<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION
14(d)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
National Propane Partners, L.P.
- -------------------------------------------------------------------------------
(Name of Subject Company)
Columbia Propane, L.P.;
CP Holdings, Inc.;
Columbia Propane Corporation;
Columbia Energy Group
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(Bidders)
Common Units, representing limited partner interests
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(Title of Class of Securities)
637250 10 1
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(CUSIP Number of Class of Securities)
Kenneth H. Marks, Jr., Esq.
Columbia Propane, L.P.
c/o Columbia Energy Group Service Corporation
13880 Dulles Corner Lane
Herndon, VA 20171
(Name, Address and Telephone Number of
Persons Authorized to Receive Notices and
Communications on Behalf of Bidders)
With copy to:
Robert S. Rachofsky, Esq.
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY 10019
CALCULATION OF FILING FEE
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<TABLE>
<CAPTION>
Transaction
Valuation/1/ Amount of Filing Fee/2/
<S> <C>
$80,418,600 $16,084
</TABLE>
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[_]Check box if any part of the fee is offset as provided by Rule 0-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the form
or schedule and the date of its filing.
Amount previously paid:None Filing party:Not Applicable
Form or registration no.:Not ApplicableDate filed:Not Applicable
(Continued on following page(s))
(Page 1 of 6 Pages)
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/1/ Based on the offer to purchase all 6,701,550 outstanding common units
representing limited partner interests ("Common Units") in the Subject Company
at $12.00 per Common Unit.
/2/ The amount of the filing fee equals 1/50 of one percent of Transaction
Valuation.
<PAGE>
Item 1. Security and Subject Company.
(a). The name of the subject company is National Propane Partners, L.P., a
Delaware limited partnership (the "Partnership"), which has its principal
executive offices at Suite 1700, 200 1st Street S.E., Cedar Rapids, Iowa
52401-1409.
(b). This Schedule 14D-1 relates to the offer by the Purchaser (as defined
below) to purchase all outstanding Common Units in National Propane Partners,
L.P. at a price of $12.00 per Common Unit, net to the seller in cash, without
interest (the "Offer Price"), upon the terms and subject to the conditions set
forth in the Offer to Purchase dated April 9, 1999 (the "Offer to Purchase")
and in the related Letter of Transmittal (which, together with any amendments
or supplements thereto, collectively constitute the "Offer"), copies of which
are attached hereto as Exhibits (a)(1) and (a)(2), respectively. Information
concerning the number of outstanding Common Units is set forth in the
"Introduction" of the Offer to Purchase and is incorporated herein by
reference. Reference is also made to Section 12 ("Purpose of the Offer; The
Purchase Agreement; The Merger") of the Offer to Purchase which is
incorporated herein.
(c). Information concerning the principal market in which the Common Units
are traded and the high and low sales prices of Common Units for each
quarterly period during the past two years is set forth in Section 6 ("Price
Range of the Common Units; Distributions on the Common Units") of the Offer to
Purchase and is incorporated herein by reference.
Item 2. Identity and Background.
(a)-(d). This Schedule 14D-1 is being filed by Columbia Propane, L.P., a
Delaware limited partnership (the "Purchaser"), its managing general partner
CP Holdings, Inc., a Delaware corporation ("Purchaser General Partner"),
Columbia Propane Corporation, a Delaware corporation and parent company of
Purchaser General Partner ("Purchaser Holdings"), and Columbia Energy Group, a
Delaware corporation, parent company of Purchaser Holdings and a registered
holding company under the Public Utility Holding Company Act of 1935, as
amended ("Columbia"). Information concerning the principal business and the
address of the principal offices of the Purchaser, Purchaser General Partner,
Purchaser Holdings and Columbia is set forth in Section 9 ("Certain
Information Concerning the Purchaser, Purchaser General Partner, Purchaser
Holdings and Columbia") of the Offer to Purchase and is incorporated herein by
reference. The names, business addresses, present principal occupation or
employment, material occupations, positions, offices or employments during the
last five years and citizenship of the directors and executive officers of
Purchaser General Partner, Purchaser Holdings and Columbia are set forth in
Schedule I to the Offer to Purchase and are incorporated herein by reference.
(e)-(g). The information set forth in Section 9 ("Certain Information
Concerning the Purchaser, Purchaser General Partner, Purchaser Holdings and
Columbia") and Schedule I ("Directors and Executive Officers of Purchaser
General Partner, Purchaser Holdings and Columbia") of the Offer to Purchase is
incorporated herein by reference.
Item 3. Past Contacts, Transactions or Negotiations with the Subject Company.
(a) and (b). The information set forth in Section 9 ("Certain Information
Concerning the Purchaser, Purchaser General Partner, Purchaser Holdings and
Columbia"), Section 11 ("Contacts with the Partnership; Background of the
Offer") and Section 12 ("Purpose of the Offer; The Purchase Agreement;
Merger") of the Offer to Purchase is incorporated herein by reference.
Item 4. Source and Amount of Funds or Other Consideration.
(a). The information set forth in Section 10 ("Source and Amount of Funds")
of the Offer to Purchase is incorporated herein by reference.
(b). Not applicable.
(c). Not applicable.
<PAGE>
Item 5. Purpose of the Tender Offer and Plans or Proposals of the Bidder.
(a)-(e). The information set forth in Section 11 ("Contacts with the
Partnership; Background of the Offer"), Section 12 ("Purpose of the Offer; The
Purchase Agreement; Merger") and Section 13 ("Distributions") of the Offer to
Purchase is incorporated herein by reference.
(f) and (g). The information set forth in Section 7 ("Effect of the Offer on
the Market for the Common Units; Stock Exchange Listing; Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is incorporated
herein by reference.
Item 6. Interest in Securities of the Subject Company.
(a) and (b). The information set forth in Section 9 ("Certain Information
Concerning the Purchaser, Purchaser General Partner, Purchaser Holdings and
Columbia"), Section 12 ("Purpose of the Offer; The Purchase Agreement;
Merger") and Schedule I ("Directors and Executive Officers of Purchaser
General Partner, Purchaser Holdings and Columbia") of the Offer to Purchase is
incorporated herein by reference.
Item 7. Contracts, Arrangements, Understandings or Relationships with Respect
to the Subject Company's Securities.
The information set forth in "Introduction," Section 9 ("Certain Information
Concerning the Purchaser, Purchaser General Partner, Purchaser Holdings and
Columbia"), Section 11 ("Contacts with the Partnership; Background of the
Offer") and Section 12 ("Purpose of the Offer; The Purchase Agreement;
Merger") of the Offer to Purchase is incorporated herein by reference.
Item 8. Persons Retained, Employed or to be Compensated.
The information set forth in "Introduction" and in Section 16 ("Fees and
Expenses") of the Offer to Purchase is incorporated herein by reference.
Item 9. Financial Statements of Certain Bidders.
The information set forth in Section 9 ("Certain Information Concerning the
Purchaser, Purchaser General Partner, Purchaser Holdings and Columbia") of the
Offer to Purchase is incorporated herein by reference.
Item 10. Additional Information.
(a). The information set forth in Section 11 ("Contacts with the
Partnership; Background of the Offer") and Section 12 ("Purpose of the Offer;
The Purchase Agreement; Merger") of the Offer to Purchase is incorporated
herein by reference.
(b) and (c). The information set forth in Section 15 ("Certain Legal
Matters") of the Offer to Purchase is incorporated herein by reference.
(d). The information set forth in Section 7 ("Effect of the Offer on the
Market for the Common Units; Stock Exchange Listing; Exchange Act
Registration; Margin Regulations") of the Offer to Purchase is incorporated
herein by reference.
(e). None.
(f). The entire texts of the Offer to Purchase, the Letter of Transmittal
and the Purchase Agreement, copies of which are attached hereto as Exhibits
(a)(1), (a)(2), and (c)(1), are incorporated herein by reference.
<PAGE>
Item 11. Material to be Filed as Exhibits.
<TABLE>
<C> <S>
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
(a)(4) Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(6) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(7) Form of Summary Advertisement dated April 9, 1999.
(a)(8) Text of Joint Press Release dated April 5, 1999, issued by Triarc
Companies, Inc. and Columbia.
(a)(9) Text of Press Release dated April 8, 1999, issued by Columbia
(included for the limited purpose of describing the Offer and the
Merger).
(a)(10) Text of Press Release dated April 9, 1999, issued by Columbia.
(b) None.
(c)(1) Purchase Agreement, between Purchaser, Purchaser General Partner,
Purchaser Holdings, the Partnership, National Propane Corporation,
National Propane SGP, Inc. and Triarc Companies, Inc. dated April 5,
1999.
(c)(2) Guaranty of Columbia with respect to certain tax related obligations
of Purchaser, Purchaser General Partner and Purchaser Holdings, dated
April 5, 1999.
(d) None.
(e) Not applicable.
(f) None.
</TABLE>
<PAGE>
SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Dated: April 9, 1999
Columbia Propane, L.P.
By:CP Holdings, Inc.
Its General Partner
By: /s/ A. Mason Brent
-----------------------------------
Name: A. Mason Brent
Title: President and CEO
CP Holdings, Inc.
By: /s/ A. Mason Brent
-----------------------------------
Name: A. Mason Brent
Title: President and CEO
Columbia Propane Corporation
By: /s/ A. Mason Brent
-----------------------------------
Name: A. Mason Brent
Title: President and CEO
Columbia Energy Group
By: /s/ Michael W. O'Donnell
-----------------------------------
Name: Michael W. O'Donnell
Title: Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Exhibit Name Number
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<C> <S> <C>
(a)(1) Offer to Purchase.
(a)(2) Letter of Transmittal.
(a)(3) Notice of Guaranteed Delivery.
Letter to Brokers, Dealers, Commercial Banks, Trust Companies
(a)(4) and Other Nominees.
(a)(5) Letter to Clients for use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
Guidelines for Certification of Taxpayer Identification
(a)(6) Number on Substitute Form W-9.
(a)(7) Form of Summary Advertisement dated April 9, 1999.
(a)(8) Text of Joint Press Release dated April 5, 1999, issued by
Triarc Companies, Inc. and Columbia.
