIONS OF IPCH AND IPCH STOCKHOLDERS TO CONSUMMATE THE MERGER........... 41
Section 9.1. Compliance With Agreement.......................................................... 41
Section 9.2. Representations and Warranties..................................................... 41
Section 9.3. Certificate........................................................................ 41
Section 9.4. Opinion of Counsel................................................................. 41
Section 9.5. Additional Agreements.............................................................. 41
Section 9.6. Corporate Authorization............................................................ 42
Section 9.7. Third Party Consents............................................................... 42
ARTICLE X INDEMNIFICATION............................................................................. 42
Section 10.1. Indemnity of IPCH Stockholders..................................................... 42
Section 10.2. A.................................................................................. 43
Section 10.3. Procedure.......................................................................... 44
Section 10.4. Costs.............................................................................. 46
Section 10.5. Claims Against Escrow.............................................................. 46
Section 10.6. Limitations on Indemnification..................................................... 46
Section 10.7. Reduction for Insurance............................................................ 47
Section 10.8. Agreement Respecting Environmental Matters......................................... 47
ARTICLE XI TERMINATION................................................................................ 49
Section 11.1. Termination........................................................................ 49
Section 11.2. No Liability....................................................................... 50
Section 11.3. Notice............................................................................. 50
Section 11.4. Effect of Termination.............................................................. 50
ARTICLE XII MISCELLANEOUS............................................................................. 51
Section 12.1. Notices............................................................................ 51
Section 12.2. Amendments; No Waivers............................................................. 52
Section 12.3. Survival........................................................................... 52
Section 12.4. Assignment......................................................................... 52
Section 12.5. Governing Law...................................................................... 53
Section 12.6. IPCH Stockholders' Representative.................................................. 53
Section 12.7. Counterparts; Effectiveness........................................................ 55
Section 12.8. No Third Party Beneficiaries....................................................... 55
Section 12.9. Interpretation..................................................................... 55
Section 12.10. Enforcement........................................................................ 55
Section 12.11. Entire Agreement................................................................... 56
Section 12.12. Severability....................................................................... 56
iii
Table of Contents
-----------------
Page
----
iv
APPENDICES
Appendix I - Definitions
EXHIBITS
Exhibit A Certificate of Merger
Exhibit B Escrow Agreement
Exhibit C Employment Agreement (Xxxxx)
Exhibit D Employment Agreement (Xxxxxx)
Exhibit E Nonsolicitation Agreement
Exhibit F Registration Rights Agreement
Exhibit G Stockholder Joinder Agreement
Exhibit H Form of Legal Opinion - IPCH and IPCH Stockholders
Exhibit I Form of Legal Opinion - Inergy Holdings
Exhibit J Key Employees ("Knowledge")
SCHEDULES
Schedule 2.1(f) September 30, 2001 Balance Sheet of IPCH
Schedule 2.1(f)(i) Sample Calculation of Net Working Capital
Schedule 3.1 IPCH Subsidiaries
Schedule 3.2 Foreign Qualifications
Schedule 3.4 Required Consents
Schedule 3.5 Contract Defaults
Schedule 3.6 Licenses, Permits, etc.
Schedule 3.7 IPCH Compliance with Law
Schedule 3.8(a) IPCH Options and Warrants
Schedule 3.9 Absence of Certain Events
Schedule 3.10(a) IPCH Real Property
Schedule 3.10(b) Propane Tanks and Personal Property
Schedule 3.10(c) Dependent Contracts
Schedule 3.11 Patents and Trademarks
Schedule 3.12 Material Contracts and Required Consents
Schedule 3.13 Insurance Policies
Schedule 3.14 Taxes
Schedule 3.16 IPCH Suppliers and Customers
Schedule 3.17 No Litigation or Adverse Events
Schedule 3.18(a) Benefit Plans
Schedule 3.18(d) Exceptions to Tax Qualified Plans
Schedule 3.18(h) 280G Payments
Schedule 3.19 IPCH Business Names
Schedule 3.21(e) Hazardous Substances
Schedule 7.14 Material Real Property
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER, dated as of December 19, 2001 (the
"Agreement"), by and among Inergy Holdings, LLC, a Delaware limited liability
company ("Inergy Holdings"), IPCH Acquisition Corp., a Delaware corporation and
wholly owned subsidiary of Inergy Holdings ("IPCH Acquisition Corp."), IPCH
Merger Corp., a Delaware corporation and wholly-owned subsidiary of IPCH
Acquisition Corp. ("Merger Sub"), Inergy, L.P., a Delaware limited partnership
("MLP") with publicly traded common units ("MLP Units"), Independent Propane
Company Holdings, a Delaware corporation ("IPCH"), certain holders of Series E
Preferred Stock of IPCH (the "Signing IPCH Stockholders") and joined in by Xxxxx
X. Xxxxx ("Xxxxx"), Xxxxxx X. Xxxxxx ("Xxxxxx") and Inergy Propane, LLC, a
Delaware limited liability company wholly-owned by MLP ("Inergy Propane") for
certain limited purposes as set forth herein.
RECITALS:
A. The respective Boards of Directors of IPCH, Inergy Holdings, IPCH
Acquisition Corp. and Merger Sub, and Inergy GP, LLC, the Managing General
Partner of MLP, have approved the merger of Merger Sub with and into IPCH (the
"Merger"), upon the terms and subject to the conditions set forth in this
Agreement, pursuant to which each issued and outstanding share of Series E
Senior Redeemable Preferred Stock, par value $.01 per share of IPCH (the "Series
E Preferred Stock"), will be converted into the right to receive cash and MLP
Units, as hereinafter provided, and each issued and outstanding share of Series
D Convertible Preferred Stock, par value $.01 per share of IPCH (the "Series D
Preferred Stock"), and Common Stock, par value $.01 per share ("Common Stock"),
of IPCH will be converted into the right to receive $.01 in cash.
B. Immediately following consummation of the Merger the following
will occur: IPCH, as the surviving corporation of the Merger (the "Surviving
Corporation"), will dissolve; Independent Propane Company, a Delaware
corporation and wholly-owned operating subsidiary of IPCH (the "IPCH Operating
Subsidiary"), will convert into a Delaware limited liability company; the
membership interest in IPCH Operating Subsidiary will be transferred by IPCH
Acquisition Corp. to Inergy Propane; and thereafter IPCH Operating Subsidiary
will be merged into Inergy Propane.
C. Inergy Holdings, Merger Sub, MLP, IPCH and the Signing IPCH
Stockholders desire to make certain representations, warranties, covenants and
agreements in connection with the Merger and related matters, including setting
forth the terms and conditions of the Merger.
NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements contained in this Agreement, the parties agree as
follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, the capitalized terms used in this
Agreement shall have the meanings specified or referred to in Appendix I hereto
which is incorporated herein by reference.
ARTICLE II
THE MERGER
Section 2.1. The Merger.
----------
(a) The Merger. Upon the terms and subject to the conditions of
----------
this Agreement and in accordance with the General Corporation Law of the
State of Delaware (the "Delaware Law"), at the Effective Time Merger Sub
shall be merged with and into IPCH. As a result of the Merger, the
separate corporate existence of Merger Sub shall cease and IPCH shall
continue as the Surviving Corporation of the Merger.
(b) Effective Time. As soon as practicable after the Closing
--------------
(i) the Certificate of Merger for the Merger ("Certificate of Merger"),
in substantially the form attached hereto as Exhibit A, prepared and
executed in accordance with the relevant provisions of the Delaware Law,
shall be filed with the Secretary of State of Delaware. The parties
hereto agree to take all such further actions as may be required by law
to make the Merger effective. The Merger shall become effective in
accordance with the terms of this Agreement upon the filing of the
Certificate of Merger (such time and date being referred to herein as the
"Effective Time").
(c) The Closing. The Closing of the Merger and transactions
-----------
contemplated by this Agreement will take place at 10:00 a.m. on December
19, 2001 or such other date as IPCH and Inergy Holdings may agree. The
Closing shall take place at the offices of Xxxxxxx, Mag & Fizzell, P.C.,
at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx Xxxx, Xxxxxxxx, or such other
place as may be mutually agreed upon by the parties hereto.
(d) Effects of the Merger. At and after the Effective Time, the
---------------------
Merger will have the effects set forth in the Delaware Law. Without
limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and
franchises of Merger Sub and IPCH shall be vested in the Surviving
Corporation, and all debts, liabilities and duties of Merger Sub and IPCH
shall become the debts, liabilities and duties of the Surviving
Corporation. In addition, the Merger shall have the following effects:
(i) Certificate of Incorporation. The Certificate of
----------------------------
Incorporation of IPCH as in effect immediately prior to the
Effective Time shall be the Certificate of Incorporation of the
Surviving Corporation.
2
(ii) Bylaws. The Bylaws of IPCH as in effect immediately
------
prior to the Effective Time shall be the Bylaws of the Surviving
Corporation.
(iii) Board of Directors. The directors of Merger Sub at
------------------
the Effective Time shall be the initial directors of the Surviving
Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected and qualified,
as the case may be.
(iv) Officers. The officers of Merger Sub at the
--------
Effective Time shall be the initial officers of the Surviving
Corporation, until the earlier of their resignation or removal or
until their respective successors are duly elected or appointed
and qualified, as the case may be.
(e) Effect on Capital Stock. At the Effective Time, by virtue
-----------------------
of the Merger and without any action on the part of the parties hereto or
their respective stockholders:
(i) Series E Preferred Stock. Each share of Series E
------------------------
Preferred Stock outstanding immediately prior to the Effective
Time shall be converted into the right to receive from IPCH
Acquisition Corp. (A) subject to Section 2.3(b) hereof, the number
of MLP Units set forth in Section 2.1(f)(ii) below divided by
Twenty-Nine Thousand (29,000), (B) the cash determined under
Section 2.1(f) divided by Twenty-Nine Thousand (29,000), and (C)
the additional cash, if any, which shall be payable following
determination of the Final Cash Consideration Amount in accordance
with Section 2.1(f)(i), with such additional cash calculation
divided by Twenty-Nine Thousand (29,000).
(ii) Series D Preferred Stock. Each share of Series D
------------------------
Preferred Stock outstanding immediately prior to the Effective
Time shall be converted into the right to receive from IPCH
Acquisition Corp. cash in the amount of $.01 per share.
(iii) Common Stock. Each share of Common Stock outstanding
------------
immediately prior to the Effective Time shall be converted into
the right to receive from IPCH Acquisition Corp. cash in the
amount of $.01 per share.
(iv) Stock Options and Warrants. Each warrant for the
--------------------------
purchase of Common Stock or Series D Preferred Stock and each
stock option for the purchase of Common Stock or Series D
Preferred Stock (collectively, the "Stock Rights") outstanding
immediately prior to the Effective Time shall be converted into
the right to receive from IPCH Acquisition Corp. the consideration
specified below:
1. Stock Options. Each stock option shall, by
-------------
virtue of the Merger and without any action on the part of
the holder thereof, be converted into the right to receive,
at the Effective Time, an amount in cash equal to (A) $.01
per share of Common Stock or Series D Preferred Stock, as
the case may be, issuable upon the exercise of such option
less (B) the exercise price for each such share, which
exercise price will be
3
deducted from the amount of Merger Consideration otherwise
payable to the holder thereof and less (C) the applicable
amount of withholding for income and employment Tax
purposes (which amounts shall be paid to the Surviving
Corporation to be applied to such Taxes for the benefit of
the stockholders disposing of the options).
2. Warrants. Each warrant for the purchase of
--------
Common Stock or Series D Preferred Stock shall, by virtue
of the Merger and without any action on the part of the
holder thereof, be converted into the right to receive, at
the Effective Time, an amount in cash equal to (A) $.01 per
share of Common Stock or Series D Preferred Stock, as the
case may be, issuable upon the exercise of such warrant
less (B) the exercise price for each such share, which
exercise price will be deducted from the amount of Merger
Consideration otherwise payable to the holder thereof.
(v) Merger Sub Common Stock. Each share of common stock
-----------------------
of Merger Sub outstanding immediately prior to the Effective Time
shall be converted into one share of Common Stock of the Surviving
Corporation.
(vi) Fractional MLP Units. No fractional MLP Units shall
--------------------
be issued in connection with the conversion of the Series E
Preferred Stock in the Merger and the distribution of MLP Units in
respect thereof, but in lieu of such fraction, the Surviving
Corporation shall make a cash payment (without interest and
subject to the payment of any applicable withholding Taxes) equal
to $26.30 times such fraction. Such cash payments shall be made by
company check of IPCH Acquisition Corp.
(f) Merger Consideration. The portion of the Merger
--------------------
Consideration for shares of Series E Preferred Stock shall consist of
cash and MLP Units determined as follows:
(i) Cash. The cash portion of the Merger Consideration
----
payable for shares of Series E Preferred Stock shall be an amount
equal to:
(A) Seventeen Million Four Hundred Thousand
Dollars ($17,400,000);
(B) minus an amount equal to the Transaction
Expenses;
(C) minus the amount, if any, by which IPCH's
Adjusted Shareholders' Equity is less than Twelve Million
Four Hundred Thousand Dollars ($12,400,000);
(D) plus (or minus) the amount by which the net
working capital of IPCH [defined as adjusted current assets
less adjusted current liabilities (each of those terms
being determined in the manner illustrated on Schedule
2.1(f)(i) hereto)] at the Effective Time is greater (or
less) than Four Million Five Hundred Thousand Dollars
($4,500,000); and
4
(E) minus (or plus) the amount by which the sum
of indebtedness, excluding that certain note payable plus
interest through the Closing Date to Xxxxx Xxxx (which for
information purposes only is $170,781 as of September 30,
2001), of IPCH for borrowed money at the Effective Time and
amounts owed at the Effective Time to the selling parties
in acquisitions made by IPCH or its Subsidiaries is greater
(or less) than Fifty-Five Million Dollars ($55,000,000).
To confirm the procedure for determining net working capital, a
calculation of net working capital based on the consolidated
balance sheet of IPCH at December 18, 2001, is set forth in
Schedule 2.1(f)(i), which calculation has been reviewed by the
independent public accounting firms representing IPCH and MLP,
respectively.
As used herein, "Transaction Expenses" shall mean bonuses
or fees paid or payable to Xxxxx and Xxxxxx specifically in
connection with the Merger and all legal, accounting, investment
banking and other fees and costs, including those of UBS Warburg
LLC, incurred at or prior to the Effective Time by IPCH or any
Subsidiary of IPCH as a result of the proposed sale of IPCH or any
Subsidiary of IPCH, as a result of the Merger or in connection
with this Agreement to the extent the same are incurred or are
recordable under generally accepted accounting principles ("GAAP")
from and after September 1, 2001 through the Effective Time, and
"IPCH's Adjusted Shareholders' Equity" shall mean the
shareholders' equity of IPCH as determined from the consolidated
balance sheet of IPCH as of the Effective Time prepared in
accordance with GAAP, consistently applied, plus the amount of any
Transaction Expenses included as a reduction of the merger
consideration pursuant to item (B) of Section 2.1(f)(i) above to
the extent such Transaction Expenses were included as an expense
of IPCH at or prior to the Effective Time and thereby had the
effect of reducing the shareholders' equity of IPCH as of the
Effective Time. Transaction Expenses shall not include any costs
or expenses incurred or paid by Inergy Holdings or any of its
affiliates in connection with the Merger or otherwise. Two days
prior to the Closing (or such other date agreed to by the IPCH
Stockholders' Representative and Inergy Holdings), the IPCH
Stockholders' Representative shall provide instructions to Inergy
Holdings to pay the Transaction Expenses and Inergy Holdings shall
pay on the Closing Date such Transaction Expenses to those Persons
to which such amounts are owed in accordance with such
instructions (and also, notwithstanding anything to the contrary
herein contained, Two Hundred Thousand Dollars ($200,000) shall be
withheld from the cash portion of the Merger Consideration and
shall be paid to the IPCH Stockholders' Representative and held
and administered by the IPCH Stockholders' Representative as a
reserve (the "Reserve Account") for any fees and expenses that may
be incurred by the IPCH Stockholders' Representative on behalf of
the IPCH Stockholders under this Agreement). Prior to the Closing,
the parties shall make a mutually acceptable estimate of the cash
amount payable under this Section 2.1(f)(i) (the "Estimated Cash
Consideration"). At the Closing, Inergy Holdings shall (1) deliver
to the Escrow Agent under the Escrow Agreement One Hundred
Thousand Dollars
5
($100,000) and (2) pay to the holders of the Series E Preferred
Stock the balance of such Estimated Cash Consideration as provided
in Section 2.1(e)(i) above and Sections 2.3 and 2.4 below. Within
forty-five (45) days after the Closing, Inergy Holdings shall
provide to the IPCH Stockholders' Representative (1) a balance
sheet of IPCH as of the Effective Time (which statement shall be
prepared in accordance with GAAP consistently applied with the
historical financial statements of IPCH, except that no effect
shall be given to (a) the transactions contemplated hereby or
relating to Inergy Holdings' financing of either the Surviving
Corporation or any of the transactions contemplated hereby or (b)
any purchase accounting or other similar adjustments resulting
from the consummation of the transactions contemplated hereby) and
(2) a calculation of the cash portion of the Merger Consideration
pursuant to the provisions of this Section 2.1(f), including the
amount by which the Estimated Cash Consideration is less than or
greater than such cash portion of the Merger Consideration. The
IPCH Stockholders' Representative shall have a period of
forty-five (45) days to review and raise any objections to such
balance sheet and/or calculation. During such 45-day period,
Inergy Holdings shall provide the IPCH Stockholders'
Representative and its advisors with timely access to the work
papers, trial balances and similar materials used in connection
with the preparation of the balance sheet and calculation,
including the work papers, trial balances and similar materials
prepared by the Inergy Holdings' accountants. Inergy Holdings and
the IPCH Stockholders' Representative shall work in good faith to
resolve any such objections and reach a written agreement with
respect thereto, but if no agreement is reached within fifteen
days after such objection is made, then Xxxxxx Xxxxxxxx, LLP shall
review the matter in disagreement and shall determine the
appropriate resolution thereof in accordance with the terms hereof
within sixty (60) days after the expiration of the aforementioned
forty-five (45) day period. The written determination of Xxxxxx
Xxxxxxxx, LLP shall be delivered to Inergy Holdings and the IPCH
Stockholders' Representative and shall be final, binding and
nonappealable by the parties, absent manifest error or fraud. The
fees and expenses of Xxxxxx Xxxxxxxx, LLP shall be borne by (A)
Inergy Holdings, if such determination of Xxxxxx Xxxxxxxx, LLP
results in a calculation of the cash portion of the Merger
Consideration that is closer to that calculated by the IPCH
Stockholders' Representative than that calculated by Inergy
Holdings, and (b) the IPCH Stockholders, if such determination of
Xxxxxx Xxxxxxxx, LLP results in a calculation of the cash portion
of the Merger Consideration that is closer to that calculated by
Inergy Holdings than that calculated by the IPCH Stockholders'
Representative. The cash portion of the Merger Consideration
determined pursuant to the foregoing procedures shall be the
"Final Cash Consideration Amount."
(ii) MLP Units. The total number of MLP Units shall be
---------
365,019.
Section 2.2. Dissenting Shares. Pursuant to the Securityholders
-----------------
Agreement, dated September 11, 1998 among IPCH and the securityholders of IPCH
(the "Securityholders Agreement"), IPCH represents and warrants to Inergy
Holdings that each holder of outstanding capital stock of IPCH of each class and
each holder of an option or warrant to purchase any such
6
capital stock have agreed to consent to the Merger and to waive any statutory or
other dissenters' rights or appraisal rights under Delaware Law.
Section 2.3. Payment of Merger Consideration. Payment of the Merger
-------------------------------
Consideration shall be made in accordance with the following:
(a) Delivery of Stock. Prior to the Closing, Inergy Holdings
-----------------
will deliver to each record holder of outstanding shares of Stock a form
of letter of transmittal ("Letter of Transmittal") to be used for the
purpose of surrendering Stock Certificates to Inergy Holdings in exchange
for the right to receive a portion of the Merger Consideration for each
share of Stock represented by such Stock Certificate, such letter of
transmittal to include, in the case of IPCH Stockholders (other than the
Signing IPCH Stockholders), the representations and agreements set forth
in Section 6.3(b), (c) and (d) of this Agreement. At or subsequent to the
Closing, Stock Certificates representing all of the outstanding Stock
will be surrendered by the holders thereof to Inergy Holdings together
with properly completed and executed letters of transmittal, and Inergy
Holdings shall cause the Merger Consideration to be delivered in
accordance with the procedures set forth in Section 2.3(b).
