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PURCHASE AGREEMENT
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BY AND AMONG
COLUMBIA PROPANE L.P.,
CP HOLDINGS, INC.,
COLUMBIA PROPANE CORPORATION,
NATIONAL PROPANE PARTNERS, L.P.,
NATIONAL PROPANE CORPORATION,
NATIONAL PROPANE SGP, INC.
AND
TRIARC COMPANIES, INC.
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April 5, 1999
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TABLE OF CONTENTS
THE OFFER
ARTICLE I
SECTION 1.1 The Offer........................................................2
(a) Commencement................................................2
(b) Offer Documents.............................................3
SECTION 1.2 National MLP Action..............................................4
(a) Special Committee...........................................4
(b) Schedule 14D-9..............................................4
(c) Security Position Listings..................................5
(d) Admission as Limited Partner................................5
ARTICLE II
THE TRANSACTIONS
SECTION 2.1 The Reorganization of the National MLP GP Interests..............6
(a) Reorganization of National MLP..............................6
(b) Purchase of National OLP Interests..........................6
SECTION 2.2 Merger and Conversion of Interests in the National OLP...........7
(a) Merger of National MLP With and Into the Purchaser..........7
(b) Effect of the Merger........................................7
(c) Acquisition of Interests of the National OLP................7
SECTION 2.3 Closing..........................................................8
SECTION 2.4 Surrender of Units; Transfer Books...............................8
(a) Paying Agent................................................8
(b) Surrender of Certificates...................................9
(c) Delivery of Funds to the Surviving Entity...................9
(d) No Further Rights..........................................10
(e) No Liability...............................................10
(f) Withholding Rights.........................................10
SECTION 2.5 Transactions Involving Special Limited Partner Interests........10
(a) Put Right .................................................10
(b) Call Right.................................................11
SECTION 2.6 Merger of the National MGP......................................11
i
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE NATIONAL PARTIES
SECTION 3.1 Organization and Existence..................................12
SECTION 3.2 Authority; Binding Effect...................................12
SECTION 3.3 SEC Filings.................................................13
SECTION 3.4 Financial Statements........................................13
SECTION 3.5 Offer Documents; Schedule 14D-9.............................14
SECTION 3.6 No Material Adverse Change..................................14
SECTION 3.7 Ownership...................................................14
SECTION 3.8 No Conflict.................................................16
SECTION 3.9 No Default..................................................16
SECTION 3.10 Copies Complete.............................................17
SECTION 3.11 Brokerage Arrangements......................................17
SECTION 3.12 Undisclosed Liabilities.....................................17
SECTION 3.13 No Litigation...............................................17
SECTION 3.14 Environmental Matters.......................................18
SECTION 3.15 [Intentionally Left Blank]..................................19
SECTION 3.16 Vote Required...............................................19
SECTION 3.17 Labor Matters...............................................19
SECTION 3.18 Compliance with Laws........................................20
SECTION 3.19 Insurance...................................................20
SECTION 3.20 Intellectual Property.......................................20
SECTION 3.21 Employee Benefit Matters....................................20
SECTION 3.22 Certain Agreements..........................................21
SECTION 3.23 Taxes.......................................................22
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER PARTIES
SECTION 4.1 Organization and Existence..................................23
SECTION 4.2 Authority; Binding Effect...................................24
SECTION 4.3 No Conflict.................................................24
SECTION 4.4 No Default..................................................24
SECTION 4.5 Offer Documents; Information Statement......................25
SECTION 4.6 Financing...................................................25
SECTION 4.7 Brokerage Arrangements......................................25
ii
ARTICLE V
ADDITIONAL AGREEMENTS, COVENANTS, RIGHTS AND
OBLIGATIONS
SECTION 5.1 Access to Information...........................................26
SECTION 5.2 Conduct of Business.............................................26
(a) Ordinary Course............................................26
(b) Restrictions on National MLP and National OLP..............26
(c) General Business...........................................28
(d) Employees of the National MGP..............................29
(e) Restrictions on the Purchaser, Purchaser Holdings
and Purchaser General Partner..............................29
SECTION 5.3 Certain Filings.................................................33
SECTION 5.4 Information Statement...........................................34
SECTION 5.5 Certain Instruments.............................................34
SECTION 5.6 Other Consents..................................................34
SECTION 5.7 No Solicitation.................................................35
SECTION 5.8 Permitted Actions...............................................36
SECTION 5.9 Indemnified Debt................................................37
SECTION 5.10 Environmental Permits...........................................38
SECTION 5.11 Further Action; Commercially Reasonable Efforts.................39
SECTION 5.12 Notification of Certain Matters.................................39
SECTION 5.13 Certain Indebtedness............................................40
SECTION 5.14 Consistent Tax Reporting........................................40
SECTION 5.15 No Public Announcement..........................................41
SECTION 5.16 Expenses........................................................41
SECTION 5.17 Tax Matters.....................................................43
(a) Purchase Price Allocations.................................43
(b) Code Section 704(c) Election...............................43
(c) Tax Cooperation............................................43
(d) Certain Tax Contests.......................................44
ARTICLE VI
CONDITIONS
SECTION 6.1 Conditions to the Merger........................................44
(a) Conveyance of Acquired Interests...........................44
(b) Approval of a Unit Majority................................45
(c) No Injunctions or Restraints...............................45
(d) Corporate and Partnership Authority........................45
(e) Acceptance.................................................45
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SECTION 6.2 Conditions to the Purchase of National OLP Interests............45
(a) Reorganization.............................................45
(b) Approval of a Unit Majority................................45
(c) No Injunctions or Restraints...............................46
(d) Corporate and Partnership Authority........................46
(e) Acceptance.................................................46
(f) Prepayment.................................................46
ARTICLE VII
EMPLOYEES AND EMPLOYEE BENEFITS
SECTION 7.1 Offers of Employment; Severance Obligations.....................46
SECTION 7.2 Increased Severance Costs.......................................47
SECTION 7.3 401(k) Plan; Direct Roll-Over...................................47
SECTION 7.4 Assumed Employee Liabilities....................................47
SECTION 7.5 Collective Bargaining Matters...................................47
SECTION 7.6 Multiemployer Plan Arrangements.................................48
SECTION 7.7 Losses Relating to Employees and Employee Benefits..............49
ARTICLE VIII
TERMINATION
SECTION 8.1 Events of Termination...........................................49
(a) Consent .................................................49
(b) No National Common Units Purchased.........................49
(c) National Recommendation....................................49
(d) Outside Date...............................................50
(e) Applicable Law Change......................................50
SECTION 8.2 Effect of Termination...........................................50
(a) No Liability...............................................50
(b) Termination Fee............................................50
(c) Topping Fee................................................50
(d) Specific Performance; Attorneys' Fees......................51
(e) Other Remedies.............................................51
(f) Outside Date Breakage Fee..................................51
iv
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnification of Certain National Parties.....................52
(a) Indemnification of Certain National Parties................52
(b) Limitation of Liability....................................52
(c) Limitations with Respect to Certain Tax Losses.............53
(d) Limitation of Indemnification..............................53
SECTION 9.2 Indemnification of the Purchaser Parties........................53
(a) Debt Indemnity.............................................53
(b) Other Indemnity............................................54
SECTION 9.3 Termination of Indemnities; Survival Periods....................54
SECTION 9.4 Demands.........................................................55
SECTION 9.5 Right to Contest and Defend.....................................55
SECTION 9.6 Cooperation.....................................................56
SECTION 9.7 Right to Participate............................................56
SECTION 9.8 Payment of Damages..............................................56
SECTION 9.9 Exclusivity.....................................................56
ARTICLE X
MISCELLANEOUS
SECTION 10.1 [Intentionally Left Blank]......................................57
SECTION 10.2 Notices.........................................................57
SECTION 10.3 Governing Law...................................................58
SECTION 10.4 Entire Agreement; Amendments and Waivers........................59
SECTION 10.5 Binding Effect and Assignment...................................59
SECTION 10.6 Severability....................................................59
SECTION 10.7 Parties in Interest.............................................60
SECTION 10.8 Disclosure......................................................60
SECTION 10.9 Interpretation..................................................60
SECTION 10.10 References; Construction........................................60
SECTION 10.11 Context.........................................................60
SECTION 10.12 Execution.......................................................61
Annexes
Annex A Conditions to the Offer
v
Schedules
Schedule 3.1 National Qualifications; National MLP and National OLP
Investments or Interests in, or Control Over, Other
Entities
Schedule 3.4 National MLP Consolidated Financial Statements
Schedule 3.6 National MLP Adverse Trends or Conditions
Schedule 3.7 Liens, Claims and Encumbrances on the General Partner
Interests and Incentive Distribution Rights, the Limited
Partner Interests, the National SGP Stock, the National
Subordinated Units, the NSSI Stock, or the National
Acquired Interests
Schedule 3.7(i) National Outstanding Subscription Rights
Schedule 3.8 National Required Consents; Conflicts, Defaults, Breaches,
Accelerations, or Required Authorizations, Approvals or
Consents
Schedule 3.9 National Defaults
Schedule 3.11 National Brokerage Arrangements
Schedule 3.12 National Officers and Employees of National MGP for
Purposes of "Knowledge of the National MGP"
Schedule 3.13 National Litigation
Schedule 3.14 Environmental Documents; National Predecessors and Retained
Environmental Liabilities
Schedule 3.17 National Labor Matters
Schedule 3.19 National Insurance
Schedule 3.21 National Employee Benefit Plans and Multiemployer Pension
Plans
Schedule 3.22 National Material Agreements
Schedule 3.23 National Tax Matters
Schedule 4.7 Purchaser Brokerage Arrangements
Schedule 5.2(b) National Unrestricted Transactions
Schedule 5.2(d) Amendments to National Employee Agreements or Arrangements
Schedule 5.2(e) Restricted Changes to Purchaser OLP's Tax Methods; National
OLP Adjusted Tax Basis
Schedule 5.5 Consent Matters
Schedule 5.9 National MGP's Basis as of Effective Time
Schedule 5.13(i) Refinancing of Indebtedness
Schedule 5.13(ii) Repayment of Indebtedness
Schedule 5.14 Consistent Tax Reporting
Schedule 7.1(a) National MGP Employee Retention Program
Schedule 7.1(b) National Employment and Severance Agreements
Schedule 7.1(c) National MGP Stock, Phantom Stock, Unit or Phantom Unit
Plans
Schedule 7.4 National Incentive Compensation Plans
Schedule 7.5 Collective Bargaining Representatives
Schedule 9.1 National Pending Litigation
Schedule 9.2(a) Indemnified Debt
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DEFINED TERMS
Acceptance ....................................................................3
Acceptance Date ...............................................................3
Acquired Interests ............................................................1
Acquiring Person .............................................................33
Acquisition Line .............................................................40
affiliate .....................................................................8
Agreement .....................................................................1
Alternate Appraisal ..........................................................43
Amendment No 2 ..............................................................40
Annex A .......................................................................2
Applicable Date ..............................................................33
Applicable Law Change ........................................................32
Appraisal ....................................................................43
Assets .......................................................................43
Board .........................................................................2
Call Notice ..................................................................11
Certificates ..................................................................9
Claim ........................................................................55
Closing .......................................................................8
Closing Agreement ............................................................23
Closing Date ..................................................................8
Code .........................................................................10
Confidentiality Agreement ....................................................26
Damages ......................................................................32
Debt Indemnity ...............................................................54
Delaware Court ...............................................................58
Delaware Law ..................................................................2
Effective Tax Rate ...........................................................31
Effective Time ................................................................7
Employees ....................................................................46
Environmental and Health and Safety Laws .....................................18
Environmental Documents ......................................................19
Environmental Permits ........................................................38
ERISA ........................................................................20
Exchange Act ..................................................................2
Fee ..........................................................................51
First Mortgage Notes .........................................................40
Hazardous Materials ..........................................................18
Hazardous Waste Laws .........................................................18
HSR Act ......................................................................11
Incentive Distribution Rights .................................................1
vii
Indemnified Debt .............................................................54
Information Statement .........................................................4
Knowledge of the National MGP ................................................17
Xxxxxx Opinion ................................................................4
Losses .......................................................................52
Material Adverse Effect ......................................................14
Merger ........................................................................7
Merger Consideration ..........................................................7
MGP's Basis ..................................................................37
Minimum Condition .............................................................2
Multiemployer Plan ...........................................................48
National Assets ..............................................................31
National Board ................................................................2
National Common Units .........................................................1
National Financial Statements ................................................13
National General Partners .....................................................1
National MGP ..................................................................1
National MLP ..................................................................1
National MLP GP Interests .....................................................1
National MLP Partnership Agreement ............................................1
National OLP ..................................................................1
National OLP GP Interests .....................................................1
National OLP Interests ........................................................1
National OLP Partnership Agreement ............................................1
National Parties .............................................................12
National Permits .............................................................20
National Plan ................................................................21
National Plans ...............................................................21
National Possible Alternatives ...............................................35
National Representing Parties ................................................22
National SGP ..................................................................1
National Subordinated Units ...................................................1
National Superior Transaction ................................................36
Note Agreements ..............................................................40
Notice ...................................................................32, 57
NSSI .........................................................................12
NYSE .........................................................................41
Offer .........................................................................1
Offer Consideration ...........................................................1
Offer Documents ...............................................................3
Offer to Purchase .............................................................3
Other Indemnity ..............................................................54
Other Permits ................................................................38
viii
Paying Agent ..................................................................8
Predecessors .................................................................18
Purchaser .....................................................................1
Purchaser General Partner .....................................................1
Purchaser Group Member .......................................................32
Purchaser Holdings ............................................................1
Purchaser Material Adverse Effect ............................................24
Purchaser OLP .................................................................7
Purchaser Parties ............................................................12
Put Condition ................................................................11
Put Notice ...................................................................10
Remedial Allocation Method ...................................................43
Required Consents ............................................................16
Retention Program ............................................................46
Schedule 14D-1 ................................................................3
Schedule 14D-9 ................................................................4
SEC ...........................................................................3
SGP Board .....................................................................2
Special Committee .............................................................2
Special Limited Partner .......................................................7
Special Limited Partner Interest ..............................................7
Surviving Corporation .........................................................7
Tax Controversy ..............................................................44
Tax Indemnity Provisions .....................................................53
Tax Provisions ...............................................................31
Tax Return ...................................................................23
Tax Ruling ...................................................................23
Taxes ........................................................................23
Threshold Amount .............................................................31
Transactions ..................................................................3
Triarc ........................................................................1
Triarc Note ...................................................................6
WARN .........................................................................47
Withdrawal Liability .........................................................48
ix
PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement") is made and entered into as of
the 5th day of April, 1999, by and among Columbia Propane L.P., a Delaware
limited partnership (the "Purchaser"), CP Holdings, Inc., a Delaware corporation
and the general partner of the Purchaser ("Purchaser General Partner"), Columbia
Propane Corporation, a Delaware corporation ("Purchaser Holdings"), National
Propane Partners, L.P., a Delaware limited partnership (the "National MLP")
governed by the Amended and Restated Agreement of Limited Partnership of the
National MLP dated as of July 2, 1996, as amended through the date hereof (the
"National MLP Partnership Agreement"), National Propane Corporation, a Delaware
corporation and managing general partner of the National MLP (the "National
MGP"), National Propane SGP, Inc., a Delaware corporation and special general
partner of the National MLP (the "National SGP," and together with the National
MGP, the "National General Partners"), and Triarc Companies, Inc., a Delaware
corporation and the indirect parent corporation of the National General Partners
("Triarc").
W I T N E S S E T H:
WHEREAS, the National MLP is the sole limited partner of National Propane,
L.P., a Delaware limited partnership (the "National OLP") governed by the
Amended and Restated Agreement of Limited Partnership of the National OLP dated
as of July 2, 1996, as amended through the date hereof (the "National OLP
Partnership Agreement"), of which the National General Partners are the sole
general partners;
WHEREAS, the Purchaser, directly or indirectly, desires (i) to make a cash
tender offer (the "Offer") to acquire 100% of the issued and outstanding common
units of the National MLP ("National Common Units") for $12.00 per Unit (such
amount, or any greater amount per National Common Unit paid pursuant to the
Offer, being hereinafter referred to as the "Offer Consideration"), net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions of this Agreement and the Offer, (ii) to acquire 100% of the
outstanding subordinated units representing subordinated general partner
interests in the National MLP ("National Subordinated Units"), (iii) to acquire
100% of the unsubordinated general partner interests in the National MLP (the
"National MLP GP Interests") and 100% of the Incentive Distribution Rights
representing general partner interests in the National MLP (the "Incentive
Distribution Rights"), (iv) to acquire 100% of the unsubordinated general
partner interests in the National OLP (the "National OLP GP Interests"), and (v)
to acquire substantially all of the limited partner interests in the National
OLP (all of such interests, the "National OLP Interests" (collectively, the
items in clauses (i) through (v) are the "Acquired Interests")); and the
National MLP and the National General Partners have agreed to sell the Acquired
Interests on the terms and subject to the conditions hereinafter set forth;
WHEREAS, the Board of Directors of Purchaser Holdings and Purchaser
General Partner (for itself and on behalf of the Purchaser) have approved the
making of the Offer and the transactions related thereto;
WHEREAS, the Board of Directors of the National MGP (the "National
Board"), acting upon the recommendation of the special committee (the "Special
Committee") of the National Board, has approved the terms of the Offer and the
other transactions contemplated herein and resolved and agreed, subject to the
terms and conditions contained herein, to recommend that holders of National
Common Units tender such National Common Units pursuant to the Offer; and
WHEREAS, the Board of Directors of Purchaser Holdings, the Board of
Directors of Purchaser General Partner, the National Board and the Board of
Directors of National SGP (the "SGP Board") have each approved the transactions
set forth in this Agreement on behalf of themselves and any entity of which they
are the managing general partner in accordance with the General Corporation Law
of the State of Delaware and the Delaware Revised Uniform Limited Partnership
Act (collectively, the "Delaware Law") upon the terms and subject to the
conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions contained
herein, the parties hereto agree as follows:
ARTICLE I
THE OFFER
SECTION 1.1 The Offer.
(a) Commencement.
Provided that this Agreement shall not have been terminated in accordance
with Section 8.1 and none of the conditions set forth in Annex A attached hereto
and incorporated herein by reference ("Annex A") shall have occurred or be
existing (unless such conditions shall have been waived by the Purchaser),
Purchaser General Partner shall cause the Purchaser to commence (within the
meaning of Rule 14d-2(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")), and the Purchaser shall commence, the Offer at the Offer
Consideration as promptly as reasonably practicable after the date hereof, but
in no event later than five business days after the date hereof. The obligation
of the Purchaser to accept for payment and pay for National Common Units
tendered pursuant to the Offer shall be subject only to (i) the condition (the
"Minimum Condition") that at least the number of National Common Units that,
when combined with the National Common Units already owned by Purchaser Holdings
and its direct or indirect subsidiaries, constitutes a majority of the then
outstanding National Common Units on a fully diluted basis shall have been
validly tendered and not withdrawn prior to the expiration of the Offer and (ii)
the satisfaction or waiver of the other conditions set forth in Annex A hereto.
The Purchaser expressly reserves the right, in its sole discretion and
notwithstanding anything to the contrary in this Agreement including Annex A, to
extend the Offer in accordance with law, to waive any condition (other than the
Minimum Condition), to increase the Offer Consideration, and to make any other
2
changes in the terms and conditions of the Offer; provided, however, that no
change may be made which (A) decreases or changes the form of the Offer
Consideration, (B) reduces the minimum number of National Common Units to be
purchased in the Offer below the Minimum Condition, (C) imposes conditions to
the Offer in addition to those set forth in Annex A hereto, (D) amends or
changes the terms and conditions of the Offer in any manner adverse to the
holders of National Common Units (other than Purchaser Holdings and its
subsidiaries) or (E) changes or waives the Minimum Condition. The Offer
Consideration shall, subject to applicable withholding of taxes, be net to the
seller in cash, without interest thereon, upon the terms and subject to the
conditions of the Offer. The Purchaser shall extend the Offer from time to time
to the extent necessary to permit cure, resolution, elimination or waiver of the
conditions set forth in Annex A; provided, that the Purchaser shall not be
obligated to make any such extension (x) if the Purchaser reasonably determines
that any condition set forth in Annex A is not capable of being cured, resolved
or eliminated, (y) after the termination of this Agreement in accordance with
its terms or (z) in any event, to a date later than 60 days following the
commencement of the Offer. Subject to the terms and conditions of the Offer, the
Purchaser shall accept for payment and pay, as promptly as practicable after
expiration of the Offer, for all National Common Units validly tendered and not
withdrawn (the "Acceptance"), the date of which shall be the "Acceptance Date."