(a)(9) Text of Press Release dated April 8, 1999, issued by Columbia
(included for the limited purposes of describing the Offer
and the Merger).
(a)(10) Text of Press Release dated April 9, 1999, issued by
Columbia.
(b) None.
(c)(1) Purchase Agreement, between Purchaser, Purchaser General
Partner, Purchaser Holdings, the Partnership, National
Propane Corporation, National Propane SGP, Inc. and Triarc
Companies, Inc. dated April 5, 1999.
(d) None.
(e) Not Applicable.
(f) None.
</TABLE>
<PAGE>
EXHIBIT (a)(1)
Offer to Purchase for Cash
All Outstanding Common Units
Representing Limited Partner Interests
in
NATIONAL PROPANE PARTNERS, L.P.
at
$12.00 Net Per Common Unit
by
COLUMBIA PROPANE, L.P.,
the managing general partner of which
is a wholly-owned subsidiary of
COLUMBIA PROPANE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 6, 1999, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO A PURCHASE AGREEMENT DATED AS OF APRIL
5, 1999, AMONG COLUMBIA PROPANE, L.P. (THE "PURCHASER"), CP HOLDINGS, INC.,
COLUMBIA PROPANE CORPORATION, NATIONAL PROPANE PARTNERS, L.P. (THE
"PARTNERSHIP"), NATIONAL PROPANE CORPORATION, THE MANAGING GENERAL PARTNER OF
THE PARTNERSHIP ("NATIONAL MGP"), NATIONAL PROPANE SGP, INC. AND TRIARC
COMPANIES, INC., THE INDIRECT PARENT OF THE GENERAL PARTNERS OF THE
PARTNERSHIP ("TRIARC"). THE BOARD OF DIRECTORS OF NATIONAL MGP (THE "NATIONAL
BOARD"), ACTING ON THE RECOMMENDATION OF THE SPECIAL COMMITTEE OF THE NATIONAL
BOARD (THE "SPECIAL COMMITTEE"), HAS UNANIMOUSLY APPROVED AND ADOPTED THE
PURCHASE AGREEMENT, THE OFFER AND THE MERGER, AND HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE HOLDERS OF
COMMON UNITS ("UNITHOLDERS") AND RECOMMENDS THAT THE UNITHOLDERS ACCEPT THE
OFFER AND TENDER THEIR COMMON UNITS. COLUMBIA PROPANE CORPORATION IS A WHOLLY-
OWNED SUBSIDIARY OF COLUMBIA ENERGY GROUP ("COLUMBIA").
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
COMMON UNITS (THE "MINIMUM NUMBER OF COMMON UNITS") THAT CONSTITUTES AT LEAST
A MAJORITY OF THE THEN OUTSTANDING COMMON UNITS OF THE PARTNERSHIP ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN
OTHER TERMS AND CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTIONS
1, 14 AND 15.
--------------
IMPORTANT
Any Unitholder desiring to tender Common Units (as defined herein) should
either (i) complete and sign the Letter of Transmittal or a facsimile copy
thereof in accordance with the instructions in the Letter of Transmittal, have
such Unitholder's signature thereon guaranteed if required by the Letter of
Transmittal, mail or deliver the Letter of Transmittal or such facsimile, or,
in the case of a book-entry transfer effected pursuant to the procedure set
forth in Section 2, an Agent's Message (as defined herein), and any other
required documents, to the Depositary (as defined herein) and either deliver
the certificates for such Common Units to the Depositary along with the Letter
of Transmittal or facsimile or deliver such Common Units pursuant to the
procedure for book-entry transfer set forth in Section 2 or (ii) request such
Unitholder's broker, dealer, commercial bank, trust company or other nominee
to effect the transaction for such Unitholder. A Unitholder having Common
Units registered in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such broker, dealer, commercial bank,
trust company or other nominee if such Unitholder desires to tender such
Common Units.
Any Unitholder who desires to tender Common Units and whose certificates
representing such Common Units are not immediately available or who cannot
comply in a timely manner with the procedure for book-entry transfer, or who
cannot deliver all required documents to the Depositary prior to the
expiration of the Offer, may tender such Common Units by following the
procedure for guaranteed delivery set forth in Section 2.
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
any other tender offer materials may be directed to the Information Agent or
the Dealer Manager at their respective addresses and telephone numbers set
forth on the back cover of this Offer to Purchase.
The Dealer Manager for the Offer is PaineWebber Incorporated.
April 9, 1999
<PAGE>
TABLE OF CONTENTS
<TABLE>
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Page
----
<C> <S> <C>
INTRODUCTION............................................................. 1
1. TERMS OF THE OFFER.................................................. 2
2. PROCEDURE FOR TENDERING COMMON UNITS................................ 4
3. WITHDRAWAL RIGHTS................................................... 6
4. ACCEPTANCE FOR PAYMENT AND PAYMENT.................................. 7
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES............................. 8
6. PRICE RANGE OF THE COMMON UNITS; DISTRIBUTIONS ON THE COMMON UNITS.. 11
7. EFFECT OF THE OFFER ON THE MARKET FOR THE COMMON UNITS; STOCK
EXCHANGE LISTING; EXCHANGE ACT REGISTRATION; MARGIN REGULATIONS..... 11
8. CERTAIN INFORMATION CONCERNING THE PARTNERSHIP...................... 12
9. CERTAIN INFORMATION CONCERNING THE PURCHASER, PURCHASER GENERAL
PARTNER, PURCHASER HOLDINGS AND COLUMBIA............................ 15
10. SOURCE AND AMOUNT OF FUNDS.......................................... 17
11. CONTACTS WITH THE PARTNERSHIP; BACKGROUND OF THE OFFER.............. 17
12. PURPOSE OF THE OFFER; THE PURCHASE AGREEMENT; MERGER................ 19
13. DISTRIBUTIONS....................................................... 32
14. CERTAIN CONDITIONS OF THE OFFER..................................... 32
15. CERTAIN LEGAL MATTERS............................................... 34
16. FEES AND EXPENSES................................................... 35
17. MISCELLANEOUS....................................................... 36
SCHEDULE I DIRECTORS AND EXECUTIVE OFFICERS OF PURCHASER GENERAL PARTNER,
PURCHASER HOLDINGS AND COLUMBIA.............................. 37
</TABLE>
<PAGE>
To the Holders of Common Units of National Propane Partners, L.P.
INTRODUCTION
Columbia Propane, L.P., a Delaware limited partnership (the "Purchaser"),
which has as its managing general partner CP Holdings, Inc. ("Purchaser
General Partner"), a Delaware corporation and a wholly-owned subsidiary of
Columbia Propane Corporation ("Purchaser Holdings"), hereby offers to purchase
all outstanding common units (the "Common Units") representing limited partner
interests in National Propane Partners, L.P., a Delaware limited partnership
(the "Partnership"), at $12.00 per Common Unit (the "Offer Price"), net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in this Offer to Purchase and in the related Letter of Transmittal
(which, together with any amendments or supplements hereto or thereto,
collectively constitute the "Offer"). Purchaser Holdings is a wholly-owned
subsidiary of Columbia Energy Group ("Columbia").
Tendering Unitholders whose Common Units are registered in their own name
and who tender directly to the Depositary (as defined below) will not be
obligated to pay brokerage fees or commissions to the Purchaser or the
Depositary or, except as set forth in Instruction 6 of the Letter of
Transmittal, U.S. Federal, state or local transfer taxes on the purchase of
Common Units pursuant to the Offer. Unitholders who hold their Common Units
through a bank or broker should check with such institution as to whether they
charge any service fees. The Purchaser will pay any fees and expenses of
PaineWebber Incorporated, which is acting as Dealer Manager (the "Dealer
Manager"), ChaseMellon Shareholder Services, L.L.C., which is acting as the
Depositary (the "Depositary"), and Innisfree M&A Incorporated, which is acting
as Information Agent (the "Information Agent"), incurred in connection with
the Offer. See Section 16.
The Offer is being made pursuant to the Purchase Agreement dated as of April
5, 1999 (the "Purchase Agreement"), among the Purchaser, Purchaser General
Partner, Purchaser Holdings, the Partnership, National Propane Corporation,
the managing general partner of the Partnership ("National MGP"), National
Propane SGP, Inc. ("National SGP, together with National MGP, the "National
General Partners"), the special general partner of the Partnership, and Triarc
Companies, Inc., the indirect parent of National SGP and National MGP
("Triarc"), pursuant to which, following the consummation of the Offer and the
satisfaction or waiver of certain conditions, the Partnership will be merged
with and into the Purchaser, with the Purchaser surviving the merger (as such,
the "Surviving Partnership") and with Purchaser General Partner becoming the
Surviving Partnership's managing general partner (the "Merger"). Immediately
following the closing of the Merger, National MGP will hold a 1.0% special
limited partner interest in the Purchaser OLP (as defined herein). On the
effective date of the Merger (the "Effective Date"), each outstanding Common
Unit not tendered in the Offer (other than Common Units owned by the Purchaser
or its affiliates) will be converted into the right to receive the Offer Price
(or any higher price that may be paid for each Common Unit pursuant to the
Offer) in cash, without interest (the "Offer Consideration"). See Section 12.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
COMMON UNITS (THE "MINIMUM NUMBER OF COMMON UNITS") THAT CONSTITUTES AT LEAST
A MAJORITY OF THE THEN OUTSTANDING COMMON UNITS OF THE PARTNERSHIP ON A FULLY
DILUTED BASIS (THE "MINIMUM CONDITION"). THE OFFER IS ALSO SUBJECT TO CERTAIN
OTHER TERMS AND CONDITIONS SET FORTH IN THIS OFFER TO PURCHASE. SEE SECTIONS
1, 14 AND 15.