(b) Payment Procedure. Subject to the delivery of One Hundred
-----------------
Thousand Dollars ($100,000) in escrow as provided herein and to the
withholding of Two Hundred Thousand Dollars ($200,000) to be held and
administered by the IPCH Stockholders' Representative in the Reserve
Account as contemplated by Section 2.1(f)(i), payment of the cash portion
of the Merger Consideration shall first be made by paying to each
Stockholder providing a Letter of Transmittal a cash amount determined as
the product of the applicable Cash Amount for the Stock held by such
Stockholder and the number of shares of such Stock held at the Effective
Time by such Stockholder, by the delivery of cashier's checks in the
respective names of such Stockholders at Closing to the IPCH
Stockholders' Representative for subsequent delivery to such Stockholder,
or if the Cash Amount payable to any Stockholder is in excess of
$500,000, then, at the election of such Stockholder by wire transfer of
immediately available funds to such bank account as shall be designated
in writing by such Stockholder prior to the Closing. Subject to the
delivery of 190,114 MLP Units in escrow as provided herein, IPCH
Acquisition Corp. shall deliver 174,905 MLP Units to the holders of the
Series E Preferred Stock (such holders being referred to herein as the
"IPCH Stockholders") by delivery to each such holder who has provided a
Letter of Transmittal a certificate representing such holder's pro rata
share (based on the percentage ownership of such IPCH Stockholder of
Series E Preferred Stock at the Effective Time) of Distributable MLP
Units or a cash payment, if applicable, pursuant to Section 2.1(e)(vi)
hereof. For any IPCH Stockholder providing a Letter of Transmittal
following the Closing, the Surviving Corporation will deliver to each
such holder a certificate dated the Closing Date representing such
holder's pro rata share (based on the percentage ownership of such IPCH
Stockholder of Series E Preferred Stock at the Effective Time) of
Distributable MLP Units or a cash payment, if applicable, pursuant to
Section 2.1(e)(i) hereof following receipt of such Letter of Transmittal.
At the Closing, IPCH Acquisition Corp. shall make a cash payment to the
holders of the Series D Preferred Stock and the holders of Common Stock
pursuant to Sections 2.1(e)(ii) and 2.1(e)(iii) hereof, respectively, by
delivery to each such holder who has
7
provided a Letter of Transmittal the cash payment required by said
Sections. For any holder of the Series D Preferred Stock or Common Stock
providing a Letter of Transmittal following the Closing, the Surviving
Corporation will deliver to each such holder the cash payment required by
Sections 2.1(e)(ii) or 2.1(e)(iii) hereof, as the case may be, following
receipt of such Letter of Transmittal. At the time of the termination of
the Escrow Agreement, all funds, if any, remaining in the Reserve Account
shall be distributed by the IPCH Stockholders' Representative to the IPCH
Stockholders (pro rata in accordance with the percentage ownership of
each such IPCH Stockholder of Series E Preferred Stock at the Effective
Time).
(c) Payment is in Full Satisfaction of All Rights. The payment
---------------------------------------------
of the Merger Consideration pursuant to this Section 2.3 shall be deemed
to be made in full satisfaction of all rights pertaining to the
outstanding shares of Stock except for the right to receive distributions
under the terms of the Escrow Agreement and the rights under this
Agreement and the other documents and instruments referred to herein or
contemplated hereby.
(d) No Further Transfers. After the Effective Time, there shall
--------------------
be no further registration of transfers of the Stock on the record books
of the Surviving Corporation. If, after the Effective Time, Stock
Certificates are presented to the Surviving Corporation, together with
the other instruments required hereby, they shall be cancelled and
exchanged for the applicable Cash Amounts and portion of the
Distributable Units as provided in this Section 2.3 and the right to
receive distributions under the Escrow Agreement.
Section 2.4. Escrow.
------
(a) The parties agree that (i) One Hundred Thousand Dollars
($100,000) of the cash consideration otherwise payable to the IPCH
Stockholders shall be delivered at Closing to U.S. Bank, N.A. (the
"Escrow Agent") and 190,114 MLP Units shall be delivered to the Escrow
Agent within ten days after the Closing Date, which cash and MLP Units
shall be held in escrow until December 31, 2002, subject to extension
beyond that date with respect to claims made against the escrowed funds
prior to December 31, 2002 pursuant to the terms of an escrow agreement
(the "Escrow Agreement") substantially in the form attached hereto as
Exhibit B among Inergy Holdings, the IPCH Stockholders and the Escrow
Agent. The parties acknowledge that the purpose of the escrow is to serve
as a reserve from which Inergy Holdings may be paid for Damages sustained
by Inergy Holdings or its assigns as provided in Article X hereof and as
a source of payment under Section 2.4(b) and (c) below.
(b) (i) In the event the Final Cash Consideration Amount is
equal to or less than the Estimated Cash Consideration, then cash (or if
there is insufficient cash then held in escrow, cash and MLP Units
(valued at the Agreed MLP Unit Value per MLP Unit) in an amount equal to
such difference shall be released from the Escrowed Funds and returned to
IPCH Acquisition Corp. as a reduction in the Merger Consideration, and if
such difference is less than One Hundred Thousand Dollars ($100,000),
then cash in an amount equal to the amount by which such difference is
less than One Hundred Thousand
8
Dollars ($100,000) shall be released from the Escrowed Funds to the IPCH
Stockholders in accordance with their pro rata share (based on the
percentage ownership of each such IPCH Stockholder of Series E Preferred
Stock at the Effective Time) of such amount, subject to Section 2.4(e)
below as to the portion of the cash that would have been received.
(ii) In the event the Final Cash Consideration Amount is
more than the Estimated Cash Consideration, then One Hundred Thousand
Dollars ($100,000) in cash shall be released from the Escrowed Funds to
the IPCH Stockholders (pro rata in accordance with the percentage
ownership of each such IPCH Stockholder of Series E Preferred Stock at
the Effective Time), and IPCH Acquisition Corp. shall pay to the IPCH
Stockholders their respective pro rata share (based on the percentage
ownership of each such IPCH Stockholder of Series E Preferred Stock at
the Effective Time) of the amount of such difference.
(c) In the event any accounts receivable used in determining
the net working capital under Section 2.1(f)(i)(D) above are not paid by
the account debtor on or before one hundred eighty (180) days following
the Effective Time (subject to the reserve for doubtful accounts
applicable thereto utilized in the determination of net working capital
pursuant to Section 2.1(f)(i)(D) above as finally determined in the
working capital adjustment), then cash (or if there is no cash then held
in escrow, MLP Units having a total Agreed MLP Unit Value) in an amount
equal to the amount of any such accounts receivable not so paid shall be
released from the Escrowed Funds and returned to IPCH Acquisition Corp.
as a reduction in the Merger Consideration payable under Section
2.1(e)(i);
(d) In the event any MLP Units are to be released from the
Escrowed Funds and returned to Inergy Holdings pursuant to this Section
2.4, the number of MLP Units shall be determined by dividing the dollar
amount to be so released by the Agreed MLP Unit Value.
(e) In the event any IPCH Stockholder does not provide a Letter
of Transmittal as provided in Section 2.3 prior to December 31, 2002, the
portion of the cash and MLP Units that would be deliverable to such IPCH
Stockholder shall be delivered to Inergy Holdings to hold for delivery to
such IPCH Stockholder when, if ever, such IPCH Stockholder provides a
Letter of Transmittal.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF IPCH
IPCH hereby represents and warrants to Inergy Holdings and IPCH
Acquisition Corp. and agrees both as of the date hereof and as of the
Closing Date as follows:
Section 3.1. Corporate Organization. Each of IPCH and each IPCH
----------------------
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of its state of organization, and has all requisite
power and authority to own, operate and lease its assets and to
9
conduct its business as and where such business is now conducted. Except as
described in Schedule 3.1 attached hereto, IPCH has no Subsidiary and does not
------------
hold any equity or other ownership interest in any other entity.
Section 3.2. Due Qualification. Each of IPCH and each IPCH Subsidiary is
-----------------
duly qualified to do business and is in good standing under the laws of each
jurisdiction in which the nature of its business or of the properties owned or
leased by it makes such qualification necessary. A list of such jurisdictions is
attached hereto as Schedule 3.2.
------------
Section 3.3. Authority; Binding Effect. IPCH has the right, power,
-------------------------
authority, and capacity to execute and deliver this Agreement and all other
agreements contemplated hereby, to perform the obligations hereunder and
thereunder on its part to be performed and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by IPCH of this
Agreement and all other agreements and documents contemplated hereby and the
performance by IPCH of its respective obligations to be performed hereunder and
thereunder have been duly approved by all necessary action, and no further
approvals are required by the officers, directors or stockholders of IPCH in
connection therewith, other than the stockholder approval referred to in Section
7.11 hereof. This Agreement constitutes, and when duly executed and delivered,
all other agreements contemplated hereby will constitute, the legal, valid, and
binding obligations of IPCH, enforceable against IPCH in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, or other similar laws relating to or affecting
creditors' rights generally and to general equity principles (whether such
enforceability is considered in a proceeding at law or in equity).
Section 3.4. No Creation of Violation, Default, Breach or Encumbrance.
--------------------------------------------------------
The execution, delivery and performance of this Agreement by IPCH does not, and
the consummation by IPCH of the transactions contemplated hereby will not (i)
violate (A) any statute, rule or regulation to which IPCH or any of its
Subsidiaries is subject or (B) any order, writ, injunction, decree, judgment or
ruling of any court, administrative agency or governmental body to which IPCH or
any of its Subsidiaries is subject, (ii) except as set forth in Schedule 3.4,
------------
conflict with or violate any provision of the Organizational Documents of IPCH
or any of its Subsidiaries, or (iii) assuming receipt of the consents set forth
in Schedule 3.4 hereto, require the consent of any Person or result in the
------------
breach of or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, violate, conflict with, breach
or give rise to any right of termination, cancellation or acceleration of, or to
a loss of benefit to which IPCH or any of its Subsidiaries is entitled, under
(A) any mortgage, indenture, note or other instrument or obligation for the
payment of money or any contract, agreement, lease or license, in each case, to
which IPCH or any of its Subsidiaries is a party and which is material to the
business of IPCH or any IPCH Subsidiary, or (B) any governmental licenses,
authorizations, permits, consents or approvals required for IPCH or any of its
Subsidiaries to own, license or lease and operate its properties or to conduct
its business as presently conducted by it and which is material to the business
of IPCH or any IPCH Subsidiary.
Section 3.5. No Present Default. Except as disclosed in Schedule 3.5
------------------ ------------
hereto, all contracts, agreements, leases and licenses to which IPCH or any of
its Subsidiaries is a party, and which are material to the business of IPCH or
any IPCH Subsidiary, are in full force and effect and constitute legal, valid
and binding obligations of IPCH or such Subsidiary. Except as
10
disclosed in Schedule 3.5 hereto, neither IPCH nor any of its Subsidiaries is in
------------
any material respect in default under or in breach of any mortgage, indenture,
note or other instrument or obligation for the payment of money or any contract,
agreement, lease or license, and to the Knowledge of IPCH, no other parties to
any such mortgage, indenture, note, instrument, obligation, contract, agreement,
lease or license is in default thereunder or in breach thereof in any material
respect; no event has occurred which, with the passage of time or the giving of
notice, would constitute such a breach or default by IPCH or any of its
Subsidiaries or, to the Knowledge of IPCH, by any such other party; no claim of
default thereunder has been asserted or, to the Knowledge of IPCH, threatened;
and neither IPCH nor, to the Knowledge of IPCH, any other party thereto, is
seeking the renegotiation thereof.
Section 3.6. Approvals, Licenses and Authorizations.
--------------------------------------
(a) Except as contemplated hereby and as described in Schedule 3.6
------------
hereto, no (i) order, license, consent, waiver, authorization or approval
of, or (ii) exemption by, or (iii) giving of notice to, or (iv)
registration with or the taking of any other action in respect of, any
person not a party to this Agreement (including any federal, state, local,
foreign or other governmental department, commission, board, bureau, agency
or instrumentality, including, but not limited to, those such entities with
regulatory, oversight or licensing authority in any way dealing with or
touching upon trucking or the hauling of propane), and no filing,
recording, publication or registration in any public office or any other
place, in each case, is now, or under existing law in the future will be,
necessary on behalf of IPCH or any of its Subsidiaries (x) to authorize
IPCH `s execution, delivery and performance of this Agreement or any other
agreement, document or instrument contemplated hereby to be executed and
delivered by IPCH, (y) to authorize the consummation by IPCH of the
transactions contemplated hereby or thereby, or (z) for the legality,
validity, binding effect or enforceability with respect to IPCH of any of
the foregoing.
(b) All licenses, permits, concessions, warrants, franchises and other
governmental authorizations and approvals of all federal, state, local or
foreign governmental or regulatory bodies required or necessary for IPCH
and its Subsidiaries to carry on their respective businesses (including,
but not limited to, the business of trucking or the hauling of propane) as
and where presently conducted by it and material to the respective
businesses of each have been duly obtained and are in full force and effect
and are set forth truly, correctly and completely on Schedule 3.6 hereto.
------------
There are no proceedings pending or, to the Knowledge of IPCH, threatened
which are likely to result in the revocation, cancellation or suspension or
any material modification of any thereof.
Section 3.7. Compliance With Law. Except as set forth on Schedule 3.7
------------------- ------------
hereto or as otherwise addressed in connection with another representation or
warranty in this Agreement including the Schedules, neither IPCH nor any of its
Subsidiaries is in violation of any federal, state, local or foreign statute,
law, ordinance (including any zoning or building ordinance), or regulation, or
any order, requirement, rule, permit, concession, grant, franchise, license or
other authorization of any court, administrative agency, governmental body or
arbitration tribunal, in each case, relating or applicable to IPCH or any of its
Subsidiaries, or to any of the assets or the
11
business of IPCH or any of its Subsidiaries other than such violations as are
not material to their respective business.
Section 3.8. Capitalization; Financial Statements.
------------------------------------
(a) The authorized equity securities of IPCH consist of 500,000 shares
of Common Stock of which 153,194 shares are issued and outstanding, 100
shares of Series D Preferred Stock, none of which shares are issued and
outstanding, 35,000 shares of Series E Preferred Stock, of which 29,000
shares are issued and outstanding and 14,900 shares of undesignated
preferred stock, none of which are issued and outstanding. All of the
outstanding equity securities of IPCH have been duly authorized and validly
issued and are fully paid and nonassessable. Schedule 3.8(a) sets forth a
---------------
list of the holders of IPCH's outstanding common stock, Series D Preferred
Stock and Series E Preferred Stock, together with a list of all options and
warrants for the purchase of any class of equity securities of IPCH, true
and correct copies of which options and warrants have been delivered to
Inergy Holdings. Other than as set forth on Schedule 3.8(a), there are no
---------------
contracts relating to the issuance, sale, or transfer of any equity
securities or other securities of IPCH. None of the outstanding equity
securities, warrants, options or other securities of IPCH was issued in
violation of the Securities Act or any other law. Except as described in
Schedule 3.1 attached hereto, IPCH does not own, or have any right to
------------
acquire, any equity securities or other securities of any Person (other
than IPCH) or any direct or indirect equity or ownership interest in any
other business. To the Knowledge of IPCH, each of the IPCH Stockholders is
an "accredited investor" under Regulation D of the SEC.
(b) IPCH has delivered to Inergy Holdings the audited consolidated
balance sheets of IPCH as of the Balance Sheet Date and as of the date that
is one year and two years prior to such Balance Sheet Date and the related
audited statements of income, stockholder's equity and cash flows for each
of the three fiscal years then ended, and the notes thereto, together with
the report of Xxxxxx Xxxxxxxx LLP, independent certified public
accountants.
(c) The financial statements referred to in Section 3.8(b) above
fairly present the financial position, results of operation and cash flows
of IPCH and its Subsidiaries as and at the relevant dates thereof and for
the periods covered thereby in accordance with GAAP.
(d) Except as set forth in the Balance Sheet or in the Schedules
hereto, IPCH and its Subsidiaries have no (i) liabilities or obligations,
direct or contingent, accrued or otherwise, of a nature customarily
reflected in financial statements in accordance with GAAP, except those
incurred after the Balance Sheet Date in the ordinary course of business
consistent with past practice and except lease and other contract
obligations and other obligations or liabilities which are required to be
disclosed in this Agreement or the Schedules hereto, and (ii) liabilities
or obligations under any Benefit Plans except those incurred after the
Balance Sheet Date in the ordinary course of business consistent with past
practice and pursuant to the terms of the Benefit Plans described in
Schedule 3.18(a).
----------------
12
Section 3.9. Absence of Certain Events. Since the Balance Sheet Date, the
-------------------------
businesses of IPCH and its Subsidiaries have been operated only in the ordinary
and normal course of business. Except as set forth in Schedule 3.9 hereto, since
------------
the Balance Sheet Date:
(a) Except for the matters addressed in (b) through (e) below, there
has not been any material adverse change in the financial condition,
assets, liabilities, results of operations, business or condition,
financial or otherwise, of IPCH or its Subsidiaries and there has been no
occurrence, circumstance or combination thereof which could reasonably be
expected to result in any such material adverse change thereto before or
after the Closing Date, other than changes relating to United States or
foreign economies in general or the industries in which IPCH or any of its
Subsidiaries operates and not specifically relating to the business of IPCH
or any Subsidiary;
(b) There has not been any damage, destruction or loss, whether
covered by insurance or not, adversely affecting the assets or the business
in any material way;
(c) Except in the ordinary course of business and consistent with past
practices or as included in Transaction Expenses, there has not been any
increase or decrease in the compensation payable to or to become payable by
IPCH or any of its Subsidiaries to any of the officers, key employees or
agents of the business, or change in any insurance, pension or other
beneficial plan, payment or arrangement made to, for or with any of such
officers, key employees or agents or any commission or bonus paid to any of
such officers, key employees or agents;
(d) IPCH and its Subsidiaries have not (i) incurred any obligation or
liability or assumed, guaranteed, endorsed or otherwise become responsible
for the liabilities or obligations of any other person (whether absolute,
accrued, contingent or otherwise), except trade or business obligations
incurred in the ordinary course of business; (ii) discharged or satisfied
any Lien or paid any obligation or liability (whether absolute, accrued,
contingent or otherwise), other than in the ordinary course of business;
(iii) mortgaged, pledged, created or subjected to a Lien any of the assets
or properties owned by IPCH or any of its Subsidiaries except pursuant to
the Senior Credit Facility; (iv) sold, assigned, transferred, leased or
otherwise disposed of any of the assets or properties owned by IPCH or any
of its Subsidiaries, except in the ordinary course of business, or acquired
any assets except in the ordinary course of business; (v) amended,
terminated, waived or released any rights or canceled any debt in excess of
$5,000 owing to or claim by IPCH or any of its Subsidiaries; (vi)
transferred or granted any rights under any Contracts and Other Agreements,
patents, inventions, trademarks, trade names, service marks or copyrights,
or registrations or licenses thereof or applications therefor, or with
respect to any know-how or other proprietary or trade rights; (vii)
modified or changed any Material Contracts in a manner not disclosed to
Inergy Holdings in the copies of such Material Contracts provided to or
made available to Inergy Holdings; or (viii) entered into any transaction,
contract or commitment which by reason of its size or otherwise was
material to the business of IPCH and its Subsidiaries or financial
condition of IPCH and its Subsidiaries or which was not in the ordinary
course of IPCH's business as now conducted; and
13
(e) Neither IPCH nor any of its Subsidiaries have terminated,
discontinued, closed or disposed of any plant, facility or business
operation.
Section 3.10. Title to and Condition of Properties.