(b) Offer Documents.
As soon as reasonably practicable on the date of commencement of the
Offer, the Purchaser shall file with the Securities and Exchange Commission (the
"SEC") and disseminate to holders of National Common Units to the extent
required by law a Tender Offer Statement on Schedule 14D-1 (together with all
amendments and supplements thereto, the "Schedule 14D-1") with respect to the
Offer and the other transactions contemplated by this Agreement (the
"Transactions"). The Schedule 14D-1 shall contain or shall incorporate by
reference an offer to purchase (the "Offer to Purchase") and forms of the
related letter of transmittal and any related summary advertisement (the
Schedule 14D-1, the Offer to Purchase and such other documents, together with
all supplements and amendments thereto, being referred to herein collectively as
the "Offer Documents"). Purchaser Holdings, the Purchaser and the National MGP
agree to correct promptly any information provided by any of them for use in the
Offer Documents which shall have become false or misleading in any material
respect, and Purchaser Holdings and the Purchaser further agree to take all
steps necessary to cause the Schedule 14D-1 as so corrected to be filed with the
SEC and the other Offer Documents as so corrected to be disseminated to holders
of National Common Units, in each case as and to the extent required by
applicable federal securities laws. The National MGP and its counsel shall be
given an opportunity to review and comment on the Offer Documents and any
amendments thereto prior to the filing thereof with the SEC. Purchaser Holdings
and the Purchaser shall provide the National MGP and its counsel with a copy of
any written comments or telephonic notification of any verbal comments Purchaser
Holdings or the Purchaser may receive from the SEC or its staff with respect to
the Offer Documents promptly after the receipt thereof and shall provide the
National MGP and its counsel with a copy of any written responses and telephonic
notification of any verbal response of Purchaser Holdings, the Purchaser or
their counsel. In the event that the Offer is terminated or withdrawn by the
Purchaser, Purchaser Holdings and the Purchaser shall cause all
3
tendered National Common Units represented by the certificate or certificates
surrendered to the Paying Agent (as defined herein) to be returned to the
registered holders of the National Common Units.
SECTION 1.2 National MLP Action.
(a) Special Committee.
The National MLP, acting through the National Board, hereby approves of
and consents to the Offer and the Transactions and represents that (i) the
National Board acting on the recommendation of the Special Committee, at a
meeting duly called and held on April 1, 1999, has unanimously (A) approved and
adopted this Agreement, the Offer and the Transactions and (B) determined that
the Offer and the Transactions are fair to and in the best interests of the
holders of Common Units and resolved to recommend, subject to the conditions set
forth herein, that the holders of National Common Units accept the Offer, and
(ii) Xxxxxx Brothers has delivered to the Special Committee a written opinion
(the "Xxxxxx Opinion") substantially to the effect that the consideration to be
received by the holders of National Common Units pursuant to each of the Offer
and the Merger is fair to such holders from a financial point of view. The
National MGP has been authorized by Xxxxxx Brothers, subject to prior review by
such financial advisor, to include such fairness opinion (or references thereto
or descriptions thereof) in the Offer Documents and in the Schedule 14D-9 (as
defined in paragraph (b) of this Section 1.2) and an information statement (as
required under the Exchange Act or, if not permitted by applicable law, stock
exchange regulation, or the National MLP Partnership Agreement, a proxy
statement) (the "Information Statement"). Subject to the fiduciary duties of the
National Board under applicable law, the National MLP hereby consents to the
inclusion in the Offer Documents of the recommendation of the National Board
described above; provided, however, that such recommendation may be withdrawn,
modified, qualified or changed as set forth in Section 5.8 below.
(b) Schedule 14D-9.
As soon as reasonably practicable on or after the date of commencement of
the Offer, the National MLP shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with all
amendments and supplements thereto, the "Schedule 14D-9") containing, subject to
the fiduciary duties of the National Board under applicable law, the
recommendation of the Special Committee described in Section 1.2(a) and shall
disseminate to holders of National Common Units, the Schedule 14D-9 to the
extent required by Rule 14d-9 promulgated under the Exchange Act and any other
applicable federal securities laws; provided, however, that such recommendation
may be withdrawn, modified, qualified or changed as set forth in Section 5.8
below. Any such withdrawal, modification, qualification or change shall not
constitute a breach of this Agreement, but will nonetheless be subject to the
provisions of Section 8.1. The National MLP, Purchaser Holdings and the
Purchaser agree to correct promptly any information provided by any of them for
use in the Schedule 14D-9 which shall have become false or misleading, and the
National MLP further agrees to take all steps necessary to cause the Schedule
14D-9 as so corrected to be filed with
4
the SEC and disseminated to holders of National Common Units, in each case as
and to the extent required by applicable federal securities laws. Purchaser
Holdings, the Purchaser and their counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 and any amendments
thereto prior to the filing thereof with the SEC. The National MLP will provide
Purchaser Holdings, the Purchaser and their counsel with a copy of any written
comments or telephonic notification of any oral comments the National MLP may
receive from the SEC or its staff with respect to the Schedule 14D-9 promptly
after the receipt thereof and will provide Purchaser Holdings, the Purchaser and
their counsel with a copy of any written responses to the SEC or its staff of
the National MLP or its counsel.
(c) Security Position Listings.
The National MLP shall promptly furnish the Purchaser with mailing labels
containing the names and addresses of all record holders of National Common
Units and with security position listings of National Common Units held in stock
depositories, each as of the most recent date reasonably practicable, together
with all other available listings and computer files containing names, addresses
and security position listings of record holders and non-objecting beneficial
owners of National Common Units as of the most recent date reasonably
practicable. The National MLP shall furnish the Purchaser with such additional
information, including, without limitation, updated listings and computer files
of unitholders, mailing labels and security position listings, and such other
assistance as Purchaser Holdings, the Purchaser or their agents may reasonably
request. Subject to the requirements of applicable law, and except for such
steps as are necessary to disseminate the Offer Documents and any other
documents necessary to consummate the Offer or the Transactions, Purchaser
Holdings and the Purchaser shall hold in confidence the information contained in
such labels, listings and files, shall use such information only in connection
with the Offer and the Transactions, and, if this Agreement shall be terminated
in accordance with Section 8.1, shall, at the request of the National MLP,
deliver promptly to the National MLP all copies of such information then in
their possession and shall certify in writing to the National MLP its compliance
with this Section 1.2(c).
(d) Admission as Limited Partner.
The National General Partners and the Purchaser shall use commercially
reasonable efforts to take such actions as are required under the National MLP
Partnership Agreement to effect the prompt admission of the Purchaser as a
limited partner of the National MLP with respect to all National Common Units
acquired by the Purchaser pursuant to the Offer in accordance with the terms of
the National MLP Partnership Agreement.
5
ARTICLE II
THE TRANSACTIONS
SECTION 2.1 The Reorganization of the National MLP GP Interests.
(a) Reorganization of National MLP.
After the Acceptance Date and immediately prior to the Closing, as defined
below, Triarc shall unconditionally and irrevocably pay $14,883,720 to the
National OLP under the promissory note in the original principal amount of $40.7
million with a remaining outstanding balance (immediately prior to the payment
referred to in this sentence) of $30.7 million issued by Triarc to the order of
the National OLP (the "Triarc Note"), together with interest, calculated based
on a rate per annum of 9.44%, for the period from the Acceptance Date to the
Closing, on a principal amount equal to (x) $2.40 multiplied by (y) the number
of Common Units accepted and paid for in the Offer; it being understood that
Triarc hereby waives any right to set-off, counterclaim or any other defense to
such payment. Thereafter, the National MGP shall cause (i) the National MLP to
redeem (A) all 1.0% of the unsubordinated general partner interests in the
National MLP owned by the National SGP in exchange for the simultaneous
distribution to the National SGP of a 0.9798% limited partner interest in the
National OLP, (B) all 4,533,638 National Subordinated Units and all Incentive
Distribution Rights owned by the National MGP in exchange for the simultaneous
distribution to the National MGP of a 22.6351% limited partner interest in the
National OLP and (C) all 1.0% of the unsubordinated general partner interest in
the National MLP owned by the National MGP (other than a general partner
interest valued at $1,000) in exchange for the simultaneous distribution to the
National MGP of a 0.9798% limited partner interest in the National OLP, and
immediately thereafter, (ii) the National OLP to redeem all of the National OLP
Interests owned by the National MGP other than a 1% limited partner interest in
the National OLP (inclusive of the interest in (c) above), (which 1% limited
partner interest, for purposes of determining the aggregate consideration to be
paid to the National General Partners hereunder, shall be initially valued at
$700,000), in exchange for the simultaneous assignment and distribution to the
National MGP of the Triarc Note, the principal amount of which (at the time of
the assignment and distribution referred to in this clause (ii)) will be
$15,816,280. The Purchaser, Purchaser General Partner and Purchaser Holdings
agree that the National MGP and/or the National SGP, as applicable, shall be
permitted to transfer interests to be acquired under this Section 2.1 to an
affiliate of Triarc; provided, however, that such affiliate agrees to be bound
by the provisions hereof.
(b) Purchase of National OLP Interests.
At the Closing, (x) the Purchaser shall purchase all of the National OLP
Interests owned by the National SGP for an aggregate consideration of $686,000,
and (y) Purchaser General Partner shall purchase (i) all of the National OLP GP
Interests owned by the National SGP for an aggregate consideration of $707,000
and (ii) all of the National OLP GP Interests owned by the National MGP (other
than a National OLP GP Interest valued at $1,000) for an aggregate consideration
of
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$706,000. All payments made pursuant to this Section 2.1(b) shall be made in
cash, payable at the Closing (defined below) by wire transfer of immediately
available funds.
SECTION 2.2 Merger and Conversion of Interests in the National OLP.
(a) Merger of National MLP With and Into the Purchaser.
At the Closing, immediately following the completion of the transactions
described in Section 2.1, Purchaser General Partner and the National MGP shall
cause the National MLP to be merged with and into the Purchaser (the "Merger")
by filing a certificate of merger with the Secretary of State of the State of
Delaware, in such form as is required by, and executed in accordance with the
relevant provisions of, the Delaware Law (the date and time of such filing being
the "Effective Time"). As a result of the Merger, the separate existence of the
National MLP shall cease, and the Purchaser shall continue as the surviving
entity of the Merger (the "Surviving Entity").
(b) Effect of the Merger.
At the Effective Time, by virtue of the Merger and without any action on
the part of the Purchaser, the National MLP or any holder of National Common
Units, (i) each of the 6,701,550 National Common Units not owned by the
Purchaser or an affiliate thereof shall be converted into the right to receive
an amount in cash equal to the highest amount per National Common Unit paid to
holders of National Common Units in the Offer (the "Merger Consideration"), (ii)
the general partner interest of the National MLP owned by the National MGP shall
be converted into the right to receive $1,000 in cash, and (iii) each
partnership interest of the Purchaser outstanding immediately prior to the
Effective Time shall be converted into one partnership interest of the Surviving
Entity, with the same rights, powers and privileges as the interest so converted
and shall constitute the only outstanding partnership interests of the Surviving
Entity.
(c) Acquisition of Interests of the National OLP.
At the Closing, immediately following the Merger described in Section
2.2(a), Purchaser General Partner shall purchase the general partner interest
valued at $1,000 in the National OLP held by the National MGP, and in
consideration therefor, Purchaser General Partner shall pay to the National MGP
$1,000 and, as successor general partner of the National OLP, Purchaser General
Partner shall cause the National OLP to convert the 1% limited partner interest
held by the National MGP in the National OLP into a 1% special limited partner
interest in the National OLP (the "Special Limited Partner Interest," and the
holder thereof (i.e., the National MGP as the former managing general partner of
the National OLP) shall be known as the "Special Limited Partner"). From and
after such purchase and issuance, the National OLP shall be referred to as the
"Purchaser OLP." The Special Limited Partner Interest shall be nontransferable
(except to an affiliate (as defined below) of the Special Limited Partner) other
than as described in Section 2.5 and shall have no voting rights.
Notwithstanding any provision of this Agreement (but subject to the last
paragraph
7
of Section 5.2 and to Section 5.9) or the National OLP Partnership Agreement or
of the partnership agreement of the Purchaser OLP to the contrary, the National
MGP consents and agrees that the partnership agreement of the Purchaser OLP may
be amended at any time in any manner whatsoever and the Purchaser OLP may engage
in any merger, consolidation, sale or other disposition of assets or dissolution
and liquidation without the consent of the Special Limited Partner; provided,
however, that the Purchaser Parties (as defined below) agree that no such
amendment shall (x) adversely affect the tax deferral for the benefit of the
National MGP sought to be accomplished by the Debt Indemnity (as herein defined)
or (y) materially adversely affect the non-voting, economic value of the Special
Limited Partner Interest. In addition, upon the issuance of any additional
partnership interests of the Purchaser OLP, the National MGP shall have the
right, but not the obligation, to make additional capital contributions to the
Purchaser OLP to maintain up to a 1% interest in the Purchaser OLP. As used
herein, the term "affiliate" shall have the meaning assigned to such term in
Rule 12b-2 under the Exchange Act. The National General Partners and National
MLP agree to execute such documents as are reasonably requested by the Purchaser
or Purchaser Holdings in order to effect the transfers described in this Section
2.2 and in Section 2.1.
SECTION 2.3 Closing.
Upon the terms and subject to the conditions set forth in this Agreement,
the closing of the Merger and the other transactions contemplated by Sections
2.1 and 2.2 (the "Closing") shall take place at the offices of LeBoeuf, Lamb,
Xxxxxx & XxxXxx, L.L.P., in New York City, at 10:00 a.m. local time on the date
(which shall be a business day) of satisfaction or waiver of the conditions set
forth in Article VI, unless another date is agreed by the parties (the "Closing
Date").
SECTION 2.4 Surrender of Units; Transfer Books.
(a) Paying Agent.
Prior to the Acceptance Date, the Purchaser shall designate a bank or
trust company reasonably satisfactory to the National MLP to act as Depositary
for the Offer and Paying Agent for the Merger (the "Paying Agent") in connection
with the Offer and the Merger to receive the funds to which holders of National
Common Units shall become entitled pursuant hereto. Immediately prior to the
Acceptance and immediately prior to the Merger, as applicable, Purchaser
Holdings or Purchaser General Partner shall deposit or shall cause the Surviving
Entity to have sufficient funds to deposit and shall cause the Surviving Entity
to deposit, as applicable, in trust with the Paying Agent, cash in the aggregate
amount equal to the product of (i) the number of National Common Units tendered
and not withdrawn, for purposes of the Offer, or outstanding immediately prior
to the Effective Time (other than National Common Units owned by Purchaser
Holdings or the Purchaser), for purposes of the Merger and (ii) the Offer
Consideration. Such funds shall be invested by the Paying Agent as directed by
Purchaser Holdings, provided that such investments shall be in obligations of or
guaranteed by the United States of America or of any agency thereof and backed
by the full faith and credit of the United States of America, in commercial
paper obligations rated A1 or B1 or better by Xxxxx'x Investors Services, Inc.
or Standard & Poor's Corporation,
8
respectively, or in deposit accounts, certificates of deposit or banker's
acceptances of, repurchase or reverse repurchase agreements with, or Eurodollar
time deposits purchased from, commercial banks with capital, surplus and
undivided profits aggregating in excess of $100 million (based on the most
recent financial statements of such bank which are then publicly available at
the SEC or otherwise); provided, however, that no loss on any investment made
pursuant to this Section 2.4 shall relieve the Purchaser of its obligation to
pay the Offer Consideration for each applicable National Common Unit.
(b) Surrender of Certificates.
Any letter of transmittal delivered pursuant to this Agreement shall
specify that delivery of a National Common Unit shall be effected, and risk of
loss and title to the certificates evidencing such National Common Units (the
"Certificates") shall pass, only upon proper delivery of the Certificates to the
Paying Agent and shall specify instructions for use in effecting the surrender
of the Certificates pursuant to such letter of transmittal. Upon surrender to
the Paying Agent of a Certificate, together with such letter of transmittal,
duly completed and validly executed in accordance with the instructions thereto,
and such other documents as may be required pursuant to such instructions, the
holder of such Certificate shall be entitled to receive in exchange therefor the
Offer Consideration for each National Common Unit formerly evidenced by such
Certificate, and such Certificate shall then be cancelled. No interest shall
accrue or be paid on the Offer Consideration payable upon the surrender of any
Certificate for the benefit of the holder of such Certificate. If payment of the
Offer Consideration is to be made to a person other than the person in whose
name the surrendered Certificate is registered on the transfer books of the
National MLP, it shall be a condition of payment that the Certificate so
surrendered shall be endorsed properly or otherwise be in proper form for
transfer and that the person requesting such payment shall have paid all
transfer and other taxes required by reason of the payment of the Offer
Consideration to a person other than the registered holder of the Certificate
surrendered or shall have established to the satisfaction of the Surviving
Entity that such taxes either have been paid or are not applicable. The
Surviving Entity shall pay all charges and expenses, including those of the
Paying Agent, in connection with the distribution of the Offer Consideration. In
the event that any Certificate shall have been lost, stolen or destroyed, the
Paying Agent shall issue in exchange therefor, upon receipt of an affidavit of
that fact by the holder thereof and such bond, security or indemnity as may be
reasonably required, the Merger Consideration that such holder has the right to
receive pursuant to the provisions of this Article II. Until surrendered as
contemplated by this Section 2.4, each Certificate shall be deemed at any time
after the Effective Time to evidence only the right to receive upon such
surrender the Merger Consideration applicable to the National Common Units
evidenced by such Certificate.
(c) Delivery of Funds to the Surviving Entity.
At any time following the first anniversary after the Effective Time, the
Surviving Entity shall be entitled to require the Paying Agent to deliver to it
any funds which had been made available to the Paying Agent and not disbursed to
holders of National Common Units (including, without
9
limitation, all interest and other income received by the Paying Agent in
respect of all funds made available to it) and, thereafter, such holders shall
be entitled to look to the Purchaser (subject to abandoned property, escheat and
other similar laws) only as general creditors thereof with respect to any Offer
Consideration that may be payable upon due surrender of the Certificates held by
them.
(d) No Further Rights.
At Effective Time, the transfer books of the National MLP shall be closed
and, thereafter, there shall be no further registration of transfers of National
Common Units on the records of the National MLP. From and after the Effective
Time or the Acceptance Date, as applicable, the holders of National Common Units
outstanding immediately prior to the Effective Time or the Acceptance Date, as
applicable, shall cease to have any rights with respect to such National Common
Units except as otherwise provided herein or by applicable law.
(e) No Liability.
None of the Purchaser, the National MLP or the Paying Agent shall be
liable to any person in respect of any Offer Consideration or Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates shall not have
been surrendered prior to such date on which any Offer Consideration or Merger
Consideration would escheat to or become the property of any governmental entity
or authority, any such cash shall, to the extent permitted by applicable law,
become the property of the Purchaser free and clear of all claims or interest of
any person or entity previously entitled thereto other than the holder of such
Certificate as specified in Section 2.4(d).
(f) Withholding Rights.
The Surviving Entity or the Purchaser, as the case may be, shall be
entitled to deduct and withhold from the consideration otherwise payable
pursuant to this Agreement to any person such amounts as it is required to
deduct and withhold with respect to the making of such payment under the
Internal Revenue Code of 1986, as amended (the "Code"), or any provision of
state, local or foreign tax law. To the extent that amounts are so withheld by
the Surviving Entity or the Purchaser, as the case may be, such amounts withheld
shall be treated for purposes of this Agreement as having been paid to such
person in respect of which such deduction and withholding was made by the
Surviving Entity or the Purchaser, as the case may be.
SECTION 2.5 Transactions Involving Special Limited Partner Interests.
(a) Put Right.