THE BOARD OF DIRECTORS OF NATIONAL MGP, MANAGING GENERAL PARTNER OF THE
PARTNERSHIP (THE "NATIONAL BOARD"), ACTING ON THE RECOMMENDATION OF THE
SPECIAL COMMITTEE OF THE NATIONAL BOARD (THE "SPECIAL COMMITTEE"), HAS
UNANIMOUSLY APPROVED AND ADOPTED THE PURCHASE AGREEMENT, THE OFFER AND THE
MERGER, AND HAS DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN
THE BEST INTERESTS OF THE UNITHOLDERS AND RECOMMENDS THAT THE UNITHOLDERS
ACCEPT THE OFFER AND TENDER THEIR COMMON UNITS.
<PAGE>
Lehman Brothers Inc., as financial advisor to the Special Committee,
delivered to the Special Committee its written opinion dated April 1, 1999,
that, as of such date and based upon and subject to the matters set forth
therein, from a financial point of view the consideration to be received by
the Unitholders pursuant to each of the Offer and the Merger is fair to such
Unitholders.
The Partnership has informed the Purchaser that, as of April 5, 1999, there
were 6,701,550 Common Units issued and outstanding, and 295,000 outstanding
Options to Purchase Common Units (of which none had exercise prices less than
the Offer Price). Accordingly, the Minimum Number of Common Units is
3,498,276. As of the date hereof, none of the Purchaser, Purchaser General
Partner or Purchaser Holdings owns any Common Units. If the Purchaser acquires
the Minimum Number of Common Units, it will have sufficient voting power to
approve the Merger on behalf of Unitholders without the affirmative vote of
any other Unitholders.
Due to its inability to pay quarterly distributions to Unitholders, the
Partnership currently has a quarterly distribution arrearage of $0.7875 per
Common Unit for quarters through December 31, 1998. Under the terms of the
Purchase Agreement, the Partnership is prohibited from declaring, setting
aside or paying any further distributions to Unitholders. Thus, such
arrearages and any quarterly distributions in respect of any quarter after
December 31, 1998, will not be paid pursuant to the terms of the Offer or the
Merger. See Section 6.
Holders of Common Units will not have appraisal rights as a result of the
Offer or the Merger.
The Purchase Agreement is more fully described in Section 12. Certain
Federal income tax consequences of the sale of Common Units pursuant to the
Offer and the exchange of Common Units for the Offer Consideration pursuant to
the Merger are described in Section 5.
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH
RESPECT TO THE OFFER.
1. Terms of The Offer
Upon the terms and subject to the conditions of the Offer, the Purchaser
will accept for payment and pay for all Common Units validly tendered prior to
the Expiration Date and not theretofore properly withdrawn in accordance with
Section 3. As used herein, the term "Expiration Date" means 12:00 Midnight,
New York City time, on May 6, 1999, unless and until the Purchaser shall have
extended the period of time during which the Offer is open, either in its sole
discretion or pursuant to the mandatory extension requirements set forth
below, in which event the term "Expiration Date" shall mean the latest time
and date at which the Offer, as so extended by the Purchaser, shall expire.
Pursuant to the terms of the Purchase Agreement, the Purchaser must extend
the Offer from time to time to the extent necessary to permit cure,
resolution, elimination or waiver of the conditions set forth in Section 14 of
this Offer to Purchase; 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 such Section 14 is not capable of being cured, resolved
or eliminated, (y) after the termination of the Purchase Agreement in
accordance with its terms or (z) in any event, to a date later than 60 days
following the commencement of the Offer.
In addition, pursuant to the terms of the Purchase Agreement and in
accordance with the applicable rules and regulations of the Commission, the
Purchaser expressly reserves the right, in its sole discretion, and
notwithstanding anything to the contrary in the Purchase Agreement or in
Section 14 of this Offer to Purchase, 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 changes in the terms and
conditions of the Offer; provided, however, that no change may be made which
(i) decreases or changes the form of the Offer Consideration, (ii) reduces the
minimum number of Common Units to be purchased in the Offer below the Minimum
Condition, (iii) imposes conditions to the Offer in addition to those set
forth in Section 14 of this
2
<PAGE>
Offer to Purchase, (iv) amends or changes the terms and conditions of the
Offer in any manner adverse to the holders of Common Units (other than
Purchaser Holdings and its subsidiaries) or (v) changes or waives the Minimum
Condition. There can be no assurance that the Purchaser will exercise its
right to extend the Offer.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE
PURCHASE PRICE OF THE COMMON UNITS, REGARDLESS OF ANY EXTENSION OF THE OFFER
OR ANY DELAY IN MAKING PAYMENT FOR THE COMMON UNITS.
Any extension, waiver, amendment or termination will be followed as promptly
as practicable by public announcement. In the case of an extension, Rule 14e-
1(d) under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), requires that the announcement be issued no later than 9:00 a.m., New
York City time, on the next business day after the previously scheduled
Expiration Date in accordance with the public announcement requirements of
Rule 14d-4(c) under the Exchange Act. Subject to applicable law (including
Rules 14d-4(c) and 14d-6(d) under the Exchange Act, which require that any
material change in the information published, sent or given to Unitholders in
connection with the Offer be promptly disseminated to Unitholders in a manner
reasonably designed to inform Unitholders of such change), and without
limiting the manner in which the Purchaser may choose to make any public
announcement, the Purchaser will not have any obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
press release to the Dow Jones News Service. As used in this Offer to
Purchase, "business day" means any day other than a Saturday, Sunday or a
federal holiday and shall consist of the time period from 12:01 a.m. through
12:00 Midnight, New York City time.
If the Purchaser extends the Offer or if the Purchaser (whether before or
after its acceptance for payment of Common Units) is delayed in its acceptance
for payment of or payment for Common Units or it is unable to pay for Common
Units pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer, the Depositary may retain tendered Common
Units on behalf of the Purchaser, and such Common Units may not be withdrawn
except to the extent tendering Unitholders are entitled to withdrawal rights
as described in Section 3. However, the ability of the Purchaser to delay the
payment for Common Units that the Purchaser has accepted for payment is
limited by Rule 14e-1 under the Exchange Act, which requires that a bidder pay
the consideration offered or return the securities deposited by or on behalf
of holders of securities promptly after the termination or withdrawal of such
bidder's offer.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend
the Offer to the extent required by Rules 14d-4(c), 14d-6(d) and 14e-1 under
the Exchange Act. The minimum period during which the Offer must remain open
following material changes in the terms of the Offer or information concerning
the Offer, other than a change in price or a change in the percentage of
securities sought or any dealer solicitation fee, will depend upon the facts
and circumstances then existing, including the relative materiality of the
changed terms or information. With respect to a change in price or a change in
the percentage of securities sought, a minimum period of ten business days is
generally required to allow for adequate dissemination and investor response.
Consummation of the Offer is conditioned upon satisfaction of the Minimum
Condition and the other conditions set forth in Section 14. Subject to the
terms and conditions contained in the Purchase Agreement, the Purchaser
reserves the right (but shall not be obligated) to waive any or all such other
conditions set forth in Section 14.
The Partnership has provided the Purchaser with mailing labels containing
the names and addresses of all record holders of Common Units and with
security position listings of Common Units held in stock depositories. This
Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed to record holders of Common Units and furnished to
brokers, dealers, commercial banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the Unitholder lists or, if
applicable, who are
3
<PAGE>
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Common Units.
2. Procedure for Tendering Common Units
Valid Tender. For a Unitholder validly to tender Common Units pursuant to
the Offer, either (i) a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), together with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined below), and any other documents required by the Letter of Transmittal
must be received by the Depositary at one of its addresses set forth on the
back cover of this Offer to Purchase and either (a) certificates for tendered
Common Units must be received by the Depositary at one of such addresses or
(b) such Common Units must be delivered pursuant to the procedure for book-
entry transfer set forth below (and a Book-Entry Confirmation (as defined
below) received by the Depositary), in each case prior to the Expiration Date,
or (ii) the tendering Unitholder must comply with the guaranteed delivery
procedure set forth below.
THE METHOD OF DELIVERY OF COMMON UNITS, THE LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING UNITHOLDER AND
DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
Book-Entry Transfer. The Depositary will establish an account with respect
to the Common Units at The Depository Trust Company (the "Book-Entry Transfer
Facility") for purposes of the Offer within two business days after the date
of this Offer to Purchase. Any financial institution that is a participant in
the Book-Entry Transfer Facility's system may make book-entry delivery of
Common Units by causing the Book-Entry Transfer Facility to transfer such
Common Units into the Depositary's account in accordance with the Book-Entry
Transfer Facility's procedures for such transfer. However, although delivery
of Common Units may be effected through book-entry transfer into the
Depositary's account at the Book-Entry Transfer Facility, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed with
any required signature guarantees, or an Agent's Message, and any other
required documents must, in any case, be transmitted to, and received by, the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date, or the tendering Unitholder must
comply with the guaranteed delivery procedure described below.
The confirmation of a book-entry transfer of Common Units into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "Book-Entry Confirmation". DELIVERY OF THE LETTER OF
TRANSMITTAL OR OTHER DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN
ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT
CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "Agent's Message" means a message transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility
has received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Common Units that such participant has
received and agrees to be bound by the terms of the Letter of Transmittal and
that the Purchaser may enforce such agreement against the participant.
Signature Guarantees. No signature guarantee is required on the Letter of
Transmittal if (i) the Letter of Transmittal is signed by the registered
holder of Common Units (which, for purposes of this Section, includes any
participant in the Book-Entry Transfer Facility's system whose name appears on
a security position listing
4
<PAGE>
as the owner of the Common Units) tendered therewith and such registered
holder has not completed either the box entitled "Special Delivery
Instructions" or the box entitled "Special Payment Instructions" on the Letter
of Transmittal or (ii) such Common Units are tendered for the account of a
firm that is a participant in the Security Transfer Agents Medallion Program,
the New York Stock Exchange Medallion Signature Guarantee Program or the Stock
Exchange Medallion Program (each, an "Eligible Institution"). In all other
cases, all signatures on the Letter of Transmittal must be guaranteed by an
Eligible Institution. If the certificates for Common Units are registered in
the name of a person other than the signer of the Letter of Transmittal, or if
payment is to be made or certificates for Common Units not tendered or not
accepted for payment are to be issued to a person other than the registered
holder of the certificates surrendered, the tendered certificates must be
endorsed or accompanied by appropriate powers, in either case signed exactly
as the name or names of the registered holders or owners appear on the
certificates, with the signatures on the certificates or powers guaranteed as
aforesaid. See Instructions 1 and 5 to the Letter of Transmittal.