------------------------------------
(a) Schedule 3.10(a) hereto contains a true, correct and complete
----------------
list of all real property in which IPCH or any of its Subsidiaries has any
ownership interest, including the complete legal description of each parcel
of such real property. Schedule 3.10(a) hereto contains a true, correct and
----------------
complete list of all leases and subleases of real property under which IPCH
or any of its Subsidiaries is a lessor or lessee (true, accurate and
complete copies of which have previously been made available to Inergy
Holdings). To the Knowledge of IPCH and its Subsidiaries, IPCH or one of
its Subsidiaries has good and indefeasible fee simple title to all of the
real properties described on Schedule 3.10(a) hereto as being "owned real
----------------
property", and good and indefeasible title to all the leasehold estates
created by the leases and subleases described on Schedule 3.10(a) hereto
----------------
wherein IPCH or one of its Subsidiaries is a lessee or sublessee (such real
properties and leasehold estates collectively referred to herein as the
"Real Property"), all free and clear of Liens, encumbrances, easements,
restrictions and reservations except for the following (collectively, the
"Permitted Encumbrances"): (i) valid and subsisting rights of way,
easements, restrictions, reservations and other encumbrances (other than
Liens) that affect the Real Property but do not materially interfere with
the use of such property as currently used by IPCH or any of its
Subsidiaries; (ii) the lien for real estate or ad valorem taxes for the
current year which are not yet due and payable or any "rollback taxes" or
similar assessments for prior years due to a change in use or ownership
which are not yet due and payable; (iii) Liens imposed by law, such as
mechanics', workers', materialmen's, carriers' or other like liens
(excluding, however, any statutory or other Lien in favor of a lessor under
a lease) arising in the ordinary course of business which secure the
payment of obligations which are not yet due and payable or which are being
diligently contested in good faith by appropriate proceedings; (iv) all
matters which a survey (Category IA, Condition II according the Texas
Surveyors Association Manual of Practice or substantially the equivalent)
or a physical inspection of the property would disclose, except to the
extent such matter would materially interfere with the use of the property
as currently used by IPCH or any of its Subsidiaries; (v) any matter
disclosed or contained in any vesting deed into IPCH or one of its
Subsidiaries (whether past or present), as to any of the Material Real
Properties only, or in any of the fourteen leases for the "Focus Leasehold
Properties" identified on Schedule 3.10(a)(a); and (vi) Liens disclosed on
----------------
Schedule 3.10(a). Without limiting the generality of the foregoing, as to
----------------
leasehold estates under the leases and subleases of Real Property wherein
IPCH or one of its Subsidiaries is a lessee or sublessee, IPCH or one of
its Subsidiaries (i) has quiet and peaceable possession of each of the
leased properties pursuant to the terms of the respective lease or
sublease, (ii) has no actual notice of a default thereunder, and (iii) has
not prepaid rent for more than a one-month period, except as may be
required pursuant to the terms of the applicable lease or sublease. To the
Knowledge of IPCH and its Subsidiaries, all leases and subleases in which
IPCH or any of its Subsidiaries is a lessor or sublessor are in full force
and effect and there is no default or event of default thereunder.
14
(b) A list of the propane tanks which are owned by IPCH or its
Subsidiaries is included on Schedule 3.10(b) and is true, correct and
----------------
complete in all material respects. A copy of the material forms of lease
agreements under which IPCH or its Subsidiaries is a lessor of propane
tanks previously has been provided to Inergy Holdings. A true, correct and
complete list of all vehicles owned or leased by IPCH or its Subsidiaries
is included on Schedule 3.10(b). Vehicles are marked as active or inactive
----------------
depending on their relative use by IPCH or its Subsidiaries in the conduct
of their respective businesses. A copy of the material lease agreements
related to vehicles leased by IPCH or its Subsidiaries previously has been
delivered to Inergy Holdings. A true, correct and complete list of
substantially all of the propane storage tanks used in the business of IPCH
or its Subsidiaries which are physically located on real property owned or
leased by IPCH or one of its Subsidiaries is included on Schedule 3.10(b).
----------------
IPCH or one of its Subsidiaries has good and indefeasible title to (i) all
of the personal property set forth on Schedule 3.10(b) and indicated as
being owned by it, (ii) all of the assets reflected in the consolidated
financial statements of IPCH, and (iii) all assets purported to have been
acquired by IPCH or one of its Subsidiaries after the date of such
financial statements (A) free and clear of all Liens, except for Liens
disclosed on Schedule 3.10(b) and the Permitted Encumbrances, and (B) other
----------------
than such assets disposed of in the usual and ordinary course of IPCH's
business consistent with past practices, and all of such assets are in the
possession and control of IPCH or one of its Subsidiaries or a third party
pursuant to a contractual arrangement.
(c) The conduct of the business of IPCH and its Subsidiaries in the
ordinary course is not dependent upon the right to use the property of
others, except under (i) the leases and subleases described on Schedule
--------
3.10(a) hereto wherein IPCH or one of its Subsidiaries is a lessee or
-------
sublessee, or (ii) valid and binding agreements identified on Schedule
--------
3.10(c) hereto (true, accurate and complete copies of which have previously
-------
been delivered to Inergy Holdings) and except for such rights, the loss of
which, individually or in the aggregate, would not have a material adverse
effect (as distinct from the defined term "Material Adverse Effect") on the
business or properties of IPCH or its Subsidiaries. The Real Property and
the improvements located thereon do not encroach upon the property of
others and there are no encroachments onto the Real Property from the
property of others, in either case which would materially affect the use of
the property as currently used or would otherwise have a Material Adverse
Effect. IPCH or one of its Subsidiaries has all utility connections, and
the right to use the same, necessary for the conduct of their businesses in
the ordinary course as presently conducted and, to the Knowledge of IPCH
and its Subsidiaries, said utilities are available under public rights of
way or easements benefiting the Real Property.
(d) IPCH or one of its Subsidiaries owns or has rights to use all
assets, property and rights which are appropriate for the conduct of the
business of IPCH and its Subsidiaries as such business has been conducted
during the past two years.
(e) The tangible assets owned by IPCH and its Subsidiaries, including,
but not limited to, the machinery, equipment (including all vehicles marked
as active on Schedule 3.10(b)), furniture and fixtures are in good
operating condition and repair,
15
normal wear and tear excepted, and of an appropriate character suitable for
the uses for which intended in the operation of the business of IPCH and
its Subsidiaries.
(f) All inventories of IPCH and its Subsidiaries used in the ordinary
course of business are of a quality and quantity usable and salable in the
ordinary course of business and the values at which such inventories are
carried on the books of account fairly represent the value thereof, are not
in excess of realizable value in the ordinary course of business, and
reflect the normal inventory valuation policy of IPCH and its Subsidiaries.
(g) The accounts receivable of IPCH and its Subsidiaries as shown on
its books and records have arisen in the ordinary course of business,
represent valid and enforceable obligations owed to IPCH or one of its
Subsidiaries and are recorded as accounts receivable on the books of IPCH
or one of its Subsidiaries in accordance with GAAP.
Section 3.11. Intangible Properties.
---------------------
(a) Schedule 3.11 hereto contains a list of all patents and
-------------
applications therefor, trademarks, trademark registrations and applications
therefor, trade names, service marks, copyrights, copyright registrations
and applications therefor, both foreign and domestic, owned, possessed,
used or held by or licensed to IPCH or one of its Subsidiaries and related
to the operation of its business and IPCH or one of its Subsidiaries owns
the entire right, title and interest in and to the same, together with the
goodwill associated therewith. Except as set forth on Schedule 3.11, IPCH
or one of its Subsidiaries has the unrestricted right, other than any
restrictions as may exist or arise under common law, to use trade secrets,
know-how, formulae, technical processes and information, manufacturing,
testing and operating techniques and procedures, all engineering data and
plans and all other data and information used by IPCH or such Subsidiary in
its business or which is necessary for its business as now conducted.
Except as set forth on Schedule 3.11, none of the items in the categories
listed in the preceding sentence of this Section 3.11 are subject to any
pending or threatened challenge or infringement, and no impediment exists
as to the exclusive ownership and use or validity of any such item by IPCH
or its Subsidiaries. Except as set forth on Schedule 3.11, the foregoing
constitutes all information necessary to permit the conduct from and after
the Closing Date of the business of IPCH and its Subsidiaries, as such
business is and has normally been conducted. Except as set forth on
Schedule 3.11, all acts necessary under all provisions of applicable law to
-------------
protect the items listed on Schedule 3.11, including, without limitation,
the filing of required affidavits of use and incontestability, applications
for renewals of registrations and notice of registration, have been taken
by IPCH or its Subsidiaries. Except as set forth on Schedule 3.11, all
licenses granted to IPCH by others which are required to conduct the
business of IPCH and its Subsidiaries are assignable without consent of or
notice to any person, without change in the terms or provisions thereof and
without premium. To the Knowledge of IPCH, neither IPCH nor any of its
Subsidiaries has infringed any unexpired patent, trademark, trademark
registration, trade name, copyright, copyright registration, trade secret
or any other proprietary or intellectual property right of any party in
connection with the
16
operation of its business. Except as set forth on Schedule 3.11, neither
IPCH nor any of its Subsidiaries has given any indemnification for patent,
trademark, service xxxx or copyright infringements.
(b) Schedule 3.11 hereto contains a list of the trade secrets related
-------------
to the operation of the business by IPCH or any of its
Subsidiaries.
Section 3.12. Contracts and Commitments.
-------------------------
(a) Schedule 3.12 hereto lists all Material Contracts related to the
-------------
operation of the business to which IPCH or any of its Subsidiaries is a
party or by which it or any of its assets or properties are bound (true and
correct copies of each of which have been previously delivered to Inergy
Holdings). Each Material Contract is in full force and effect and embodies
the complete understanding between the parties thereto with respect to the
subject matter thereof. Except as expressly set forth on Schedule 3.12, (i)
-------------
there exists no material default or claim thereof by any party to any
Material Contract, (ii) there are no facts or conditions which, if
continued or noticed, would result in a default having any more than an
inconsequential Adverse Effect under any Material Contract, (iii) neither
IPCH nor any of its Subsidiaries has received any notice that any person
intends to cancel, modify or terminate any Material Contract, or to
exercise or not to exercise any options to terminate or extend thereunder,
(iv) neither IPCH nor any of its Subsidiaries has given any notice of
cancellation, modification or termination of any Material Contract or of
exercise or non-exercise of any options thereunder, (v) each Material
Contract is a valid and binding agreement enforceable against IPCH or its
respective Subsidiary in accordance with its terms and (vi) excluding those
transactions in Recital B above, no consent or approval of the other
parties to any Material Contract or any person pursuant to any Material
Contract is required for the consummation of the transactions contemplated
herein, except as set forth on said Schedule, all of which have been or
will be obtained and will be in full force and effect at the Effective
Time.
(b) Other than those giving rise to Transaction Expenses, neither IPCH
nor any of its Subsidiaries is a party to any contract for goods or
services or any lease with any officer, director, stockholder, employee or
agent of IPCH or any of its Subsidiaries or any Affiliate of any such
person.
(c) No purchase or sale commitments by IPCH or its Subsidiaries are in
excess of the normal, ordinary and usual requirements of the business of
IPCH and its Subsidiaries; except as set forth on Schedule 3.12 hereto,
-------------
neither IPCH nor any of its Subsidiaries has any outstanding power of
attorney to any person, firm or corporation for any purpose whatsoever;
neither IPCH nor any of its Subsidiaries is restricted by agreement from
carrying on its business, as currently conducted, anywhere in the world; to
the Knowledge of IPCH, no officer, director, stockholder or Affiliate of
IPCH or its Subsidiaries has any financial interest, direct or indirect, in
the suppliers or customers of IPCH or its Subsidiaries; except as set forth
on Schedule 3.12 hereto, neither IPCH nor any of its Subsidiaries grants
-------------
discounts or rebates to its customers.
17
(d) Other than this Agreement, neither IPCH nor any of its
Subsidiaries has made any other contract or agreement or granted any option
to sell or otherwise transfer all or a significant part of the capital
stock or assets of IPCH or any of its Subsidiaries.
Section 3.13. Insurance. A list of all policies of insurance and bonds of
---------
any type presently in force (including without limitation all occurrence based
policies which provide coverage for events occurring in any of the five years
prior to the date hereof) with respect to the business of IPCH or any of its
Subsidiaries, including, without limitation, those covering product liability
claims and the assets and operations of IPCH and its Subsidiaries, are set forth
on Schedule 3.13 hereto. To the knowledge of IPCH, such policies and bonds
-------------
provide coverage in such amounts, and against such losses and risks, as
maintained by comparable businesses exercising prudent business practices to
provide for the protection of the business and assets and operations. IPCH will
use its commercially reasonable efforts to maintain its insurance policies in
effect up to and including the Closing Date.
Section 3.14. Tax Returns and Tax Audits.
--------------------------
(a) Except as described on Schedule 3.14 hereto, IPCH and each of its
-------------
Subsidiaries has filed with all appropriate governmental agencies all Tax
or information returns and Tax reports required to be filed. All such
returns and reports as are based on income have been prepared on the same
basis as those of previous years; and all federal, state, foreign and local
income, profits, franchise, sales, use, occupation, property, excise, ad
--
valorem, employment or other taxes ("Tax" or "Taxes") of IPCH and each of
-------
its Subsidiaries, together with all interest, penalties, assessments or
deficiencies claimed to be due by any such taxing authority with respect to
the foregoing have been fully paid or adequately reserved for in accordance
with GAAP in the IPCH financial statements.
(b) IPCH and each of its Subsidiaries has made adequate accruals in
accordance with GAAP for the payment of all Taxes payable in respect of the
period subsequent to the last period for which such taxes were paid, IPCH
and each of its Subsidiaries has no liability for such taxes in excess of
the amounts so paid or accruals so made.
(c) Except as described on Schedule 3.14, neither IPCH nor any of its
-------------
Subsidiaries is a party to any pending action or proceeding, nor, to the
Knowledge of IPCH or any of its Subsidiaries, is any action or proceeding
threatened by any governmental authority for assessment or collection of
Taxes or any other governmental charges, and no claim for assessment or
collection of Taxes or any other governmental charges has been asserted
against IPCH or any of its Subsidiaries, nor, to the Knowledge of IPCH or
any of its Subsidiaries, is the assertion of any such claim pending nor is
there any basis for any such claim. To the Knowledge of IPCH and its
Subsidiaries, there have been no reports prepared by any agent of the
Internal Revenue Service with respect to any Tax matter involving IPCH or
any of its Subsidiaries.
(d) Except as provided in Schedule 3.14, neither IPCH nor any of its
-------------
Subsidiaries is or has been required to file any Tax returns with, or pay
any Taxes to, any foreign countries or political subdivisions thereof.
Except as provided in Schedule 3.14,
-------------
18
neither IPCH nor any of its Subsidiaries has in effect any powers of
attorney with respect to any Tax matters involving it. At no time has a
consent been filed by IPCH or any of its Subsidiaries to have the
provisions of section 341(f)(2) of the Code apply, nor has any agreement
under section 341(f)(3) been filed by IPCH or any of its Subsidiaries.
(e) IPCH agrees to provide to Inergy Holdings such other Tax
information with respect to the business or the assets of IPCH and its
Subsidiaries as Inergy Holdings may reasonably request.
(f) There are no Taxes, fees or governmental charges (including
without limitation sales taxes) payable by IPCH or any of its Subsidiaries
to any state, city or subdivision of either thereof solely as a result of
the Merger.
(g) As of September 30, 2001, IPCH had a net operating loss for
Federal income tax purposes of at least Ten Million One Hundred Ninety
Thousand Dollars ($10,190,000). Schedule 3.14(g) reflects as of September
----------------
30, 2001 the net operating loss ("NOL") incurred by IPCH in the tax year
indicated, the utilization (if any) of such NOL, the expiration date of
such NOL, any limitation on IPCH's use of such NOL resulting from any
previous transactions of IPCH and the amount of any net unrealized built-in
gain or loss under ss. 382(h) of the Code at the time of each such previous
transaction.
(h) IPCH and its Subsidiaries have a tax basis in their assets
(excluding cash, accounts receivable, inventory and other current assets)
of at least Thirty-Four Million Dollars ($34,000,000) pursuant to
applicable provisions of the Code. Schedule 3.14(h) reflects as of
----------------
September 30, 2001, by category of asset, the original tax basis of each
asset of IPCH, the accumulated depreciation of each such asset and the net
tax basis of each such asset.
Section 3.15. Books and Records.
-----------------
(a) The books, records and accounts of IPCH and its Subsidiaries (i)
are in all material respects true, complete and correct, (ii) have been
maintained in accordance with good business practices on a basis consistent
with prior years and (iii) stated in reasonable detail and accurately and
fairly reflect in all material respects the transactions conducted.
(b) IPCH and its Subsidiaries have devised and maintain a system of
internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; and (ii) transactions are recorded as necessary
(A) to permit preparation of financial statements in conformity with GAAP
or any other criteria applicable to such statements, and (B) to maintain
accountability for the assets of IPCH and its Subsidiaries.
Section 3.16. Substantial Customers and Suppliers. Schedule 3.16 hereto
----------------------------------- -------------
sets forth a true and complete list of the twenty largest suppliers to IPCH and
its Subsidiaries (on the basis of cost) of goods (including propane) or services
purchased during the twelve months ended September 30, 2000 and 2001, as well as
the dollar amounts of such goods or services purchased during such year.
Schedule 3.16 hereto also sets forth a true and complete list of the twenty
-------------
19
largest customers of each IPCH and its Subsidiaries (in terms of
sales) during the twelve months ended September 30, 2000 and 2001, as well as
the dollar amounts of such sales during such year. Except to the extent set
forth in Schedule 3.16, since September 30, 2001, no such supplier or customer
-------------
has given notice of an intention to cease or reduce its sales to or purchases
from IPCH.
Section 3.17. No Litigation or Adverse Events. Except as described in
-------------------------------
Schedule 3.17, there is no action, suit, claim or legal, administrative,
-------------
arbitration, condemnation or other proceeding or governmental investigation or
examination or any change in any zoning or building ordinance affecting any of
the assets of IPCH or its Subsidiaries, pending or, to the Knowledge of IPCH or
any of its Subsidiaries, threatened or injunction or orders entered, pending or,
to the Knowledge of IPCH, threatened against IPCH or any of its Subsidiaries or
any business, properties or assets of IPCH or any of its Subsidiaries, at law or
in equity, before or by any federal, state, municipal or other governmental
department, court, commission, board, bureau, agency or instrumentality,
domestic or foreign, to restrain or prohibit the consummation of the
transactions contemplated hereby or which, if determined adversely, is
reasonably likely to (i) result in a Material Adverse Effect or (ii) materially
and adversely affect the consummation of the transactions contemplated by this
Agreement, and to the Knowledge of IPCH, there is no state of facts currently
existing on which any of the foregoing might be based.
Section 3.18. Employee Benefit Plans; Labor Matters.
-------------------------------------
(a) Schedule 3.18(a) sets forth a true and complete list of any and
----------------
all pension, retirement, savings, disability, medical, dental, health, life
(including any individual life insurance policy as to which IPCH or any of
its Subsidiaries is the owner, beneficiary or both), death benefit, group
insurance, profit sharing, deferred compensation, stock options or other
stock incentive, bonus incentive, vacation pay, severance or termination
pay, employment agreement, "cafeteria" or "flexible benefit" plan under
Section 125 of the Code, or other employee or director benefit plan, trust,
arrangement, contract, agreement, policy or commitment, whether formal or
informal, written or oral, under which employees, former employees,
directors or former directors of IPCH or any of its Subsidiaries are
entitled to participate by reason of their current or prior employment, or
current or former directorship, with IPCH or any of its Subsidiaries,
including, without limitation, any "employee benefit plan" as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), (i) to which IPCH or any of its Subsidiaries is a party
or a sponsor or a fiduciary thereof or (ii) with respect to which IPCH or
any of its Subsidiaries has made payments, contributions or commitments, or
may otherwise have any liability (collectively, the "Benefit Plans"). With
respect to the Benefit Plans, individually and in the aggregate, IPCH or
any of its Subsidiaries has made available to Inergy Holdings, a true and
correct copy of (a) the most recent annual report (Form 5500) filed with
the IRS, if any, (b) such Benefit Plan, (c) any summary plan description
relating to such Benefit Plan and (d) each trust agreement and group
annuity contract, if any, relating to such Benefit Plan.
(b) The Benefit Plans have been operated and administered by IPCH and
its Subsidiaries in compliance with all applicable laws relating to
employment or labor matters including ERISA and the Code in all material
respects. With respect to the
20
Benefit Plans, no event has occurred which would subject IPCH or any of its
Subsidiaries to material liability (except liability for benefits, claims
and funding obligations payable in the ordinary course) under ERISA, the
Code, or any other applicable statute, order or governmental rule or
regulation. With respect to the Benefit Plans, individually and in the
aggregate, there has been no prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code which would result in
material liability to IPCH or any of its Subsidiaries, and there has been
no action, suit, grievance, arbitration or other claim with respect to the
administration or investment of assets of the Benefit Plans (other than
routine claims for benefits made in the ordinary course of plan
administration) pending, or to the Knowledge of IPCH or any of its
Subsidiaries, threatened.
(c) All contributions to and payments under any Benefit Plan required
in respect of periods ending on or before the Closing Date have been made
by IPCH and its Subsidiaries before the Closing Date. There is no
agreement, contract or understanding between IPCH or any of its
Subsidiaries, on the one hand, and any employee, participant, labor union,
collective bargaining unit or other person or entity, on the other hand,
that requires or may require any amendment to any of the Benefit Plans.
(d) Except as provided in Schedule 3.18(d), each Benefit Plan that is
intended to be tax qualified under Section 401(a) of the Code is tax
qualified and each such Benefit Plan has received, or application has been
made for, a favorable determination letter from the IRS stating that the
Plan meets the requirements of the Code and that any trust or trusts
associated with the Plan are tax exempt under Section 501(a) of the Code.
Each Benefit Plan that is funded with a trust that is intended to be
tax-exempt under Section 501(c)(9) of the Code is exempt from taxation and,
except as provided in Schedule 3.18(d), each such trust has received a
letter from the IRS stating that the trust meets the requirements of the
Code for tax-exempt status, within the immediately preceding three-year
period.