At any time, the Special Limited Partner may require, upon 30 days prior
written notice to Purchaser General Partner and the Purchaser OLP (the "Put
Notice"), that the Purchaser OLP purchase all (but not less than all) of the
Special Limited Partner Interest; provided that as a
10
condition (the "Put Condition") to the obligation of the Purchaser OLP to
purchase such Special Limited Partner Interest, (i) the Special Limited Partner
must deliver good and valid title to the Special Limited Partner Interest, free
and clear of all liens, claims and other encumbrances and (ii) any waiting
periods under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), or otherwise, shall have expired. The Purchaser OLP may
elect to have an affiliate make such purchase. The purchase price shall consist
of cash in an amount equal to the fair market value of the Special Limited
Partner Interest as of the date of the Put Notice, determined by a nationally
recognized independent appraiser or investment banking firm selected by
Purchaser General Partner. Any payment pursuant to this paragraph shall be made
by wire transfer of immediately available funds. Purchaser OLP shall not be
obligated to purchase the Special Limited Partner Interest unless the Put
Condition is satisfied.
(b) Call Right.
At any time, Purchaser General Partner may require, upon 30 days prior
written notice to the Special Limited Partner (the "Call Notice"), that the
Special Limited Partner sell to the Purchaser OLP all (but not less than all) of
the Special Limited Partner Interest in consideration of (i) the payment of the
cash price as provided in Section 2.5(a), and (ii) an additional amount in cash,
if such sale is consummated within ten years after the Effective Time, equal to
(A) any incremental gain realized by the Special Limited Partner resulting from
a decrease in its share of Indemnified Debt, as defined in Section 9.2(a) of
this Agreement, multiplied by (B) a fraction, the numerator of which is the
Effective Tax Rate (as defined in Section 5.2 of this Agreement) and the
denominator of which is one minus the Effective Tax Rate. Such purchase shall be
effected no later than 30 days after the date of the Call Notice, subject to any
waiting periods under the HSR Act, or otherwise, having expired. Any payment
pursuant to this paragraph shall be made by wire transfer of immediately
available funds. The Special Limited Partner shall deliver good and valid title
to the Special Limited Partner Interest free and clear of all liens, claims and
other encumbrances in the event this call right is exercised.
SECTION 2.6 Merger of the National MGP.
The parties hereto agree that prior to or following the Closing, the
National MGP shall be permitted to merge with or into Triarc or an affiliate of
Triarc so long as the successor entity of such merger (if not the National MGP)
expressly assumes, or assumes by operation of law, the obligations of the
National MGP hereunder.
11
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE NATIONAL
PARTIES
The National MLP, the National MGP, the National SGP and Triarc
(collectively with National Sales and Service Inc. ("NSSI"), the "National
Parties") hereby represent and warrant, jointly and severally, to the Purchaser,
Purchaser General Partner and Purchaser Holdings (the "Purchaser Parties") that:
SECTION 3.1 Organization and Existence.
Each of the National MLP and the National OLP has been duly organized and
is validly existing and in good standing as a limited partnership under the laws
of the State of Delaware, and each of the National MGP, the National SGP, NSSI
and Triarc is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. Each of the National MLP and
the National OLP has full partnership power and authority, and each of the
National MGP, the National SGP, NSSI and Triarc has full corporate power and
authority to own and lease the properties and assets it now owns and leases and
to carry on its businesses as and where such properties are now owned or leased
and such business is now conducted. Each of the National Parties and the
National OLP are duly licensed or qualified to do business as a foreign
corporation or foreign limited partnership, as applicable, and are in good
standing in each jurisdiction in which the character of the properties and
assets now owned or leased by them or the nature of the business now conducted
by them requires them to be so licensed or qualified and where the failure so to
qualify or be licensed could reasonably be expected to have a Material Adverse
Effect (as defined below). Schedule 3.1 contains a list of each jurisdiction in
which the National MLP, the National OLP, the National MGP, the National SGP and
NSSI are duly licensed or qualified to do business as a foreign limited
partnership or foreign corporation. Except as set forth on Schedule 3.1, the
National MLP and the National OLP have no direct or indirect investment or
interest in or control over any other corporation, partnership, joint venture or
other business entity.
SECTION 3.2 Authority; Binding Effect.
Each of the National Parties has all corporate or partnership authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement and the Transactions have been duly authorized, executed
and delivered by each of the National Parties, subject with respect to the
Merger to the approval and adoption of this Agreement, and with respect to the
other Transactions contemplated by Sections 2.1 and 2.2, to any necessary
approval thereof under the National MLP Partnership Agreement, by the
unitholders (which, as contemplated by this Agreement, may be obtained without a
meeting or solicitation of consents of unitholders), and is the legal, valid and
binding obligation of each of the National Parties, enforceable against each of
the National Parties in accordance with its terms. The National MGP, through the
National Board, has
12
approved this Agreement and the transactions contemplated hereby and determined
that it will, subject to Section 5.8, recommend to the holders of National
Common Units acceptance of the Offer.
SECTION 3.3 SEC Filings.
Since July 2, 1996 (a) the National MLP has timely made all filings
required to be made by the Securities Act and the Exchange Act, (b) all filings
by the National MLP with the SEC, at the time filed (in the case of documents
filed pursuant to the Exchange Act) or when declared effective by the SEC (in
the case of registration statements filed under the Securities Act) complied in
all material respects with the applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations of the SEC thereunder, (c) no
such filing, at the time described above, contained any untrue statement of a
material fact or omitted to state any material fact required to be stated
therein in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading, and (d) all financial
statements contained or incorporated by reference therein complied as to form
when filed in all material respects with the rules and regulations of the SEC
with respect thereto, were prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
involved (except as may be indicated in the notes thereto), and fairly present
in all material respects the financial condition and results of operations of
the National MLP at and as of the respective dates thereof and the consolidated
results of its operations and changes in cash flows for the periods indicated
(subject in the case of unaudited statements, to normal year-end audit
adjustments).
SECTION 3.4 Financial Statements.
Attached as Schedule 3.4 are copies of the National MLP's draft
consolidated balance sheet as at December 31, 1998, and the related draft
consolidated statement of income, cash flows and unit holders' equity for the
fiscal year then ended (including in all cases the notes thereto) (collectively,
the "National Financial Statements"). The National Financial Statements have
been prepared in accordance with generally accepted accounting principles
consistently applied except as noted therein and fairly present in all material
respects the consolidated financial position of the National MLP and its
subsidiaries as of the respective dates set forth therein and the results of
operations and cash flows for the National MLP and its subsidiaries for the
respective fiscal periods set forth therein. Notwithstanding the foregoing, the
footnotes to the National Financial Statements will be revised following the
execution of this Agreement to reflect the transactions contemplated by this
Agreement; provided, further, that Purchaser will be provided with an
opportunity to review the revisions to the National Financial Statements prior
to filing. Triarc has paid to the National OLP on March 31, 1999 a quarterly
interest payment of $1,036,125 on the Triarc Note.
13
SECTION 3.5 Offer Documents; Schedule 14D-9.
None of the information supplied or to be supplied by any of the National
Parties for inclusion or incorporation by reference in the Schedule 14D-9, Offer
Documents and, if applicable, the Information Statement, will, at the respective
times the Schedule 14D-9, the Offer Documents, the Information Statement, or any
amendments or supplements thereto are filed with the SEC or are first published,
sent or given to holders of National Common Units, as the case may be, contain
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading, except that no
representation is made by the National Parties with respect to statements made
or incorporated by reference therein based on information supplied by any of the
Purchaser Parties for inclusion in the Schedule 14D-9. The Schedule 14D-9 will
comply as to form in all material respects with the requirements of the Exchange
Act and the rules and regulations promulgated thereunder.
SECTION 3.6 No Material Adverse Change.
Since September 30, 1998, and except as publicly disclosed prior to the
date hereof by the National MLP, there has not occurred any material adverse
change in, or any event or circumstance that (singly or together with any other
such events or circumstances) could reasonably be expected to have a material
adverse effect on, the assets, liabilities, properties, business, operations,
earnings, results of operations, business or financial condition of the National
MLP, the National OLP and NSSI, taken as a whole or on the ability of the
National Parties to effect the Transactions (any such change or effect (taking
into account the proviso to this sentence), a "Material Adverse Effect");
provided, however that a Material Adverse Effect shall exclude any change or
effect due to (i) general business, economic or financial conditions that are
not unique to the National MLP but also affect other corporations, partnerships,
persons or entities who participate or are engaged in the lines of business in
which the National MLP also participates or is engaged and (ii) any continuation
but not a material worsening of an adverse trend or condition publicly disclosed
prior to the date hereof by National MLP or as described in Schedule 3.6.
SECTION 3.7 Ownership.
(a) The National MGP and the National SGP are the sole general
partners of the National MLP, each with a 1.0% unsubordinated general partner
interest in the National MLP and, in the case of the National MGP, the related
Incentive Distribution Rights in respect thereof pursuant to the National MLP
Partnership Agreement.
(b) The National MGP and the National SGP are the sole general
partners of the National OLP, each with a 1.0101% unsubordinated general partner
interest in the National OLP pursuant to the National OLP Partnership Agreement.
14
(c) All of the general partner interests in the National MLP and the
National OLP have been duly authorized and have been validly issued to the
National MGP and the National SGP in accordance with the National MLP
Partnership Agreement and the National OLP Partnership Agreement, and are owned
by the National MGP and the National SGP free and clear of all liens, claims and
encumbrances, except as set forth on Schedule 3.7; and the Incentive
Distribution Rights have been duly authorized and have been validly issued to
the National MGP in accordance with the National MLP Partnership Agreement, and
are owned by the National MGP free and clear of all liens, claims and
encumbrances, except as set forth on Schedule 3.7.
(d) The National MLP is the sole limited partner of the National OLP
with a 97.9798% limited partner interest in the National OLP; such limited
partner interest has been duly authorized and validly issued in accordance with
the National OLP Partnership Agreement, is fully paid (to the extent required by
the National OLP Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described in the National MLP's
Prospectus dated June 26, 1996 under the caption "The Partnership
Agreement--Limited Liability") and is owned by the National MLP free and clear
of all liens, claims and encumbrances, except as set forth on Schedule 3.7.
(e) All of the shares of issued and outstanding capital stock of the
National SGP have been duly authorized and validly issued and are fully paid and
nonassessable, and are owned by the National MGP free and clear of all liens,
claims and encumbrances, except as set forth on Schedule 3.7.
(f) The only outstanding limited partner interests of the National
MLP are 6,701,550 National Common Units, which have been duly authorized by the
National MLP Partnership Agreement and are validly issued and fully paid (to the
extent required under the National MLP Partnership Agreement) and nonassessable
(except as such nonassessability may be affected by matters described in the
National MLP's Prospectus dated June 26, 1996 under the caption "The Partnership
Agreement--Limited Liability").
(g) The 4,533,638 National Subordinated Units representing
subordinated general partner interests in the National MLP held by the National
MGP have been duly authorized and validly issued in accordance with the National
MLP Partnership Agreement, constitute the only subordinated general partner
interests issued and outstanding and are owned by the National MGP free and
clear of all liens, claims and encumbrances, except as set forth on Schedule
3.7.
(h) All the outstanding shares of capital stock of NSSI have been
duly authorized and validly issued and are fully paid and nonassessable and are
owned of record and beneficially by the National OLP free and clear of all
liens, claims and encumbrances, except as set forth on Schedule 3.7.
(i) Except as set forth on Schedule 3.7(i), there are no outstanding
subscriptions, options, convertible securities, warrants, calls or rights of any
kind (issued or granted by, or binding
15
upon, the National MLP or the National OLP) to purchase or otherwise acquire any
security of or equity interest in the National MLP or the National OLP.
(j) The National Parties (i) have good and valid title to the
outstanding Acquired Interests owned by them free and clear of any liens, claims
or encumbrances, except as set forth in Schedule 3.7 and (ii) will convey to the
National MLP, the National OLP, the Purchaser or Purchaser General Partner, as
applicable, at the Closing, good and valid title to such Acquired Interests to
be transferred to them pursuant to Sections 2.1 and 2.2, free and clear of any
liens, claims or encumbrances.
SECTION 3.8 No Conflict.
Except for any required filings under the HSR Act, any required filings
with the SEC and under Delaware Law and assuming receipt of the approvals and
consents described in Schedule 3.8 (the "Required Consents") and receipt of the
requisite votes of the holders of outstanding National Common Units as
contemplated by Section 3.16, the execution and delivery of this Agreement do
not, and the fulfillment and compliance with the terms and conditions hereof and
the consummation of the transactions contemplated hereby will not (a) conflict
with any of, or require the consent of any person or entity under, the terms,
conditions or provisions of the charter documents or bylaws or equivalent
governing instruments of any of the National Parties or the National OLP, as
applicable, (b) violate any provision of, or require any consent, authorization
or approval under, any law or administrative regulation or any judicial,
administrative or arbitration order, award, judgment, writ, injunction or decree
applicable to any of the National Parties or the National OLP, (c) except as
described in Schedule 3.8, conflict with, result in a breach of, constitute a
default under (whether with notice or the lapse of time or both) or accelerate
or permit the acceleration of the performance required by, or require any
consent, authorization or approval under, any indenture, mortgage, lien or any
material agreement, contract, commitment or instrument to which any of the
National Parties or the National OLP, as applicable, is a party or by which any
of the National Parties or the National OLP is bound or to which any asset of
any of the National Parties or the National OLP is subject, or (d) result in the
creation of any lien, charge or encumbrance on the assets or properties of any
of the National Parties or the National OLP under any such indenture, mortgage,
lien, agreement, contract or instrument.
SECTION 3.9 No Default.
Assuming receipt of the Required Consents and except as set forth on
Schedule 3.9, none of the National Parties or the National OLP is in default
under, and no condition exists that with notice or lapse of time or both could
reasonably be expected to constitute a default under, (a) any mortgage, loan
agreement, indenture, evidence of indebtedness or other instrument evidencing
borrowed money or other agreement to which it or any of its properties are
subject to or bound, or (b) any judgment, order or injunction of any court,
arbitrator or governmental agency except for such defaults and conditions that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
16
SECTION 3.10 Copies Complete.
The National Parties have delivered or made available to the Purchaser
Parties for their review copies of the charter documents, bylaws and other
governing documents, each as amended to date, and the copies of all material
leases, contracts, instruments, agreements, licenses, permits, certificates and
any such documents delivered or made available by any of the National Parties to
any of the Purchaser Parties in connection with the transactions contemplated by
this Agreement are complete and accurate in all material respects and are true
and correct copies of the originals thereof.
SECTION 3.11 Brokerage Arrangements.
Except as set forth in Schedule 3.11, none of the National Parties or the
National OLP has entered (directly or indirectly) into any agreement with any
person, firm or corporation that would obligate any of the Purchaser Parties,
the National MLP, the National OLP or the Purchaser OLP to pay any commission,
brokerage or "finder's fee" in connection with the transactions contemplated
herein.
SECTION 3.12 Undisclosed Liabilities.
Except (i) as disclosed to the Purchaser Parties prior to the date hereof,
or reserved against or reflected on or provided for on the National Financial
Statements (including the footnotes thereto) or otherwise disclosed in any
filing by the National MLP with the SEC prior to the date hereof; or (ii) as
incurred after December 31, 1998 in the ordinary course of business consistent
with prior practice and not prohibited by this Agreement, neither the National
MLP nor the National OLP has any liabilities or obligations which are known, or
should reasonably have been known in the customary exercise of their respective
business duties, by any of the officers and employees of the National MGP listed
on Schedule 3.12 (the "Knowledge of the National MGP") and that would be
required by generally accepted accounting principles to be reflected or reserved
against on a balance sheet of the National MLP or the National OLP or in the
notes thereto and that, individually or in the aggregate, have or could
reasonably be expected to have a Material Adverse Effect. Neither Carib Gas
Corporation of St. Croix, Carib Gas Corporation of St. Xxxxxx nor All Seasons
Propane Holdings Co. have, to the Knowledge of the National MGP, any material
liabilities.
SECTION 3.13 No Litigation.
Other than as set forth Schedule 3.13, there is no (a) suit, action,
proceeding or governmental investigation pending or, to the Knowledge of the
National MGP, threatened in writing against or affecting the National Parties or
the National OLP or any of their properties, or (b) judgment, decree,
injunction, rule or order of any governmental body or arbitrator outstanding
against the National Parties or the National OLP that (in any case) could
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or prevent the National Parties or the National OLP from
consummating the transactions contemplated by this Agreement.
17
SECTION 3.14 Environmental Matters.
(a) Except as would not reasonably be expected to have, individually
or in the aggregate, a Material Adverse Effect or as set forth on Schedule 3.14,
to the Knowledge of the National MGP:
(i) each of the National MGP, the National MLP, the National
OLP and NSSI has obtained all licenses, permits and other authorizations,
has prepared and filed all required plans and reports, and has maintained
all data and files required under all environmental, health and safety and
hazardous waste laws, ordinances, rules and regulations and any binding
judicial or administrative interpretations thereof and all orders,
decrees, judgments and injunctions issued by a governmental agency in each
case relating to pollution or the protection, cleanup or restoration of
the environment or natural resources or to human health and safety
("Environmental and Health and Safety Laws") or Hazardous Materials (as
defined below) ("Hazardous Waste Laws") required for the conduct of its
businesses and operations and is in compliance with all applicable
Environmental and Health and Safety Laws and Hazardous Waste Laws;
(ii) there are not any past or present conditions or
circumstances at, or arising out of, any current or former businesses,
operations, assets or properties of the National MGP, the National MLP,
the National OLP or NSSI including but not limited to on-site or off-site
disposal or release of any chemical substance, product, waste, or
contaminants, including but not limited to petroleum, petroleum products,
propane and any fraction thereof, propane byproducts, lead, mercury,
asbestos and asbestos containing materials, polychlorinated biphenyls, and
all other materials and substances regulated pursuant to Environmental and
Health and Safety Laws or the presence of which could result in liability
under any Environmental and Health and Safety Laws or Hazardous Waste Laws
("Hazardous Materials") which conditions or circumstances could reasonably
be expected to give rise to (1) liabilities or obligations for any
cleanup, remediation, disposal or corrective action under any
Environmental and Health and Safety Laws or Hazardous Waste Laws or (2)
claims arising for personal injury, property damage, or damage to natural
resources;
(iii) none of the National MGP, the National MLP, the National
OLP or NSSI has (1) received any notice of noncompliance with, violation
of, or liability or potential liability under any Environmental and Health
and Safety Laws or Hazardous Waste Laws or (2) entered into any consent
decree or order or is subject to any order of any court or governmental
authority or tribunal under any Environmental and Health and Safety Laws
or Hazardous Waste Laws;
(iv) none of the National MGP, the National MLP, the National
OLP or NSSI has or may have retained or assumed, either contractually or
by operation of law, from any person or entity (collectively,
"Predecessors") any liability arising from, related to or
18
otherwise connected with (1) Environmental and Health and Safety Laws or
(2) Hazardous Waste Laws. A true, accurate and complete list of the
identities of such Predecessors and the nature of the retained
environmental liabilities is attached to Schedule 3.14;
(v) the National MGP has provided or made available to the
Purchaser and their representatives: (1) copies of all material
environmental, health or safety reports, records, studies, audits,
analyses, data, site assessments and other documentation conducted or
prepared by or on behalf of the National MGP, the National MLP, the
National OLP or NSSI and relating to the businesses, operations and
properties owned, leased or operated by the National MGP, the National
MLP, the National OLP or NSSI, and (2) the identity and location of all
off-site treatment, storage and disposal facilities used as well as the
nature and quantity of Hazardous Materials sent by the National MGP, the
National MLP, the National OLP or NSSI or, to Knowledge of the National
MGP, any Predecessor (collectively "Environmental Documents"). A true,
accurate and complete list of Environmental Documents is set forth on
Schedule 3.14.
(b) For purposes of this Section 3.14 only, the Knowledge of the
National MGP shall have the meaning set forth in Section 3.12 and shall include
the actual knowledge of the persons set forth in Schedule 3.14.
SECTION 3.15 [Intentionally Left Blank].
SECTION 3.16 Vote Required.
The affirmative vote of the holders of at least a majority of the
outstanding National Common Units and the affirmative vote of the holders of at
least a majority of the outstanding National Subordinated Units are the only
votes of the holders of any partnership interests in the National MLP necessary
to approve this Agreement on behalf of the National Parties.
SECTION 3.17 Labor Matters.
Except as set forth on Schedule 3.17, to the Knowledge of the National
MGP, none of the National General Partners, the National MLP or the National OLP
(a) is a party to, or bound by, any collective bargaining agreement or other
contract with a labor union or labor organization or is the subject of any
claims initiated by any labor organization to represent any of its employees not
currently represented by a labor organization or (b) is the subject of any
proceeding asserting that it has committed an unfair labor practice or any
threatened claims alleging that it has committed an unfair labor practice or (c)
is the subject of any strike, work stoppage or material labor dispute.