Guaranteed Delivery. If a Unitholder desires to tender Common Units pursuant
to the Offer and such Unitholder's certificates for Common Units are not
immediately available or the procedure for book-entry transfer cannot be
completed on a timely basis or time will not permit all required documents to
reach the Depositary prior to the Expiration Date, such Unitholder's tender
may be effected if all the following conditions are met:
(i) such tender is made by or through an Eligible Institution;
(ii) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser is received by the
Depositary, as provided below, prior to the Expiration Date; and
(iii) the certificates for all tendered Common Units, in proper form for
transfer (or a Book-Entry Confirmation with respect to such Common Units),
together with a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by the Letter of Transmittal are received by the Depositary within
three trading days after the date of execution of such Notice of Guaranteed
Delivery. A "trading day", for purposes of the preceding sentence, is any
day on which the New York Stock Exchange, Inc. (the "NYSE") and banks in
New York are open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice of Guaranteed Delivery.
Notwithstanding any other provision hereof, payment for Common Units
accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (i) certificates for (or a timely
Book-Entry Confirmation with respect to) such Common Units, (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer,
an Agent's Message, and (iii) any other documents required by the Letter of
Transmittal. Accordingly, tendering Unitholders may be paid at different times
depending upon when certificates for Common Units or Book-Entry Confirmations
are actually received by the Depositary.
Purchaser's acceptance for payment of Common Units validly tendered pursuant
to one of the procedures described above will constitute a binding agreement
between the tendering Unitholder and the Purchaser upon the terms and subject
to the conditions of the Offer.
Appointment as Proxy. By executing a Letter of Transmittal as set forth
above (including through delivery of an Agent's Message), the tendering
Unitholder irrevocably appoints A. Mason Brent and Thomas E. Perkins, Jr., and
each of them and any other designees of the Purchaser, as such Unitholder's
attorneys-in-fact and proxies as set forth in the Letter of Transmittal, each
with full power of substitution, to the full extent of such Unitholder's
rights with respect to the Common Units tendered by such Unitholder and
accepted for payment by
5
<PAGE>
the Purchaser and with respect to any and all other Common Units or other
securities or rights issued or issuable in respect of such Common Units on or
after April 9, 1999. All such proxies are coupled with an interest in the
tendered Common Units. Such appointment will be effective when, and only to
the extent that, the Purchaser accepts for payment Common Units tendered by
such Unitholder as provided herein. Upon such acceptance for payment, all
prior powers of attorney and proxies given by such Unitholder with respect to
such Common Units or other securities or rights will, without further action,
be revoked and no subsequent powers of attorney and proxies may be given (and,
if given, will not be deemed effective). The designees of the Purchaser will
thereby be empowered to exercise all voting and other rights with respect to
such Common Units or other securities or rights in respect of any annual,
special or adjourned meeting of the Unitholders, by written consent or
otherwise, as they in their sole discretion deem proper. The Purchaser
reserves the right to require that, in order for Common Units to be deemed
validly tendered, immediately upon the Purchaser's acceptance for payment of
such Common Units, the Purchaser must be able to exercise full voting and
other rights with respect to such Common Units and other securities or rights,
including voting at any meeting of Unitholders then scheduled or acting by
written consent without a meeting.
Determination of Validity. All questions as to the form of documents and the
validity, eligibility (including time of receipt) and acceptance for payment
of any tender of Common Units will be determined by the Purchaser in its sole
discretion, which determination will be final and binding on all parties. The
Purchaser reserves the absolute right to reject any or all tenders determined
by it not to be in proper form or the acceptance for payment of or payment for
which may, in the opinion of the Purchaser's counsel, be unlawful. The
Purchaser also reserves the absolute right to waive any defect or irregularity
in any tender with respect to any particular Common Units, whether or not
similar defects or irregularities are waived in the case of other Common
Units. No tender of Common Units will be deemed to have been validly made
until all defects or irregularities relating thereto have been cured or
waived. None of the Purchaser, Purchaser General Partner, Purchaser Holdings,
Columbia, the Depositary, the Information Agent, the Dealer Manager or any
other person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification. The Purchaser's interpretation of the terms and conditions of
the Offer (including the Letter of Transmittal and the instructions thereto)
will be final and binding on all parties.
Backup Withholding. Unitholders who tender Common Units may be subject to
31% backup withholding unless a Unitholder (1) provides a correct taxpayer
identification number ("TIN") (which, for an individual holder, is the
holder's social security number) and any other required information to the
paying agent, or (2) is a corporation or comes within certain exempt
categories and, when required, demonstrates this fact and otherwise complies
with applicable requirements of the backup withholding rules. A Unitholder may
avoid backup withholding by properly completing and signing the Substitute
Form W-9 included as part of the Letter of Transmittal. A Unitholder who does
not provide a correct TIN may be subject to penalties imposed by the Internal
Revenue Service. If a Unitholder who is subject to backup withholding does not
properly complete and sign the Substitute Form W-9, the Purchaser will
withhold 31% from payments to such Unitholder. Any amount paid as backup
withholding does not constitute an additional tax and will be creditable
against the holder's U.S. Federal income tax liability. Each Unitholder should
consult with its own tax advisor as to such Unitholder's qualification for
exemption from backup withholding and the procedure for obtaining such
exemption. See Section 5 and Instruction 9 of the Letter of Transmittal.
3. Withdrawal Rights
Except as otherwise provided in this Section 3, tenders of Common Units made
pursuant to the Offer are irrevocable. Common Units tendered pursuant to the
Offer may be withdrawn pursuant to the procedures set forth below at any time
prior to the Expiration Date and, unless theretofore accepted for payment by
the Purchaser pursuant to the Offer, may also be withdrawn at any time after
June 7, 1999.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its
addresses set forth on the back cover of this Offer to Purchase and must
6
<PAGE>
specify the name of the person having tendered the Common Units to be
withdrawn, the number of Common Units to be withdrawn and the name of the
registered holder of the Common Units to be withdrawn, if different from the
name of the person who tendered the Common Units. If certificates for Common
Units to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary
and, unless such Common Units have been tendered by an Eligible Institution,
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution. If Common Units have been tendered pursuant to the procedures for
book-entry delivery set forth in Section 2, any notice of withdrawal must also
specify the name and number of the account at the Book-Entry Transfer Facility
to be credited with the withdrawn Common Units and otherwise comply with the
Book-Entry Transfer Facility's procedures. Withdrawals of tenders of Common
Units may not be rescinded, and any Common Units properly withdrawn will
thereafter be deemed not validly tendered for purposes of the Offer. However,
withdrawn Common Units may be retendered by following once again one of the
procedures described in Section 2 at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding on all parties. None
of the Purchaser, Purchaser General Partner, Purchaser Holdings, Columbia, the
Depositary, the Information Agent, the Dealer Manager or any other person will
be under any duty to give notification of any defects or irregularities in any
notice of withdrawal or incur any liability for failure to give any such
notification.
4. Acceptance for Payment and Payment
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension
or amendment), the Purchaser will accept for payment and pay for all Common
Units validly tendered prior to the Expiration Date and not properly withdrawn
in accordance with Section 3. Any determination concerning the satisfaction of
such terms and conditions will be within the discretion of the Purchaser, and
such determination will be final and binding on all tendering Unitholders. See
Sections 1 and 14. Subject to the applicable rules of the Securities and
Exchange Commission (the "Commission"), the Purchaser expressly reserves the
right, in its sole discretion, to delay acceptance for payment of or payment
for Common Units in order to comply in whole or in part with any applicable
law, government regulation or condition. Any such delays will be effected in
compliance with Rule 14e-1(c) under the Exchange Act (relating to the
Purchaser's obligation to pay for or return tendered Common Units promptly
after the termination or withdrawal of the Offer).
In all cases, payment for Common Units accepted for payment pursuant to the
Offer will be made only after timely receipt by the Depositary of (i)
certificates for such Common Units (or timely Book-Entry Confirmation of a
transfer of such Common Units as described in Section 2), (ii) a Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, or, in the case of a book-entry transfer,
an Agent's Message, and (iii) any other documents required by the Letter of
Transmittal.
IF, PRIOR TO THE EXPIRATION DATE, THE PURCHASER INCREASES THE CONSIDERATION
TO BE PAID PER COMMON UNIT PURSUANT TO THE OFFER, THE PURCHASER WILL PAY THE
INCREASED CONSIDERATION FOR ALL COMMON UNITS PURCHASED PURSUANT TO THE OFFER,
WHETHER OR NOT THE COMMON UNITS WERE TENDERED PRIOR TO THE INCREASE IN
CONSIDERATION.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Common Units validly tendered to the Purchaser
and not properly withdrawn as, if and when the Purchaser gives oral or written
notice to the Depositary of the Purchaser's acceptance for payment of such
Common Units. Upon the terms and subject to the conditions of the Offer,
payment for Common Units accepted for payment pursuant to the Offer will be
made by deposit of the purchase price therefor with the Depositary, which will
act as agent for tendering Unitholders for the purpose of receiving payment
from the Purchaser and transmitting payment to tendering Unitholders whose
Common Units have been accepted for payment.
7
<PAGE>
If the Purchaser is delayed in its acceptance for payment of or payment for
Common Units or is unable to accept for payment or pay for Common Units
pursuant to the Offer for any reason, then, without prejudice to the
Purchaser's rights under the Offer (but subject to compliance with Rule 14e-
1(c) under the Exchange Act, which requires that a tender offeror pay the
consideration offered or return the tendered securities promptly after the
termination or withdrawal of a tender offer), the Depositary may,
nevertheless, on behalf of the Purchaser, retain tendered Common Units, and
such Common Units may not be withdrawn except to the extent tendering
Unitholders are entitled to exercise, and duly exercise, withdrawal rights as
described in Section 3.
UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE
PURCHASE PRICE OF THE COMMON UNITS, REGARDLESS OF ANY EXTENSION OF THE OFFER
OR ANY DELAY IN MAKING SUCH PAYMENT.