(e) Neither IPCH nor its Subsidiaries, nor any entity which, together
with IPCH and its Subsidiaries, would be deemed to be a "single employer"
within the meaning of Section 414(b), (c), (m) or (o) of the Code now
maintains or contributes to or, within the immediately preceding three-year
period, has maintained or contributed to any plan that is (i) a defined
benefit plan within the meaning of Section 3(35) of ERISA or (ii) subject
to the requirements of Title IV of ERISA.
(f) Neither IPCH nor any of its Subsidiaries is a party to any
collective bargaining or other labor union contract. There is no pending
or, to the knowledge of IPCH, threatened union organizational effort, labor
dispute, strike or work stoppage relating to employees of IPCH or any of
its Subsidiaries and none has occurred within the immediately preceding
five (5)-year period. Except as set forth in Schedule 3.18, neither IPCH
-------------
nor any of its Subsidiaries, or any representative or employee of IPCH or
such Subsidiary, has been charged with (by written notice) or, to the
Knowledge of IPCH, committed any unfair labor practice in connection with
the operation of the business of IPCH or any of its Subsidiaries, and there
is no pending or, to the Knowledge of IPCH, threatened charge or complaint
against IPCH or any of its Subsidiaries by the National Labor Relations
Board or any comparable state agency. IPCH and its Subsidiaries is in
21
compliance with all applicable laws respecting employment, wages, hours,
safety and health and other terms and conditions of employment, except for
such noncompliance as would have only an inconsequential Adverse Effect on
the business or properties of IPCH or its Subsidiaries. Neither IPCH nor
any of its Subsidiaries has experienced a "plant closing" or "mass layoff"
within the meaning of the Worker Adjustment and Retraining Notification
Act, 29 U.S.C. (S)(S) 2101 et seq. ("WARN") within the immediately
preceding three-year period.
(g) There are no written or oral employment agreements,
employment contracts or understandings relating to employment (other than
ordinary course arrangements for "at-will" employment) to which IPCH or any
of its Subsidiaries is a party (excluding any such agreements, contracts or
understandings listed in Schedule 3.18(a) hereto).
----------------
(h) Except as described in Schedule 3.18, the consummation of the
-------------
transactions contemplated by this Agreement will not (either alone or upon
the occurrence of any additional acts or events) result in any payment
(whether of severance pay or increase in compensation, benefits or rights
or otherwise) becoming due from IPCH or any of its Subsidiaries to any of
its employees, former employees, directors or former directors, nor
accelerate the timing of any payment or the vesting of any rights or
increase the amount of any compensation due to any such person. As a direct
or indirect result of the consummation of the transactions contemplated
hereby, except as described in Schedule 3.18(h), IPCH reasonably expects
----------------
that neither IPCH nor any of its Subsidiaries will be obligated to make a
payment to any person that would not be deductible as a result of the
application of Section 280G of the Code.
Section 3.19. Business Names. Set forth on Schedule 3.19 is a list of all
-------------- -------------
names and related states under which IPCH or any of its Subsidiaries does
business.
Section 3.20. Brokers and Finders. Except for UBS Warburg LLC, no broker or
--------------------
finder has acted for IPCH or any of its Subsidiaries in connection with this
Agreement and the transactions contemplated hereby; and no broker or finder is
entitled to any brokerage or finder's fee or other commission in respect thereof
based in any way on any agreement, arrangement or understanding made by IPCH or
any of its Subsidiaries.
Section 3.21. Environmental. Except as disclosed in Schedule 3.21 hereto:
------------- -------------
(a) To IPCH's Knowledge, there has not been, as of the date
hereof, any "Release" (as defined in 42 U.S.C. (S)9601(22)) or threat of a
Release of any "Hazardous Substances" (as defined in 42 U.S.C. (S)9601(14))
or oil, gasoline or other petroleum related products on or about any of the
Real Property, except for releases of propane into the atmosphere that
would reasonably be expected in the normal course of operating a retail
propane business such as that conducted by IPCH and its Subsidiaries.
(b) Neither IPCH nor any of its Subsidiaries has any contract or
agreement, or has otherwise arranged, for disposal or treatment, or
arranged with a transporter for
22
transport for disposal or treatment, of Hazardous Substances at any
"facility" (as defined in 42 U.S.C.(S)9601(9)) owned or operated by another
Person.
(c) Neither IPCH nor any of its Subsidiaries has accepted any
Hazardous Substances from any third party for transport to disposal or
treatment facilities or sites selected by IPCH or any of its Subsidiaries.
(d) To IPCH's Knowledge, the Real Property and the use thereof is
in compliance with and IPCH and its Subsidiaries are in compliance with all
applicable laws, statutes, ordinances, rules and regulations of any
governmental or quasi-governmental authority (federal, state or local)
relating to environmental protection, underground storage tanks, toxic
waste, hazardous waste, oil or Hazardous Substance handling, treatment,
storage, disposal or transportation, or arranging therefor, respecting any
products or materials previously or now located, delivered to or in transit
to or from the Real Property, including without limitation the Resource
Conservation and Recovery Act, the Comprehensive Environmental Response,
Compensation and Liability Act, and the Superfund Amendments and
Reauthorization Act of 1986.
(e) To IPCH's Knowledge, the past disposal practices of IPCH and
its Subsidiaries (and, to IPCH's Knowledge, their respective predecessors,
if any) relating to Hazardous Substances (including hazardous wastes) have
been accomplished in compliance with all applicable laws, rules,
regulations and ordinances in all material respects.
(f) Neither IPCH nor any of its Subsidiaries has been notified
of, nor to the Knowledge of IPCH is there any basis for any potential
liability of IPCH or any of its Subsidiaries with respect to the clean-up
of any site at which IPCH or any of its Subsidiaries has disposed of
Hazardous Substances or oil, gasoline or other petroleum related products
("Waste Disposal Site"). Neither IPCH nor any of its Subsidiaries has any
information to the effect that any Waste Disposal Site has been or is under
investigation by any local, state or federal governmental body, authority
or agency.
(g) Neither IPCH nor any of its Subsidiaries has received any
notification of releases of Hazardous Substances or oil from any
governmental or quasi-governmental agency.
Section 3.22. Disclosure. To the Knowledge of IPCH and subject to
----------
amendments to the Schedules hereto pursuant to Section 7.13 hereof, none of the
financial statements referred to in Section 3.8 above, or any representation or
warranty or other provision contained herein, or in any document, schedule or
certificate delivered or to be delivered to Inergy Holdings in connection with
this Agreement or the transactions contemplated hereby, or any written
statement, certificate or other document furnished to Inergy Holdings in
connection with this Agreement or the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact necessary in order to make the statements contained
therein, taken as a whole, in light of the circumstances in which they were
made, not misleading. To IPCH's Knowledge, there is no fact which has not been
23
disclosed in writing to Inergy Holdings by IPCH which would be material to a
purchaser of the business and assets of IPCH and its Subsidiaries.
IPCH DOES NOT MAKE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OF
ANY NATURE WHATSOEVER WITH RESPECT TO IPCH AND ITS SUBSIDIARIES, INCLUDING ANY
OF THE ASSETS OF IPCH OR ANY SUBSIDIARY, EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES EXPRESSLY SET FORTH IN THIS AGREEMENT, AND EXCEPT AS SET FORTH
EXPRESSLY HEREIN, THE CONDITION OF THE ASSETS OF IPCH AND ITS SUBSIDIARIES SHALL
BE "AS IS" AND "WHERE IS."
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF INERGY HOLDINGS
Inergy Holdings represents and warrants to IPCH and the IPCH
Stockholders, both as of the date hereof and as of the Closing Date, as follows:
Section 4.1. Organization. Inergy Holdings is a limited liability company
------------
and Merger Sub is a corporation, each duly organized, validly existing and in
good standing under the laws of the State of Delaware, and each has the power
and authority and all licenses, authorizations, permits, consents and approvals
required to own, license or lease and operate its properties and to conduct its
business as presently conducted by it.
Section 4.2. Authority; Binding Effect. Each of Inergy Holdings and Merger
-------------------------
Sub has the right, power, authority and capacity to execute and deliver this
Agreement and all other agreements contemplated hereby, to perform its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by each of Inergy
Holdings and Merger Sub of this Agreement and all other agreements and documents
contemplated hereby and the performance by each of Inergy Holdings and Merger
Sub of all obligations on its part to be performed hereunder and thereunder have
been duly approved by all necessary action by Inergy Holdings and Merger Sub,
and no further approvals are required by the members of Inergy Holdings or the
stockholders of Merger Sub in connection therewith. This Agreement constitutes,
and when duly executed and delivered by Inergy Holdings and Merger Sub, all
other agreements contemplated hereby will constitute, the legal, valid and
binding obligation of Inergy Holdings and Merger Sub, as applicable, enforceable
against Inergy Holdings and Merger Sub, as applicable, in accordance with its
terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally and to general equity principles (whether such
enforceability is considered in a proceeding at law or in equity).
Section 4.3. No Creation of Violation, Default, Breach or Encumbrance. The
--------------------------------------------------------
execution and delivery by Inergy Holdings and Merger Sub of this Agreement do
not, and the consummation by Inergy Holdings and Merger Sub of the transactions
contemplated hereby will not (i) violate (A) any statute, rule or regulation to
which Inergy Holdings or Merger Sub is subject or (B) any order, writ,
injunction, decree, judgment or ruling of any court, administrative agency or
governmental body to which Inergy Holdings or Merger Sub is subject, (ii)
conflict
24
with or violate any provision of the Organizational Documents of Inergy Holdings
or Merger Sub or (iii) require the consent of any person or entity or result in
the breach of or constitute a default under any contract, agreement, lease,
license, mortgage, indenture, note or other instrument or obligation to which
Inergy Holdings or Merger Sub is a party, which could adversely affect the
ability of Inergy Holdings or Merger Sub to consummate the transactions
contemplated by this Agreement.
Section 4.4. Brokers and Finders. Except for X.X. Xxxxxxx & Sons,
-------------------
Inc., no broker or finder has acted for Inergy Holdings or Merger Sub in
connection with this Agreement and the transactions contemplated hereby; and no
broker or finder is entitled to any brokerage or finder's fee or other
commission in respect thereof based in any way on any agreement, arrangement or
understanding made by Inergy Holdings or Merger Sub.
Section 4.5. No Adverse Action. There are no actions, suits, claims
-----------------
or legal, administrative, arbitration or other proceedings or governmental
investigations or examinations pending or, to the Knowledge of Inergy Holdings,
threatened or injunctions or orders entered, pending or threatened against
Inergy Holdings or Merger Sub or its business, property or assets, at law or in
equity, before or by any federal, state, municipal or other governmental
department, court, commission, board, bureau, agency or instrumentality,
domestic or foreign, to restrain or prohibit the consummation of the
transactions contemplated hereby or to obtain damages which if decided adversely
would adversely affect the ability of Inergy Holdings, MLP or Merger Sub to
consummate the transactions provided for in this Agreement, and to the knowledge
of Inergy Holdings there is no state of facts currently existing on which any of
the foregoing might be based.
Section 4.6. Approvals, Licenses and Authorizations. No (i) order,
--------------------------------------
license, consent, waiver, authorization or approval of, or (ii) exemption by, or
(iii) giving of notice to, or (iv) registration with or the taking of any other
action in respect of, any person not a party to this Agreement (including any
federal, state, local, foreign or other governmental department, commission,
board, bureau, agency or instrumentality), and no filing, recording, publication
or registration in any public office or any other place, in each case, is now,
or under existing law in the future will be, necessary on behalf of Inergy
Holdings or Merger Sub (x) to authorize Inergy Holdings' and Merger Sub's
execution, delivery and performance of this Agreement or any other agreement,
document or instrument contemplated hereby to be executed and delivered by
either of them, (y) to authorize the consummation by Inergy Holdings and Merger
Sub of the transactions contemplated hereby or thereby, or (z) for the legality,
validity, binding effect or enforceability with respect to Inergy Holdings and
Merger Sub of any of the foregoing.
Section 4.7. Financing Commitment. Inergy Holdings has provided IPCH
--------------------
with a copy of a letter dated December 11, 2001 of First Union National Bank
setting forth, among other things, certain financing commitments respecting the
transactions contemplated by this Agreement.
Section 4.8. No Knowledge of Misrepresentation or Omission. Neither
---------------------------------------------
Inergy Holdings nor Merger Sub has any knowledge that any representation or
warranty of IPCH or any IPCH Stockholder made in this Agreement that is
qualified as to materiality is not true and correct, or that any not so
qualified is not true and correct in any material respect. Neither Inergy
25
Holdings nor Merger Sub has any knowledge of any material error in, or material
omission from, any Schedule, except in each case for items discovered by Inergy
Holdings or Merger Sub after the date of this Agreement of which Inergy Holdings
will give IPCH prompt notice.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF MLP, IPCH ACQUISITION CORP. AND MERGER SUB
Section 5.1. MLP Representations and Warranties. MLP represents and
----------------------------------
warrants to IPCH and the IPCH Stockholders, both as of the date hereof and as of
the Closing Date, as follows:
(a) Organization; Documentation. MLP is a limited
---------------------------
partnership duly organized, validly existing and in good standing
under the laws of the State of Delaware, and has the power and
authority and all licenses, authorizations, permits, consents and
approvals required to own, license or lease and operate its
properties and to conduct its business as presently conducted by it.
The MLP Units will be, when delivered pursuant to the Merger, validly
issued, fully paid and nonassessable Common Units of MLP
(b) Authority; Binding Effect. MLP has the right, power,
-------------------------
authority and capacity to execute and deliver this Agreement and all
other agreements contemplated hereby, to perform its obligations
hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution and delivery by MLP of
this Agreement and all other agreements and documents contemplated
hereby and the performance by MLP of all obligations on its part to
be performed hereunder and thereunder have been duly approved by all
necessary action by MLP, and no further approvals are required by the
partners of MLP in connection therewith. This Agreement constitutes,
and when duly executed and delivered by MLP, all other agreements
contemplated hereby will constitute, the legal, valid and binding
obligation of MLP, enforceable against MLP, in accordance with its
terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating
to or affecting creditors' rights generally and to general equity
principles (whether such enforceability is considered in a proceeding
at law or in equity).
(c) No Creation of Violation, Default, Breach or
--------------------------------------------
Encumbrance. The execution and delivery by MLP of this Agreement do
-----------
not, and the consummation by MLP of the transactions contemplated
hereby will not (i) violate (A) any statute, rule or regulation to
which MLP is subject or (B) any order, writ, injunction, decree,
judgment or ruling of any court, administrative agency or
governmental body to which MLP is subject, (ii) conflict with or
violate any provision of the Organizational Documents of MLP, or
(iii) require the consent of any person or entity or result in the
breach of or constitute a default under any contract, agreement,
lease, license, mortgage, indenture, note or other instrument or
obligation to which MLP is a party, which could adversely affect the
ability of MLP to consummate the transactions contemplated by this
Agreement.
26
(d) Brokers and Finders. Except for X.X. Xxxxxxx & Sons, Inc., no
-------------------
broker or finder has acted for MLP in connection with this Agreement and the
transactions contemplated hereby; and no broker or finder is entitled to any
brokerage or finder's fee or other commission in respect thereof based in any
way on any agreement, arrangement or understanding made by MLP.
(e) No Adverse Action. There are no actions, suits, claims or legal,
-----------------
administrative, arbitration or other proceedings or governmental investigations
or examinations pending or, to the Knowledge of MLP, threatened or injunctions
or orders entered, pending or threatened against MLP or its business, property
or assets, at law or in equity, before or by any federal, state, municipal or
other governmental department, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, to restrain or prohibit the consummation
of the transactions contemplated hereby or to obtain damages which if decided
adversely would adversely affect the ability of MLP to consummate the
transactions provided for in this Agreement.
(f) Approvals, Licenses and Authorizations. No (i) order, license,
--------------------------------------
consent, waiver, authorization or approval of, or (ii) exemption by, or (iii)
giving of notice to, or (iv) registration with or the taking of any other action
in respect of, any person not a party to this Agreement (including any federal,
state, local, foreign or other governmental department, commission, board,
bureau, agency or instrumentality), and no filing, recording, publication or
registration in any public office or any other place, in each case, is now, or
under existing law in the future will be, necessary on behalf of MLP (x) to
authorize MLP's execution, delivery and performance of this Agreement or any
other agreement, document or instrument contemplated hereby to be executed and
delivered by MLP, (y) to authorize the consummation by MLP of the transactions
contemplated hereby or thereby, or (z) for the legality, validity, binding
effect or enforceability with respect to MLP of the foregoing.
(g) MLP SEC Documents. The MLP SEC Documents, as of their respective
-----------------
filing date, did not contain any untrue statement of a material fact or omit to
state any fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading. None of the MLP
or any of its Subsidiaries has sustained since the date of the latest audited
financial statements included in the MLP SEC Documents any material loss or
interference with its business from fire, explosion, flood or other calamity,
whether or not covered by insurance, or from any labor dispute or court or
governmental action, order or decree, and, since the respective dates as of
which information is given in the MLP SEC Documents, there has not been any
material change in the capitalization or long-term debt of the MLP or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, stockholders' equity or results of operations of
the MLP or any of its Subsidiaries.
(h) Compliance with Law. Neither MLP nor any of its Subsidiaries is in
-------------------
violation of any federal, state, local or foreign statute, law, ordinance
(including any zoning or building ordinance), or regulation, or any order,
requirement, rule, permit, concession, grant, franchise, license or other
authorization of any court, administrative
27
agency, governmental body or arbitration tribunal, in each case,
relating or applicable to MLP or any of its Subsidiaries, or to any of
the assets or the business of MLP or any of its Subsidiaries other than
such violations as are not material to the respective business of each
and would have only an inconsequential effect on the business or
properties of MLP or its Subsidiaries.
(i) At all times since its formation, MLP has been taxable as a
partnership under the Code for Federal, state and local tax purposes.
MLP has filed all Tax returns and paid all Taxes it has been required
to file and pay. MLP has made full and adequate withholding for all
Taxes required to be withheld.
Section 5.2. Merger Sub Representations and Warranties. Merger Sub
-----------------------------------------
represents and warrants to IPCH and the IPCH Stockholders, both as of the date
hereof and as of the Closing Date, as follows:
(a) Organization. Merger Sub is a corporation duly organized,
------------
validly existing, and in good standing under the laws of the State of
Delaware.
(b) Authority, Binding Effect. Merger Sub has full power and
-------------------------
authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and
legally binding obligation of Merger Sub, enforceable in accordance
with its terms and conditions.
(c) No Creation of Violation, Default, Breach or Encumbrance.
--------------------------------------------------------
The execution and delivery by Merger Sub of this Agreement do not, and
the consummation by Merger Sub of the transactions contemplated hereby
will not (i) violate (A) any statute, rule or regulation to which
Merger Sub is subject or (B) any order, writ, injunction, decree,
judgment or ruling of any court, administrative agency or governmental
body to which Merger Sub is subject, (ii) conflict with or violate any
provision of the Organizational Documents of Merger Sub, or (iii)
require the consent of any person or entity or result in the breach of
or constitute a default under any contract, agreement, lease, license,
mortgage, indenture, note or other instrument or obligation to which
Merger Sub is a party, which could adversely affect the ability of
Merger Sub to consummate the transactions contemplated by this
Agreement.
(d) Brokers and Finders. Except for X.X. Xxxxxxx & Sons, Inc.,
-------------------
no broker or finder has acted for Merger Sub in connection with this
Agreement and the transactions contemplated hereby; and no broker or
finder is entitled to any brokerage or finder's fee or other
commission in respect thereof based in any way on any agreement,
arrangement or understanding by Merger Sub.
(e) Approvals, Licenses and Authorizations. Other than the
--------------------------------------
filing of a Certificate of Merger with the Secretary of State of the
State of Delaware, no (i) order, license, consent, waiver,
authorization or approval of, or (ii) exemption by, or (iii) giving of
notice to, or (iv) registration with or the taking of any other action
in respect of, any person not a party to this Agreement (including any
federal, state, local, foreign or other governmental department,
commission, board, bureau, agency or instrumentality), and no
28
filing, recording, publication or registration in any public office or any
other place, in each case, is now, or under existing law in the future will
be, necessary on behalf of Merger Sub (x) to authorize Merger Sub's
execution, delivery and performance of this Agreement or any other
agreement, document or instrument contemplated hereby to be executed and
delivered by Merger Sub, (y) to authorize the consummation by Merger Sub of
the transactions contemplated hereby or thereby, or (z) for the legality,
validity, binding effect or enforceability with respect to Merger Sub of
the foregoing.
Section 5.3. IPCH Acquisition Corp. Representations and Warranties. IPCH
-----------------------------------------------------
Acquisition Corp. represents and warrants to IPCH and the IPCH Stockholders,
both as of the date hereof and as of the Closing Date, as follows:
(a) Organization. IPCH Acquisition Corp. is a corporation duly
------------
organized, validly existing, and in good standing under the laws of the State of
Delaware.