19
SECTION 3.18 Compliance with Laws.
The National MLP, the National OLP and NSSI hold all required, necessary
or applicable permits, licenses, variances, exemptions, orders, franchises and
approvals of all governmental entities to conduct the business as currently
conducted, except where the failure to so hold would not reasonably be expected
to have a Material Adverse Effect (the "National Permits"). The National MLP and
the National OLP are in compliance with the terms of the National Permits except
where the failure to so comply would not reasonably be expected to have a
Material Adverse Effect. Neither the National MLP nor the National OLP has
violated or failed to comply with any statute, law, ordinance, regulation, rule,
permit or order of any Federal, state or local government, domestic or foreign,
or any governmental entity, any arbitration award or any judgment, decree or
order of any court or other governmental entity, applicable to either the
National MLP or the National OLP or their respective businesses, assets or
operations, except for violations and failures to comply that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 3.19 Insurance.
Set forth on Schedule 3.19 is a list of all primary and excess casualty
and liability insurance policies providing coverage for bodily injury and
property damage maintained by or on behalf of the National MLP. The National MLP
has made available true and correct copies of all such policies to the
Purchaser. Such insurance coverage is reasonably adequate for the operation of
the business conducted by the National MLP taking into account the cost and
availability of such insurance and customs in the propane industry.
SECTION 3.20 Intellectual Property.
To the Knowledge of the National MGP, the National MLP owns or possesses
adequate licenses and other valid rights to use all patents, patent rights,
trademarks, trademark rights and proprietary information used or held for use in
connection with its business as currently being conducted, and there are no
assertions or claims challenging the validity of any of the foregoing which
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
SECTION 3.21 Employee Benefit Matters.
(a) Schedule 3.21 contains a true and complete list of each written
employee benefit plan (as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all written employment and
severance agreements (or written consulting agreements with natural persons) and
any written employee compensation plan, including without limitation, any
pension, retirement, severance, retention, profit sharing, stock option, stock
purchase, bonus, health, life, disability or fringe benefit plan sponsored or
maintained by any of the National Parties or NSSI with respect to employees of
the National MGP or NSSI (each such plan and
20
agreement a "National Plan" and collectively, the "National Plans"). Except as
set forth in Schedule 3.21 to this Agreement, the transactions contemplated by
this Agreement will not accelerate the time of payment or vesting, increase the
amount of compensation due or result in a severance payment for any director,
officer or employee or former director, officer or employee (including any
beneficiary) of any of the National Parties.
(b) Except as set forth on Schedule 3.21 none of the National Plans
is a multiemployer pension plan as defined in Section 3(37) of ERISA.
(c) Each National Plan is and has been maintained in substantial
compliance with all applicable laws and has been administered and operated in
all material respects in accordance with its terms. Neither the National MGP nor
any entity required to be aggregated with the National MGP pursuant to Section
414(b) or (c) of the Code has incurred any material liability that has not been
fully paid or satisfied or could reasonably be expected to incur any material
liability, in either case under Title IV of ERISA or Section 412 of the Code.
SECTION 3.22 Certain Agreements.
Except as set forth on Schedule 3.22, or filed with the SEC by the
National MLP prior to the date hereof, to the Knowledge of the National MGP none
of the National MLP, the National OLP or NSSI is a party to:
(i) any material agreement, license or instrument that
prohibits the National MLP or the National OLP from competing in the
retail propane distribution business in any geographical area in the
United States;
(ii) any material supply contract containing "take or pay"
provisions;
(iii) any material agreement under which the National MLP, the
National OLP or NSSI has agreed to indemnify or hold harmless any past or
present affiliate thereof or any past or present officer, director,
employee or stockholder of any such affiliate; or
(iv) any material written agreement, arrangement or
understanding, with any other of the National Parties or any other
affiliate. Since September 30, 1998, there has not occurred any
transaction between any of the National MLP, the National OLP or NSSI on
the one hand and any affiliate thereof on the other, other than in the
ordinary course of business under the foregoing agreements, arrangements
and understandings.
21
SECTION 3.23 Taxes.
(a) Except as provided in Schedule 3.23:
(i) From the date of formation until the Acceptance Date, the
National MLP and the National OLP have been, and are, entities properly
taxable as partnerships and not as corporations pursuant to Code sections
7701(a) and 7704 and the regulations thereunder;
(ii) The National MLP, the National OLP and NSSI (together the
"National Representing Parties") have filed or caused to be filed, within
the times and in the manner prescribed by law, all material Federal,
state, local and foreign Tax Returns and Tax reports that are required to
be filed by the National Representing Parties or with respect to the
assets of any of the National Representing Parties and such returns and
reports reflect accurately all material items required to be reported
therein for the periods covered thereby and are true, complete and correct
in all material respects;
(iii) The National Representing Parties have, within the time
and in the manner prescribed by law, paid (and until the Acceptance will
pay within the time and in the manner prescribed by law) all material
Taxes imposed on or incurred by such party that are currently due and
payable;
(iv) None of the National Representing Parties has requested
any extension of time within which to file any material Tax Return, which
Tax Return has not since been filed or has executed any outstanding
waivers or comparable consents regarding the application of the statute of
limitations with respect to any Taxes or Tax Returns of any National
Representing Party for any period prior to the Acceptance Date, and none
of the National Representing Parties has been requested to enter into any
such agreement or waiver;
(v) There is no action, suit, proceeding, investigation,
audit, or claim now pending or threatened by any authority regarding any
material Taxes relating to the National Representing Parties, the National
MGP, the National SGP, or the assets of the National Representing Parties,
for any period prior to the Acceptance;
(vi) No material deficiency for any Taxes has been proposed,
asserted or assessed against any of the National Representing Parties that
has not been resolved and paid in full; and
(vii) The National Representing Parties have made available
complete and accurate copies, covering all years ending on or after
December 31, 1996, of (A) all material Tax Returns, and any amendments
thereto, filed by any National Representing Party, (B) all material audit
reports or similar materials received from any taxing authority relating
to any Tax Return filed by any National Representing Party and (C) any
material Closing
22
Agreements or Tax rulings (or any pending requests for such rulings)
applicable with respect to any National Representing Party.
(b) "Taxes" as used in this Agreement, shall mean any federal,
state, county, local or foreign taxes, charges, fees, levies, or other
assessments, including all income, sales and use, ad valorem, transfer, gains,
profits, excise, franchise, real and personal property, gross receipts, business
and occupation, employment, disability, payroll, license, estimated, severance
or withholding taxes, other taxes or similar charges of any kind whatsoever
imposed by any governmental entity, whether imposed directly on a Person or
resulting under Treasury Regulation Section 1.1502-6 (or any similar provision
of state, local or foreign law), as a transferee or successor, by contract or
otherwise and includes any interest and penalties (civil or criminal) on or
additions to any such taxes or in respect of a failure to comply with any
requirement relating to any Tax Return and any expenses incurred in connection
with the determination, settlement or litigation of any tax liability. "Tax
Return" as used in this Agreement, shall mean a report, return or other
information required to be supplied to a governmental entity with respect to
Taxes including, where permitted or required, combined or consolidated returns
for any group of entities. "Tax Ruling," as used in this Agreement, shall mean a
written ruling of a taxing authority relating to Taxes. "Closing Agreement," as
used in this Agreement, shall mean a written and legally binding agreement with
a taxing authority relating to Taxes.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER PARTIES
The Purchaser Parties hereby represent and warrant, jointly and severally,
to the National Parties that:
SECTION 4.1 Organization and Existence.
The Purchaser has been duly organized and is validly existing and in good
standing as a limited partnership under the laws of the State of Delaware, and
Purchaser Holdings and Purchaser General Partner are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware. The Purchaser has full partnership power and authority, and Purchaser
Holdings and Purchaser General Partner have full corporate power and authority
to own and lease the properties and assets they now own and lease and to carry
on their businesses as and where such properties are now owned or leased and
such businesses are now conducted. Each of the Purchaser Parties are duly
licensed or qualified to do business as a foreign corporation or foreign limited
partnership, as applicable, and are in good standing in each jurisdiction in
which the character of the properties and assets now owned or held by them or
the nature of the business now conducted by them requires them to be so licensed
or qualified and where the failure so to qualify or be licensed could reasonably
be expected to have a material adverse effect on the assets, liabilities,
properties, business, operations, earnings, results of operations, business or
financial condition of
23
the Purchaser, Purchaser Holdings and Purchaser General Partner, taken as a
whole, or on the ability of the Purchaser Parties to effect the Transactions (a
"Purchaser Material Adverse Effect").
SECTION 4.2 Authority; Binding Effect.
Each of the Purchaser Parties has all corporate or partnership authority
to enter into this Agreement and to consummate the transactions contemplated
hereby. This Agreement has been duly authorized, executed and delivered by each
of the Purchaser Parties, and is the legal, valid and binding obligation of each
of the Purchaser Parties, enforceable against each of the Purchaser Parties in
accordance with its terms.
SECTION 4.3 No Conflict.
Except for any required filings under the HSR Act, any required filings
with the SEC and under Delaware Law and any applicable state takeover laws, the
execution and delivery of this Agreement do not, and the fulfillment and
compliance with the terms and conditions hereof and the consummation of the
Transactions will not (a) conflict with any of, or require the consent or
approval of any person or entity under, the terms, conditions or provisions of
the relevant partnership agreements, charter documents or bylaws or equivalent
governing instruments of any of the Purchaser Parties, (b) violate any provision
of, or require any consent, authorization or approval under, any law or
administrative regulation or any judicial, administrative or arbitration order,
award, judgment, writ, injunction or decree applicable to any of the Purchaser
Parties, (c) conflict with, result in a breach of, constitute a default under
(whether with notice or the lapse of time or both) or accelerate or permit the
acceleration of the performance required by, or require any consent,
authorization or approval under, any indenture, note, or other evidence of
indebtedness, mortgage, lien or any material agreement, contract, commitment or
instrument to which either of the Purchaser Parties is a party or by which
either of the Purchaser Parties is bound or to which any asset of either of the
Purchaser Parties is subject, or (d) result in the creation of any lien, charge
or encumbrance on the assets or properties of either of the Purchaser Parties
under any such indenture, mortgage, lien, agreement, contract or instrument.
SECTION 4.4 No Default.
None of the Purchaser Parties is in default under, and no condition exists
that with notice or lapse of time or both could reasonably be expected to
constitute a default under, (a) any mortgage, loan agreement, indenture,
evidence of indebtedness or other instrument evidencing borrowed money or other
agreement to which it or any of its properties are bound, or (b) any judgment,
order or injunction of any court, arbitrator or governmental agency, except for
such defaults and conditions that, individually or in the aggregate, could not
reasonably be expected to have a Purchaser Material Adverse Effect.
24
SECTION 4.5 Offer Documents; Information Statement.
The Offer Documents will not, at the time the Offer Documents are filed
with the SEC or are first published, sent or given to holders of National Common
Units, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements made therein, in the light of the circumstances
under which they are made, not misleading. The information supplied by the
Purchaser Parties for inclusion in the Information Statement and Schedule 14D-9
will not, on the date the Information Statement or Schedule 14D-9 (or any
amendment or supplement thereto) is first mailed to holders of National Common
Units contain any untrue statement of a material fact, or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Notwithstanding the foregoing, the Purchaser Parties make no
representation or warranty with respect to any information supplied by any of
the National Parties or any of their representatives which is contained in any
of the foregoing documents or the Offer Documents. The Offer Documents shall
comply in all material respects as to form with the requirements of the Exchange
Act and the rules and regulations thereunder.
SECTION 4.6 Financing.
Purchaser Holdings has, or will have available to it at the time the
Purchaser is required to pay for the Acquired Interests as contemplated by this
Agreement, and will make available to the Purchaser, sufficient funds to permit
the Purchaser to acquire the Acquired Interests pursuant to this Agreement.
SECTION 4.7 Brokerage Arrangements.
Except as set forth on Schedule 4.7, none of the Purchaser Parties has
entered (directly or indirectly) into any agreement with any person, firm or
corporation that would obligate any of the National Parties to pay any
commission, brokerage or "finder's fee" in connection with the transactions
contemplated herein.
ARTICLE V
ADDITIONAL AGREEMENTS, COVENANTS, RIGHTS AND
OBLIGATIONS
25
SECTION 5.1 Access to Information.
From the date of this Agreement to the Effective Time or until this
Agreement is terminated as provided in Article VIII, each of the National MGP
and the National MLP shall provide, and the National MGP shall cause the
National OLP to provide, to each of the Purchaser Parties reasonable and prompt
access to all of its books, records (including making copies as reasonably
requested), assets, properties, employees, agents and representatives, and shall
furnish or cause to be furnished, as applicable, to each of the Purchaser
Parties such information as any such party may reasonably request, upon prior
notice and during normal business hours, unless any such access and disclosure
would violate the terms of any agreement to which any National Party or the
National OLP is bound or any applicable law or regulation. Each of the National
Parties will, and the National MGP will cause the National OLP to, allow the
Purchaser Parties access to and consultation with the lawyers, accountants, and
other professionals employed or used by the National Parties and the National
OLP for all purposes under this Agreement. Any such consultation shall occur
under circumstances appropriate to maintain intact the attorney-client privilege
as to privileged communications and attorney work product and any other
applicable privilege. Until the Closing, the confidentiality of any data or
information so acquired shall be maintained by each of the Purchaser Parties and
their representatives pursuant to the terms of the Confidentiality Agreement
between the parties hereto dated November 30, 1998 (the "Confidentiality
Agreement"), which each of the above-named parties hereby acknowledges is
binding on it.
SECTION 5.2 Conduct of Business.
(a) Ordinary Course.
From the date of this Agreement to the Effective Time, each of the
National MGP, the National SGP and the National MLP shall continue, and the
National MGP shall cause the National OLP and NSSI to continue, to maintain its
respective assets and properties and operate its respective business in the
ordinary course as was being conducted prior to the execution of this Agreement.
(b) Restrictions on National MLP and National OLP.
Without first obtaining the written consent of Purchaser General Partner,
which consent shall not be unreasonably withheld or delayed, from the date
hereof until the Effective Time, except as otherwise contemplated by this
Agreement or as set forth on Schedule 5.2(b), the National MLP will not (and the
National MGP covenants that it will cause the National MLP and the National OLP
and NSSI not to):
(i) make any material change in the conduct of its business
and operations or its financial reporting and accounting methods;
(ii) other than in the ordinary course of business consistent
with past practice, enter into any material contract or agreement or
terminate or amend in any material
26
respect any material contract or agreement to which it is a party, waive
any material rights under any material contract or agreement to which it
is a party, or be in default in any material respect thereunder;
(iii) declare, set aside or pay any distributions to its
partners or split, combine or reclassify any of its equity securities or
issue or authorize the issuance of any other securities in respect of, in
lieu of or in substitution for any of its equity securities, or purchase,
redeem or otherwise acquire, directly or indirectly, any such securities;
(iv) merge into or with or consolidate with any other
corporation, partnership, person or other entity or acquire all or
substantially all of the business or assets of any corporation,
partnership, person or other entity or form, acquire any interest in or
contribute any assets to any partnership or joint venture or enter into
any similar arrangement;
(v) make any change in its agreement of limited partnership;
(vi) (A) make any purchase of any securities of any
corporation, partnership, person or entity, or (B) make any investment in
any corporation, partnership, joint venture or other business enterprise
(other than ordinary-course overnight investments consistent with cash
management practices of the National MLP and the National OLP);
(vii) incur any indebtedness for borrowed money (except for
borrowings under existing working capital facilities up to an aggregate of
$1.0 million) or guarantee any such indebtedness or issue, sell or
guarantee any debt securities or any rights or warrants to acquire any
debt securities;
(viii) sell, lease, pledge, encumber or otherwise dispose of
any portion of its assets other than in the ordinary course of business
consistent with past practice;
(ix) issue, deliver or sell or authorize or propose the
issuance, delivery or sale of, any of its equity securities or securities
convertible into its equity securities, or subscriptions, rights, warrants
or options to acquire or other agreements or commitments of any character
obligating it to issue any such securities;
(x) settle in excess of $1.0 million (individually or in the
aggregate) any claim, demand, lawsuit or state or federal regulatory
proceeding not covered by insurance;
(xi) except as required on an emergency basis, purchase, lease
or otherwise acquire any property of any kind whatsoever other than in the
ordinary course of business or make any capital expenditures in excess of
$1.0 million in the aggregate;
27
(xii) allow or permit the expiration, termination or
cancellation at any time of any material insurance policy applicable to
its business or operations, unless such policy is replaced, with no loss
of coverage, by a comparable insurance policy (to the extent available on
commercially reasonable terms);
(xiii) (A) make or rescind any material express or deemed
election relating to Taxes, (B) make a request for a Tax Ruling or enter
into a Closing Agreement, (C) settle or compromise any material claim,
action, suit, litigation, proceeding, arbitration, investigation, audit,
or controversy relating to Taxes other than those matters set forth in
Schedule 5.2(b) hereto or (D) change any of its methods of reporting
material income or deductions for federal income tax purposes from those
employed in the preparation of its federal income Tax Return for the
taxable year ending December 31, 1997, except as may be required by a
change in applicable law; or
(xiv) commit to do any of the foregoing.
(c) General Business.
From the date hereof until the Effective Time, the National MLP covenants
that it will (and the National MGP covenants that it will cause the National
MLP, the National OLP and NSSI to):
(i) maintain its assets and properties in good working order
and condition as of the date hereof, ordinary wear and tear and casualty
excepted;
(ii) use its commercially reasonable efforts to maintain and
preserve in all material respects its business organization intact and
maintain in all material respects its relationships with suppliers,
customers, lessors and others having business relations with it;
(iii) file on a timely basis all notices, reports or other
filings required to be filed with or reported to any federal, state,
municipal or other governmental department, commission, board, bureau,
agency or any instrumentality of any of the foregoing wherever located;
(iv) file on a timely basis all applications or other
documents necessary to maintain, renew or extend any material permit,
license, variance or any other approval required by any governmental
authority necessary or required for the continuing operation of its
business, whether or not such approval would expire before or after the
Effective Time; and
(v) (A) file or caused to be filed, within the times and in
the manner prescribed by law, all Tax Returns and Tax reports that are
required to be filed by such person determined consistent with prior
practices; (B) pay or cause to be paid, within the time and in the manner
prescribed by law, all material Taxes (including any estimated Taxes)
28
imposed on such party that are currently due and payable; and (C)
establish and maintain reserves adequate to pay all material Taxes not yet
due or payable as of the date of Closing and for any deferred taxes in
accordance with GAAP, determined in each case assuming the National MLP
and the National OLP are partnerships for tax purposes.
(d) Employees of the National MGP.
From the date hereof until the Effective Time, the National MGP covenants
that (i) it will use its commercially reasonable efforts to retain its employees
related to the operation of the National MLP and the National OLP, (ii) it will
not hire any employee except in the ordinary course of business consistent with
past practice, (iii) it will not hire any management personnel with an annual
salary in excess of $65,000 without first giving Purchaser General Partner a
reasonable opportunity to consult with the National MGP regarding such
prospective hire, (iv) except as set forth in Schedule 5.2(d)(A), it will not
adopt any material new employee benefit plan, arrangement, practice or policy,
or material employment, severance, consulting or other compensation arrangement,
with or for the benefit of new or existing employees, or, except as set forth in
Schedule 5.2(d), amend any existing employee benefit plan, arrangement, practice
or policy, or existing employment, severance, consulting or other compensation
arrangement in any material respect, without prior written consent of the
Purchaser, which consent shall not be unreasonably withheld, provided that any
new severance arrangement or any amendment to an existing severance arrangement
that results in additional costs equal to or less than $25,000 in the aggregate
for all such new arrangements and amendments shall be deemed not to be material
for purposes of this clause (iv), (v) it will not materially increase the
compensation or level of benefits applicable to its employees, except for normal
increases consistent with past practice, (vi) it will not materially change the
nature of National MLP's at cost reimbursement obligation for employee services
and (vii) it will not permit NSSI to do any of the foregoing.
(e) Restrictions on the Purchaser, Purchaser Holdings and Purchaser
General Partner.