If any tendered Common Units are not purchased pursuant to the Offer because
of an invalid tender or otherwise, the certificates for such Common Units will
be returned, and if certificates are submitted for more Common Units than are
tendered, new certificates for the Common Units not tendered will be sent, in
each case without expense, to the tendering Unitholder (or, in the case of
Common Units delivered by book-entry transfer of such Common Units into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
procedure set forth in Section 2, such Common Units will be credited to an
account maintained at the Book-Entry Transfer Facility) as promptly as
practicable after the expiration or termination of the Offer.
The Purchaser reserves the right to transfer or assign, in whole or from
time to time in part, to Purchaser General Partner, or to one or more direct
or indirect wholly-owned subsidiaries of Purchaser General Partner, the right
to purchase Common Units tendered pursuant to the Offer. Any such transfer or
assignment will not relieve the Purchaser of its obligations under the Offer
and will in no way prejudice the rights of tendering Unitholders to receive
payment for Common Units validly tendered and accepted for payment pursuant to
the Offer.
5. Certain Federal Income Tax Consequences
The U.S. Federal income tax discussion set forth below is for general
information only and does not purport to address all aspects of taxation that
may be relevant to a particular Unitholder. This discussion is based upon the
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
existing regulations promulgated thereunder and administrative and judicial
interpretations thereof, all as in effect as of the date hereof and all of
which are subject to change (possibly with retroactive effect). This summary
does not discuss all aspects of U.S. Federal income taxation that may be
relevant to a particular Unitholder in light of such Unitholder's specific
circumstances or to certain types of Unitholders subject to special treatment
under the U.S. Federal income tax laws including, without limitation,
financial institutions, insurance companies, tax-exempt organizations and
broker dealers. This discussion applies only to Unitholders for whom the
Common Units are capital assets within the meaning of Code section 1221 and
does not discuss the U.S. Federal income tax consequences to a Unitholder who,
for U.S. Federal income tax purposes, is a non-resident alien individual, a
foreign corporation, a foreign partnership, or a foreign estate or trust, nor
does it consider the effect of any foreign, state, local or other tax laws.
Each Unitholder tendering Common Units should consult such Unitholder's own
tax advisor as to the particular tax consequences to such Unitholder of
accepting the offer, including the application of the alternative minimum and
U.S. Federal, foreign, state, local and other tax laws.
The following discussion is based on the assumption that the Partnership is
treated as a partnership for U.S. Federal income tax purposes and is not a
"publicly traded partnership" that is taxable as a corporation pursuant to
Code section 7704.
Gain or Loss. A taxable Unitholder will recognize a gain or loss on the sale
of such Unitholder's Common Units in an amount equal to the difference between
(i) the amount realized by such Unitholder on the sale and (ii) such
Unitholder's adjusted tax basis in the Common Units sold. The amount realized
by a Unitholder will include the Unitholder's share of the Partnership's
liabilities, if any (as determined under Code section 752 and the regulations
thereunder). The adjusted tax basis in the Common Units of a Unitholder will
depend upon
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<PAGE>
individual circumstances. (See also "Partnership Allocations in Year of Sale"
below.) Each Unitholder who plans to tender hereunder should consult with the
Unitholder's own tax advisor as to the Unitholder's adjusted tax basis in the
Unitholder's Common Units and the resulting tax consequences of a sale.
Character of Gain or Loss. Except to the extent any gain or loss is
attributable to "unrealized receivables" or "inventory items" held by the
Partnership or National OLP (as defined in Section 8 hereof), gain or loss
recognized by a Unitholder on a sale of a Common Unit pursuant to the Offer
generally will be treated as a capital gain or loss. Capital losses are
deductible only to the extent of capital gains, except that non-corporate
taxpayers may deduct up to $3,000 of capital losses in excess of the amount of
their capital gains against ordinary income. Excess capital losses generally
can be carried forward to succeeding years (a corporation's carryforward
period is five years and a non-corporate taxpayer can carry forward such
losses indefinitely); and a corporation is permitted to carry back excess
capital losses to the three preceding taxable years, provided the carryback
does not increase or produce a net operating loss for any of those years.
Character of Gain or Loss Attributable to Unrealized Receivables
or Substantially Appreciated Inventory. A portion of the gain or loss upon
the sale of Common Units may be attributable to "unrealized receivables" or
"inventory items" held by the Partnership or National OLP. If any portion of
the amount of gain or loss realized by a Unitholder is attributable to
"unrealized receivables" (which includes certain depreciation recapture) or
"inventory items" as defined in Code section 751, then a portion of the
Unitholder's gain or loss may be ordinary rather than capital. A Unitholder
who tenders Common Units which are purchased pursuant to the Offer must file
an information statement with such Unitholder's U.S. Federal income tax return
for the year of the sale which provides the information specified in Treasury
Regulation Section 1.751-1(a)(3).
Ordinary Income and Capital Gain Tax Rates. The maximum U.S. Federal income
tax rate applicable to capital gains realized by individuals or other non-
corporate taxpayers is 20% for sales of capital assets held for more than one
year. Corporate taxpayers are taxed at a maximum effective U.S. Federal income
tax rate of 35% for both capital gains and ordinary income. The maximum
effective U.S. Federal income tax rate for ordinary income of individuals and
other noncorporate taxpayers is 39.6%. Although it is unclear in the absence
of Treasury Regulations promulgated under Code section 1(h)(11) whether gain
from the sale of a Common Unit would be subject to tax at a maximum rate of
25% or 39.6% to the extent such gain would be attributable to the recapture of
depreciation with respect to real property held by the Partnership if the
Partnership sold such property at its fair market value, the Joint Committee
on Taxation has stated that the 25% tax rate would be applicable with respect
to such gain. Unitholders are urged to consult with their advisors to
determine the tax rate applicable with respect to gain resulting from the sale
of a Common Unit.
Passive Activity Loss Limitation. Under Code section 469, a non-corporate
taxpayer or personal service corporation generally can deduct "passive losses"
attributable to a "publicly traded partnership" (such as the Partnership) in
any year only to the extent of the person's passive income attributable to
such "publicly traded partnership" for that year. A closely held corporation
(other than personal service corporations) may offset such losses against
active income as well as passive activity income for that year, but not
"portfolio income" as defined in the Treasury Regulations promulgated under
Code section 469. A portion of any post-1986 losses of Unitholders from the
Partnership may have been passive losses. Thus, Unitholders may have
"suspended" passive losses from the Partnership. Substantially all gain or
loss from a sale of Common Units pursuant to the Offer will be passive income
or loss.
If a Unitholder sells less than all of its Common Units pursuant to the
Offer, suspended passive losses, if any (including a portion of any loss
recognized on the sale of Common Units), can be currently deducted (subject to
other applicable limitations) to the extent of the Unitholder's passive income
from the Partnership for that and any subsequent year (including any gain
recognized on the sale of Common Units). If, on the other hand, a Unitholder
sells 100% of its Common Units pursuant to the Offer, any "suspended" losses
and any losses recognized upon the sale of the Common Units will be offset
first against any other net passive gain to the Unitholder from the sale of
the Common Units and any other net passive activity income from other passive
activity investments, and the balance of any "suspended" net losses from the
Common Units will no longer be
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<PAGE>
subject to the passive activity loss limitation and, therefore, will be
deductible by such Unitholder from its other income (subject to any other
applicable limitations), including ordinary income. If a tendering Unitholder
has suspended passive losses from the Partnership, such Unitholder must sell
all of its Common Units to receive these tax benefits.
Partnership Allocations in Year of Sale. A tendering Unitholder will be
allocated the Unitholder's pro rata share of the annual taxable income and
losses from the Partnership, in accordance with the terms and conditions of
the Partnership's partnership agreement, with respect to the Common Units sold
for the period ending the month of sale, even though such Unitholder will not
receive any cash distributions from the Partnership after the date of sale.
Such allocations would affect a Unitholder's adjusted tax basis in the
tendered Common Units and, therefore, the amount of gain or loss recognized by
the Unitholder on the sale of the Common Units.
Partnership Termination. Code section 708(b) provides that a partnership
terminates for U.S. Federal income tax purposes if there is a sale or exchange
of 50% or more of the total interest in partnership capital and profits within
a twelve-month period (although successive transfers of the same interest
within a twelve-month period will be treated as a single transfer for this
purpose). In the event of a termination, the Partnership's tax year would
close and the Partnership would be treated for income tax purposes as if it
had contributed all of its assets and liabilities to a "new" partnership in
exchange for an interest in the "new" partnership. The Partnership would then
be treated as making a distribution of the interests in the "new" partnership
to the new partners and the remaining partners in liquidation of the
Partnership.
A tax termination will adversely affect the amount of depreciation
deductions reported by the Partnership for the period following the date of
such termination because any "new" partnership would be treated as having
acquired its assets on the date of the deemed contribution resulting in the
start of a new depreciation recovery period beginning on such date. A tax
termination of the Partnership also could have the adverse effect, on
Unitholders whose tax year is not the calendar year, of the inclusion of more
than one year of Partnership tax items in one tax return of such Unitholders,
resulting in a "bunching" of income or deductions. If more than approximately
87% of Common Units are purchased pursuant to the Offer, those transfers will
cause a tax termination of the Partnership and National OLP.
Backup Withholding. Unitholders who tender Common Units may be subject to
31% backup withholding unless a Unitholder provides (1) a correct TIN (which,
for an individual holder, is the holder's social security number) and any
other required information to the paying agent, or (2) is a corporation or
comes within certain exempt categories and, when required, demonstrates this
fact and otherwise complies with applicable requirements of the backup
withholding rules. A Unitholder may avoid backup withholding by properly
completing and signing the Substitute Form W-9 included as part of the Letter
of Transmittal. A Unitholder who does not provide a correct TIN may be subject
to penalties imposed by the Internal Revenue Service. If a Unitholder who is
subject to backup withholding does not properly complete and sign the
Substitute Form W-9, the Purchaser will withhold 31% from payments to such
Unitholder. Any amount paid as backup withholding does not constitute an
additional tax and will be creditable against the holder's U.S. Federal income
tax liability. Each Unitholder should consult with its own tax advisor as to
such Unitholder's qualification for exemption from backup withholding and the
procedure for obtaining such exemption. See Instruction 9 of the Letter of
Transmittal.