(b) Authority, Binding Effect. IPCH Acquisition Corp. has full power
-------------------------
and authority to execute and deliver this Agreement and to perform its
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of IPCH Acquisition Corp., enforceable in accordance with its terms
and conditions.
(c) No Creation of Violation, Default, Breach or Encumbrance. The
--------------------------------------------------------
execution and delivery by IPCH Acquisition Corp. of this Agreement do not, and
the consummation by IPCH Acquisition Corp. of the transactions contemplated
hereby will not (i) violate (A) any statute, rule or regulation to which IPCH
Acquisition Corp. is subject or (B) any order, writ, injunction, decree,
judgment or ruling of any court, administrative agency or governmental body to
which IPCH Acquisition Corp. is subject, (ii) conflict with or violate any
provision of the Organizational Documents of IPCH Acquisition Corp., or (iii)
require the consent of any person or entity or result in the breach of or
constitute a default under any contract, agreement, lease, license, mortgage,
indenture, note or other instrument or obligation to which IPCH Acquisition
Corp. is a party, which could adversely affect the ability of IPCH Acquisition
Corp. to consummate the transactions contemplated by this Agreement.
(d) Brokers and Finders. Except for X.X. Xxxxxxx & Sons, Inc., no
-------------------
broker or finder has acted for IPCH Acquisition Corp. in connection with this
Agreement and the transactions contemplated hereby; and no broker or finder is
entitled to any brokerage or finder's fee or other commission in respect thereof
based in any way on any agreement, arrangement or understanding by IPCH
Acquisition Corp.
(e) Approvals, Licenses and Authorizations. Other than the filing of a
--------------------------------------
Certificate of Merger with the Secretary of State of the State of Delaware, no
(i) order, license, consent, waiver, authorization or approval of, or (ii)
exemption by, or (iii) giving of notice to, or (iv) registration with or the
taking of any other action in respect of, any person not a party to this
Agreement (including any federal, state, local, foreign or other governmental
department, commission, board, bureau, agency or instrumentality), and no
filing, recording, publication or registration in any public office or any other
place, in each case, is now, or under existing law in the future will be,
necessary on behalf of
29
IPCH Acquisition Corp. (x) to authorize IPCH Acquisition Corp.'s execution,
delivery and performance of this Agreement or any other agreement, document
or instrument contemplated hereby to be executed and delivered by IPCH
Acquisition Corp., (y) to authorize the consummation by IPCH Acquisition
Corp. of the transactions contemplated hereby or thereby, or (z) for the
legality, validity, binding effect or enforceability with respect to IPCH
Acquisition Corp. of the foregoing.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF IPCH STOCKHOLDERS
Each of the Signing IPCH Stockholders hereby severally and not jointly
represents and warrants (as to itself only) to Inergy Holdings and IPCH
Acquisition Corp. as follows:
Section 6.1. Authorization. Such IPCH Stockholder has all requisite power
-------------
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. This Agreement has been duly
executed and delivered by or on behalf of such IPCH Stockholder and constitutes
the valid and binding agreement of such IPCH Stockholder, enforceable against
such IPCH Stockholder in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors generally
or by general equity principles.
Section 6.2. Non-Contravention. The execution, delivery and performance by
-----------------
such IPCH Stockholder of this Agreement and the consummation by such IPCH
Stockholder of the transactions contemplated by this Agreement do not and will
not contravene or conflict with any agreement, contract or obligation to which
such IPCH Stockholder is a party.
Section 6.3. Investment Representations.
--------------------------
(a) Review of MLP SEC Documents. Such IPCH Stockholder has
---------------------------
reviewed the MLP SEC Documents and recognizes that an investment in MLP
involves significant risks, including those set forth under the caption
"Risk Factors" in the Prospectus, dated July 25, 2001, of MLP. Such IPCH
Stockholder has been furnished any information relating to MLP and its
Affiliates, their respective business and financial condition, the MLP
Units and any other matter requested by such IPCH Stockholder and has been
afforded the opportunity to ask questions and receive answers concerning
MLP and to obtain any additional information which MLP possesses or can
acquire without unreasonable effort or expense. Such IPCH Stockholder has
also been furnished access to any and all other information that is
material to such IPCH Stockholder or a reasonable investor's decision to
acquire the MLP Units.
(b) Accredited Investor. Such IPCH Stockholder is an "accredited
-------------------
investor" under Regulation D of the SEC.
(c) Investment Intent. The MLP Units are being acquired (i) solely
-----------------
for investment for such IPCH Stockholder's own account and not as nominee
or agent or otherwise on behalf of any other person, and (ii) not with a
view to or with any present
30
intention to reoffer, resell, fractionalize, assign, grant any
participating interest in, or otherwise distribute the MLP Units in
violation of the Securities Act.
(d) Legend. Such IPCH Stockholder agrees that the certificates
------
evidencing the MLP Units acquired by such IPCH Stockholder shall be stamped
or otherwise imprinted with a conspicuous legend in substantially the
following form:
The Units represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act") or any state
securities laws. These Units have been acquired for investment and not
with a view to distribution or resale, and may not be sold, pledged,
hypothecated, donated or otherwise transferred, whether or not for
consideration, without an effective registration statement under the
Act and any applicable state securities laws, or an opinion of counsel
satisfactory to Inergy, L.P. that such registration is not required
with respect to the proposed disposition thereof and that such
disposition will not cause the loss of the exemption(s) upon which
Inergy relied in transferring these Units to the original purchaser
thereof.
Such IPCH Stockholder agrees that a stop transfer order shall be placed on
the transfer books maintained with respect to the MLP Units which gives
effect to the foregoing restrictive legend.
ARTICLE VII
ADDITIONAL COVENANTS OF THE PARTIES
Section 7.1. Access to IPCH Information. Until the Closing, IPCH will
--------------------------
furnish Inergy Holdings, its Affiliates, officers, employees, accountants,
attorneys, representatives and agents, with all financial, operating,
engineering and other data and information concerning the business and the
assets of IPCH and its Subsidiaries as Inergy Holdings shall from time to time
request and as is customary and reasonable for transactions of this nature and
will accord Inergy Holdings and its authorized representatives access during
normal business hours to the assets, books, records, contracts and documents of
IPCH and its Subsidiaries (including tax returns filed and those in preparation)
and will give such persons the opportunity to ask questions of, and receive
answers from, appropriate representatives of IPCH with respect to the business
and the assets of IPCH and its Subsidiaries. Provided that Inergy Holdings, MLP
and their respective representatives gaining access to information as a result
of the transactions contemplated hereby do not intentionally withhold from IPCH
their knowledge of a material breach of this Agreement by IPCH, no
investigations by Inergy Holdings, or its Affiliates, employees, accountants,
attorneys, representatives or agents, shall reduce or otherwise affect the
obligation or liability of IPCH's Stockholders with respect to any
representations, warranties, covenants or agreements made herein by IPCH or the
IPCH Stockholders or in any other certificate, instrument, agreement or document
executed and delivered in connection with this Agreement.
31
Section 7.2. Public Information. Until the Closing or termination of this
------------------
Agreement, IPCH shall consult with Inergy Holdings and Inergy Holdings shall
consult with IPCH with respect to the content of any communications to be made
to employees, customers, suppliers and others having dealings with IPCH or
IPCH's Subsidiaries as well as communications made to the public and to the form
and content of any application or report to be made to any judicial or
regulatory authority or other governmental authority which relates to the
transactions contemplated by this Agreement; provided that no such communication
shall be made to the public without the prior consent of Inergy Holdings and the
IPCH Stockholders' Representative. Neither MLP, Inergy Holdings nor any
Affiliate, agent or representative of either, shall communicate with or
otherwise contact employees, customers, suppliers or others having dealings with
IPCH or its Subsidiaries without the prior written consent of IPCH.
Notwithstanding the foregoing, Inergy Holdings and/or MLP may make such press
releases and public disclosures as Inergy Holdings and/or MLP may deem necessary
or appropriate to comply with state and Federal securities laws after allowing
the IPCH Stockholders' Representative a reasonable time to comment on such
release or disclosure in advance of such issuance.
Section 7.3. Confidentiality. All information disclosed by any party to
---------------
this Agreement to the other party, to the fullest extent reasonably possible,
shall be kept confidential by such receiving party and shall not be used by such
receiving party other than as herein contemplated or required by court order,
except to the extent that such information was known by such receiving party
when received or is or hereafter becomes legally obtainable from other sources
(and not as a result of being a party to this Agreement) or to the extent such
duty as to confidentiality is waived in writing by the other party. In the event
of termination of this Agreement, each party hereto shall use all reasonable
efforts to return, upon request, to the other parties, all documents (and
reproductions thereof) received from such other parties (and in the case of
reproductions, all such reproductions made by the receiving party) that include
information not within the exceptions contained in the first sentence of this
Section 7.3.
Section 7.4. IPCH Interim Operations. Except as otherwise expressly
-----------------------
contemplated or permitted hereby, or as required by any Governmental Entity of
competent jurisdiction, without the prior consent of Inergy Holdings, from the
date hereof until the Effective Time, IPCH shall, and shall cause each of its
Subsidiaries to, conduct their respective businesses in all material respects in
the ordinary course consistent with past practice and shall use commercially
reasonable efforts to (i) preserve intact their respective business
organizations, (ii) maintain in effect all material foreign, federal, state and
local licenses, approvals and authorizations, including, without limitation, all
material licenses and permits that are required to carry on their businesses and
(iii) preserve existing relationships with their material customers, lenders,
suppliers and others having material business relationships with it. Without
limiting the generality of the foregoing, except as otherwise expressly
contemplated or permitted by this Agreement, or as required by a Governmental
Entity of competent jurisdiction, from the date hereof until the Effective Time,
without the prior consent of Inergy Holdings, IPCH shall not, and shall cause
each of its Subsidiaries to not:
(a) amend or propose to amend any Organization Documents, unless
otherwise pre-approved in writing by Inergy Holdings;
32
(b) split, combine or reclassify any shares of capital stock or
declare, set aside or pay any dividend;
(c) (i) issue, deliver or sell, or authorize the issuance,
delivery or sale of, any shares of capital stock of any class or any
securities convertible into or exercisable for, or any rights, warrants or
options to acquire, any such capital stock or any such convertible
securities, other than pursuant to the terms of the Stock Rights; or (ii)
amend in any respect any term of any outstanding security;
(d) incur any capital expenditures or any obligations or
liabilities in respect thereof, except for those (i) contemplated by the
capital expenditure budgets for IPCH and its Subsidiaries made available to
Inergy Holdings, or (ii) incurred in the ordinary course of business of
IPCH and consistent with past practice;
(e) except in the ordinary course of business, acquire (whether
pursuant to cash merger, stock or asset purchase or otherwise) in one
transaction or series of related transactions (i) any assets (including any
equity interests) having a fair market value in excess of $75,000, or (ii)
all or substantially all of the equity interests of any Person or any
business or division of any Person;
(f) sell, lease, license, perform services, encumber or otherwise
dispose of any assets, other than (i) sales or licenses of finished goods
or the performance of services in the ordinary course of business
consistent with past practice, (ii) equipment and property no longer used
in the operation of their business and (iii) assets related to discontinued
operations of IPCH or any IPCH Subsidiary;
(g) (i) incur any indebtedness for borrowed money or guarantee any
such indebtedness, (ii) issue or sell any debt securities or warrants or
rights to acquire any debt securities, (iii) make any loans, advances or
capital contributions to or investments in, any other Person, or (iv)
guarantee any debt securities or indebtedness of others except, in each
case, in the ordinary course of business consistent with past practice
(which exception shall include, without limitation, borrowings under IPCH's
existing credit agreements and overnight borrowings);
(h) (i) enter into any agreement or arrangement that limits or
otherwise restricts IPCH or any of its Subsidiaries from engaging or
competing in any line of business or in any location, or (ii) enter into,
amend, modify or terminate any Material Contract or otherwise waive,
release or assign any material rights, claims or benefits thereunder;
provided, however, that this Section 7.4(h) shall not prevent IPCH or its
Subsidiaries from entering into material contracts with customers,
suppliers or distributors, so long as such contracts are entered into in
the ordinary course and consistent with prior practice;
(i) (A) except as required by law or a written agreement existing
on or prior to the date hereof, or as is consistent with past practice or
for routine raises on anniversary dates, increase the amount of
compensation of any director or executive officer or make any increase in
or commitment to increase any employee benefits, (B)
33
except as required by law, a written agreement existing on or prior to the
date hereof, or a severance policy existing as of the date hereof, grant
any severance or termination pay to any director, officer or employee or,
(C) adopt any additional employee benefit plan or, except in the ordinary
course of business consistent with past practice or the terms of a plan and
containing only normal and customary terms, make any contribution to any
existing such plan or (D) except as may be required by law or a written
agreement or employee benefit plan existing on or prior to the date hereof,
or as contemplated by this Agreement, enter into, amend in any respect, or
accelerate the vesting under any Benefit Plan, employment agreement,
option, license agreement or retirement agreements, or (E) hire any
employee with an annual base salary in excess of $50,000, unless otherwise
pre-approved in writing by Inergy Holdings;
(j) change (x) any methods of accounting in effect at September
30, 2001, or (y) IPCH's fiscal year;
(k) other than in the ordinary course of business consistent with
past practices and containing only normal and customary terms (i) settle,
propose to settle or commence, any litigation, investigation, arbitration,
proceeding or other claim, or (ii) make any material Tax election or enter
into any settlement or compromise of any Tax liability;
(l) enter into any new line of business; or
(m) agree, resolve or commit to do any of the foregoing.
Section 7.5. Acquisition Proposals. IPCH and the IPCH Stockholders agree to
---------------------
not, and to not authorize or knowingly permit any officer, director, employee,
investment banker, attorney, accountant, agent or other advisor or
representative of IPCH or the IPCH Stockholders, directly or indirectly, to (i)
solicit, initiate or knowingly facilitate or encourage the submission of any
Acquisition Proposal for IPCH, (ii) participate in any discussions or
negotiations regarding, or furnish to any Person any information with respect
to, or take any other action knowingly to facilitate any inquiries or the making
of any proposal that constitutes an Acquisition Proposal for IPCH, (iii) grant
any waiver or release under any standstill or similar agreement with respect to
any class of IPCH equity securities or (iv) enter into any agreement with
respect to any Acquisition Proposal for IPCH.
Section 7.6. Employment Agreements. By joining in this Agreement, each of
---------------------
Xxxxx and Xxxxxx agrees that, at the Closing, he will enter into an employment
agreement with the IPCH Operating Subsidiary, and IPCH agrees to cause the IPCH
Operating Subsidiary to enter into such employment agreement, such employment
agreement to be substantially in the form attached hereto as Exhibits C and D,
respectively. The parties acknowledge and agree that the foregoing does not
constitute a covenant or obligation of IPCH or the IPCH Stockholders and that
the failure of either Xxxxx or Xxxxxx to enter into such employment agreements
shall not constitute a breach or default under this Agreement by IPCH or the
IPCH Stockholders for which indemnification by IPCH or the IPCH Stockholders or
the liability for or payment of any Damages shall be imposed on IPCH or the IPCH
Stockholders.
34
Section 7.7. Nonsolicitation Agreements. Each of X.X. Xxxxxx Partners
--------------------------
(SBIC), LLC and Summit Capital, Inc. agrees that, at the Closing, it will enter
into a nonsolicitation agreement in the form attached hereto as Exhibit E (the
"Nonsolicitation Agreements").
Section 7.8. Registration Rights Agreement. At the Closing MLP and the
-----------------------------
IPCH Stockholders agree to enter into the registration rights agreement in the
form attached hereto as Exhibit F (the "Registration Rights Agreement").
Section 7.9. Reasonable Best Efforts. Subject to the terms and conditions
-----------------------
hereof, each party will use reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement as promptly as practicable;
provided, however, that no party shall be required to make any material monetary
expenditure, commence or participate in any litigation or offer or grant any
material accommodation (financial or otherwise) to any third Person.
Section 7.10. Further Assurances. In case at any time after the Closing any
------------------
further action is necessary to carry out the purposes of this Agreement, each of
the parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other party reasonably may
request. At and after the Effective Time, the officers and directors of the
Surviving Corporation will be authorized to execute and deliver, in the name and
on behalf of IPCH or Merger Sub, any deeds, bills of sale, assignments or
assurances and to take and do, in the name and on behalf of IPCH or Merger Sub,
any other actions and things to vest, perfect or confirm of record or otherwise
in the Surviving Corporation any and all right, title and interest in, to and
under any of the rights, properties or assets of IPCH or Merger Sub acquired or
to be acquired by the Surviving Corporation as a result of, or in connection
with the Merger.
Section 7.11. IPCH Stockholder Approval. Each of the Signing IPCH
-------------------------
Stockholders agrees to proceed to take all action under Delaware Law, the
Securityholders Agreement or otherwise that is required or appropriate for the
holders of any class of capital stock of IPCH to approve this Agreement and the
Merger and to qualify the Merger as an "Approved Sale" under the Securityholders
Agreement. Xxxxx, by his joining in this Agreement, agrees to vote all of the
shares of Common Stock held by him in favor of the approval of this Agreement
and the Merger.
Section 7.12. MLP Guaranty. MLP hereby unconditionally and irrevocably
------------
guarantees to IPCH, the IPCH Stockholders, their heirs and permitted assigns,
the full and prompt payment when due and performance of all indebtedness,
liabilities and obligations of Inergy Holdings and IPCH Acquisition Corp. to
IPCH and the IPCH Stockholders under this Agreement, together with all interest,
taxes, fees, charges, costs, expenses and other amounts chargeable to Inergy
Holdings, IPCH Acquisition Corp., Merger Sub or MLP thereunder or in connection
therewith (the "Obligations"). MLP acknowledges and agrees that, with respect to
all obligations to pay money, such guaranty shall be a guaranty of payment and
not of collection. If IPCH Acquisition Corp., Merger Sub or Inergy Holdings
shall default in the due and punctual performance of any of the Obligations or
in the full and timely payment of any amount owed in respect to the Obligations,
MLP, within five (5) days of receiving notice from the IPCH Stockholders'
Representative of such default, will perform or cause to be performed such
Obligations and will make full payment of any amount due with respect thereto at
its sole cost and expense. The
35
liabilities and obligations of MLP to IPCH and the IPCH Stockholders pursuant to
this section shall be unconditional and irrevocable and shall not be conditioned
or contingent upon the pursuit of any remedies against Merger Sub, IPCH
Acquisition Corp. or Inergy Holdings or any other person. MLP hereby waives any
right, whether legal or equitable, statutory or non-statutory, to require the
IPCH Stockholders' Representative to proceed against or take action against or
pursue any remedy with respect to Merger Sub or Inergy Holdings or any other
Person or make presentment or demand for performance or give any notice of
nonperformance before IPCH or the IPCH Stockholders may enforce rights against
MLP hereunder and, to the fullest extent permitted by law, any other defenses or
benefits that may be derived from or afforded by applicable law limiting the
liability of or exonerating guarantors or sureties, or which may conflict with
the terms of this section. The unconditional obligation of MLP hereunder will
not be affected, impaired or released by any extension, waiver, amendment or
thing whatsoever which would release a guarantor or surety (other than
satisfaction in full of the Obligations).
Section 7.13. Supplemental Information. IPCH agrees that, with respect to
------------------------
the representations and warranties of IPCH contained in this Agreement, IPCH
will have the continuing obligation and right until the Closing to promptly
provide Inergy Holdings with such additional supplemental Information
(collectively, the "Supplemental Information"), in the form of (a) amendments to
then existing Schedules or (b) additional Schedules, as would be necessary, in
light of the circumstances, conditions, events and states of fact then known to
IPCH, to make each of those representations and warranties true and correct as
of the Closing. For purposes only of determining whether the conditions to the
obligations of Inergy Holdings have been satisfied, the Schedules to this
Agreement as of the Closing Date will be deemed to be the Schedules to this
Agreement as of the date hereof as amended or supplemented by the Supplemental
Information provided to Inergy Holdings prior to the Closing pursuant to this
Section 7.13; provided, however, that if the Supplemental Information so
provided discloses the existence of circumstances, conditions, events or
statements of facts which, in any combination thereof, (i) have had a Material
Adverse Effect on IPCH or, (ii) in the sole judgment of Inergy Holdings
exercised in good faith are having or will have a Material Adverse Effect on
IPCH, Inergy Holdings will be entitled to terminate this Agreement pursuant to
Article XI by notice to IPCH.