Without first obtaining the written consent of the National MGP, which
consent shall not be unreasonably withheld or delayed, from the date hereof
until the Effective Time, except as otherwise contemplated by this Agreement, if
the effect of any of the following could reasonably be expected to lead to the
failure of the Purchaser Parties to consummate the transactions contemplated by
this Agreement, the Purchaser will not (and Purchaser Holdings covenants that it
will cause the Purchaser and Purchaser General Partner not to):
(i) make any material change in the conduct of its business
and operations or its financial reporting and accounting methods;
(ii) other than in the ordinary course of business, enter into
any material contract or agreement or terminate or amend in any material
respect any material contract
29
or agreement to which it is a party, waive any material rights under any
material contract or agreement to which it is a party, or be in default in
any material respect thereunder;
(iii) declare, set aside or pay any dividends or make any
distributions to its partners, or split, combine or reclassify any of its
equity securities or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for any of its
equity securities, or purchase, redeem or otherwise acquire, directly or
indirectly, any such securities;
(iv) merge into or with or consolidate with any other
corporation, partnership, person or other entity, acquire all or
substantially all of the business or assets of any corporation,
partnership, person or other entity or form, acquire any interest in or
contribute any assets to any partnership or joint venture or enter into
any similar arrangement;
(v) make any change in its agreement of limited partnership;
(vi) (A) make any purchase of any securities of any
corporation, partnership, person or entity, or (B) make any investment in
any corporation, partnership, joint venture or other business enterprise
other than ordinary-course overnight investments consistent with cash
management practices of Purchaser Holdings;
(vii) incur any indebtedness for borrowed money or guarantee
any such indebtedness or issue, sell or guarantee any debt securities or
any rights or warrants to acquire any debt securities;
(viii) sell, lease or otherwise dispose of any material
portion of its assets other than in the ordinary course of business
consistent with past practice;
(ix) settle in excess of $1.0 million (individually or in the
aggregate) any claim, demand, lawsuit or state or federal regulatory
proceeding unless prior to such settlement the National MGP shall have
been given a reasonable opportunity to consult with Purchaser General
Partner, including but not limited to the ability to make a presentation
to the Board of Directors of Purchaser General Partner, if requested,
regarding such settlement;
(x) allow or permit the expiration, termination or
cancellation at any time of any material insurance policy applicable to
its business or operations, unless such policy is replaced, with no loss
of coverage, by a comparable insurance policy (to the extent available on
commercially reasonable terms) provided that Purchaser General Partner
shall notify the National MGP if any such insurance coverage will not be
replaced;
(xi) commit to do any of the foregoing.
30
In addition, from the Closing Date until the expiration of the Debt
Indemnity (as defined below), the Purchaser shall not, and Purchaser Holdings
covenants that it shall cause the Purchaser, Purchaser General Partner and
Purchaser OLP not to, without the prior written consent of the Special Limited
Partner, (i) except as required by Applicable Law (as defined below), implement
or adopt any material change in the Purchaser OLP's federal income tax methods,
principles or elections listed on Schedule 5.2(e) including the application of
the remedial method under Section 704(c) of the Code to the assets contributed
to the National OLP by the National MGP and the National SGP and the
non-amortization of Section 197 intangibles contributed to the National OLP by
the National MGP and the National SGP (the "National Assets") (except to the
extent that a Section 743(b) adjustment exceeds the carrying value of such
intangibles immediately preceding the Closing Date) if such change relates to
any of the National Assets; (ii) sell or otherwise dispose of any assets of the
Purchaser OLP (other than the Marshfield, Wisconsin property, should it be or
become an asset of the Purchaser OLP) if such sale or disposition would result
in greater than $5,000,000 of gain per year (the "Threshold Amount"), on a
cumulative basis permitting carry-forwards, to be allocable to the National MGP
pursuant to Section 704(c) of the Code; or (iii) increase as of any date
following the date of Closing the Section 704 carrying value of the National
Assets; provided, however that in the event that either the Purchaser or the
Purchaser OLP breaches covenant (i), (ii) or (iii) of this paragraph, subject to
Section 9.1(d), Purchaser Holdings, Purchaser General Partner and the Purchaser
OLP agree to indemnify the National MGP, in an amount equal to the sum of (x)
(A) the incremental gain recognized as a result of such breach (and in the case
of clause (ii), such gain exceeding the Threshold Amount, and in the case of
clause (iii), the income allocated to the National MGP with respect to the
revalued property reduced by the deductions or losses allocated to the National
MGP with respect to the revalued property applying the principles of Code
Section 704(c)) (plus any penalties or additions to tax imposed on the National
Parties by any taxing authority as a result of such breach) multiplied by (B) a
fraction, the numerator of which is the maximum net marginal statutory federal
and state income tax rates (expressed as a decimal) in the jurisdictions
applicable to the National MGP for the year in which such gain is recognized
(taking into account the deductibility of state income tax in determining the
liability for federal income tax) (the "Effective Tax Rate") and the denominator
of which is one minus the Effective Tax Rate and (y) any other losses, costs,
damages, expenses (other than taxes but including attorneys fees and interest,
penalties and additions to tax imposed on the National Parties by any taxing
authority) as a result of such breach but only to the extent such damages result
in a cash expenditure by one of the National Parties. Schedule 5.2(e) will be
provided to the Purchaser on or prior to the date of this Agreement in
substantially final form; provided, however, the National MGP may at any time
prior to the date that is two weeks after the date of this Agreement revise,
supplement or amend Schedule 5.2(e), subject to the written consent of the
Purchaser and such consent shall not be unreasonably withheld by the Purchaser.
The adjusted tax basis as of December 31, 1998 of the assets in total by class
of National OLP is set forth on Schedule 5.2(e), and, on or before the date that
is 60 days after the Closing Date, such schedule shall be amended by Purchaser
to reflect the adjusted tax basis of such assets as of the Effective Time.
Except to the extent provided in the next sentence, Applicable Law for purposes
of the last paragraph of Section 5.2, Section 5.9, Section 5.14 or Section 5.17
(the "Tax Provisions") shall mean (i) with respect to U.S. federal income taxes,
any amendments or new enactments (whether prospective or retroactive) to the
Code or the Treasury Department Regulations
31
promulgated thereunder, and any final determination of a Federal circuit court
with applicable jurisdiction with respect to the Purchaser OLP, in each case
occurring after the Applicable Date (as hereinafter defined) and (ii) with
respect to state income taxes, any amendments or new enactments (whether
prospective or retroactive) to the Code, the Treasury Department Regulations
promulgated thereunder (and any amendments or new enactments to any similar
state statutes or applicable regulations) and any final determination of a
Federal circuit court with applicable jurisdiction with respect to such state
(or a state court with similar appellate authority), in each case occurring
after the Applicable Date. Purchaser or Purchaser Holdings shall notify (the
"Notice") National MGP if any amendment, new enactment or final determination
requires that Purchaser Holdings or any affiliate thereof or successor thereto
(a "Purchaser Group Member") take any action prohibited by this Agreement or
refrain from any action required by this Agreement (an "Applicable Law Change");
provided, however, such amendment, new enactment or final determination shall
not be considered to result in an Applicable Law Change if: (i) a nationally
recognized law firm, selected by the National MGP delivers within 90 days
following delivery of the Notice an opinion addressed to Purchaser, Purchaser
Holdings and National MGP, that there is a reasonable basis to conclude that a
court with appropriate jurisdiction would conclude that such amendment,
enactment or final determination does not result in an Applicable Law Change;
(ii) National MGP agrees in writing to assume, at its sole expense, the defense
of any audits, examinations, investigations, claims, suits or other
administrative or judicial proceedings with respect to the acts or failures to
act identified in the Notice; (iii) National MGP agrees in writing to indemnify
and hold harmless, to the fullest extent permitted by law, subject to Section
9.1(d), each Purchaser Group Member from and against any and all losses, costs,
damages, expenses (including any attorneys fees) or Taxes ("Damages") resulting
from such amendment, new enactment or final determination being treated for
purposes of this Agreement as not resulting in an Applicable Law Change (except
to the extent of any Tax benefit not claimed as a result of this proviso) but
only to the extent (x) such Damages result in a cash expenditure by a Purchaser
Group Member or (y) such Damages are otherwise offset by any credit,
carryforward, carryback, available deduction or other offset available to a
Purchaser Group Member; and (iv) to the extent that the net worth of the
National MGP or any successor thereto is less than $30 million (a "Net Worth
Deficiency") at either the time the indemnification agreement provided for in
clause (iii) is entered into or at the time of payment of any indemnity
thereunder, Triarc shall execute a guaranty of the National MGP's indemnity
obligations under clause (iii) above to the extent of such Net Worth Deficiency
(not previously guaranteed by Triarc under this clause (iv)) for the benefit of
the Purchaser Group Members in form and substance reasonably acceptable to the
Purchaser; provided that, the maximum aggregate amount of such Triarc guaranty
shall in no event be more than $30 million and shall be reduced by (x) $750,000
per annum on each anniversary of the date of this Agreement (beginning on the
first anniversary of the date of this Agreement), and (y) any amounts paid by
the National MGP pursuant to (x) the indemnity referred to in clause (iii) above
or (y) the Debt Indemnity. Net worth for purposes of this clause shall mean (a)
the sum of the capital stock, additional paid in capital and retained earnings
(less accumulated deficits) of the National MGP, all as shown on its
consolidated balance sheet at such time; in accordance with U.S. generally
accepted accounting principles; provided, however, that deferred taxes and
liabilities to Triarc or its affiliates shall be disregarded until paid and
amounts due from Triarc or its affiliates shall be reflected as an asset at face
value. Any indemnity required under this section shall be paid
32
to Purchaser Holdings (i) with respect to any Taxes, within 30 days after the
entry of a final determination of a U.S. federal circuit court in which the
Purchaser OLP is a party (or any state court with similar appellate authority in
which the Purchaser OLP is a party) or any other final determination as that
term is defined in Code Section 1313 or any similar state determination) solely
with respect to any Tax controversy not appealed to a federal circuit court or
any state court with similar appellate authority or (ii) in the case of any
indemnity not involving Taxes, within 60 days of the receipt by National MGP of
written notice that such expense has been incurred by a Purchaser Group Member.
Any indemnity paid by National MGP to any Purchaser Group Member with respect to
Taxes shall be determined in a manner consistent with the first sentence of this
last paragraph of this Section 5.2. For purposes of this Agreement, the
"Applicable Date" shall be the Acceptance Date; provided, however, that if the
Purchaser provides the National MGP (with a copy to Triarc), at least three
business days prior to the Acceptance Date, (A) a written opinion of a
nationally recognized law firm, addressed to the National MGP, that states (i)
an Applicable Law Change has occurred since the date of this Agreement and (ii)
the action prohibited or required under this Agreement affected by such
Applicable Law Change, and (B) a written notice accompanying such legal opinion,
in which the Purchaser in good faith represents that such Applicable Law Change
would materially adversely affect it, then the Applicable Date with respect to
the matter(s) contained in such opinion pursuant to clause (ii) of this proviso
(but with respect to no other matters) shall be the date of this Agreement.
SECTION 5.3 Certain Filings.
As promptly as practicable following the execution of this Agreement (or
at the time such filings are required in the case of filings contemplated by
Section 2.5) the parties shall (a) prepare and file with the Federal Trade
Commission and the Department of Justice any appropriate filings and any
supplemental information which may be reasonably requested in connection
therewith under the HSR Act, it being agreed that the Purchaser is the primary
"Acquiring Person" for purposes of the HSR Act and shall pay the required filing
fee (including filings as contemplated by Section 2.5), (b) use their
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws and regulations to consummate and make effective
the Transactions, (c) except as contemplated by this Agreement, use its
commercially reasonable efforts not to take any action or enter into any
transaction, which would cause any of its representations or warranties
contained in this Agreement to be untrue or result in a breach of any covenant
made by it in this Agreement and (d) the parties hereto shall make all required
filings under applicable state securities laws. Each party hereto shall use its
commercially reasonable efforts (other than qualifying to do business in any
jurisdiction in which it is not now so qualified) to cause each filing made by
it with any governmental body to become effective as promptly as possible.
33
SECTION 5.4 Information Statement.
As soon as practicable following the purchase of all National Common Units
validly tendered and not withdrawn pursuant to the Offer, if required by
applicable law, the National MGP shall file the Information Statement with the
SEC under the Exchange Act, and shall use its commercially reasonable efforts to
have the Information Statement cleared by the SEC. Purchaser General Partner and
the National MGP shall cooperate with each other in the preparation of the
Information Statement, and the National MGP shall notify Purchaser General
Partner of the receipt of any comments of the SEC with respect to the
Information Statement and of any requests by the SEC for any amendment or
supplement thereto or for additional information and shall provide to Purchaser
General Partner promptly copies of all correspondence between the National MGP
or any representative of the National MGP and the SEC. The National MGP shall
give Purchaser General Partner and its counsel the opportunity to review the
Information Statement prior to its being filed with the SEC and shall give
Purchaser General Partner and its counsel the opportunity to review all
amendments and supplements to the Information Statement and all responses to
requests for additional information and replies to comments prior to their being
filed with, or sent to, the SEC. Each of the National MGP and Purchaser Holdings
agrees to use its commercially reasonable efforts, after consultation with the
other parties hereto, to respond promptly to all such comments of and requests
by the SEC and to cause the Information Statement and all required amendments
and supplements thereto to be mailed to the holders of National Common Units at
the earliest practicable time. On the first business day following expiration of
the period required by Rule 14c-2(b) under the Exchange Act, the Purchaser shall
execute a consent, as the holder of the majority of the National Common Units,
and the National MGP shall execute a consent, as the holder of all of the
National Subordinated Units, to approve all of the transactions contemplated
hereby, including the Merger.
SECTION 5.5 Certain Instruments.
Commencing upon the execution of this Agreement, Purchaser Holdings and
Purchaser General Partner and the National MGP shall use their commercially
reasonable efforts to obtain any required consents to the transactions
contemplated by this Agreement of, and any actions required by, the matters set
forth in Schedule 5.5. The other parties hereto shall cooperate with Purchaser
General Partner and the National MGP as Purchaser General Partner and the
National MGP may reasonably request; provided, that all fees, costs and expenses
of obtaining such consents shall be allocated as described in Section 5.16.
SECTION 5.6 Other Consents.
(a) The Purchaser Parties and the National Parties shall use
commercially reasonable efforts to obtain any consents necessary to transfer
title to, and thereafter shall use their respective commercially reasonable
efforts to transfer title to, any assets used primarily in the business of the
National MLP or the National OLP (whether owned by the National MLP, the
National OLP or the National MGP, but excluding the capital stock of any
subsidiaries of the National MGP) including, but not limited to, any tradenames,
intellectual property rights, real
34
property rights (including the interest of the National MGP in the Marshfield,
Wisconsin property) or personal property rights, from the National MGP, the
National SGP and the National MLP to the National OLP;
(b) if such consents are not obtained, the National MGP shall use
its commercially reasonable efforts to take such other action as may be
necessary to provide the Purchaser OLP with rights to such assets substantially
equivalent to those held by the National MGP, and the National SGP and the
National MLP; and
(c) Purchaser Holdings and Purchaser General Partner shall assume
effective as of the Closing, and Purchaser Holdings, Purchaser General Partner
and the National General Partners shall use commercially reasonable efforts to
obtain the discharge effective as of the Closing of the National General
Partners from, any liabilities or obligations arising out of or related to the
National General Partners' role as general partners under and pursuant to the
National MLP Partnership Agreement and the National OLP Partnership Agreement,
except to the extent that the National General Partners would not have been
entitled to be reimbursed or indemnified therefor under the National MLP
Partnership Agreement or the National OLP Partnership Agreement; provided, that
all costs and expenses of obtaining such consents and transfers shall be borne
solely by the Purchaser if the transactions contemplated by this Agreement are
consummated. Simultaneously with the Effective Time, the National MGP shall
transfer, or cause to be transferred, title to the assets in clause (a) above to
the National OLP, by the execution of such documents or instruments deemed
necessary and appropriate by Purchaser General Partner in form and substance
reasonably satisfactory to Purchaser General Partner and the National MGP. As
part of the foregoing asset transfers, the National Parties shall assign or
cause their affiliates to assign to the Purchaser OLP or its designee any rights
which any of them may have under any insurance policy (in effect as of or prior
to the date hereof) or against any third party with respect to any Losses (as
herein defined) arising or resulting from, or relating to, the Marshfield,
Wisconsin property. If any such rights are not assignable, the National Parties
shall, and shall use commercially reasonable efforts to cause their affiliates
to, at the sole expense and under the reasonable control and direction of the
Purchaser OLP, pursue any such rights for the benefit of the Purchaser and its
affiliates.
SECTION 5.7 No Solicitation.
Subject to Section 5.8 below, each of the National Parties (on behalf of
itself and its affiliates, including the National MLP and the National OLP)
agree that upon execution of this Agreement, they shall terminate all
discussions and negotiations with others regarding a sale or other transaction
involving (a) the Acquired Interests, (b) all or substantially all of the
assets, business or securities of the National MLP or the National OLP, or (c)
any other transaction similar to the transactions contemplated by this Agreement
(collectively, the "National Possible Alternatives"), and thereafter will not,
directly or indirectly, nor shall they authorize or permit any of their
officers, directors or employees to, or any investment banker, financial
advisor, attorney, accountant or other representative retained by them to, so
long as this Agreement remains in effect, (i) solicit, initiate, encourage
(including by way of furnishing information or assistance), conduct discussions
with or
35
engage in negotiations with any person or entity regarding or take any other
action to facilitate any inquiries or the making of any proposal which
constitutes or may reasonably be expected to lead to a National Possible
Alternative, (ii) enter into an agreement with any person or entity, other than
the Purchaser or its affiliates, providing for a National Possible Alternative,
(iii) make or authorize any statement, recommendation or solicitation in support
of or approve any National Possible Alternative by any person or entity, other
than by the Purchaser or its affiliates, or (iv) withdraw, modify, qualify or
change the recommendation of the transactions contemplated by this Agreement by
the Special Committee or the National Board.
SECTION 5.8 Permitted Actions.
Notwithstanding the provisions of Section 5.7 above, prior to the
Acceptance, Triarc, the National MGP, the National SGP, the National MLP and the
National OLP shall be entitled to take any action otherwise prohibited by
Section 5.7 in response to any third party inquiry, contact or proposal received
by any or all of them (including furnishing information to any such third party,
but only pursuant to a written confidentiality agreement) if (a) the initial
inquiry, contact or proposal from any third party was not received in violation
of Section 5.7 above, (b) the Special Committee shall have determined, in its
good faith judgment, that any such otherwise prohibited action could reasonably
be expected to lead to the negotiation and consummation of a National Possible
Alternative that in the opinion of the Special Committee could reasonably be
expected to be more beneficial than the transactions contemplated by this
Agreement, taken as a whole, to the holders of National Common Units other than
the National MGP and its affiliates (a "National Superior Transaction") and (c)
the Special Committee shall have determined, after consultation with and based
on the advice of its outside legal counsel, that the failure to take such action
would be inconsistent with the National MGP's or the National Board's fiduciary
duties to holders of National Common Units under applicable law; provided, that
none of the National MGP, the National SGP, the National MLP or the National OLP
may execute a binding agreement to effect a National Superior Transaction unless
this Agreement has first been terminated as provided in Section 8.1. Triarc, the
National MGP (on behalf of itself, the National MLP and the National OLP and the
National SGP) and the National MLP agree that each of them will notify Purchaser
General Partner immediately if any inquiry, contact or proposal is received by,
any such information is requested from, or any such discussions or negotiations
are sought to be initiated or continued with, it or any of its representatives,
indicating, in connection with such notice, the name of such person or entity
and the material terms and conditions of any inquiry, contact or proposal and
thereafter shall keep Purchaser General Partner informed, on a current basis, on
the status and terms of any such inquiry, contact or proposal and the status of
any such negotiations or discussions.
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SECTION 5.9 Indemnified Debt.