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<PAGE>
6. Price Range of the Common Units; Distributions on the Common Units
The Common Units are traded on the NYSE under the symbol "NPL". The
following table sets forth, for each of the periods indicated, the high and
low reported sales prices per Common Unit on the NYSE as reported in published
financial sources.
<TABLE>
<CAPTION>
Sales
Price
-------------
High Low
---- ----
<S> <C> <C>
1997
First Quarter............................................ $21 $19 1/4
Second Quarter........................................... 20 1/2 18 7/8
Third Quarter............................................ 22 20 1/8
Fourth Quarter........................................... 22 7/16 21
1998
First Quarter............................................ $23 1/8 $18 1/2
Second Quarter........................................... 20 7/16 14 3/4
Third Quarter............................................ 16 5/16 9 3/16
Fourth Quarter........................................... 13 1/2 4 1/2
1999
First Quarter............................................ $ 7 5/8 $ 4 1/2
Second Quarter through April 8, 1999..................... 12 6 1/4
</TABLE>
On April 5, 1999, the last full day of trading before the public
announcement of the execution of the Purchase Agreement, the reported closing
sale price of the Common Units on the NYSE was $6 13/16 per Common Unit. On
April 8, 1999, the last full day of trading before the commencement of the
Offer, the reported last sale price of the Common Units on the NYSE was $11
1/2 per Common Unit. UNITHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS
FOR THE COMMON UNITS.
From its inception until the third quarter of 1998, the Partnership declared
quarterly distributions of $0.525 per Common Unit. On October 21, 1998, the
Partnership declared a quarterly distribution for the quarter ended September
30, 1998, of $0.2625 per Common Unit rather than $0.525 per Common Unit,
resulting in an arrearage of $0.2625 per Common Unit with respect to such
quarter. The Partnership announced that it eliminated its quarterly
distribution for the quarter ended December 31, 1998. This elimination
resulted in an arrearage of an additional $0.525 per Common Unit with respect
to the quarter ended December 31, 1998.
Pursuant to the Waiver (as defined below) the Partnership has effectively
agreed not to make any distributions on Common Units until all amounts
outstanding under the Bank Facility (as defined below) are repaid in full.
Under the terms of the Purchase Agreement, the Partnership is prohibited from
declaring, setting aside or paying any further distributions to Unitholders.
Thus, neither of the arrearages set forth above nor any quarterly distribution
in respect of any quarter after December 31, 1998, will be paid pursuant to
the terms of the Offer or the Merger.
7. Effect of the Offer on the Market for the Common Units; Stock Exchange
Listing; Exchange Act Registration; Margin Regulations
The purchase of Common Units pursuant to the Offer will reduce the number of
holders of Common Units and the number of Common Units that might otherwise
trade publicly and could adversely affect the liquidity and market value of
the remaining Common Units held by Unitholders other than the Purchaser.
Stock Exchange Listing. Depending upon the number of Common Units purchased
pursuant to the Offer, the Common Units may no longer meet the requirements of
the NYSE for continued listing. According to the NYSE's published guidelines,
the NYSE would consider delisting the Common Units if, among other things:
(i) the number of record holders of 100 or more Common Units should fall below
1,200; (ii) the number of publicly held Common Units (exclusive of holdings of
Purchaser General Partner and Purchaser and any other
11
<PAGE>
subsidiaries or affiliates of Purchaser General Partner and of their officers
or directors or their immediate families or other concentrated holdings of 10%
or more ("NYSE Excluded Holdings")) should fall below 600,000; or (iii) the
aggregate market value of such publicly held Common Units (exclusive of NYSE
Excluded Holdings) should fall below $5,000,000. If, as a result of the
purchase of Common Units pursuant to the Offer or otherwise, the Common Units
no longer meet the requirements of the NYSE for continued listing and the
listing of the Common Units is discontinued, the market for the Common Units
could be adversely affected. It is possible that the Common Units would
continue to trade in the over-the-counter market and that price quotations
would be reported by other sources. The extent of the public market for the
Common Units and the availability of such quotations, however, would depend
upon the number of holders of Common Units remaining at such time, the
interests in maintaining a market in Common Units on the part of securities
firms, the possible termination of registration of the Common Units under the
Exchange Act, as described below, and other factors.
Exchange Act Registration. The Common Units are currently registered under
the Exchange Act. Registration of the Common Units under the Exchange Act may
be terminated upon application of the Partnership to the Commission if the
Common Units are neither listed on a national securities exchange nor held by
300 or more holders of record. Termination of registration of the Common Units
under the Exchange Act would substantially reduce the information required to
be furnished by the Partnership to its Unitholders and to the Commission and
would make certain provisions of the Exchange Act no longer applicable to the
Partnership, such as the shortswing profit recovery provisions of Section
16(b) of the Exchange Act, the requirement of filing Annual Reports on Form
10-K, furnishing a proxy or information statement pursuant to Section 14(a) or
(c) of the Exchange Act in connection with Unitholders' meetings and the
requirements of Rule 13e-3 under the Exchange Act with respect to "going
private" transactions. Furthermore, the ability of "affiliates" of the
Partnership and persons holding "restricted securities" of the Partnership to
dispose of such securities pursuant to Rule 144 promulgated under the
Securities Act of 1933, as amended, may be impaired or eliminated.
Unless registration of the Common Units is terminated prior to the Merger,
following the consummation of the Merger, trading of the Common Units will
cease to be reported on the NYSE and the registration of the Common Units
under the Exchange Act will be terminated at such time.
Margin Regulations. The Common Units are currently "margin securities" under
the regulations of the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board"), which has the effect, among other things, of
allowing brokers to extend credit on the collateral of the Common Units.
Depending upon factors similar to those described above regarding listing and
market quotations, it is possible that, following the Offer, the Common Units
would no longer constitute "margin securities" for the purposes of the margin
regulations of the Federal Reserve Board and therefore could no longer be used
as collateral for loans made by brokers. If registration of Common Units under
the Exchange Act were terminated, the Common Units would no longer be "margin
securities" or be eligible for NYSE reporting.
8. Certain Information Concerning the Partnership
According to the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1997, the Partnership, a master limited partnership, is a
Delaware limited partnership which through National Propane, L.P. ("National
OLP") and its subsidiary, National Sales & Service, Inc. ("NSSI") is engaged
primarily in (i) the retail marketing of propane to residential, commercial
and industrial, and agricultural customers and to dealers that resell propane
to residential and commercial customers and (ii) the retail marketing of
propane-related supplies and equipment, including home and commercial
appliances.
Set forth below is certain selected preliminary consolidated financial
information with respect to the Partnership excerpted from the information
contained in the Partnership's Notification of Late Filing on Form 12b-25
filed on April 1, 1999 (the "12b-25") and in a Form 8-K also filed on such
date (the "Form 8-K"). More comprehensive financial information is included in
such reports and other documents filed, and to be filed, by the Partnership
with the Commission, and the following summary is qualified in its entirety by
reference to such reports and such other documents and all the financial
information (including any related notes) contained therein. In the 12b-25,
the Partnership indicated that it would be filing its Annual Report on Form
10-K for the
12
<PAGE>
year ended December 31, 1998 (the "1998 Form 10-K"), on or before April 15,
1999. Such reports and other documents should be available for inspection and
copies thereof should be obtainable in the manner set forth below under
"Available Information on the Partnership".
In the Form 8-K, the Partnership indicated that it expects to report in its
1998 Form 10-K, revenues of approximately $134 million, operating income of
approximately $6.2 million and a net loss of approximately $1.5 million
compared with revenues of $165.2 million, operating income of $9.8 million and
net income of $3.8 million in the year ended December 31, 1997. The decrease
in revenues in 1998 compared to 1997 was stated to be due primarily to
decreased selling prices ($20.6 million) as a result of lower product costs
and propane sales volume decreases ($10.9 million) principally as a result of
warmer weather in 1998 compared to 1997. The Partnership indicated that
operating income declined principally due to the lower sales volumes ($5
million) and an increase in selling, general and administrative expenses
(approximately $1.6 million) partially offset by decreased operating expenses
attributable to revenues ($2.9 million).
Other than as set forth herein, the information concerning the Partnership
contained in this Section has been taken from or based upon publicly available
documents on file with the Commission and other publicly available
information. Although the Purchaser, Purchaser General Partner, Purchaser
Holdings and Columbia do not have any knowledge that any such information is
untrue, none of the Purchaser, Purchaser General Partner, Purchaser Holdings
or Columbia takes any responsibility for the accuracy or completeness of such
information or for any failure by the Partnership to disclose events that may
have occurred and may affect the significance or accuracy of any such
information.
In the fall of 1998, Purchaser Holdings and Triarc began to engage in
preliminary discussions concerning a possible acquisition of the Partnership
by Purchaser Holdings. See Section 11. In this connection, Triarc and its
representatives discussed with Purchaser Holdings and its representatives
certain matters regarding the business and financial condition of the
Partnership, and Triarc provided Purchaser Holdings with selected budget
information of the Partnership. The budget information was prepared by the
Partnership's management in the ordinary course of its annual budgeting
processes. The Partnership has informed the Purchaser, Purchaser General
Partner and Purchaser Holdings that it has not revised or updated the budget
information since the date it was provided to them, nor has it undertaken to
do so.
Set forth below is a summary of selected budget information provided to the
Purchaser, Purchaser General Partner and Purchaser Holdings as described
above.