Section 7.14. Title Insurance. Prior to the Closing Date, IPCH shall
---------------
cooperate, at no cost or expense to IPCH or its Subsidiaries, with Inergy
Holdings (or any other entity, designated by Inergy Holdings, having an
insurable ownership interest) in its effort to obtain one or more policies of
title insurance (collectively, the "Title Policy") respecting the Real Property
designated as "material real property" on Schedule 7.14 (the "Material Real
-------------
Property") and conforming to the following specifications:
(a) The form of the Title Policy will be ALTA Owner's Policy Form
B 1970 (amended 10/17/70), or as to leasehold estates, ALTA Leasehold
Owner's Policy - 1975, or the approved form, for the jurisdiction in which
the Material Real Property is located, which is the substantial equivalent
thereof;
(b) The Title Policy will be issued by Xxxxxxx Title Guaranty
Company (the "Title Company");
36
(c) The Title Policy will be in an amount reflecting the fair
market value of the Material Real Property insured thereby;
(d) The Title Policy will be dated concurrent with or subsequent
to the Closing;
(e) There will be no exceptions to coverage other than the
Permitted Encumbrances, or any standard preprinted exceptions for which
endorsements are not available which shall be deemed Permitted Encumbrances
for purposes of this Section 7.14.
(f) The Title Policy may contain a zoning endorsement in the form
of ALTA Form 3.1, or the approved substantial equivalent thereof for the
jurisdictions in which the Material Real Property is located, if any is
available, showing the zoning classification of the Material Real Property
and confirming that the current use of the Material Real Property is in
conformance with the applicable zoning laws and use restrictions;
(g) The Title Policy may contain an assignment endorsement
whereby the insurer agrees to consent to the assignment of the policy to,
and to issue without charge an endorsement to the policy to show as an
insured under the policy, any of the following, to the extent available in
the jurisdiction in question: (i) any successor to Inergy Holdings, by
dissolution, liquidation, merger, consolidation, reorganization or
otherwise; (ii) any stockholder of Inergy Holdings to whom the Material
Real Property, or any part thereof, is distributed; and (iii) any Affiliate
of Inergy Holdings, including any entity controlled by, in control of or
under common control with Inergy Holdings and to whom an interest in the
Material Real Property, or any part thereof, is transferred; and
(h) The Title Policy may contain a "non-imputation" endorsement
pursuant to which the Title Company shall agree that knowledge of IPCH or
its Subsidiaries will not be imputed to Inergy Holdings or the named
insured under the Title Policy on and after the effective date thereof, to
the extent available in the jurisdiction in question.
Inergy Holdings may obtain one or more current commitments from the
Title Company setting forth the basis upon which the Title Company is willing to
insure title to the Material Real Property (collectively, the "Title
Commitment"). If the Title Commitment discloses any liens, easements,
restrictions, reservations or other defects to title to the Material Real
Property, other than the Permitted Encumbrances, Inergy Holdings shall advise
IPCH of the same in writing within fifteen (15) days after receipt by Inergy
Holdings of the Title Commitment. Matters not objected to by Inergy Holdings
within said period shall be deemed to be additional Permitted Encumbrances. As
to any matters to which Inergy Holdings objects, IPCH may, at its option but
without any obligation to do so, remedy such matters as are susceptible of being
remedied and shall, within ten (10) days after Inergy Holdings gives IPCH notice
of objection to such matters, give notice to Inergy Holdings as to which matters
it has or will remedy, if it elects to so remedy. In the event IPCH refuses to
remedy any matter to which Inergy Holdings has delivered notice to IPCH pursuant
to the terms of this Section 7.14, Inergy Holdings shall have the option of (x)
consummating the transaction contemplated hereby and
37
accepting such title as IPCH holds, without change in or to the terms hereof, or
(y) exercising its rights under Section 11.1 hereof.
Section 7.15. Required Consents and Agreements of Other IPCH Stockholders.
-----------------------------------------------------------
IPCH agrees to use its commercially reasonable efforts to obtain (a) the
required third party consents referred to in Section 3.12(a)(vi) and (b) an
agreement of each holder of Series E Preferred Stock who is not a Signing IPCH
Stockholder hereunder in the form of the Stockholder's Joinder Agreement
attached hereto as Exhibit G ("Stockholder Joinder Agreement").
Section 7.16. Insurance. After the Effective Time, IPCH Acquisition Corp.
---------
(for so long as the Surviving Corporation or any of its Subsidiaries is a
subsidiary thereof) and MLP shall maintain or cause its affiliates to maintain
insurance coverage on the business, operations, assets and properties of its
Subsidiaries and their successors and assigns at least as extensive and of the
same type and character as the insurance in effect and held by IPCH and its
Subsidiaries immediately prior to the Effective Time; provided, however, that
such insurance may be terminated after the expiration of all indemnities by
IPCH, its affiliates and the IPCH Stockholders under this Agreement.
Section 7.17. Termination of 401(k) Plan. IPCH shall, prior to the Closing
--------------------------
Date, adopt any and all resolutions and take all other actions that are
necessary or appropriate to (i) fund the Independent Gas Company 401(k) Plan, as
referenced in Schedule 3.18 (the "401(k) Plan"), with any profit sharing and/or
matching contributions that have accrued as of the Closing Date; (ii) require
that all 401(k) Plan participant elective deferrals have ceased enough ahead of
time for such elective deferrals to be remitted to the 401(k) Plan prior to the
Closing Date; (iii) except as set forth immediately above in (i) and (ii) of
this Section, cease all other contributions to the 401(k) Plan as of the day
before the Closing Date; (iv) terminate the 401(k) Plan; and (v) fully vest all
participant account balances in the 401(k) Plan immediately before the Closing
Date. Inergy shall assume full responsibility for and bear the full expense of
(x) amending the 401(k) Plan following the Closing Date in such manner as is
necessary for the 401(k) Plan to be in compliance with all applicable laws as of
the 401(k) Plan's termination date and (y) applying for and obtaining a
favorable determination letter with respect to the termination of the Plan from
the IRS. Following the receipt of a favorable determination letter, Inergy will
distribute the assets of the 401(k) Plan. Following the Closing Date, Inergy
agrees to accept its appointment, or will appoint an unrelated corporation, as
successor plan trustee and successor plan administrator of the 401(k) Plan.
ARTICLE VIII
CONDITIONS TO INERGY PARTIES' OBLIGATION TO CONSUMMATE THE MERGER
-----------------------------------------------------------------
Each and every obligation of Inergy Holdings, IPCH Acquisition Corp.,
Merger Sub and MLP (collectively, the "Inergy Parties") to be performed at or
before the Closing hereunder is subject, at Inergy Holdings' election, to the
satisfaction (or waiver by Inergy Holdings) on or prior to the Closing Date of
the conditions set forth below. Notwithstanding the failure of any one or more
of such conditions, Inergy Holdings may nevertheless proceed with Closing
without satisfaction, in whole or in part, of any one or more of such
conditions, and by
38
proceeding shall be deemed to have waived any Inergy Party's right to recover
damages for any such failure.
Section 8.1. Compliance with Agreement. IPCH and each Signing IPCH
-------------------------
Stockholder shall have performed or complied in all material respects with their
respective obligations and agreements contained in this Agreement which are
required to be performed or complied with by such party on or prior to the
Closing Date.
Section 8.2. Representations and Warranties. Except as reflected in the
------------------------------
Supplemental Information, the representations and warranties of IPCH and each
Signing IPCH Stockholder contained in this Agreement shall be true, complete and
correct in all material respects (except for those representations and
warranties that are qualified as to materiality, in which case such
representations and warranties shall be true, complete and correct as made) on
and as of the Closing Date with the same force and effect as though such
representations and warranties had been made or given on the Closing Date (other
than any representation or warranty that expressly relates to a specific date,
which representation and warranty shall be correct on the date so specified).
Section 8.3. Certificate. IPCH and each IPCH Stockholder listed on the
-----------
signature pages hereto shall have delivered to Inergy Holdings a certificate,
dated the Closing Date, signed (as appropriate) by its duly authorized officers
to the effect stated in Sections 8.1 and 8.2 hereof.
Section 8.4. Corporate Authorization. Inergy Holdings shall have received a
-----------------------
copy of the resolutions of the directors and stockholders of IPCH, certified as
of the Closing Date by the secretary or assistant secretary thereof, duly
authorizing the execution, delivery and performance by IPCH of this Agreement
and each other agreement and instrument contemplated hereby to be executed and
delivered by IPCH together with an incumbency certificate as to the persons
authorized to execute and deliver such documents and instruments on its behalf.
Section 8.5. Opinion of Counsel. Inergy Holdings shall have been furnished
------------------
with (i) the opinion of Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to IPCH and the
Signing IPCH Stockholders, dated the Closing Date and addressed to Inergy
Holdings, substantially in the form set forth in Exhibit H-1 hereto, and (ii)
-----------
the opinion of X'Xxxxxxxx, LLP, counsel to X.X. Xxxxxx Partners (SBIC) LLC,
dated the Closing Date and addressed to Inergy Holdings, substantially in the
form set forth in Exhibit H-2 hereto.
-----------
Section 8.6. Good Standing. IPCH shall have delivered to Inergy Holdings
-------------
certificates issued by appropriate governmental authorities evidencing the good
standing of IPCH and the IPCH Operating Subsidiary as of a date or dates not
more than five (5) days prior to the Closing Date as a corporation of the
respective states in which organized or qualified to do business.
Section 8.7. Additional Agreements.
---------------------
(a) Each IPCH Stockholder referred to in Section 7.7 shall have
executed and delivered a Nonsolicitation Agreement.
(b) IPCH Stockholders' Representative, on behalf of the IPCH
Stockholders, shall have executed and delivered the Escrow Agreement.
39
(c) IPCH Stockholders' Representative, on behalf of the IPCH
Stockholders, shall have executed and delivered the Registration Rights
Agreement.
(d) Xxxxx and Xxxxxx shall have executed and delivered the
employment agreements with the IPCH Operating Subsidiary pursuant to
Section 7.6.
(e) The required third party consents referred to in Section
3.12(a)(vi) shall have been obtained.
Section 8.8. No Litigation. No party hereto shall be a party to or be
-------------
threatened with any litigation or administrative proceeding relating to any of
such parties or any of their assets or properties or to this Agreement or the
transactions contemplated hereby which would restrain or prohibit such party
from consummating the transactions contemplated hereby or would require
divestiture of assets by Inergy Holdings as a result of the consummation of the
transactions contemplated hereby.
Section 8.9. Third Party Consents. Inergy Holdings shall have received the
--------------------
consents (or in lieu thereof waivers) listed in Schedule 3.4 hereto. All filings
------------
with, and approvals by, third parties required to be made or received by Inergy
Holdings for the consummation of the transactions contemplated herein, excluding
those in Recital B hereto shall have been made or obtained.
Section 8.10. Financing. Inergy Holdings and/or Inergy Propane, LLC (the
---------
operating subsidiary of MLP) shall have obtained financing for the cash portion
of the merger consideration, the refinancing of the existing indebtedness of
IPCH and Inergy Propane, LLC and such other financing needs of Inergy Holdings
or Inergy Propane, LLC all as contemplated in the letter of First Union National
Bank referred to in Section 4.7 hereof and such financing commitment letter
shall be reasonably satisfactory to the IPCH Stockholders.
Section 8.11. No Adverse Event. The business and the assets of IPCH shall
----------------
not be adversely affected or threatened to be adversely affected in any material
way as a result of fire, explosion, hurricane, earthquake, disaster, accident or
other casualty, shortage of any material supplies, changes in technology, strike
or labor disturbance, obsolescence of product or service, any action or
threatened action by the United States or any other governmental authority,
flood, drought, embargo, riot, civil disturbance, uprising, activity of armed
forces, act of God or public enemy.
Section 8.12. Proceedings Satisfactory. All proceedings, corporate or
------------------------
other, to be taken in connection with the transactions contemplated by this
Agreement, and all documents incident thereto, shall be reasonably satisfactory
in form and substance to Inergy Holdings, including, without limitation, the
IPCH stockholder approval referred to in Section 7.11 hereof.
40
ARTICLE IX
CONDITIONS TO OBLIGATIONS OF IPCH AND IPCH STOCKHOLDERS TO CONSUMMATE THE
-------------------------------------------------------------------------
MERGER
------
Each and every obligation of IPCH and each IPCH Stockholder to be
performed at or before the Closing hereunder is subject, at such party's
election, to the satisfaction (or waiver by IPCH and the IPCH Stockholders'
Representative) on or prior to the Closing Date of the conditions set forth
below. Notwithstanding the failure of any one or more of such conditions, IPCH
and IPCH Stockholders may nevertheless proceed with the Closing without
satisfaction, in whole or in part, of any one or more of such conditions, but
which action shall not prejudice right of IPCH or any IPCH Stockholder to
recover damages for any such failure.
Section 9.1. Compliance With Agreement. Each of the Inergy Parties shall
-------------------------
have performed all of their respective obligations and agreements and complied
in all material respects with all covenants, warranties and conditions contained
in this Agreement which are required to be performed or complied with by the
Inergy Parties on or prior to the Closing Date.
Section 9.2. Representations and Warranties. The representations and
------------------------------
warranties of each of the Inergy Parties, Merger Sub and MLP contained in this
Agreement shall be true, complete and correct in all material respects on and as
of the Closing Date with the same force and effect as though such
representations and warranties had been given on the Closing Date.
Section 9.3. Certificate. Each of the Inergy Parties shall have delivered
-----------
to IPCH and the Signing IPCH Stockholders a certificate dated the Closing Date
and signed by a duly authorized person or officer of each respective entity to
the effect stated in Sections 9.1 and 9.2 hereof and shall state that none of
the Inergy Parties has Knowledge of any breach or default by IPCH or any of the
Signing IPCH Stockholders under this Agreement.
Section 9.4. Opinion of Counsel. IPCH shall have been furnished with the
------------------
opinion of Xxxxxxx, Mag & Fizzell, P.C., counsel to the Inergy Parties, dated
the Closing Date and addressed to the IPCH Stockholders, substantially in the
form set forth in Exhibit I hereto.
---------
Section 9.5. Additional Agreements.
---------------------
(a) Inergy Holdings shall have entered into the Nonsolicitation
Agreements.
(b) Inergy Holdings shall have entered into the Escrow Agreement.
(c) MLP shall have entered into the Registration Rights Agreement.
(d) Inergy Holdings shall have entered into employment agreements
with Xxxxx and Xxxxxx pursuant to Section 7.6.
(e) The required third party consents referred to in Schedule 3.4
and Section 3.12(a)(vi) shall have been obtained.
41
Section 9.6. Corporate Authorization. IPCH shall have received a copy of
-----------------------
the resolutions of the respective boards of directors or comparable governing
body of each of the Inergy Parties, certified as of the Closing Date by an
appropriate officer or duly authorized representative of such party, duly
authorizing the execution, delivery and performance by such party of this
Agreement and each other Agreement and instrument contemplated hereby to be
executed and delivered by such party.
Section 9.7. Third Party Consents. IPCH shall have received the consents
--------------------
or waivers listed in Schedule 3.4 hereto.
------------
Section 9.8. Stockholder Approval. IPCH shall have obtained the
--------------------
stockholder approval required under the General Corporation Law of the State of
Delaware.
Section 9.9. Good Standing. IPCH shall have received a copy of
-------------
certificates issued by appropriate governmental authorities evidencing the good
standing of MLP and Inergy Holdings as of November 27, 2001 or later as a
limited partnership or corporation of the respective states in which organized
or qualified to do business.
Section 9.10. No Litigation. No party hereto shall be a party to or be
-------------
threatened with any litigation or administrative proceeding relating to any of
such parties or any of their assets or properties or to this Agreement or the
transactions contemplated hereby which would restrain or prohibit such party
from consummating the transactions contemplated hereby.
ARTICLE X
INDEMNIFICATION
---------------
Section 10.1. Indemnity of IPCH Stockholders.
(a) Subject to the provisions of this Article X, each IPCH
Stockholder, from and after the Closing Date, severally agrees in
accordance with its pro rata ownership percentage of the Series E Preferred
Stock at the Effective Time to indemnify and hold Inergy Holdings and its
Subsidiaries and MLP and its Subsidiaries (including, without limitation,
the Surviving Corporation after the Effective Time), successors and
assigns, harmless from and against any and all damage, loss, cost,
obligation, claims, demands, assessments, judgments or liability (whether
based on contract, tort, product liability, strict liability or otherwise),
including taxes, and all expenses (including interest, penalties and
attorneys' and accountants' fees and disbursements) but in any event
excluding Covered Costs paid by the IPCH Stockholders (collectively
"Damages") incurred in litigation or otherwise, and any investigation
relating thereto, by any of the above-named persons, directly or
indirectly, resulting from or in connection with:
(i) Any breach of any representation or warranty, or failure
to perform any covenant or agreement made or undertaken, by IPCH or
such IPCH Stockholder (but not any other IPCH Stockholder) in this
Agreement or in any other agreement, certificate, schedule, exhibit or
writing delivered to Inergy Holdings pursuant to this Agreement;
42
(ii) Claims, actions or causes of action by any holder of
IPCH capital stock or options or warrants to purchase IPCH
Capital Stock seeking damages or any remedy under Delaware Law
for dissenters' rights in the Merger;
(iii) Any Damages resulting from any injury, accident,
disruption of business or third party action occurring before or
at any time within one year after the Effective Time as a result
of the failure, at the Effective Time, of any of the bulk storage
facilities of IPCH, the IPCH Operating Subsidiary or any other
Subsidiary of IPCH to comply with any requirements of insurance
policies existing and in effect at the Effective Time or the
standards and requirements set forth in Pamphlet #58 of the
National Fire Protection Association; provided, however, that the
amount of such indemnity shall be allocated between Inergy
Holdings and its affiliates and such IPCH Stockholders in such
proportion as is appropriate to reflect the relative fault of
Inergy Holdings, its affiliates and any third parties, on the one
hand, and the actions or failure to act by IPCH prior to Closing
on the other hand which resulted in such Damages and such IPCH
Stockholders shall only indemnify Inergy Holdings for IPCH's
proportion of such amount; and
(iv) Any action, suit, proceeding or claim incident to any
of the foregoing.
(b) Notwithstanding any other provision in this Agreement, each
IPCH Stockholder's liability under this Agreement and related
agreements, including any payment of Covered Costs, shall be limited
as follows: (i) for all claims made prior to July 1, 2002, such IPCH
Stockholder shall not be liable, in the aggregate, for more than his
pro rata share (based on the percentage ownership of such IPCH
Stockholder of Series E Preferred Stock at the Effective Time) times
Ten Million Dollars ($10,000,000) and (ii) for all claims made on or
after July 1, 2002 and prior to December 31, 2002, such IPCH
Stockholder shall not be liable, in the aggregate, for more than his
pro rata share (based on the percentage ownership of such IPCH
Stockholder of Series E Preferred Stock at the Effective Time) times
Five Million Dollars ($5,000,000) less the amount of claims made prior
to July 1, 2002 to the extent indemnification is determined to be
required for such claims). By way of example, to the extent that the
Inergy Parties make claims prior to July 1, 2002, such claims may only
amount up to $10 million in the aggregate. To the extent such claims
are made by the Inergy Parties prior to July 1, 2002 and such claims
exceed $5 million, no additional claims may be made by Inergy Parties
on or after July 1, 2002. To the extent that claims are made by the
Inergy Parties prior to July 1, 2002 and such claims are less than $5
million, the Inergy Parties may make additional claims up to an amount
equal to the difference between the amount of the accrued claims, to
the extent indemnification is ultimately determined to be required,
and $5 million. If claims are not made by the Inergy Parties prior to
July 1, 2002, Inergy may make claims for up to $5 million thereafter.
Section 10.2. A. Inergy Holdings' Indemnity. Inergy Holdings, MLP and
--------------------------
the Surviving Corporation, from and after the Closing Date, shall jointly and
severally indemnify and hold each
43
IPCH Stockholder harmless from and against any Damages incurred by such IPCH
Stockholder resulting from or in connection with:
(a) Any misrepresentation, breach of warranty or failure to perform
any covenant or agreement made or undertaken by either Inergy Holdings,
MLP, IPCH Acquisition Corp. or Merger Sub in this Agreement or in any other
agreement or certificates delivered by Inergy Holdings, IPCH Acquisition
Corp., MLP or Merger Sub to the IPCH Stockholders pursuant to this
Agreement;
(b) Any action, suit, proceeding or claim incident to any of the
foregoing; and
(c) Except as provided in Section 10.1(a)(iii) above or in Section
10.8 below, the operation of the business and ownership of the assets and
properties of IPCH, its Subsidiaries and Affiliates and their successors
and assigns after the Effective Time.
Section 10.2. B. MLP's Indemnity. MLP, from and after the Closing Date,
---------------
shall indemnify and hold each IPCH Stockholder harmless from and against any
Damages incurred by such IPCH Stockholder resulting from or in connection with:
(a) Any misrepresentation, breach of warranty or failure to perform
any covenant or agreement made or undertaken by MLP in this Agreement or in
any other agreement or certificates delivered by MLP to the IPCH
Stockholders pursuant to this Agreement; and
(b) Any action, suit, proceeding or claim incident to any of the
foregoing.