Following the Effective Time and until the termination of the Debt
Indemnity pursuant to Section 9.3, Purchaser Holdings and Purchaser General
Partner shall cause the Purchaser OLP not to (a) prepay, defease, purchase or
otherwise retire any of the Indemnified Debt (unless such Indemnified Debt is
simultaneously replaced by the Purchaser OLP with at least an equivalent amount
of new Indemnified Debt providing for no greater amortization), (b) modify any
of the Indemnified Debt so as to eliminate or limit the recourse liability of
the National MGP with respect thereto, (c) merge or consolidate with or
otherwise become a corporation for federal income tax purposes, (d) cause or
permit any other corporation, partnership, person or entity (other than
Purchaser Holdings and its affiliates, or any successor thereto, or any
successor to the Purchaser OLP) to assume, guarantee, indemnify against or
otherwise incur any liability with respect to any Indemnified Debt, or (e)
except as required by Applicable Law, take or fail to take any other action that
would result in the share of the Indemnified Debt which is allocated to the
National MGP for purposes of Section 752 of the Code and Treasury Regulations
promulgated thereunder pursuant to the Debt Indemnity to be reduced by an amount
in excess of the National MGP's adjusted tax basis in its interest in the
Purchaser OLP, as adjusted following the Effective Time (the "MGP's Basis");
provided, however, that such covenants shall only apply to the extent any
actions described in (a), (b), (c), (d) or (e) above would result in the share
of the Indemnified Debt which is allocated to the National MGP for purposes of
Section 752 of the Code to be reduced by an amount in excess of the MGP's Basis
at all times until termination of the Debt Indemnity pursuant to Section 9.3
hereof. The MGP's Basis as of December 31, 1998, is set forth on Schedule 5.9,
and, on or before the date that is 60 days after Closing Date, such schedule
shall be amended by Purchaser to reflect the MGP's Basis as of the Effective
Time. In addition, Purchaser Holdings and Purchaser General Partner shall cause
the Purchaser OLP to refinance scheduled principal payments on the Indemnified
Debt with sufficient recourse debt so that at all times until the termination of
the Debt Indemnity pursuant to Section 9.3 hereof, the amount of Indemnified
Debt which is allocable to the National MGP for purposes of Section 752 of the
Code shall not be reduced by an amount exceeding the National MGP's Basis.
Following the Effective Time and until the termination of the Debt Indemnity
pursuant to Section 9.3, (i) Purchaser Holdings and Purchaser General Partner
shall cause the Purchaser OLP to use all commercially reasonable efforts to not
take or omit to take any action, if such action or omission (with the giving of
notice or the passing of time, or both) would constitute a breach of, or give
rise to a default or event of default under, any Indemnified Debt, and (ii) the
National MGP shall have the right, but not the obligation, to arrange for the
refinancing described above if and only if the Purchaser OLP is unable to do so
in accordance with this paragraph. From and after the Effective Time and until
the termination of the Debt Indemnity pursuant to Section 9.3, Purchaser
Holdings and Purchaser General Partner shall cause the Purchaser OLP to furnish
to the National MGP, (A) within 30 days after the end of each calendar year, a
certificate of the chief financial officer of Purchaser General Partner, stating
that (1) the Indemnified Debt has not been reduced by an amount exceeding the
MGP's Basis, as of the end of such calendar year and (2) no event that
constitutes, or with the passing of time or the giving of notice, or both, would
reasonably be expected to constitute, an event of default under any Indemnified
Debt has occurred, or if any such event has occurred, describing such event and
the action Purchaser General Partner intends to
37
take with respect thereto, (B) concurrently with providing them to the lenders,
agents or trustees in respect of the Indemnified Debt, copies of any compliance
certificates, together with any attachments thereto, required pursuant to any
Indemnified Debt, (C) promptly upon obtaining knowledge thereof, a description,
in reasonable detail, of any event that constitutes, or with the passing of time
or the giving of notice, or both, would reasonably be expected to constitute, an
event of default under the Indemnified Debt and (D) such other documents or
information as the National MGP may reasonably request relating specifically and
primarily to the Indemnified Debt or the Debt Indemnity. Except as required by
Applicable Law, the Purchaser OLP shall prepare and file applicable tax returns
consistent with the allocation of the Indemnified Debt, and shall for all
purposes treat the Indemnified Debt as being allocated for tax purposes to the
National MGP. In the event that before termination of the Debt Indemnity
pursuant to Section 9.3, the National MGP's share of the Indemnified Debt for
purposes of Section 752 of the Code is reduced by an amount in excess of the
National MGP's Basis as a result of a breach by Purchaser Holdings or Purchaser
General Partner or any affiliate or any successor thereto of any provision in
this Agreement, subject to Section 9.1(d), Purchaser Holdings, Purchaser General
Partner and the Purchaser OLP agree to indemnify the National MGP in an amount
equal to the sum of (x) (A) the gain recognized by the National MGP resulting
from a decrease in the National MGP's share of the Indemnified Debt (plus any
penalties or additions to tax imposed on the National Parties by any taxing
authority as a result of such breach), multiplied by (B) a fraction, the
numerator of which is the Effective Tax Rate and the denominator of which is one
minus the Effective Tax Rate and (y) any other losses, costs, damages, expenses
(other than taxes but including attorneys fees and interest, penalties and
additions to tax imposed on the National Parties by any taxing authority) as a
result of such breach but only to the extent such damages result in a cash
expenditure by one of the National Parties.
SECTION 5.10 Environmental Permits.
The National MGP and Purchaser General Partner shall cooperate in (a)
causing the National MGP, the National MLP and the National OLP to take all
actions necessary to comply with applicable requirements of Environmental and
Health and Safety Laws concerning the transfer of property, assets, stock or a
business, including without limitation the filing with appropriate permitting
agencies of all notices required in reference to the change in ownership for the
purpose of effecting the transfer or issuance of the permits, licenses and other
authorizations required under Environmental and Health and Safety Laws for the
transfer, operation and the conduct of the business of the National MLP and the
National OLP, respectively ("Environmental Permits"), (b) effectuating the
issuance, assignment or transfer, as promptly as is reasonably possible on or
after the Effective Time, of all Environmental Permits and any other licenses or
permits ("Other Permits") required as of the Effective Time, and (c)
identifying, preparing and filing any notices or reports required from Purchaser
General Partner in connection with the transfer or issuance of the required
Environmental Permits and Other Permits. For the interim period from the
Effective Time until such time as the required Environmental Permits and the
Other Permits in form and substance reasonably satisfactory to Purchaser General
Partner shall be transferred or issued, and to the extent permitted by law, the
National MGP, on behalf of itself, the National MLP and the National OLP,
authorizes the Purchaser OLP after the Merger to operate under and utilize
existing Environmental Permits and
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Other Permits. All fees, costs and expenses in connection with the transfer or
issuance of Environmental Permits or Other Permits shall be borne by the
Purchaser if the Closing occurs.
SECTION 5.11 Further Action; Commercially Reasonable Efforts.
From the date hereof through the Effective Time, upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
commercially reasonable efforts to take, or cause to be taken, all appropriate
action, and to do or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including but not limited to (i) if
necessary, cooperating in the preparation and filing of the Information
Statement, and any amendments thereto, (ii) using its commercially reasonable
efforts to obtain all Required Consents and (iii) using its commercially
reasonable efforts to make all required regulatory filings and applications and
to obtain all licenses, permits, consents, approvals, authorizations,
qualifications and orders of governmental entities or authorities and parties to
contracts as are necessary for the consummation of the Transactions and to
fulfill the conditions to the consummation of this Agreement; provided that
Purchaser General Partner shall be primarily responsible for obtaining or
transferring all required licenses, permits and authorizations, and the National
MGP shall cooperate in such process as reasonably requested by Purchaser General
Partner. To the extent practicable in the circumstances and subject to
applicable laws, each party shall provide the other with the opportunity to
review all information relating to the other party, or any of its subsidiaries,
which appears in any filing made with, or written materials submitted to, any
governmental entity or authority in connection with obtaining the necessary
regulatory approvals for the consummation of the Transactions. In case that at
any time after the Effective Time any further action is necessary or desirable
to carry out the purposes of this Agreement, the proper officers and directors
of each party to this Agreement shall use their commercially reasonable efforts
to take all such necessary action.
SECTION 5.12 Notification of Certain Matters.
The National MGP shall give prompt notice to Purchaser General Partner,
and Purchaser General Partner shall give prompt notice to the National MGP, as
applicable, of (i) the occurrence or non-occurrence of any event which would
likely cause any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect, with respect to such party, (ii)
any failure of the National Parties, to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or satisfied by
it hereunder, (iii) any failure of the Purchaser Parties to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it hereunder and (iv) the occurrence of any event
described in paragraphs (a)(iv), (a)(v) or (a)(vi) of Section 3.23; provided,
however, that the failure for any reason to give the notice required by clause
(iv) hereof shall not be a breach of this Agreement for any purpose. The
delivery of any notice pursuant to this Section 5.12 shall not limit or
otherwise affect the remedies available hereunder to the parties.
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SECTION 5.13 Certain Indebtedness.
Except as otherwise contemplated herein (including, without limitation,
Section 2.1(a)(ii) or 5.16), at or prior to the Effective Time, the National MGP
shall cause the National MLP and the National OLP to fully repay any
indebtedness owed by the National MLP and the National OLP to any of the other
National Parties or their affiliates, and all other intercompany accounts
between the National OLP and the National MLP on the one hand and the other
National Parties on the other hand, shall be eliminated by contribution to
capital, dividend or payment. Prior to the Closing, the National MGP and the
National SGP and their affiliates shall not enter into any new transactions,
agreements, arrangements or understandings with the National MLP, the National
OLP or NSSI and shall not charge any amounts under their existing agreements,
arrangements and understandings with the foregoing (including under Section 7.4
of the National MLP Partnership Agreement and the National OLP Partnership
Agreement) other than amounts charged in the ordinary course of business
consistent in nature, amount and method of determination with past practices. At
the Closing, (i) the Purchaser shall refinance the outstanding indebtedness of
the National OLP as indicated on Schedule 5.13(i) (the "Acquisition Line," and
the $125,000,000 of 8.54% First Mortgage Notes due June 30, 2010 (the "First
Mortgage Notes")) and (ii) the Purchaser shall repay the outstanding
indebtedness of the National OLP as indicated on Schedule 5.13(ii) (the working
capital line). As of the date hereof, the National MGP, the National SGP, the
National OLP and the holders of all of the First Mortgage Notes have executed
and delivered Amendment No. 2 ("Amendment No. 2") to each of the separate Note
Agreements dated as of June 26, 1996 (as amended, the "Note Agreements"), under
which the First Mortgage Notes were issued. A complete and correct copy of
Amendment No. 2 as executed has been delivered to the Purchaser. The National
Parties agree that they will, and will cause the National OLP to: (a) keep
Amendment No. 2 in effect, and not amend or modify Amendment No. 2, the Note
Agreements or the First Mortgage Notes without the prior written consent of the
Purchaser which shall not be unreasonably withheld; (b) comply with their
respective obligations under Amendment No. 2; and (c) not give the preliminary
or the final notice of optional prepayment under Section 9.2 of the Note
Agreements without the prior written consent of the Purchaser which shall not be
unreasonably withheld. The Purchaser agrees that it will pay the fee described
in Section 9 of Amendment No. 2.
SECTION 5.14 Consistent Tax Reporting.
For federal income tax purposes, the Purchaser shall report the
transactions contemplated by this Agreement in a manner consistent with the
Purchaser OLP being, after the Merger Date, a partnership for federal income tax
purposes, and the Purchaser not being treated as an "electing 1987 partnership"
within the meaning of Section 7704(g) of the Code. Except as otherwise required
by Applicable Law or agreed to in writing by the National MGP, the Purchaser
shall not take any position inconsistent with the positions taken on or
reflected in prior partnership federal income tax returns of the National MLP
and National OLP for 1996 and 1997, copies of which (other than Forms K-1 for
common unitholders) have been given to Purchaser, and the Form K-1 of the
National MGP for 1998, a copy of which will be given to Purchaser prior to
Closing, and which also are listed on Schedule 5.14 to be delivered to Purchaser
within 120 days after Closing, that could have an
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adverse federal income tax effect on the Special Limited Partner or could have
an adverse effect on the tax deferral for the benefit of the National MGP sought
to be achieved by Sections 5.2 and 5.9 hereof. The Purchaser shall have the
right to request in good faith within 30 days of the receipt of such final
schedule that the National MGP provide further detail or greater specificity
with respect to any item provided on Schedule 5.14 to the extent reasonably
necessary for the Purchaser to satisfy its obligations under this Section 5.14.
National MGP shall within fourteen days of the receipt of such request make a
good faith effort to amend Schedule 5.14 to reflect the Purchaser's reasonable
requests for greater specificity and detail. The National Parties agree to
cooperate with the Purchaser Parties and provide reasonable access to their
books, records, employees, and facilities, as well as permit reasonable access
to, and permit the cooperation of, the auditors of the National General
Partners, at the Purchaser's expense, to the extent necessary for the Purchaser
Parties to prepare audited consolidated financial statements including
information relating to National MLP and National OLP as of, and for the period
ended on, the date of the Closing. The Purchaser Parties agree to cooperate with
the National Parties and provide reasonable access to their books, records,
employees and facilities, as well as permit reasonable access to the books and
records of the Purchaser and the Purchaser OLP, at the National Parties expense,
to the extent necessary for the National Parties to prepare the schedule
referred to above.
SECTION 5.15 No Public Announcement.
Immediately upon the execution of this Agreement, the parties hereto shall
issue a press release with respect to the execution hereof and the transactions
contemplated hereby, which press release shall be reasonably satisfactory to
Purchaser General Partner and the National MGP. No party hereto shall issue any
other press release or make any other public announcement concerning this
Agreement or the transactions contemplated hereby without the prior approval of
the National MGP or Purchaser General Partner, as applicable (other than as may
be required by law or by obligations pursuant to any listing agreement with the
New York Stock Exchange (the "NYSE"), in which event the party making the public
announcement or press release shall notify the National MGP or Purchaser General
Partner, as applicable, in advance of such public announcement or press
release), which approval shall not be unreasonably withheld or delayed except
that Purchaser General Partner and the National MGP may respond to telephone
inquiries, conduct conversations and otherwise communicate with securities
analysts and may respond to inquiries from the news media.
SECTION 5.16 Expenses.
(a) (i) The National MLP and the National OLP shall pay any filing
fees with respect to the Information Statement, the costs of preparation,
filing, printing and mailing the Schedule 14D-9 and the Information
Statement, the fees and expenses of the solicitation agent for Schedule
14D-9 and the Information Statement and the fees and expenses related to
obtaining the consent of the holders of the National OLP's First Mortgage
Notes (other than the fee referred to in the last sentence of Section
5.13) and shall reimburse the National MGP or Triarc, as the case may be,
promptly after submission of an invoice with supporting
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documentation, for all such fees and expenses paid by the National MGP or
Triarc prior to Closing and not previously reimbursed;
(ii) the National MLP and the National OLP shall pay up to an
aggregate of $1.5 million of fees and expenses of the Special Committee of
the National MLP, including meeting fees and retainers, the financial
advisory fees and expenses paid to Xxxxxx Brothers Inc. in connection with
the Xxxxxx Opinion, the fees and expenses of Valuation Research
Corporation and the fees and expenses of counsel to the Special Committee
and shall reimburse the National MGP or Triarc, as the case may be,
promptly after submission of an invoice with supporting documentation, for
all such fees and expenses paid by the National MGP or Triarc prior to
Closing and not previously reimbursed;
(iii) Triarc and the National MGP shall pay all fees and
expenses of their counsel, Xxxxxxx & Xxxxx L.L.P. in connection with the
negotiation, drafting, execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, and all fees and
expenses of the National MLP's independent accountants, Deloitte & Touche
LLP and of any other professional advisors to the National Parties and the
National OLP;
(iv) From time to time after the Closing Date (except as set
forth in clause (y) below, which payment shall be made on the Closing
Date), promptly upon request from the National MGP or Triarc with
supporting documentation, the Purchaser shall reimburse (x) the National
MGP for all amounts for which the National MLP has a reimbursement
obligation (accrued, contingent or otherwise) under Section 7.4(b) of the
National MLP Partnership Agreement (including, without limitation, any
post-retirement life insurance and medical insurance employment benefits
for former employees), except where such reimbursement would be
inconsistent with clauses (i), (ii) or (iii) above; provided, however,
that, without limiting the terms of the reimbursement provisions set forth
in such Section 7.4(b) of the National MLP Partnership Agreement, the
Purchaser agrees that such reimbursement shall be made consistent in
nature, amount and method of determination with past practices in the
ordinary course of business; and (y) Triarc to the extent that any
payments of interest are made under the Triarc Note to the National OLP on
or after June 30, 1999; and
(v) Other than as set forth in Sections 5.6 and 9.1(b), none
of the Purchaser Parties, the National MLP, the National OLP or their
respective successors or assigns shall seek or otherwise be entitled to
any recovery, indemnification or other benefit under any insurance policy
owned or maintained by Triarc or the National MGP.
(b) If the Acceptance does not occur, the Purchaser Parties and the
National Parties, respectively, shall bear their own fees and expenses except as
otherwise contemplated by this Section 5.16 and Section 8.2.
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SECTION 5.17 Tax Matters.
(a) Purchase Price Allocations.
The National MGP and the Purchaser agree that, at any time until the
expiration of the Debt Indemnity, the fair market value of the assets of
National OLP shall be determined in accordance with an appraisal conducted by
Valuation Research Corporation prior to Closing (the "Appraisal"), performed in
a manner consistent with the assumptions and methodologies used by Valuation
Research Corporation in its appraisal of the assets upon formation of National
OLP; provided that, if the Appraisal places the value of the depreciable and
amortizable assets (the "Assets") at less than $117 million, the Purchaser may
cause an appraisal of the Assets to be performed by an independent, nationally
recognized appraiser selected by it (the "Alternate Appraisal"). If the
Alternate Appraisal places the value of the Assets at $130 million or less, the
National MGP and the Purchaser shall, for all tax and Code Section 704 book
purposes, utilize such value. If the Alternate Appraisal places the value of the
Assets at more than $130 million, the value placed on the Assets by the
Appraisal shall be utilized for all tax and Code Section 704 book purposes. The
National MGP and the Purchaser agree that (i) the Code Section 704 book value of
the National OLP assets shall be adjusted as of the Closing Date to be equal to
the fair market value of such assets as determined above, and (ii) the straight
line method of depreciation and the MACRS life shall be used in calculating
depreciation on the Assets for all tax and Code Section 704 book purposes for
all periods following closing of the Transactions. The Purchaser and the
National MGP agree to use the value of the Assets used for all tax and Code
Section 704 book purposes for all other purposes including for financial
accounting purposes. The Purchaser shall cause the Purchaser OLP to use the
value of the Assets so determined for tax, Code Section 704 book and all other
purposes. The Purchaser and the National MGP further agree to file any
information or schedules required by the Code in accordance with the agreed upon
allocations, and agree to be bound by, and file tax returns consistent with, any
such agreed upon allocations.
(b) Code Section 704(c) Election.
The Purchaser and the National MGP agree that the Purchaser OLP may elect
to use the "remedial allocation method" described in Treasury Regulation Section
1.704-3 (the "Remedial Allocation Method") with respect to any National Assets.
(c) Tax Cooperation.
After the date of the Closing, National General Partners and Purchaser
Holdings shall, and shall cause their respective subsidiaries and affiliates to,
cooperate in the preparation of all Tax Returns and shall provide, or cause to
be provided to the requesting party any records and other information requested
by such party (limited, however, to information pertaining to National OLP,
National MLP and NSSI) in connection therewith as well as permit access to, and
permit the cooperation of, the auditors of the National General Partners and
Purchaser Holdings. Purchaser Holdings and the National MGP each further agree
that they will cooperate fully, and cause their
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affiliates to cooperate fully, with each other and their counsel in the defense
against or compromise of any claim asserted in any proceeding regarding Taxes
imposed upon any of the National Parties, the National OLP or NSSI.
(d) Certain Tax Contests.
In connection with any audit, examination or other administrative or
judicial proceeding with respect to any controversy involving the elections,
methods or principles provided on Schedule 5.2(e) or a matter listed on Schedule
5.14 (a "Tax Controversy"), unless such elections, methods, principles or
positions are contrary to Applicable Law (as that term is defined in the last
paragraph of Section 5.2), the Purchaser and Purchaser Holdings agree that they
shall cause the Purchaser OLP to contest in good faith and using commercially
reasonable efforts with respect to such Tax Controversy and will not settle or
otherwise compromise such Tax Controversy without the written consent of the
National MGP prior to a final determination of such controversy by a Federal
circuit court with applicable jurisdiction with respect to the Purchaser OLP (or
any state court with similar appellate authority). The Purchaser and Purchaser
Holdings shall consult with the National MGP as reasonably required during the
pendency of such Tax Controversy. The Purchaser and Purchaser Holdings shall pay
all costs incurred in connection with such Tax Controversy other than costs
incurred in connection with any proceeding in the Federal circuit court with
applicable jurisdiction (or any state court with similar appellate authority)
with respect to the Purchaser OLP, which costs shall be shared equally by the
National MGP and Purchaser Holdings. The Purchaser and the National MGP shall
jointly control the Tax Controversy after a decision of any court with respect
to such Tax Controversy. This Section 5.17(d) shall not apply to any Tax
Controversy that National MGP has assumed control of pursuant to the last
paragraph of Section 5.2.