<TABLE>
<CAPTION>
For the year ending
December 31, 1999
-------------------
(estimated)
<S> <C>
Total revenues......................................... $142,976,295
Cost of goods sold .................................... $ 66,559,438
Gross profit........................................... $ 84,880,857
Operating expenses..................................... $ 59,402,000
Earnings before interest, taxes, depreciation and
amortization.......................................... $ 25,479,000
Propane volume (in gallons)............................ 161,426,674
</TABLE>
In the course of further discussions, the Partnership provided to the
Purchaser, Purchaser General Partner and Purchaser Holdings a draft of the
1998 Form 10-K dated as of March 25, 1999 (the "Draft 10-K"). The Draft 10-K
indicated that as of December 31, 1998, the Partnership was not in compliance
with its total funded debt to consolidated cash flow ratio covenant required
under the terms of its bank facility under the Credit Agreement (as defined
below ) (the "Bank Facility"). The Partnership received an unconditional
waiver dated as of February 20, 1999 (the "Waiver"), from its lenders with
respect to non-compliance with such covenant as of December 31, 1998. The
waiver also provides a conditional waiver with respect to future non-
compliance with such covenant through August 31, 1999, if: (i) on or before
April 30, 1999, the Partnership delivers to the lenders a purchase and sale
agreement from a creditworthy buyer, on terms reasonably satisfactory to the
lenders, for the
13
<PAGE>
sale of the Partnership's business or assets the terms of which must provide
for repayment in full of all obligations under the Bank Facility and the
termination of the credit agreement dated as of June 26, 1996 with such
lenders (the "Credit Agreement") and obligations of the lenders thereunder (in
each case upon closing of the sale); (ii) on the 20th day of each month
commencing April 20, 1999, the Partnership delivers to the lenders an
officer's certificate in form and substance satisfactory to the lenders as to
the status of the proposed sale of the Partnership; (iii) on or before
September 30, 1999, the sale of the Partnership's business or assets pursuant
to a purchase and sale agreement is consummated, the lenders repaid in full
and the Credit Agreement terminated; and (iv) the Partnership does not make
any further distributions to its Unitholders. Failure to comply with these
conditions would constitute an event of default under the Bank Facility. See
Section 14. The lenders made no commitment to make any further loans to the
Partnership under the Credit Agreement.
According to the Draft 10-K, as a consequence of the anticipated covenant
non-compliance, all amounts outstanding under the Bank Facility ($15,997,000
at December 31, 1998) were to be reclassified as current liabilities in the
financial statements included in the Draft 10-K. In addition, in accordance
with cross-default provisions, the Partnership's $125 million 8.54% First
Mortgage Notes due June 30, 2010 (the "First Mortgage Notes") were also to be
reclassified as current liabilities as of December 31, 1998.
The draft audit opinion in the Draft 10-K indicated that the Partnership's
difficulties in meeting its Credit Agreement covenants, the lack of adequate
financing to fund its operations beyond the waiver period and its negative
working capital (resulting from reclassification of substantially all of the
Partnership's long-term indebtedness as current liabilities) raise substantial
doubt about its ability to continue as a going concern.
The Partnership has advised the Purchaser, Purchaser General Partner and
Purchaser Holdings that the budget information and Draft 10-K are not publicly
available and that the budget information was prepared for internal purposes
only. The budget information was not prepared with a view to public disclosure
or compliance with published guidelines of the Commission or the guidelines
established by the American Institute of Certified Public Accountants
regarding projections and the excerpted information set forth above is
included in this Offer to Purchase only because it was provided to the
Purchaser, Purchaser General Partner and Purchaser Holdings. None of the
Purchaser, Purchaser General Partner, Purchaser Holdings and Columbia nor any
of their respective representatives, assumes any responsibility for the
accuracy of the budget information. The budget information is based upon a
variety of estimates and assumptions (not all of which were provided to the
Purchaser) relating to the business of the Partnership, general business and
economic conditions and other matters, many of which are inherently uncertain
or beyond the Partnership's control, and does not take into account any change
in ownership of the Partnership or any changes to Partnership operations or
capital structure which may result therefrom. The Partnership has informed the
Purchaser, Purchaser General Partner and Purchaser Holdings that among the
assumptions reflected in the budget information are: (i) the passing on to
consumers of changes in the cost of propane, and (ii) that normal degree-day
weather patterns will prevail. It is not possible to predict whether the
assumptions made in preparing the budget information will be valid or are
otherwise reasonable at the time and under the circumstances when made.
Realization of the budget information's estimates is subject to significant
financial, market, economic and competitive uncertainties and contingencies,
all of which are difficult or impossible to predict accurately and many of
which are beyond the control of the Partnership. Accordingly, there can be no
assurance that estimates based on the budget information's estimates will be
realized, or that the actual results will not vary materially from those set
forth in the budget information. The inclusion of the excerpted information
should not be regarded as a representation by the Partnership, the Purchaser,
Purchaser General Partner, Purchaser Holdings, Columbia or any of their
respective affiliates or representatives that the budget information or any
aspect thereof will be achieved.
14
<PAGE>
Certain statements in this Offer to Purchase, including without limitation
statements regarding budget information, may constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 (the "Reform Act"). The safe harbor for forward looking statements
provided in the Reform Act is not available to statements made in connection
with a tender offer. However, Unitholders should be aware that any forward-
looking statements involve risks, uncertainties and other factors which may
cause actual results, performance or achievements of the Partnership to be
materially different from any future results, performance or achievements
expressed or implied by such forward-looking statement. Such factors, many of
which are beyond the control of the Partnership (and to the extent relating
thereto, the Purchaser, Purchaser General Partner, Purchaser Holdings and
Columbia) include, but are not limited to, risks and uncertainties relating to
supply and demand for propane generally, the effects of weather and
competition; the ability to attract and retain customers; effective management
and operation of the business; general economic and other business conditions;
and successful completion of the Offer and the Merger.
Available Information on the Partnership. The Partnership is subject to the
reporting requirements of the Exchange Act and, in accordance therewith, is
required to file reports and other information with the Commission relating to
its business, financial condition and other matters. Certain information as of
particular dates concerning National MGP is filed with the Commission. Such
reports and other information should be available for inspection at the public
reference facilities of the Commission located at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the regional offices of the Commission located
in the Northwestern Atrium Center, 500 West Madison Street (Suite 1400),
Chicago, Illinois 60661 and Seven World Trade Center, 13th Floor, New York,
New York 10048. Copies should be obtainable, by mail, upon payment of the
Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission also
maintains a World Wide Web site on the internet at http://www.sec.gov that
contains reports and certain other information regarding registrants that file
electronically with the Commission. Such material should also be available for
inspection at the offices of the NYSE, 20 Broad Street, New York, New York
10005.
9. Certain Information Concerning the Purchaser, Purchaser General Partner,
Purchaser Holdings and Columbia
The Purchaser is a Delaware limited partnership. The Purchaser was organized
to acquire the Partnership and has not conducted any unrelated activities
since its organization. Purchaser General Partner is a Delaware corporation,
which was organized to be a managing general partner to the Purchaser and has
not conducted any unrelated activities since its organization. All of the
issued and outstanding shares of the Purchaser General Partner are
beneficially owned by Purchaser Holdings. Purchaser Holdings is a Delaware
corporation. Purchaser Holdings sells propane at wholesale and retail in parts
of ten states and the District of Columbia. The principal offices of the
Purchaser, Purchaser General Partner and Purchaser Holdings are located at
9200 Arboretum Parkway, Suite 140, Richmond, VA 23235. The telephone number of
the Purchaser, Purchaser General Partner and Purchaser Holdings is (804) 327-
1338.
Columbia is a Delaware corporation, and a registered holding company under
the Public Utility Holding Company Act of 1935, as amended. Columbia and its
subsidiaries comprise one of the nation's largest integrated natural gas
systems engaged in natural gas transmission, natural gas distribution, and
exploration for and production of natural gas and oil. Columbia is also
engaged in related energy businesses including the marketing of natural gas
and electricity, the generation of electricity and the distribution of
propane. Its principal office is located at 13880 Dulles Corner Lane, Herndon,
VA 20171. The telephone number of Columbia is (703) 561-6000.
Set forth below is certain selected consolidated financial information with
respect to Columbia which has been excerpted or derived from Columbia's Annual
Report on Form 10-K (the "Columbia 10-K") for the fiscal year ended December
31, 1998. More comprehensive financial information is included in the reports
(including the Columbia 10-K) and other documents filed by Columbia with the
Commission, and the following summary is qualified in its entirety by
reference to such reports and other documents and all the financial
information (including any related notes) contained therein. The Columbia 10-K
is incorporated herein by reference. Such reports and other documents should
be available for inspection and copies thereof should be obtainable in the
manner set forth below under "Available Information on Columbia".
15
<PAGE>
Selected Financial Data
Columbia and Subsidiaries
<TABLE>
<CAPTION>
December 31,
---------------------------
1998 1997 1996
-------- --------- --------
(millions, except
per share amounts or as
otherwise noted)
<S> <C> <C> <C>
INCOME STATEMENT DATA
Total net revenues................................ $1,897.1 $ 1,915.5 $1,872.9
Earnings before extraordinary item and accounting
changes.......................................... 269.2 273.3 221.6
Earnings on common stock.......................... 269.2 273.3 221.6
PER SHARE DATA*
Earnings per share of common stock:
Before extraordinary item and accounting
changes........................................ $ 3.23 $ 3.29 $ 2.75
Earnings per share of common stock.............. $ 3.23 $ 3.29 $ 2.75
Average common shares outstanding (000)......... 83,382 83,100 80,681
Diluted earnings per share of common stock:
Before extraordinary item and accounting
changes........................................ $ 3.21 $ 3.27 $ 2.74
Diluted earnings (loss per share of common
stock)......................................... $ 3.21 $ 3.27 $ 2.74
Diluted average common shares (000)............... 83,748 83,594 80,919
Dividends:
Per share ...................................... $ 0.77 $ 0.60 $ 0.40
Payout ratio (%)................................ 23.8 18.2 14.5
BALANCE SHEET DATA
Capitalization
Common stock equity............................. 2,005.3 1,790.7 1,553.6
Long-term debt.................................. 2,003.1 2,003.5 2,003.8
Short-term debt................................. N/A N/A N/A
Current maturities of long-term debt............ 0.4 0.5 0.8
Total......................................... 4,008.8 3,794.7 3,558.2
Total assets................................ $6,968.7 $66,612.3 $6,004.6
</TABLE>
- --------
* All per share amounts, average common shares outstanding and diluted average
common shares have been restated to reflect a three-for-two common stock
split, in the form of a stock dividend, effective June 15, 1998.