Section 10.2. C. IPCH Acquisition Corp.'s Indemnity. IPCH Acquisition
----------------------------------
Corp., from and after the Closing Date, shall indemnify and hold each IPCH
Stockholder harmless from and against any Damages incurred by such IPCH
Stockholder resulting from or in connection with:
(a) Any misrepresentation, breach of warranty or failure to perform
any covenant or agreement made or undertaken by IPCH Acquisition Corp. in
this Agreement or in any other agreement or certificates delivered by IPCH
Acquisition Corp. to the IPCH Stockholders pursuant to this Agreement; and
(b) Any action, suit, proceeding or claim incident to any of the
foregoing.
Section 10.3. Procedure. All claims for indemnification by a party under
---------
this Article X (the party claiming indemnification and the party against whom
such claims are asserted being hereinafter called the "Indemnified Party" and
the "Indemnifying Party," respectively) shall be asserted and resolved as
follows:
(a) In the event that any claim or demand for which an Indemnifying
Party would be liable to an Indemnified Party hereunder is asserted against
or sought to be collected from such Indemnified Party by a third party,
such Indemnified Party shall within ten (10) days (however, the failure to
give such notice within such ten (10) day period shall relieve the
Indemnifying Party from its responsibility hereunder only to the extent
such failure prejudices such Indemnifying Party) give notice (the "Claim
Notice")
44
to the Indemnifying Party of such claim or demand, specifying the nature of
and specific basis for such claim or demand and the amount or the estimated
amount thereof to the extent then feasible (which estimate shall not be
conclusive of the final amount of such claim and demand). The Indemnifying
Party shall not be obligated to indemnify the Indemnified Party under this
Agreement with respect to any such claim or demand if the Indemnified Party
fails to notify the Indemnifying Party thereof in accordance with the
provisions of this Agreement, and, as a result of such failure, the
Indemnifying Party's ability to defend against the claim or demand is
materially prejudiced. The Indemnifying Party shall have ten (10) days from
the delivery or mailing of the Claim Notice (the "Notice Period") to notify
the Indemnified Party (i) whether or not it disputes the liability of the
Indemnifying Party to the Indemnified Party hereunder with respect to such
claim or demand, and (ii) whether or not it desires, at the cost and
expense of the Indemnifying Party, to defend the Indemnified Party against
such claim or demand; provided, however, that any Indemnified Party is
-------- -------
hereby authorized, but is not obligated, prior to and during the Notice
Period, to file any motion, answer or other pleading that it shall deem
necessary or appropriate to protect its interests or those of the
Indemnifying Party. If the Indemnifying Party notifies the Indemnified
Party within the Notice Period that it desires to defend the Indemnified
Party against such claim or demand, the Indemnifying Party shall, subject
to the last sentence of this paragraph, have the right to control the
defense against the claim by all appropriate proceedings and any settlement
negotiations. If the Indemnified Party desires to participate in, but not
control, any such defense or settlement, it may do so at its sole cost and
expense. If the Indemnifying Party fails to respond to the Indemnified
Party within the Notice Period, elects not to defend the Indemnified Party,
or after electing to defend fails to commence or reasonably pursue such
defense, then the Indemnified Party shall have the right, but not the
obligation, to undertake or continue the defense of, and to compromise or
settle (exercising reasonable business judgment), the claim or other matter
all on behalf, for the account and at the risk of the Indemnifying Party.
Notwithstanding the foregoing, if the basis of the proceeding relates to a
condition of operations which existed or were conducted both prior to and
after the Closing Date or if the Indemnified Party would be otherwise
adversely affected as a result of any adverse decision of such proceeding,
each party shall have the same right to participate at its own expense and
at its own risk in the proceeding without either party having the right of
control.
(b) If requested by the Indemnifying Party, the Indemnified Party
agrees, at the Indemnifying Party's expense, to cooperate with the
Indemnifying Party and its counsel in contesting any claim or demand which
the Indemnifying Party elects to contest, or, if appropriate and related to
the claim in question, in making any counterclaim against the person
asserting the third party claim or demand, or any cross-complaint against
any person. No claim as to which indemnification is sought under this
Agreement may be settled without the consent of the Indemnifying Party.
(c) If any Indemnified Party should have a claim against the
Indemnifying Party hereunder which does not involve a claim or demand being
asserted against or sought to be collected from it by a third party, the
Indemnified Party shall send a Claim Notice with respect to such claim to
the Indemnifying Party. If the Indemnifying Party
45
disputes such claim, such dispute shall be resolved by mutual agreement of
the parties or by litigation in an appropriate court of competent
jurisdiction.
Section 10.4. Costs. If any legal action or other proceeding is brought for
-----
the enforcement or interpretation of any of the rights or provisions of this
Agreement (including the indemnification provision), or because of an alleged
dispute, breach, default or misrepresentation in connection with any of the
provisions of this Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorneys' fees and all other costs and expenses
incurred in that action or proceeding, in addition to any other relief to which
it may be entitled.
Section 10.5. Claims Against Escrow. Inergy Holdings may make claim for
---------------------
payment of Damages to which Inergy Holdings is entitled under Section 10.1
hereof by notifying the Escrow Agent and the IPCH Stockholders' Representative
of such claim pursuant to the Escrow Agreement and requesting release of
appropriate funds to Inergy Holdings to cover such Damages, but the seeking of
such claim for payment from the Escrow Agent shall not limit Inergy Holdings in
any manner in the enforcement of any other remedies available to it under this
Article X. Such request shall be processed by the Escrow Agent pursuant to the
Escrow Agreement prior to the release of any funds to Inergy Holdings.
Section 10.6. Limitations on Indemnification.
------------------------------
(a) Inergy Holdings shall not be entitled to any indemnification
for any Damages under this Agreement until such Damages shall total
$250,000 in the aggregate (the "Threshold Amount"); provided, however, that
(i) any individual claim that is not part of a group of related or similar
claims and is less than $2,500 shall not be counted toward the Threshold
Amount or any Damages exceeding the Threshold Amount, and (ii) in the event
Damages exceed the Threshold Amount, the liability for indemnification for
such Damages shall only be to the extent such Damages exceed the Threshold
Amount. The parties acknowledge that Remediation Costs shall not count
toward the Threshold Amount except to the extent that any Remediation
Costs, directly or indirectly, result from or are in connection with a
breach of the representation set forth in Section 3.21.
(b) Any claim for indemnification hereunder made against the IPCH
Stockholders shall be made prior to December 31, 2002; provided, however
that (i) a claim for indemnification as a result of the breach of a
representation made by IPCH in Section 3.21 may be brought at any time
prior to December 31, 2003; (ii) a claim for indemnification as a result of
the breach of a representation made by IPCH in Section 3.14 may be brought
at any time prior to the expiration of the statute of limitations
applicable to such representation; (iii) a claim for indemnification as a
result of the breach of a representation by IPCH in Section 3.1 or by any
IPCH Stockholder contained in Section 6.1 may be brought at any time; and
(iv) if a claim is made by the last date it can be made under this
paragraph (b), then the potential liability for indemnification therefor
shall continue beyond such period and until such claim is resolved by
agreement or in the courts
(c) If prior to the Closing any party (the "waiving party") (i)
has knowledge of any breach by any other party of any representation,
warranty or covenant contained in
46
this Agreement, (ii) the effect of such breach is a failure of any
condition to the waiving party's obligations set forth in Articles VIII or
IX hereof and (iii) the waiving party proceeds with the Closing, the
waiving party shall be deemed to have waived such breach and the waiving
party and its successors, assigns and Affiliates shall not be entitled to
be indemnified pursuant to Article X, to xxx for damages or to assert any
other right or remedy for any losses arising from any matters relating to
such condition or breach, notwithstanding anything to the contrary
contained herein or in any certificate delivered pursuant hereto.
(d) Except for actions based on or alleging actual fraud, the
sole remedy for Damages for breach of any representation or warranty
contained in this Agreement and any agreement, document or instrument
executed and delivered in connection therewith shall be indemnification
pursuant to this Article X.
Section 10.7. Reduction for Insurance. The amount which an indemnifying
-----------------------
party is required to pay to, for, or on behalf of an indemnified party pursuant
to this Article X (including under Section 10.8 below) shall be reduced
(including without limitation, retroactively) by any insurance proceeds actually
recovered by or on behalf of the indemnified party in reduction of the related
Damage ("Indemnifiable Loss"). Amounts required to be paid, as so reduced, are
hereinafter sometimes called an "Indemnity Payment". If the indemnified party
shall have received, or if the indemnifying party shall have paid on behalf of
the indemnified party, an Indemnity Payment in respect of an Indemnifiable Loss
and shall subsequently receive, directly or indirectly, insurance proceeds
(which duplicate, in whole or in part, the Indemnity Payment) in respect of such
Indemnifiable Loss, then the indemnified party shall promptly pay to the
indemnifying party the amount of such insurance proceeds, or, if less, the
amount of the Indemnity Payment. The parties hereto agree that the foregoing
shall not affect the subrogation rights of any insurance company and that the
indemnified party shall pursue the recovery of such insurance proceeds with the
same care and diligence as though no indemnification was available hereunder.
Section 10.8. Agreement Respecting Environmental Matters.
------------------------------------------
(a) The parties make this agreement respecting costs incurred by
Inergy Propane (as the successor to the assets and business of the IPCH
Operating Subsidiary as referenced in Recital B above) in connection with
the remediation of those properties held by the IPCH Operating Subsidiary
at the Effective Time and identified on Schedule 10.8 hereto (the "Subject
Properties").
(b) To the extent that Inergy Propane has reason to believe that
environmental remediation of any Subject Property is required to satisfy
applicable environmental laws, ordinances, regulations or standards,
including common law, and provided that Inergy Propane would conduct an
environmental investigation thereof irrespective of the indemnification the
IPCH Stockholders hereunder, Inergy Propane may conduct, at its expense,
such investigation of the environmental status of the Subject Properties as
it deems appropriate. In that regard, Inergy Propane anticipates engaging
third party consulting firms with expertise in assessing environmental
problems and advising as to the remediation of contaminated properties and
regulatory compliance. If any such
47
consultant advises Inergy Propane that remediation or other action must be
undertaken with respect to any of the Subject Properties to satisfy any
Federal, state, or local law, ordinance or regulation, including common law
(a "Clean-Up Property"), Inergy Propane will advise the IPCH Stockholders'
Representative of such fact in writing and provide, with such notice,
appropriate supporting information, including an estimate of the costs that
will be incurred to cause such property to satisfy applicable environmental
laws, ordinances, regulations or standards, including common law.
(c) Such costs incurred by Inergy Propane for the goods and
services provided by third parties in connection with the remediation of
any Clean-Up Property are referred to herein as "Remediation Costs." Inergy
Propane shall notify the IPCH Stockholders' Representative of Remediation
Costs as they are incurred, which costs shall be reasonable under the
circumstances. Inergy Propane shall give the IPCH Stockholders'
Representative and its advisors access to the Clean-Up Property, and to all
reports, studies and information related to such Remediation Costs that are
within Inergy Propane's possession or control, to ascertain the
appropriateness of the Remediation Costs. The IPCH Stockholders'
Representative shall have a period of 30 days to approve a Remediation Cost
after notice thereof. Such approval shall not be unreasonably withheld. If
approved or if the IPCH Stockholders' Representative fails to respond
within such 30-day period, such Remediation Cost shall be a "Covered Cost"
hereunder. If approval of a Remediation Cost is denied, the IPCH
Stockholders' Representative shall, within 30 days after such denial,
provide to Inergy Propane the opinion of a third party consulting firm with
expertise in such matters that such Remediation Cost is not appropriate.
The cost of any such third party consulting firm shall be borne by the IPCH
Stockholders. If the consulting firm retained by Inergy Propane and the
consulting firm retained by the IPCH Stockholders' Representative cannot
promptly reach an agreement as to such Remediation Cost, then such
consulting firms shall promptly select a third consulting firm with
expertise in such matters, which third consulting firm shall make a
determination as to the appropriateness of the Remediation Costs and the
amount thereof. The determination by such third consulting firm shall be
final and binding on the parties, and the Remediation Cost determined to be
appropriate by such firm shall be "Covered Costs" hereunder. The cost of
such third consulting firm shall be shared equally by the parties.
(d) The Covered Costs shall be shared as follows:
(i) the first $250,000 of Covered Costs shall be entirely
those of Inergy Propane; provided, however, that to the extent that
any Covered Costs, directly or indirectly, result from or are in
connection with a breach of the representation set forth in Section
3.21, such Covered Costs shall not be the responsibility of Inergy
Propane under this Section 10.8 but instead shall be the
responsibility of the IPCH Stockholders under Section 10.1 (subject to
the provisions of Section 10.6);
(ii) the next $1,500,000 of Covered Costs shall be shared
equally between the IPCH Stockholders on the one hand and Inergy
Propane on the other; and
48
(iii) any Covered Costs not provided for in clauses (i) and
(ii) shall be entirely those of Inergy Propane and, notwithstanding
any other provision of law, any and all other Remediation Costs shall
be borne by Inergy Propane unless such costs, directly or indirectly,
result from or are in connection with a breach of the representation
set forth in Section 3.21, in which case such costs shall be subject
to the provisions of Sections 10.1 and 10.6.
(e) Notwithstanding the foregoing, these cost sharing
arrangements shall apply only to Remediation Costs incurred prior to
December 31, 2002 (or Remediation Costs that Inergy Propane anticipates
will be incurred after December 31, 2002 and are identified in writing with
reasonable specificity to the IPCH Stockholders' Representative in the
manner set forth in Section 10.8(c) above prior to that date) with respect
to a Clean-Up Property designated by Inergy Propane under Section 10.8(b)
above, it being understood that if notice of Remediation Costs is given by
such date, then Inergy Propane shall be entitled to the sharing provisions
hereof for Covered Costs incurred subsequent to December 31, 2002 with
respect to such Clean-Up Property, and an appropriate amount shall be
retained in escrow under the Escrow Agreement to assure funds are available
from which Inergy Propane may be reimbursed.
(f) The cost sharing arrangement with respect to remediation of
the Subject Properties provided for in this Section 10.8 is independent of
any breach of a representation made in this agreement and shall apply
irrespective of whether or not Inergy Propane or any Inergy Party has
knowledge of any environmental problems on the Subject Properties. Subject
to the limits described in this Section, Inergy Propane shall look first to
the Escrowed Funds to recover any Covered Costs as provided herein.
ARTICLE XI
TERMINATION
-----------
Section 11.1. Termination. This Agreement may be terminated at any time
-----------
prior to the Closing:
(a) By the mutual agreement of IPCH, Inergy Holdings and the IPCH
Stockholders' Representative;
(b) By either Inergy Holdings, the IPCH Stockholders'
Representative or IPCH if the Closing has not taken place on or before
December 31, 2001 (the "Cut-Off Date"); provided, however, that the right
to terminate this Agreement under this Section 11.1(b) shall not be
available to any party in breach of this Agreement or whose failure to
fulfill any obligation under this Agreement has been the cause of, or
results in, the failure of the Closing to occur within such period unless
both IPCH and any of Inergy Holdings, MLP or Merger Sub are in breach or
default on the Cut-Off Date, in which case any of such parties may
terminate this Agreement;
(c) By Inergy Holdings pursuant to Section 7.13 hereof;
49
(d) By Inergy Holdings the IPCH Stockholders' Representative or
IPCH, as the case may be, if not in default or breach of this Agreement and
(i) if any of the conditions precedent to the performance of the
obligations of the party giving notice of termination shall not have been
fulfilled and cannot be fulfilled on or prior to the Cut-Off Date and shall
not have been waived in writing by such party, or (ii) if a default shall
be made by the other party in observance or in the due and timely
performance of any of the covenants and agreements herein contained that
cannot be cured on or prior to the Cut-Off Date and shall not have been
waived in writing by the terminating party; or (iii) if there exists an
inaccuracy, failure or breach of a warranty or representation set forth
herein or in any other agreement or instrument executed pursuant hereto by
the other party which by the Cut-Off Date has not been cured or waived in
writing by the terminating party for whose benefit such warranty or
representation was made or given; and
(e) At the option of Inergy Holdings the IPCH Stockholders'
Representative or IPCH, if any action or proceeding shall have been
instituted and remain pending before a court or other governmental body by
any federal, state or local government or agency thereof to restrain or
prohibit the consummation of the transactions contemplated by this
Agreement, or if any federal, state or local government or agency thereof
shall have threatened to institute any proceeding before a court or other
governmental body to restrain the consummation of such transactions or to
force divestiture, provided that neither party shall have the option to
terminate this Agreement as provided herein after any such action or notice
by any federal, state or local government or governmental agency or other
person shall be withdrawn or settled.
Section 11.2. No Liability. Except in the event of a termination of this
------------
Agreement pursuant to Section 11.1(d)(ii) or (iii) hereof, there shall be no
liability on the parties hereto or any of their respective members, managers,
officers, directors, stockholders or Affiliates as a result thereof under this
Agreement. In the event of a termination under Section 11.1(d)(ii) or (iii)
hereof, the terminating party shall only be entitled to receive from the other
party an amount up to $250,000 for reimbursement of the third party expenses the
terminating party has incurred in connection with the transactions contemplated
hereby and shall not be entitled to recover any other Damages hereunder or
otherwise. If either IPCH or Inergy Holdings is entitled to terminate this
Agreement pursuant to Section 11.1(d)(ii) or (iii), such party may instead seek
specific performance by the other party. Any party obtaining specific
performance shall be deemed to have waived any breach or default by the other
party which was known to the party prior to obtaining specific performance.
Section 11.3. Notice. Inergy Holdings may exercise its right of termination
------
of this Agreement only by delivering written notice to that effect to IPCH and
the IPCH Stockholders' Representative, provided that such notice is received by
IPCH prior to the Closing. IPCH or the IPCH Stockholders' Representative may
exercise its right of termination of this Agreement only by delivering written
notice to that effect to Inergy Holdings, provided that such notice is received
by Inergy Holdings prior to the Closing.
Section 11.4. Effect of Termination. If this Agreement is terminated as
---------------------
described in this Article XI, this Agreement shall become null and void and of
no further force and effect, except
50
for the provisions of Sections 7.2, 7.3, Article XII and this Article XI.
Nothing in this Section 11.4 shall be deemed to release any party from any
liability for any willful breach by such party of the terms and provisions of
this Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed duly given (a) on the date of delivery if
delivered personally, or by telecopy or telefacsimile, upon confirmation of
receipt, in each case, if on a Business Day, and otherwise on the next Business
Day, (b) on the first service, (c) on the fifth Business Day following the date
of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid, or (d) the second Business Day if delivered by
nationally recognized overnight courier. All notices hereunder shall be
delivered as set forth below, or pursuant to such other instructions as may be
designated in writing by the party to receive such notice:
if to the Surviving Corporation, to the address set forth below for
Inergy Holdings and IPCH, including copies;
if to Inergy Holdings, IPCH Acquisition Corp., MLP and/or Merger
Sub, to:
Inergy Holdings, LLC
0000 Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxx
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx, Mag & Fizzell, P.C.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx Xxxx, XX 00000
Attention: Xxxx X. XxXxxxxxxx
Facsimile: (000) 000-0000
if to IPCH and the Signing IPCH Stockholders to:
X. X. Xxxxxx Partners (SBIC), LLC
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Official Notice Clerk
(fbo Xxxxxx Xxxx)
Facsimile: (000) 000-0000
51
with a copy to:
X'Xxxxxxxx LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. X'Xxxxx
Facsimile: (000) 000-0000
Section 12.2. Amendments; No Waivers.
----------------------
(a) Any provision of this Agreement may be amended or waived
prior to the Effective Time if, and only if, such amendment or waiver is in
writing and, in the case of an amendment, signed by IPCH, Inergy Holdings,
MLP and the IPCH Stockholders' Representative. Any provision of this
Agreement may be amended after the Effective Time if, and only if, such
amendment is in writing and signed by Inergy Holdings, MLP and the IPCH
Stockholders' Representative.
(b) No failure or delay by any 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.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
Section 12.3. Survival. Subject to the provisions of Section 10.6(b), all
--------
representations, warranties, covenants and agreements made by the parties each
to the other in this Agreement or pursuant hereto in any certificate, instrument
or document shall survive the consummation of the transactions contemplated by
this Agreement. All representations made herein by IPCH and/or the Signing IPCH
Stockholders may be fully and completely relied upon by Inergy Holdings and MLP
notwithstanding any investigation heretofore or hereafter made by such party or
on behalf of any of them, and shall not be deemed merged into any instruments or
agreements delivered at Closing.