ARTICLE VI
CONDITIONS
SECTION 6.1 Conditions to the Merger.
The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions and only the following conditions:
(a) Conveyance of Acquired Interests.
Good and valid title to the Acquired Interests owned by the National
Parties shall have been conveyed to the Purchaser and Purchaser General Partner
pursuant to Sections 2.1 and 2.2, free and clear of any liens, claims or
encumbrances.
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(b) Approval of a Unit Majority.
This Agreement and the Merger and the other transactions contemplated
hereby shall have been approved and adopted by the affirmative vote of at least
a majority of the outstanding National Common Units voting as a class and at
least a majority of the outstanding National Subordinated Units voting as a
class to the extent required by the Delaware Law and the National MLP
Partnership Agreement.
(c) No Injunctions or Restraints.
No statute, rule, decision, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other governmental entity preventing the
consummation of the Merger shall be in effect and no action or proceeding shall
be pending which could reasonably be expected to result in such order or
injunction.
(d) Corporate and Partnership Authority.
The representations and warranties of the National Parties set forth in
Section 3.2 shall be true and correct as of the Closing Date as though made as
of such date, provided that this clause (d) shall only be a condition to the
obligation of the Purchaser Parties.
(e) Acceptance.
The Acceptance shall have occurred.
SECTION 6.2 Conditions to the Purchase of National OLP Interests.
The obligations of the Purchaser and the Purchaser General Partner to
purchase the Acquired Interests owned by the National Parties pursuant to
Section 2.1(b) shall be subject to the satisfaction at or prior to the Effective
Time of the following conditions and only the following conditions:
(a) Reorganization.
The transactions contemplated by Section 2.1(a) shall have been
consummated.
(b) Approval of a Unit Majority.
This Agreement and the Merger and the other transactions contemplated
hereby shall have been approved and adopted by the affirmative vote of at least
a majority of the outstanding National Common Units voting as a class and at
least a majority of the outstanding National Subordinated Units voting as a
class to the extent required by the Delaware Law and the National MLP
Partnership Agreement.
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(c) No Injunctions or Restraints.
No statute, rule, decision, regulation, executive order, decree, temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other governmental entity preventing the
acquisition of the Acquired Interests owned by the National Parties by the
Purchaser or Purchaser General Partner shall be in effect and no action or
proceeding shall be pending which could reasonably be expected to result in such
order or injunction.
(d) Corporate and Partnership Authority.
The representations and warranties of the National Parties set forth in
Section 3.2 and 3.7(j) shall be true and correct as of the Closing Date as
though made as of such date.
(e) Acceptance.
The Acceptance shall have occurred.
(f) Prepayment.
The National OLP shall concurrently prepay all the First Mortgage Notes
under Section 9.2 of the Note Agreements and its outstanding indebtedness under
the Acquisition Line.
ARTICLE VII
EMPLOYEES AND EMPLOYEE BENEFITS
SECTION 7.1 Offers of Employment; Severance Obligations.
The Purchaser has previously been delivered a list of employees of the
National MGP and its affiliates who are employed by the National MGP in
connection with the business of the National MLP and the National OLP setting
forth the title and base compensation and 1998 bonus of those employees who are
active employees on the date of this Agreement, including those on temporary
leave for jury duty, family and short-term medical leave, vacation or military
duty (the "Employees"). The parties agree that all Employees will be offered
employment by the Purchaser Parties. All costs of severance relating to
Employees (a) under the National MGP Employee Retention Program ("Retention
Program"), a true and correct copy of which is attached hereto as Schedule
7.1(a) (including related litigation costs), (b) under those certain employment
and severance agreements listed on Schedule 7.1(b), (c) amounts related to
payments under the stock, phantom stock, unit or phantom unit plans maintained
by the National MGP and identified on Schedule 7.1(c) which would be payable as
a result of the transactions contemplated hereby, or (d) arising by operation of
law, shall be for the Purchaser's account.
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SECTION 7.2 Increased Severance Costs.
Except as otherwise contemplated or permitted by this Agreement
(including, without limitation, Sections 5.2(a) and (d) hereof), the National
MGP shall take no action that would reasonably be expected to result in
increased severance cost obligations to the Purchaser or its affiliates as set
forth in Section 7.1 hereof without the prior written consent of Purchaser
General Partner, which shall not be unreasonably withheld.
SECTION 7.3 401(k) Plan; Direct Roll-Over.
For Employees who so elect, the Purchaser Parties' 401(k) Plan shall
accept direct roll-overs from the National MGP 401(k) Plan.
SECTION 7.4 Assumed Employee Liabilities.
(a) At the Effective Time, the Purchaser shall assume all
liabilities of the National Parties to, or with respect to, the Employees (or
their dependents or beneficiaries), including, without limitation, pursuant to
the Retention Program, accrued vacation, compensation payable under the
incentive compensation plans listed on Schedule 7.4, liability under any workers
compensation law or plan (regardless of when the incident occurred), liability
under COBRA or the Worker Adjustment and Retaining Notification Act of 1988
("WARN") or any similar state law, and any other liability related to or based
upon employment with the National Parties.
(b) In addition to, and not in limitation of, the foregoing, the
Purchaser shall assume at the Effective Time all liabilities of the National MGP
which the National MGP is or would become entitled to reimbursement pursuant to
Section 7.4 of the National MLP Partnership Agreement assuming for this purpose
such reimbursement right continued after the Effective Time except where such
provision would be inconsistent with clauses (i), (ii) or (iii) of Section 5.16;
provided, however, that, without limiting the terms of the reimbursement
provisions set forth in such Section 7.4(b) of the National MLP Partnership
Agreement, the Purchaser agrees that such reimbursement shall be made consistent
in nature, amount and method of determination with past practices in the
ordinary course of business.
SECTION 7.5 Collective Bargaining Matters.
The Purchaser shall expressly recognize any collective bargaining
representative recognized by the National MGP or any of the National Parties as
of the Effective Time for units consisting of Employees and identified on
Schedule 7.5 and shall expressly assume any and all of the National MGP's and
the National Parties' obligations under any collective bargaining agreements
(all as listed on Schedule 7.5) existing at the Effective Time with respect to
the Employees.
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SECTION 7.6 Multiemployer Plan Arrangements.
In connection with the possible imposition of withdrawal liability under
Section 4201(a) of ERISA ("Withdrawal Liability") by reason of the consummation
of the Transactions, the Purchaser will have the option, determined by it in its
sole discretion, to elect to utilize, on a plan-by-plan basis, either paragraph
(a) or (b) of this Section 7.6 with respect to each of the multiemployer pension
plans to which the National Parties had an obligation to contribute in
connection with Employees immediately prior to the Effective Time (each, a
"Multiemployer Plan"):
(a) The Purchaser and the National Parties will effect an agreement
under Section 4204 of ERISA, as follows:
(i) The Purchaser will contribute to the Multiemployer Plans
for substantially the same number of contribution base units (as defined
in Section 4001(a)(11) of ERISA) for which the National Parties had an
obligation to contribute for each of such Multiemployer Plans as may be
required under Section 4204(a)(1)(A) of ERISA.
(ii) The Purchaser and the National Parties shall each take
such appropriate actions as may be required of them respectively by
Section 4204 of ERISA in order for the National Parties not to incur
primary withdrawal liability under ERISA at the Effective Time, including
their providing such bonds or escrow arrangements as may be required by
the Multiemployer Plans under Section 4204 ERISA.
(iii) If the Purchaser completely or partially withdraws from
any Multiemployer Plan during the first five (5) plan years beginning
after the Effective Time, the National Parties will be secondarily liable
for any withdrawal liability that the National Parties would have incurred
at the Effective Time were it not for the application of Section 4204 of
ERISA.
(b) To the extent that any of the National Parties shall incur
Withdrawal Liability in connection with any of the Multiemployer Plans by reason
of the consummation of the Transactions under circumstances in which no
agreement has been effected under Section 7.6(a) with respect to such
Multiemployer Plan, the Purchaser shall directly pay in a single sum any and all
such Withdrawal Liability so incurred to the applicable Multiemployer Plan;
provided, however, that notwithstanding the foregoing, to the extent that the
Purchaser elects to utilize Section 7.6(a) with respect to a Multiemployer Plan
and any of the National Parties nonetheless incurs Withdrawal Liability in
connection with such Multiemployer Plan on account of the failure of any of the
National Parties to satisfy any of the requirements of Section 4204 of ERISA
applicable with respect thereto, the Purchaser shall not be required to pay such
Withdrawal Liability.
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SECTION 7.7 Losses Relating to Employees and Employee Benefits.
The Purchaser and the Purchaser OLP shall fully indemnify, defend, and
hold harmless the National Parties from and against any liability, loss, damage
or expense the National Parties may incur as a result of any claim made with
respect to any obligation of, or liability assumed by, the Purchaser and
Purchaser OLP pursuant to this Article VII.
ARTICLE VIII
TERMINATION
SECTION 8.1 Events of Termination.
Notwithstanding any other provision hereof, this Agreement may be
terminated prior to the Acceptance Date or, with respect to clause (d) below,
the Closing Date, as set forth below.
(a) Consent.
By Purchaser General Partner and the National MGP upon their mutual
written agreement.
(b) No National Common Units Purchased.
By (i) the Purchaser, if the Offer expires or is terminated or withdrawn
in accordance with the terms thereof or Section 1.1(a) hereof without any
National Common Units being purchased thereunder or as a result of the
occurrence or existence of any condition set forth in Annex A hereto but subject
to Section 1.1(a) hereof or (ii) by the National MGP, if the Offer is
terminated, or has not been commenced in accordance with the terms hereof within
five business days of the date hereof, or if the Purchaser has not purchased
National Common Units validly tendered and not withdrawn pursuant to the Offer
in accordance with the terms hereof within 90 days after commencement of the
Offer or (iii) by the Purchaser if, as a result of the occurrence or existence
of any condition set forth in Annex A hereto, the Offer has not been commenced
in accordance with the terms hereof within 60 days of the date hereof; provided,
however that the party seeking to terminate this Agreement pursuant to this
Section 8.1(b) and its affiliated parties are not in material breach of any of
its representations, warranties or covenants contained herein.
(c) National Recommendation.
By the National MGP prior to the Acceptance Date acting through the
Special Committee or by Purchaser General Partner, if the Special Committee
determines that a National Possible Alternative would constitute a National
Superior Transaction and the National Board or the Special Committee, consistent
with Section 5.8, withdraws, modifies, qualifies or changes in a manner adverse
to the Purchaser its recommendation that the holders of National Common Units
tender their National Common Units in the Offer.
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(d) Outside Date.
By either Purchaser Holdings or the National MGP in writing if the Closing
has not occurred by the date that is 210 days after purchase of the National
Common Units pursuant to the Offer; provided, however, that no party whose
breach hereof has been the cause of the failure to close shall have the right to
terminate this Agreement under this Section 8.1(d).
(e) Applicable Law Change.
By National MGP prior to the Acceptance Date if (A) the Applicable Date
with respect to any matter is the date of this Agreement and (B) the National
MGP notifies the Purchaser in writing that the relevant Applicable Law Change
would adversely affect the tax deferral for the benefit of the National MGP
sought to be achieved by the last paragraph of Section 5.2 and Section 5.9
hereof.
SECTION 8.2 Effect of Termination.
The following provisions shall apply in the event of a termination of this
Agreement:
(a) No Liability.
If this Agreement is terminated as permitted under Section 8.1, no party
hereto (or its officers or directors) will have any liability or further
obligation to any other party to this Agreement, except for obligations pursuant
to the last sentence of Section 5.1 hereof and any liability resulting from the
breach hereof or as set forth in this Section 8.2.
(b) Termination Fee.
In view of the expenses and foregone opportunities associated with the
negotiation and execution of this Agreement, if this Agreement is terminated as
permitted under Section 8.1(c), the National MLP shall have the obligation to
pay or cause to be paid promptly (but in no event more than three (3) days after
this Agreement is so terminated) to the Purchaser a fee of $3.0 million in cash.
No obligations of the National MGP, the National MLP or the National OLP under
this Agreement shall be terminated until such payment has been made.
(c) Topping Fee.
In the event that (i) this Agreement is terminated pursuant to Section
8.1(c) and (ii) within the 12 months following such termination a National
Possible Alternative is consummated which is more beneficial than the
transactions contemplated by this Agreement, taken as a whole, to the holders of
National Common Units other than the National MGP and its affiliates, then the
National MLP shall pay to the Purchaser, within three days of such consummation,
a topping fee equal to $6.0 million (inclusive of any amounts previously paid by
the National MLP pursuant to Section 8.2(b) hereof). If the transaction does not
involve the acquisition of substantially all of the interests in or
50
assets of the National MLP or the National OLP, then the calculation of the
amount to be paid in excess of amounts paid pursuant to Section 8.2(b) shall be
adjusted on a pro rata basis.
(d) Specific Performance; Attorneys' Fees.
The parties hereto acknowledge that the transactions contemplated hereby
are unique and specifically identifiable. Accordingly, the parties hereto
further agree and stipulate that if the Acceptance or the Closing does not occur
because of the willful failure of the National Parties, on the one hand, or the
Purchaser Parties, on the other hand, to perform their respective obligations
hereunder, (i) monetary damages and any other remedy at law will not be
adequate, (ii) the non-defaulting party shall be entitled to specific
performance as the remedy for such breach, (iii) each party hereto agrees to
waive any objection to the remedy of specific performance, (iv) each party
agrees that the granting of specific performance by any court will not be deemed
to be harsh or oppressive to the party who is ordered specifically to perform
its obligations under this Agreement, and (v) in connection with any action for
specific performance, the prevailing party shall be entitled to reasonable
attorneys' fees and other costs of prosecuting or defending such action.
(e) Other Remedies.
The right to seek specific performance hereunder shall not preclude any
party to seek any other remedy at law or in equity.
(f) Outside Date Breakage Fee.
In the event that this Agreement is terminated pursuant to Section 8.1(d)
or is terminated upon mutual agreement of the parties, on the date of such
termination Triarc shall unconditionally and irrevocably pay to the Purchaser,
as an inducement for the Purchaser Parties to enter into this Agreement and as a
breakage payment for such termination, the sum of (i) $2.40 multiplied by the
number of Common Units accepted and paid for in the Offer (such amount, the
"Fee"), and (ii) interest on the Fee, calculated based on a rate per annum of
9.44%, for the period from the Acceptance Date to such date of termination; it
being understood that Triarc hereby waives any right to set-off, counterclaim or
any other defense to such payment. It is agreed by the parties that payment of
such sum by Triarc shall not in any way limit any parties' right to seek
recovery of any damages as contemplated under this Agreement or any parties'
liability with respect to such damages.
51
ARTICLE IX
INDEMNIFICATION
SECTION 9.1 Indemnification of Certain National Parties.
(a) Indemnification of Certain National Parties.
The Purchaser, Purchaser Holdings and Purchaser General Partner, from and
after the Closing, shall (and shall cause the Purchaser OLP to) jointly and
severally indemnify and hold harmless, to the fullest extent permitted by law,
the National General Partners, Triarc and their respective stockholders,
officers, directors, affiliates, successors and assigns from and against any and
all losses, costs, damages, expenses (including reasonable attorneys' fees),
liabilities and claims (collectively, "Losses") arising or resulting from, or
relating to (a) the amounts referred to in Section 5.16(a)(iv); (b) any material
breach of the representations or warranties in Article IV; (c) the conduct of
the business or operations of the Purchaser, the Purchaser OLP, the National
MLP, the National OLP or NSSI following the Effective Time; (d) any litigation
pending on the date hereof specified on Schedule 9.1; and (e) the Marshfield,
Wisconsin property, except in each case of clauses (a) through (c) for Losses
for which the National MGP is indemnifying the Purchaser and its affiliates
pursuant to Section 9.2 below. In addition, the Purchaser, Purchaser Holdings
and Purchaser General Partner, from and after the Closing, shall (and shall
cause the Purchaser OLP to) jointly and severally indemnify and hold harmless
the National General Partners, Triarc and their respective stockholders,
officers, directors, affiliates, successors and assigns (including any person
who has acted in any such capacity at any time prior to the Effective Time), in
the manner set forth in Section 7.7 of the National MLP Partnership Agreement
and Section 7.7 of the National OLP Partnership Agreement, from and against all
Losses arising or resulting from or relating to the National MLP, the National
OLP, the National General Partners or NSSI, from which such persons, or any of
them, would have been entitled to be indemnified pursuant to such Section except
in each case for Losses for which the National MGP is indemnifying the Purchaser
and its affiliates pursuant to Section 9.2 below; provided, that this
indemnification shall not be limited as provided in the last sentence of Section
7.7(a) of the National MLP Partnership Agreement or the last sentence of Section
7.7(a) of the National OLP Partnership Agreement. For purposes only of giving
effect to the indemnification set forth in the immediately preceding sentence,
all of the terms and provisions of the National MLP Partnership Agreement and
the National OLP Partnership Agreement are incorporated herein mutatis mutandis.
(b) Limitation of Liability.
For purposes of this Article IX, all Losses shall be computed net of (a)
any insurance proceeds actually received from third-party insurance (without
consideration of deductibles) for the event or occurrence giving rise to the
Losses, and (b) any amounts actually received from any third parties based on
claims related to the event or occurrence giving rise to the Losses that the
indemnified party has against such third parties, which reduce the Losses that
would otherwise be
52
sustained. If any indemnifying party pays to the indemnified party any Losses
under this Article IX and the indemnified party subsequently recovers from some
other person any sum in respect of any matter giving rise to the relevant claim,
the indemnified party shall repay to the indemnifying party the lesser of (a)
the amount paid by the indemnifying party to the indemnified party and (b) the
sum recovered from such other person.
(c) Limitations with Respect to Certain Tax Losses.
Any amounts indemnified under the last paragraph of Section 5.2 or Section
5.9 shall be computed as therein provided, but shall otherwise be subject to
Article IX. No indemnity shall be provided to the National MGP with respect to
any Losses arising under the last paragraph of Section 5.2, Section 5.9 or
Section 5.14 (the "Tax Indemnity Provisions") to the extent that any such Losses
or any portion thereof are attributable to (i) the Internal Revenue Service
determining the National MGP is not a partner with respect to the Purchaser OLP
or the Debt Indemnity is not recognized as an obligation by the National MGP to
make payments with respect to the Indemnified Debt or reimburse a third party
with respect to the Indemnified Debt resulting in the Indemnified Debt not being
allocated to National MGP under Code Section 752 or (ii) any merger of the
National MGP with or into Triarc or an affiliate of Triarc, or the transfer
permitted by the last sentence of Section 2.1(a), results in the recognition by
the National MGP, National SGP or any transferee thereof pursuant to the last
sentence of Section 2.1(a) or any successor thereto of any income or gain for
federal income tax purposes, except in each case to the extent such
determination results from the breach by Purchaser or Purchaser Holdings of any
provision of this Agreement. Any Losses arising under more than one of the Tax
Indemnity Provisions shall be subject to indemnification under only one of such
provisions and shall not be subject to further indemnification hereunder. Losses
relating to Taxes shall only be subject to indemnification hereunder pursuant to
the Tax Indemnity Provisions.
(d) Limitation of Indemnification.
Notwithstanding any other provision of this Agreement to the contrary, in
no event shall any indemnification be provided under this Article 9 or under the
Tax Indemnity Provisions in respect of any consequential, exemplary, indirect,
incidental, special or punitive damages or lost profits.
SECTION 9.2 Indemnification of the Purchaser Parties.
(a) Debt Indemnity.
The National MGP, from and after the Closing Date, shall indemnify and
hold harmless Purchaser Holdings and its affiliates, any successors thereto, or
any of the preceding persons who subsequent to the Closing Date guarantees or
otherwise incurs any liability with respect to the Indemnified Debt (as defined
below), from and against any and all Losses arising or resulting from, or
relating to any payments that Purchaser Holdings and its affiliates or any
successors thereto are required to make (and make) from their own funds (after
prior recourse is had to the assets of the
53
Purchaser OLP); with respect to the National OLP debt at the Closing Date (as
set forth on Schedule 9.2(a)) and any refinancing, refunding or replacement
thereof ("Indemnified Debt"), due to the inability of the Purchaser OLP to pay
or refinance any such Indemnified Debt from the assets of the Purchaser OLP. The
National MGP shall be subrogated to such rights of Purchaser Holdings to the
extent that the National MGP has made any payment in respect of the indemnity
referred to in this Section 9.2(a) (the "Debt Indemnity"). Purchaser Holdings
acknowledges that the National MGP will make no representations, warranties or
covenants (including without limitation regarding net worth of the National MGP)
in connection with the Debt Indemnity.
(b) Other Indemnity.
Any amounts indemnified under the last paragraph of Section 5.2 shall be
computed as therein provided, but shall otherwise be subject to Article IX. The
National MGP and Triarc, from and after the Acceptance Date, shall jointly and
severally indemnify and hold harmless Purchaser Holdings, the Purchaser,
Purchaser General Partner and their respective stockholders, officers,
directors, affiliates, successors and assigns from and against any and all
Losses arising or resulting from, or relating to ("Other Indemnity") (i) any
material breach of the representations or warranties in Sections 3.1, 3.2 and
3.7 hereof, or (ii) any claim made by any holder of indebtedness of the National
OLP, to the extent relating to any act or omission of the National MGP, Triarc
or their affiliates prior to Closing, if such claim has been asserted in writing
prior to the Acceptance Date and does not arise from or relate to the
transactions contemplated by this Agreement or any action or omission otherwise
requested by the Purchaser.
SECTION 9.3 Termination of Indemnities; Survival Periods.
All obligations of the National MGP (other than obligations with respect
to payments that may become due as a result of any claims made by any holder of
Indemnified Debt prior to date of termination) with respect to the Debt
Indemnity shall terminate upon the sale of the Special Limited Partner Interests
pursuant to a Put Notice or a Call Notice. Except as provided in this Section
9.3, none of the representations and warranties in this Agreement shall survive
the Acceptance Date. In addition, all obligations of the National MGP and Triarc
with respect to the Other Indemnity shall terminate on the first anniversary of
the date of this Agreement (other than obligations with respect to payments that
may become due as a result of any good faith claims made to Triarc prior to the
first anniversary of the date of this Agreement) except that obligations in
respect of Losses arising or resulting from breaches of representations and
warranties in Section 3.7 shall not terminate. All covenants, agreements and
indemnities contained herein which by their terms are to be performed after the
Closing Date shall survive the Closing Date.
54
SECTION 9.4 Demands.
Each indemnified party hereunder agrees that promptly upon its discovery
of facts giving rise to a claim for indemnity under the provisions of this
Agreement, including receipt by it of notice of any demand, assertion, claim,
action or proceeding, judicial or otherwise, by any third party (such third
party actions being collectively referred to herein as the "Claim"), with
respect to any matter as to which it claims to be entitled to indemnity under
the provisions of this Agreement, it will give prompt notice thereof in writing
to the indemnifying party, together with a statement of such information
respecting any of the foregoing as it shall have. Such notice shall include a
demand for indemnification under this Agreement. The indemnifying party shall
not be obligated to indemnify the indemnified party with respect to any Claim if
the indemnified party failed to notify the indemnifying party thereof in
accordance with the provisions of this Agreement in sufficient time to permit
the indemnifying party or its counsel to defend against such matter and to make
a timely response thereto including, without limitation, any responsive motion
or answer to a complaint, petition, notice or other legal, equitable or
administrative process relating to the Claim, only insofar as such failure to
notify the indemnifying party has actually resulted in prejudice or damage to
the indemnifying party.
SECTION 9.5 Right to Contest and Defend.
The indemnifying party shall be entitled at its cost and expense to
contest and defend by all appropriate legal proceedings any Claim with respect
to which it is called upon to indemnify the indemnified party under the
provisions of this Agreement; provided, that notice of the intention so to
contest shall be delivered by the indemnifying party to the indemnified party
within 20 business days from the date of receipt by the indemnifying party of
notice by the indemnified party of the assertion of the Claim. Any such contest
may be conducted in the name and on behalf of the indemnifying party or the
indemnified party as may be appropriate. Such contest shall be conducted by
counsel selected and employed by the indemnifying party and reasonably
acceptable to the indemnified party, but the indemnified party shall have the
right but not the obligation to participate in such proceedings and to be
represented by counsel of its own choosing at its sole cost and expense.
Provided that the indemnifying party acknowledges in writing that it is
unconditionally obligated to provide such indemnification, the indemnifying
party shall have full authority to determine all action to be taken with respect
thereto; provided, however, that the indemnifying party will not have the
authority to subject the indemnified party to any obligation whatsoever, other
than the performance of purely ministerial tasks or obligations not involving
material expense. If the indemnifying party does not elect to contest any such
Claim, the indemnifying party shall be bound by the result obtained with respect
thereto by the indemnified party. At any time after the commencement of the
defense of any Claim, the indemnifying party may request the indemnified party
to agree in writing to the abandonment of such contest or to the payment or
compromise by the indemnifying party of the asserted Claim, whereupon such
action shall be taken unless the indemnified party determines that the contest
should be continued, and so notifies the indemnifying party in writing within 20
business days of such request from the indemnifying party. If such abandonment
or compromise contemplates (i) the unconditional release of the indemnified
party
55
from all further Claims arising out of the subject matter thereof, (ii) no
admission of culpability by the indemnified party and (iii) no restrictions on
the future operations of the indemnified party, and the indemnified party
nevertheless determines that the contest should be continued, the indemnifying
party shall be liable hereunder only to the extent of the amount that the other
party to the contested Claim had agreed unconditionally to accept in payment or
compromise as of the time the indemnifying party made its request therefor to
the indemnified party.
SECTION 9.6 Cooperation.
If requested by the indemnifying party, the indemnified party agrees to
cooperate with the indemnifying party and its counsel at the cost of the
indemnifying party in contesting any Claim that the indemnifying party elects to
contest or, if appropriate, in making any counterclaim against the person
asserting the Claim, or any cross-complaint against any person, and the
indemnifying party will reimburse the indemnified party for any expenses
incurred by it in so cooperating. At no cost or expense to the indemnified
party, the indemnifying party shall cooperate with the indemnified party and its
counsel in contesting any Claim.
SECTION 9.7 Right to Participate.
The indemnified party and the indemnifying party each agree to afford the
other party and its counsel the opportunity to be present at, and to participate
in, conferences with all persons, including governmental authorities, asserting
any Claim against the indemnified party or conferences with representatives of
or counsel for such persons.
SECTION 9.8 Payment of Damages.
The indemnifying party shall pay to the indemnified party in immediately
available funds any amounts to which the indemnified party may become entitled
by reason of the provisions of this Agreement, such payment to be made within
five days after any such amounts are finally determined either by mutual
agreement of the parties hereto or pursuant to the final unappealable judgment
of a court of competent jurisdiction.
SECTION 9.9 Exclusivity.
The parties acknowledge and agree that following the Acceptance, the
indemnification provisions contained in this Article IX with respect to a claim
for a breach of a representation or warranty constitute the sole remedy with
respect to such matters.
56
ARTICLE X
MISCELLANEOUS
SECTION 10.1 [Intentionally Left Blank].
SECTION 10.2 Notices.
Any notice, request, instruction, correspondence or other document to be
given hereunder by either party to the other (herein collectively called
"Notice") shall be in writing and delivered in person or by courier service
requiring acknowledgment of receipt of delivery or mailed by certified mail,
postage prepaid and return receipt requested, or by telecopier, as follows:
If to any of the National Parties, addressed to:
National Propane Corporation
000 0xx Xxxxxx XX
Xxxxx 0000
Xxxxx Xxxxxx, Xxxx 00000
Attention: President
Telecopy: (000) 000-0000
with a copy to:
Triarc Companies, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxx L.L.P.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx Xxxxxxxxxxx, Esq.
Telecopy: (000) 000-0000
57
If to any of the Purchaser Parties, addressed to:
Columbia Propane Corporation
c/o Columbia Energy Group
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Telecopy: (000) 000-0000
with a copy to:
Columbia Propane Corporation
c/o Columbia Energy Group
00000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attention: Legal Department
Telecopy: (000) 000-0000
and
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxx
Telecopy: (000) 000-0000
Notice given by personal delivery, courier service or mail shall be effective
upon actual receipt. Notice given by telecopier shall be confirmed by
appropriate answer back and shall be effective upon actual receipt if received
during the recipient's normal business hours, or at the beginning of the
recipient's next business day after receipt if not received during the
recipient's normal business hours. All Notices by telecopier shall be confirmed
promptly after transmission in writing by certified mail or personal delivery.
Any party may change any address to which Notice is to be given to it by giving
Notice as provided above of such change of address.
SECTION 10.3 Governing Law.
The provisions of this Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware and the federal
laws of the United States. Each party hereto hereby irrevocably and
unconditionally (a) consents and submits to the exclusive jurisdiction of the
courts of the State of Delaware and of the United States of America located in
the State of Delaware (each a "Delaware Court") for any actions, suits or
proceedings arising out of or relating to this Agreement or the transactions
contemplated hereby, (b) agrees that any such action, suit or proceedings may be
brought or maintained only in a Delaware Court and in no other forum,
58
(c) agrees that service of any process, summons, notice or document by U.S.
Registered or certified mail to such party at the address specified in Section
10.2 shall be effective service of process in any such action, suit or
proceeding in any Delaware Court, and (d) irrevocably and unconditionally waives
any objection to the laying of venue of any action, suit or proceeding arising
out of or related to this Agreement or the transactions contemplated hereby in
any Delaware Court located in Wilmington, Delaware, and further irrevocably and
unconditionally waives and agrees not to plead a claim in any such court that
any such action, suit or proceeding has been brought in an inconvenient forum.
SECTION 10.4 Entire Agreement; Amendments and Waivers.
This Agreement constitutes the entire agreement between the parties hereto
pertaining to the subject matter hereof and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations or other agreements
between the parties in connection with the subject matter hereof except as set
forth specifically herein or contemplated hereby. No supplement, modification or
waiver of this Agreement shall be binding unless executed in writing by the
party to be bound thereby. The failure of a party to exercise any right or
remedy shall not be deemed or constitute a waiver of such right or remedy in the
future. No waiver of any of the provisions of this Agreement shall be deemed or
shall constitute a waiver of any other provision hereof (regardless of whether
similar), nor shall any such waiver constitute a continuing waiver unless
otherwise expressly provided.
SECTION 10.5 Binding Effect and Assignment.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns; but
neither this Agreement nor any of the rights, benefits or obligations hereunder
shall be assigned, by operation of law or otherwise, by any party hereto without
the prior written consent of either Purchaser General Partner or the National
MGP, as applicable, other than as set forth herein. Nothing in this Agreement,
express or implied, is intended to confer upon any person or entity other than
the parties hereto and their respective successors and permitted assigns, any
rights, benefits or obligations hereunder.
SECTION 10.6 Severability.
If any provision of the Agreement is rendered or declared illegal or
unenforceable by reason of any existing or subsequently enacted legislation or
by decree of a court of last resort, the parties hereto shall promptly meet and
negotiate substitute provisions for those rendered or declared illegal or
unenforceable, but all of the remaining provisions of this Agreement shall
remain in full force and effect.
59
SECTION 10.7 Parties in Interest.
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 10.8 Disclosure.
Disclosure of a matter in any schedule to this Agreement shall be deemed
disclosure with respect to any other schedule so long as the relevance of the
matter to such other schedule is reasonably apparent. The mere inclusion of an
item in any schedule shall not be deemed an admission that such item represents
a material exception of fact, event or circumstance or that such item would
result in a Material Adverse Effect.
SECTION 10.9 Interpretation.
The Article and Section headings contained in this Agreement are solely
for the purpose of reference, are not part of the agreement of the parties
hereto and shall not in any way affect the meaning or interpretation of this
Agreement.
SECTION 10.10 References; Construction.
References to any "Article," "Exhibit," "Schedule" or "Section," without
more, are to Articles, Exhibits, Schedules and Sections to or of this Agreement.
Unless otherwise expressly stated, clauses beginning with the term "including"
set forth examples only and in no way limit the generality of the matters thus
exemplified.
SECTION 10.11 Context.
Whenever the context so requires, the singular number includes the plural
and vice versa, and a reference to one gender includes the other gender and the
neuter.
60
SECTION 10.12 Execution.
This Agreement may be executed in multiple counterparts each of which
shall be deemed an original and all of which shall constitute one instrument.
EXECUTED as of the date first set forth above.
NATIONAL PROPANE PARTNERS, L.P.,
By: National Propane Corporation, Its
Managing General Partner
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Operating Officer
NATIONAL PROPANE CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Operating Officer
NATIONAL PROPANE SGP, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: President and Chief
Operating Officer
TRIARC COMPANIES, INC.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President --
Corporate Development
61
COLUMBIA PROPANE CORPORATION
By: /s/ A. Xxxxx Xxxxx
---------------------------
Name: A. Xxxxx Xxxxx
Title: President and CEO
COLUMBIA PROPANE L.P.
By: CP Holdings, Inc.
Its General Partner
By: /s/ A. Xxxxx Xxxxx
------------------------
Name: A. Xxxxx Xxxxx
Title: President and CEO
CP HOLDINGS, INC.
By: /s/ A. Xxxxx Xxxxx
---------------------------
Name: A. Xxxxx Xxxxx
Title: President and CEO
62
ANNEX A
Conditions to the Offer
Notwithstanding any other provision of the Offer, the Purchaser shall not
be required to accept for payment or pay for any National Common Units tendered
pursuant to the Offer, and may terminate, extend or amend the Offer and may
postpone the acceptance for payment of and payment for National Common Units
tendered, if (i) the Minimum Condition shall not have been satisfied, (ii) any
applicable waiting period under the HSR Act shall not have expired or been
terminated prior to the expiration of the Offer or (iii) at any time on or after
the date of this Agreement, and prior to the acceptance for payment of National
Common Units, any of the following conditions shall exist:
(a) there shall be instituted or pending any action or proceeding,
or there shall have been issued and remain in effect any temporary restraining
order, preliminary or final injunction, order or decree by any court or
governmental, administrative or regulatory authority or agency, domestic or
foreign, resulting from any action or proceeding brought by any person which
does or could reasonably be expected to (i) restrain or prohibit the making of
the Offer or the consummation of any other Transaction, (ii) prohibit or limit
ownership or operation by the National MLP, Purchaser General Partner or the
Purchaser of all or any material portion of the business or assets of the
National MLP and its subsidiaries, taken as a whole, or Purchaser General
Partner or any of its subsidiaries, or compel the National MLP, Purchaser
General Partner or any of their subsidiaries to dispose of or hold separate all
or any material portion of the business or assets of the National MLP, Purchaser
General Partner, the Purchaser or any of their subsidiaries or impose any
material limitation on the ability of Purchaser General Partner or the Purchaser
to conduct such business or own such assets, in each case as a result of the
Transactions; (iii) impose material limitations on the ability of Purchaser
Holdings, Purchaser General Partner or the Purchaser (A) to exercise effectively
full rights of ownership of any National Common Units or any of the other
Acquired Interests, including, without limitation, the right to vote any
National Common Units acquired by the Purchaser pursuant to the Offer, or
otherwise on all matters properly presented to the National MLP's unitholders,
including, without limitation, the approval and adoption of this Agreement and
the Transactions or (B) to effectively control through the general partner
interests included in the Acquired Interests the business and operations of the
National MLP, National OLP or NSSI; or (iv) require divestiture by Purchaser
General Partner, the Purchaser or any of their affiliates of any significant (in
terms of value or control rights) partnership interest in the National MLP or
the National OLP;
(b) there shall have been any action taken, or any statute, rule,
regulation, order or injunction enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to (i) Purchaser General Partner, the
National MLP or any subsidiary or affiliate of Purchaser General Partner or the
National MLP or (ii) any Transaction, by any legislative body, court, government
or governmental, administrative or regulatory authority or agency, domestic or
foreign, in the case of both (i) and (ii) other than the routine application of
the waiting period provisions of the HSR Act to the Offer, or the Merger, in
each case which results or could reasonably be expected to result in any of the
consequences referred to in clauses (i) through (iv) of paragraph (a) above;
63
(c) prior to the expiration of the Offer, all material filings or
notifications required to be made prior to the acceptance for payment of any
National Common Units with any governmental entity shall not have been made, and
all material consents, approvals, authorizations or permits required to be
obtained prior to the acceptance for payment of any National Common Units from
all governmental entities in connection with the consummation of the
transactions contemplated by this Agreement shall not have been obtained or
shall not be in form and substance reasonably satisfactory to the Purchaser;
(d) there shall have occurred (i) any general suspension of, or
limitation on prices for, trading in securities on the New York Stock Exchange
or in the over-the-counter market, (ii) a declaration of a banking moratorium or
any substantial limitation or suspension of, payments in respect of banks in the
United States, (iii) any material limitation (whether or not mandatory) by any
United States federal or state government or governmental, administrative or
regulatory authority or agency on the extension of credit by banks or other
lending institutions, (iv) a commencement of a war or armed hostilities or other
national or international calamity directly or indirectly involving the United
States having a significant adverse effect on the functioning of the financial
markets in the United States, or (v) in the case of any of the foregoing
existing on the date hereof, a material acceleration or worsening thereof;
(e) (i) the National Board or the Special Committee shall have
withdrawn, modified, qualified or changed in a manner adverse to Purchaser
General Partner or the Purchaser the approval or recommendation of the Offer,
the Transactions, the Merger or this Agreement or approved or recommended any
National Possible Alternative or any other acquisition of National Common Units
other than the Offer, the Transactions and the Merger or (ii) the National Board
or the Special Committee shall have resolved to do any of the foregoing;
(f) any representation and warranty of the National Parties in this
Agreement shall not be true and correct as of the date of this Agreement and as
of the scheduled or extended expiration of the Offer as though such
representation and warranty were made at and as of such time, except for any
representation and warranty which is expressly made as of a specified date, in
which case such representation and warranty shall be true and correct as of such
specified date, except in all cases where the failure or failures of such
representations and warranties to be so true and correct (without giving effect
to any materiality or Material Adverse Effect qualification set forth herein)
would not have or would not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect;
(g) the National Parties shall have failed to perform in any
material respect any material obligation or to comply in any material respect
with any material agreement or covenant of the National Parties to be performed
or complied with by them under this Agreement;
(h) this Agreement shall have been terminated in accordance with its
terms;
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(i) any person, entity or "group" other than Purchaser Holdings or
any of its affiliates shall have become the beneficial owner (as that term is
used in Rule 13d-3 under the Exchange Act) of 33% or more of the outstanding
National Common Units;
(j) the Purchaser and the National MGP shall have agreed that the
Purchaser shall terminate the Offer or postpone the acceptance for payment of or
payment for National Common Units thereunder;
(k) Since September 30, 1998, and except as publicly disclosed prior
to the date of this Agreement by the National MLP, there shall have occurred any
Material Adverse Effect or any event or circumstance that (singly or together
with any other such events or circumstances) could reasonably be expected to
have a Material Adverse Effect;
(l) The Note Agreements (including Amendment No. 2 thereto) shall
not be in full force and effect or there shall exist and be continuing any Event
of Default (as defined therein) thereunder or any condition or event that, with
the giving of notice or the lapse of time or both, would constitute an Event of
Default thereunder; or
(m) There shall exist and be continuing under the Credit Agreement
dated June 26, 1996, as amended, by and among the National OLP, BankBoston,
N.A., and the bank lenders thereto, any Event of Default (as defined therein) or
any condition or event that, with the giving of notice or passage of time or
both, would constitute an Event of Default thereunder (other than any such Event
of Default that shall have been waived pursuant to a waiver which is in full
force and effect).
The foregoing conditions are for the sole benefit of the Purchaser and
Purchaser General Partner and may be asserted by the Purchaser or Purchaser
General Partner regardless of the circumstances giving rise to any such
condition and may be waived by the Purchaser or Purchaser General Partner in
whole or in part at any time and from time to time in their sole discretion. The
failure by Purchaser General Partner or the Purchaser at any time to exercise
any of the foregoing rights shall not be deemed a waiver of any such right; the
waiver of any such right with respect to particular facts and other
circumstances shall not be deemed a waiver with respect to any other facts and
circumstances; and each such right shall be deemed an ongoing right that may be
asserted at any time and from time to time.
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