Section 12.4. Assignment. Inergy Holdings may assign any or all of its
----------
rights under this Agreement (including, without limitation, the rights under
Article X) and all certificates, instruments and other agreements entered into
in connection with this Agreement (including, without limitation, the
Nonsolicitation Agreements and the Escrow Agreement) to any Affiliate of Inergy
Holdings, including to MLP or any Subsidiary of MLP, and such assignee or any
future assignee shall have the right to further assign such rights to any
Affiliate of Inergy Holdings, whether such assignment is pursuant to a merger or
otherwise and any such assignees shall have all of the right and power to
directly enforce such rights; provided, however, that in the event of any such
assignments Inergy Holdings shall remain liable for the performance of all its
obligations hereunder. Except as provided in the immediately preceding sentence,
neither this Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto, in whole or in part (other than
to an affiliate or by operation of law, including the laws of descent and
distribution), without the prior written consent of the other party (which
consent shall not unreasonably be withheld), and any attempt to make any such
assignment
52
without such consent shall be null and void. Subject to the provisions of this
Section 12.4, this Agreement will be binding upon, inure to the benefit of and
be enforceable by the parties and their respective successors, heirs and
assigns.
Section 12.5. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the internal laws of the State of Delaware
without regard to any principles of Delaware conflicts or choice of law.
Section 12.6. IPCH Stockholders' Representative. By the approval of this
---------------------------------
Agreement by the IPCH Stockholders, each IPCH Stockholder acknowledges that:
(a) The IPCH Stockholder irrevocably appoints the person
designated from time to time pursuant to Section 12.6(e) below as its true
and lawful attorney-in-fact, to act as its representative (the "IPCH
Stockholders' Representative") under this Agreement and, as such, to act,
as the IPCH Stockholder's agent (with full power of substitution), to take
such action in the name of the IPCH Stockholder and for and on the IPCH
Stockholder's behalf with respect to all matters relating to this Agreement
and the Escrow Agreement (including, without limitation, (i) to give and
receive (or refrain from giving or receiving) all accountings, reports,
notices, waivers and consents, (ii) to determine the Final Working Capital
in accordance with Section 2.1(f) of this Agreement and reach agreement
with Inergy Holdings with respect to the Final Cash Consideration Amount as
contemplated by Section 2.1(f) of this Agreement, (iii) to terminate this
Agreement as provided in Article XI hereof, (iv) to amend this Agreement to
extend the termination dates provided in Article IX hereof, (v) to receive
notices of any claims relating to the indemnification in Article X of this
Agreement, (vi) to elect and, if elected, to assume control of the defense
of any such claims (including the retention of counsel) and to reach an
agreement with respect to or settle any proceeding relating to such claims,
(vii) to authorize the Escrow Agent to pay any amounts from the cash amount
and MLP Units held by the Escrow Agent in accordance with the terms of the
Escrow Agreement (either to the IPCH Stockholders' Representative, to be
distributed to the IPCH Stockholders as provided in this Agreement, or to
Inergy Holdings in payment or settlement of claims), and (viii) to take any
and all actions on behalf of the IPCH Stockholders from time to time as the
IPCH Stockholders' Representative may deem necessary or desirable to
fulfill the interests and purposes of this Section (including all
paragraphs contained herein)) and to act for the IPCH Stockholder and in
the IPCH Stockholder's name, place and stead as fully to all intents and
purposes as the IPCH Stockholder could do in person. The IPCH Stockholder
further acknowledges and agrees that upon execution of this Agreement, any
delivery by the IPCH Stockholders' Representative of any waiver, amendment,
agreement, opinion, certificate or other documents executed by the IPCH
Stockholders' Representative pursuant to this Section (notwithstanding the
later execution of a Letter of Transmittal by the IPCH Stockholder), the
IPCH Stockholder shall be bound by such documents as fully as if the IPCH
Stockholder had executed and delivered such documents. The authority
conferred under this Section (including all paragraphs contained herein) is
an agency coupled with an interest and all authority conferred hereby is
irrevocable and not subject to termination by the IPCH Stockholder or by
operation of law, whether by the death or incapacity of the IPCH
Stockholder, the termination of any trust or estate or the occurrence of
any other event. If the IPCH Stockholder should die
53
or become incapacitated, if any trust or estate should terminate or if any
other such event should occur, any action taken by the IPCH Stockholders'
Representative pursuant to this Section shall be as valid as if such death
or incapacity, termination or other event had not occurred, regardless of
whether or not the IPCH Stockholders' Representative or Inergy Holdings
shall have received notice of such death, incapacity, termination or other
event. The IPCH Stockholders' Representative shall not have any duties or
responsibilities except those expressly set forth in this Agreement, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into the Agreement or shall otherwise exist
against the IPCH Stockholders' Representative. With respect to all other
actions, the IPCH Stockholders' Representative shall only take or authorize
such actions approved orally or in writing by the IPCH Stockholders holding
a majority of the Series E Preferred Stock held by all IPCH Stockholders
that have either executed and delivered this Agreement or a Letter of
Transmittal.
(b) The IPCH Stockholders' Representative shall be entitled to
rely, and shall be fully protected in relying, upon any statements
furnished to it by the IPCH Stockholder, Inergy Holdings, the Surviving
Corporation, MLP or Acquisition Corp, or any other evidence deemed by the
IPCH Stockholders' Representative to be reliable, and the IPCH
Stockholders' Representative shall be entitled to act on the advice of
counsel selected by it. The IPCH Stockholders' Representative shall be
fully justified in failing or refusing to take any action on behalf of the
IPCH Stockholders under this Agreement unless it shall have received such
advice or concurrence of the IPCH Stockholders as it deems appropriate or
it shall have been expressly indemnified to its satisfaction by the IPCH
Stockholders appointing it (severally according to their respective
percentage ownership of the Series E Preferred Stock immediately prior to
the Closing under this Agreement) against any and all liability and expense
that the IPCH Stockholders' Representative may incur by reason of taking or
continuing to take any such action.
(c) The IPCH Stockholders' Representative shall be entitled to
retain counsel and other advisors and to incur such expenses as the IPCH
Stockholders' Representative deems to be necessary or appropriate in
connection with its performance of its obligations under this Agreement,
and all such fees and expenses (including reasonable attorneys' fees and
expenses) incurred by the IPCH Stockholders' Representative shall be borne
by the IPCH Stockholders pro rata according to their respective percentage
ownership of the Series E Preferred Stock immediately prior to the Closing
under this Agreement.
(d) The IPCH Stockholders agree to indemnify the IPCH
Stockholders' Representative (in its capacity as such) ratably according to
their respective percentage ownership of the Series E Preferred Stock
immediately prior to the Closing under this Agreement against, and to hold
the IPCH Stockholders' Representative (in its capacity as such) harmless
from, any and all losses of whatever kind which may at any time be imposed
upon, incurred by or asserted against the IPCH Stockholders' Representative
in such capacity in any way relating to or arising out of its action or
failures to take action pursuant to this Agreement or in connection
herewith in such capacity; provided that no IPCH Stockholder shall be
liable for the payment of any portion of such losses resulting solely from
the gross negligence or willful misconduct of the IPCH Stockholders'
54
Representative. The agreements in this Section 12.6(d) shall survive
termination of this Agreement.
(e) X.X. Xxxxxx Partners (SBIC), LLC ("JPMP") shall be the
initial IPCH Stockholders' Representative and shall serve as the IPCH
Stockholders' Representative until the earlier of its resignation or
removal (with or without cause) by IPCH Stockholders executing this
Agreement or a Letter of Transmittal whose percentage ownership of the
Series E Preferred Stock immediately prior to the Closing under this
Agreement exceed, in the aggregate, 50% (such sum being referred to herein
as the "Controlling Percentage"). JPMP hereby accept its appointment as the
initial IPCH Stockholders' Representative and the authorization set forth
above. Upon the resignation or removal of JPMP, the IPCH Stockholders
executing this this Agreement or a Letter of Transmittal whose percentage
ownership of the Series E Preferred Stock immediately prior to the Closing
under this Agreement exceed the Controlling Percentage shall select a new
IPCH Stockholders' Representative who may resign, be removed or replaced in
such a manner as the selecting IPCH Stockholders agree. Each time a new
IPCH Stockholders' Representative is appointed pursuant to this Agreement,
such Person shall accept such position in writing.
(f) The IPCH Stockholders whose respective percentage ownership
of the Series E Preferred Stock immediately prior to the Closing under this
Agreement exceed, in the aggregate, the Controlling Percentage shall notify
Inergy Holdings of each change of IPCH Stockholders' Representative. Until
Inergy Holdings receives the foregoing notice, it shall be entitled to
assume that a prior person acting as the IPCH Stockholders' Representative
is still the duly authorized IPCH Stockholders' Representative.
Section 12.7. Counterparts; Effectiveness. This Agreement may be executed
---------------------------
in one or more counterparts, all of which shall be considered one and the same
agreement and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other party, it being
understood that both parties need not sign the same counterpart. This Agreement
shall become effective when each party hereto shall have received counterparts
hereof signed by all of the other parties hereto.
Section 12.8. No Third Party Beneficiaries. This Agreement shall be
----------------------------
binding upon and inure solely to the benefit of each party hereto, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other Person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
Section 12.9. Interpretation. When a reference is made in this Agreement
--------------
to Sections, Exhibits or Schedules, such reference shall be to a Section of or
Exhibit or Schedule to this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
Section 12.10. Enforcement. The parties agree that irreparable damage would
-----------
occur in the event that any of the provisions of this Agreement were not
performed in accordance with
55
their specific terms. It is accordingly agreed that the parties shall be
entitled to specific performance of the terms hereof, this being in addition to
any other remedy to which they are entitled at law or in equity.
Section 12.11. Entire Agreement. This Agreement (together with the exhibits
----------------
and schedules hereto) constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, both oral and written, between the parties with respect to the
subject matter hereof.
Section 12.12. Severability. If any term, provision, covenant or
------------
restriction set forth in this Agreement is held by a court of competent
jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions set forth in this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or
invalidated so long as the economic or legal substance of the transactions
contemplated hereby is not deemed by a party (acting reasonably and in good
faith) to be materially adverse to that party. Upon such a determination, the
parties shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in order that the
transactions contemplated hereby may be consummated as originally contemplated
to the fullest extent possible.
56
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
X.X. XXXXXX PARTNERS (SBIC) LLC IPCH ACQUISITION CORP.
By /s/ Xxxxxxxxxxx Xxxxxxx By /s/ Xxxx. X. Xxxxxxx
----------------------- --------------------
Xxxxxxxxxxx Xxxxxxx, General Partner Xxxx. X. Xxxxxxx, President
("IPCH Acquisition Corp.")
SUMMIT CAPITAL, INC. IPCH MERGER CORP.
By /s/ Xxxxxx X. Xxxxx By /s/ Xxxx X. Xxxxxxx
------------------- -------------------
Xxxxxx X. Xxxxx, Chairman Xxxx X. Xxxxxxx, President
("Merger Sub")
INDEPENDENT PROPANE COMPANY HOLDINGS INERGY, L.P.
By: INERGY GP, LLC,
By /s/ Xxxxx X. Xxxxx as Managing General Partner
-----------------
Xxxxx X. Xxxxx By /s/ Xxxx X. Xxxxxxx
-------------------
Xxxx X. Xxxxxxx, President
("MLP")
INERGY HOLDINGS, LLC XXXXXX FINANCIAL, INC.
By /s/ Xxxx X. Xxxxxxx By /s/ Xxxxxx Xxxx
------------------- ---------------
Xxxx X. Xxxxxxx, President Xxxxxx Xxxx
("Inergy Holdings")
TRIAD VENTURES LIMITED, L.P
By /s/ Xxxx Ban
-------------------
Special Limited Partner
57
Joined in solely for the limited purposes specified in Section 7.6 and Section
7.11 by:
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx
---------------------------------- -------------------------------------
Xxxxx X. Xxxxx Xxxxxx X. Xxxxxx
("Xxxxx") ("Xxxxxx")
Joined in solely for the limited purposes specified in Section 10.8 by:
INERGY PROPANE, LLC
By /s/ Xxxx X. Xxxxxxx
-------------------
Xxxx X. Xxxxxxx, President
("Inergy Propane")
58
APPENDIX I
DEFINITIONS
"Acquisition Proposal for IPCH" means any offer or proposal for a merger,
consolidation, share exchange, business combination, reorganization,
recapitalization, issuance of securities, liquidation, dissolution, tender offer
or exchange offer or other similar transaction or series of transactions
involving, or any purchase of 10% or more of the assets, or directly or
indirectly acquires beneficial ownership of securities representing, or
exchangeable for or convertible into, more than 10% of the outstanding
securities of any class of voting securities of IPCH or in which IPCH issues
securities representing 10% of the outstanding securities of any class of voting
securities of IPCH.
"Adverse Effect" means a single event, occurrence or fact or related series
of events, occurrences or facts having an adverse effect on the assets,
business, operations, prospects or financial condition of IPCH or its
Subsidiaries.
"Affiliate" means, with respect to any Person, any other Person, directly
or indirectly, controlling, controlled by, or under common control with, such
Person. For purposes of this definition, the term "control" (including the
correlative terms "controlling", "controlled by" and "under common control
with") means the possession, direct or indirect, of the power to direct or cause
the direction of the management and policies of a Person, whether through the
ownership of voting securities, or partnership or other ownership interests, by
contract, or otherwise.
"Agreed MLP Unit Value" shall be $26.30 per MLP Unit.
"Balance Sheet" means IPCH's audited balance sheet dated September 30,
2001.
"Balance Sheet Date" means September 30, 2001.
"Business Day" means any day other than a Saturday, Sunday or one on which
banks are authorized by law to close in the State of Missouri.
"Cash Amount" means with respect to each share of Stock the amount of the
cash consideration constituting a portion (or all as the case may be) of the
Merger Consideration payable, respectively, for each share of Common Stock,
Series D Preferred Stock, and Series E Preferred Stock, as determined pursuant
to Sections 2.1(e)(iii), 2.1(e)(ii) and 2.1(f)(i), respectively.
"Closing" means the closing of the Merger contemplated in this Agreement.
"Closing Date" means the date on which the Closing occurs.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contracts and Other Agreements" shall mean all contracts, agreements,
understandings, indentures, notes, bonds, loans, instruments, leases, subleases,
mortgages, franchises, licenses,
commitments or binding arrangements, oral or written to which IPCH or any of its
Subsidiaries is a party.
"Distributable MLP Units" shall mean that number of MLP Units, if any,
constituting a portion of the Merger Consideration to be delivered to the
holders of the Series E Preferred Stock at Closing less the number of such MLP
Units that are to be delivered to the Escrow Agent at Closing.
"Governmental Entity" means any federal, state or local governmental
authority, any transgovernmental authority or any court, tribunal,
administrative or regulatory agency or commission or other governmental
authority or agency, domestic or foreign.
"IPCH Stockholders" means the holders of the Series E Preferred Stock at
the Effective Time.
"Knowledge," with respect to IPCH and its Subsidiaries, shall encompass all
facts and information which are within the actual knowledge of any of the
officers, directors, or key employees of IPCH or any of its Subsidiaries (all of
whom are listed on Exhibit J hereto), after review of such person's own files
and inquiry of those other officers (who are current employees) of IPCH or any
IPCH Subsidiary who would reasonably be expected to have knowledge of the
specific matter at issue, and with respect to Inergy Holdings and MLP, shall
encompass all facts and information which are either within the actual knowledge
of any of the officers, directors, or employees of Inergy Holdings and MLP,
respectively, or that should have been known to such persons in the exercise of
reasonable care and after due inquiry.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
"MLP SEC Documents" means (i) MLP's Registration Statement on Form S-1
which became effective with the SEC on July 25, 2001, (ii) MLP's quarterly
report on Form 10-Q (the "10-Q") for its fiscal quarter ended June 30, 2001,
filed with the SEC, (iii) MLP's current report on Form 8-K dated November 2,
2001, filed with the SEC, and (iv) any report filed by MLP with the SEC after
the date hereof and prior to the Closing Date.
"Material Adverse Effect" shall mean with respect to the consequences of
any fact or circumstance (including the occurrence or non-occurrence of any
event), that such fact or circumstance has caused, is causing or will cause,
directly, indirectly or consequentially, singly or in the aggregate, any Damages
in excess of Five Hundred Thousand Dollars ($500,000); provided that the
foregoing shall not include the consequences of any fact or circumstance (a )
not directly related to IPCH or its Subsidiaries or to their respective business
or properties, or (b) attributable to (i) factors or events generally affecting
the industry in which the business of IPCH operates, (ii) general national,
regional or local economic or financial conditions, or (iii) changes in
governmental or legislative laws, rules or regulation.
"Material Contract" shall mean and involve any Contracts and Other
Agreements, if such involves, relates to or affects the business or the assets
or both of IPCH or its Subsidiaries, is not cancelable on notice of not longer
than thirty (30) days and without liability, penalty or premium, and if any one
or more of the following applies: (i) it involves, or may reasonably be expected
to
A-2
involve, the payment or receipt of One Hundred Thousand Dollars ($100,000) or
more (whether in cash or in goods or services of an equivalent value) over its
term, including renewal options, or Fifty Thousand Dollars ($50,000) during any
one year or (ii) it imposes unusual and burdensome restrictions on the conduct
of the business of IPCH or its Subsidiaries that would reasonably be expected to
result in an adverse financial effect to IPCH or its Subsidiaries in excess of
$50,000, (iii) it was not made in the ordinary and usual course of the business
consistent with past practice, (iv) it is a continuing contract for the
purchase, sale or distribution of materials, supplies, equipment, products or
services, (v) it materially burdens, benefits, or imposes liabilities upon, or
otherwise with respect to, any real property owned or leased by IPCH or its
Subsidiaries, (vi) the present or prospective business of IPCH or its
Subsidiaries is materially dependent upon it, or (vii) it involves the future
purchase or sale of propane at a fixed price.
"Merger Consideration" means the total consideration payable to holders of
Stock pursuant to the Merger.
"Organizational Documents" of an entity shall mean, if a corporation, its
articles of incorporation or certificate of incorporation, as the case may be,
and bylaws, and if a limited liability company, its certificate of formation and
limited liability company agreement, and any other documents, agreements or
instruments relating to the creation, formation, organization, governance or
ownership of such entity.
"Person" means an individual, a corporation, a limited liability company, a
partnership, an association, a trust or any other entity or organization,
including any Governmental Entity.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Stock" means the Common Stock, Series D Preferred Stock and Series E
Preferred Stock.
"Stock Certificate" means a certificate which prior to the Effective Time
validly evidences any share of Stock to be converted into the right to receive
any portion of the Merger Consideration.
"Stockholder(s)" means a holder as of the Effective Time of shares of
Stock.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which securities or other ownership interests having ordinary voting
power to elect a majority of the board of directors or other Persons performing
similar functions are directly or indirectly owned by such Person. "IPCH
Subsidiary" means a Subsidiary of IPCH, including the IPCH Operating Subsidiary.
In addition to the definitions set forth above, each of the following terms
is defined in the Section set forth opposite such term:
A-3
TERMS
----- SECTIONS
--------
Agreement
Certificate of Merger Preamble
Benefit Plans 2.1(b)
Claim Notice 3.18(a)
Common Stock 10.3(a)
Covered Cost Recital A
Cut-Off Date 10.8(c)
Damages 11.1(b)
Delaware Law 10.1(a)
Effective Time 2.1(a)
ERISA 2.1(b)
Escrow Agent 3.18(a)
Escrow Agreement 2.3(a)
Estimated Cash Consideration 2.3(a)
Final Cash Consideration Amount 2.1(f)(i)
GAAP 2.1(f)(i)
Xxxxxx 2.1(f)(i)
Hazardous Substances Preamble
IPCH 3.21(b)
IPCH's Adjusted Shareholders' Equity Preamble
IPCH Operating Subsidiary 2.1(f)(i)
IPCH Stockholders' Representative Recital B
Indemnified Party 12.6
Indemnifying Party 10.3
Inergy Holdings 10.3
Inergy Parties Preamble
Inergy Propane Article VIII, lead in
Letter of Transmittal Recital B
Material Real Property 2.3(a)
Merger 7.14
Merger Sub Recital A
MLP Preamble
MLP Units Preamble
NOL Preamble
Nonsolicitation Agreements 3.14(g)
Notice Period 7.7
Permitted Encumbrances 10.3(a)
Real Property 3.10(a)
Registration Rights Agreement 3.10(a)
Reserve Account 7.8
Xxxxx 2.1(f)(i)
Securityholders Agreement Preamble
Series D Preferred Stock 2.2
Series E Preferred Stock Recital A
Recital A
A-4
TERMS SECTIONS
----- --------
Stockholders Joinder Agreement 7.15
Stock Rights 2.1(e)(iv)
Subject Properties 10.8
Supplemental Information 7.13
Surviving Corporation Recital B
Tax or Taxes 3.14(a)
Title Commitment 7.14
Title Company 7.14(b)
Title Policy 7.14
Transaction Expenses 2.1(f)(i)
WARN 3.18(f)
A-5