Except as described in this Offer to Purchase or in Schedule I, none of the
Purchaser, Purchaser General Partner, Purchaser Holdings or Columbia
(together, the "Purchaser Entities") or, to the knowledge of the Purchaser
Entities, any of the persons listed in Schedule I or any associate or
majority-owned subsidiary of the Purchaser Entities or any of the persons so
listed, beneficially owns any equity security of the Partnership, and none of
the Purchaser Entities or, to the knowledge of the Purchaser Entities, any of
the other persons referred to above, or any of the respective directors,
executive officers or subsidiaries of any of the foregoing, has effected any
transaction in any equity security of the Partnership during the past 60 days
or beneficially owns or has the right to acquire any such securities.
Except as described in this Offer to Purchase or in Schedule I, (i) there
have not been any contacts, transactions or negotiations between the Purchaser
Entities, or any of their respective subsidiaries or, to the knowledge of the
Purchaser Entities, any of the persons listed in Schedule I, on the one hand,
and the Partnership or its general partners or their directors, officers or
affiliates, on the other hand, that are required to be disclosed pursuant to
the rules and regulations of the Commission and (ii) none of the Purchaser
Entities or, to the knowledge of the Purchaser Entities, any of the persons
listed in Schedule I has any contract, arrangement, understanding or
relationship with any person with respect to any securities of the
Partnership, including, but not limited to, any contract, arrangement,
understanding or relationship concerning the transfer or voting of such
securities, joint ventures, loan or option arrangements, puts or calls,
guaranties of loans, guaranties against loss or the giving or withholding of
proxies.
16
<PAGE>
Except as described in this Offer to Purchase or in Schedule I, during the
last five years, none of the Purchaser Entities or, to the best knowledge of
the Purchaser Entities, any of the persons listed in Schedule I (i) has been
convicted in a criminal proceeding (excluding traffic violations and similar
misdemeanors) or (ii) was a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such
proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting activities subject to, Federal or state
securities laws or finding any violation of such laws. The name, business
address, present principal occupation or employment, five year employment
history and citizenship of each of the directors and executive officers of
each of Purchaser General Partner, Purchaser Holdings and Columbia are set
forth in Schedule I.
Available Information on Columbia. Columbia is subject to the informational
filing requirements of the Exchange Act and, in accordance therewith, is
obligated to file reports and other information with the Commission relating
to its business, financial condition and other matters. Information, as of
particular dates, concerning Columbia's directors and officers, their
remuneration, options granted to them, the principal holders of Columbia's
securities and any material interest of such persons in transactions with
Columbia is disclosed in proxy statements distributed to Columbia's
stockholders and filed with the Commission. Such reports, proxy statements and
other information should be available for inspection at the Commission, and
copies thereof should be obtainable from the Commission, in the same manner as
set forth with respect to information concerning the Partnership in Section 8.
Such material should also be available for inspection at the offices of the
NYSE, 20 Broad Street, New York, New York 10005.
10. Source and Amount of Funds
The total amount of funds required by the Purchaser to purchase all
outstanding Common Units pursuant to the Offer and to pay fees and expenses
related to the Offer and the Merger is estimated to be approximately $213
million. The Purchaser plans to obtain all funds needed for the Offer and the
Merger through capital contributions or advances from Purchaser General
Partner, which will receive capital contributions or advances from Purchaser
Holdings. Purchaser Holdings plans to use for such capital contributions funds
that it has available in its cash accounts or funds obtained from Columbia
through capital contributions or advances. In addition to available cash,
Columbia has committed bank credit facilities that total $1.35 billion. These
facilities support an $850 million commercial paper program and other
liquidity needs. As of December 31, 1998, Columbia had no borrowings under the
bank facilities and had commercial paper outstanding of $145 million. The
Purchaser therefore has not conditioned the Offer or the Merger on obtaining
financing.
11. Contacts with the Partnership; Background of the Offer
In early fall of 1998, Purchaser Holdings and its advisors identified the
Partnership as a potentially suitable acquisition candidate based on the
Partnership's capital constraints imposed on the maintenance and expansion of
its business. Following initial internal discussions, in mid-October,
Purchaser Holdings initiated contact with Triarc regarding a possible
acquisition of the Partnership. From that meeting Purchaser Holdings concluded
that Triarc was willing to sell its interests in the Partnership.
On October 26, 1998, PaineWebber Incorporated began serving as Purchaser
Holdings' financial advisor with respect to the contemplated acquisition.
On November 30, 1998, at Purchaser Holdings' request, Dennis A. Pick, Vice
President, Energy Ventures, of Columbia Energy Group Services Corporation
("Energy Services"), a management services corporation for Columbia and its
subsidiaries, Phillip R. Aldridge, Vice President of Energy Services and Mark
A. Cleaves, Principal, Energy Ventures, of Energy Services, together with
Purchaser Holdings' financial advisor, met with John L. Barnes, Jr., Triarc's
Executive Vice President and Chief Financial Officer, Eric D. Kogan, Triarc's
Executive Vice President, Corporate Development, and Brian L. Schorr, Triarc's
Executive Vice President and General Counsel to discuss a possible
acquisition. At the meeting, the acquisition of Triac's interests in tandem
with a cash tender offer was viewed as the preferred structure of a possible
transaction.
17
<PAGE>
Following this meeting, the parties executed a customary confidentiality
agreement dated as of the same day and subsequently, commencing December 7,
1998, Triarc began providing Purchaser Holdings with certain non-public
financial and operating information regarding the Partnership.
On December 23, 1998, Triarc's legal advisors delivered to Purchaser
Holdings a letter inviting Purchaser Holdings to submit a formal written offer
to purchase all of the partner interests in the Partnership. This letter was
accompanied by an initial draft of the Purchase Agreement. On January 6, 1999,
Purchaser Holdings reiterated its interest in acquiring the Partnership and
proposed a transaction structure that included a cash tender offer for all
Common Units at a price of $8.00 per unit, a purchase of substantially all of
the general partner interests in the Partnership held by the National General
Partners for $5 million (including the agreed-upon value of the 1% Special OLP
Interest held by National MGP after the Merger), plus the exchange of the
remaining limited and general partner interests in the Partnership and
National OLP for the $40.7 million promissory note (with a remaining
outstanding balance of $30.7 million) owed by Triarc to National OLP (the
"Triarc Note"), followed by a back end merger of the Partnership with and into
the Purchaser or, in the alternative, a successful exercise of the "call"
provision under the Partnership Agreement. This proposal was explicitly made
subject to the satisfaction of several conditions, including completion of a
satisfactory due diligence review of the Partnership. In a subsequent letter
dated January 12, 1999, Purchaser Holdings provided its initial comments to
the draft Purchase Agreement and discussed several open issues with respect to
the transaction. On January 20, 1999, Purchaser Holdings delivered additional
clarifying comments to the draft Purchase Agreement.
On January 25-26, 1999, Purchaser Holdings, together with its legal and
financial advisors, conducted a preliminary financial and legal due diligence
review of the Partnership. This process included a management presentation at
which Purchaser Holdings and its representatives were provided with certain
non-public information, including budget information, concerning the business
of the Partnership. See Section 8. On January 28, 1999, Triarc sent a letter
to Purchaser Holdings extending an invitation to Purchaser Holdings to submit
a firm written offer to purchase all of the partnership interests in the
Partnership. In a telephone conversation on January 29, 1999, Triarc's counsel
provided general comments to the Purchaser's legal counsel on certain legal
and general aspects of the Purchaser's prior proposals.
Purchaser Holdings was advised by Triarc that National MGP had appointed a
Special Committee to review and evaluate any agreement that may be reached and
to make a recommendation to the National Board with respect to such
transaction on behalf of the Unitholders. Purchaser Holdings was further
informed that the Special Committee consisted of Willis G. Ryckman, III, a
director of National MGP not otherwise employed by the Partnership or Triarc.
On February 3, 1999, Purchaser Holdings sent to Triarc a written indication
of its continued interest in consummating an acquisition of the interests in
the Partnership pursuant to the transaction structure proposed in its letter
dated January 6, 1999. Purchaser Holdings increased its cash tender offer
price to $9.00 for each Common Unit. In addition, Purchaser Holdings agreed in
principle to structure the transaction in a manner that would protect Triarc's
tax position in the Partnership and to pay certain expenses of Triarc with
respect to the transaction. The indication of interest was made subject to the
satisfaction of several conditions, including the completion of a confirmatory
due diligence review of the Partnership. In a subsequent letter dated February
12, 1999, Purchaser Holdings clarified some of the positions taken in the
February 3, 1999, letter and discussed several open issues with respect to the
acquisition.
The parties and their respective legal and financial advisors engaged in
substantially continuous discussions regarding the Purchase Agreement and
other matters with respect to the transaction through February 23, 1999. On
February 23, 1999, the parties entered into an Exclusivity Agreement, which
granted the Purchaser the exclusive right until March 23, 1999, to conduct
confirmatory due diligence and negotiate a definitive Purchase Agreement.
Subsequent to the execution of the Exclusivity Agreement, Purchaser Holdings
and its representatives began to conduct such a due diligence review of the
Partnership and National OLP. The exclusivity period was subsequently extended
to March 31, 1999, and again to April 9, 1999.
18
<PAGE>
From February 23, 1999, through mid-March, the discussions, negotiations and
confirmatory due diligence continued. On March 18, 1999, Purchaser Holdings
sent a letter to the Special Committee in which it proposed (the "March 18th
Proposal") to make a cash tender offer for all Common Units at a price of
$9.50 per Common Unit, to acquire substantially all of the National General
Partners' interests in the Partnership for $5 million and to permit National
OLP to distribute to National MGP the Triarc Note (the remaining balance of
which is $30.7 million), subject to several conditions, including the
satisfactory completion of Purchaser Holdings' confirmatory due diligence.
On March 26, 1999, Purchaser Holdings and Triarc met to discuss the terms of
the proposed transaction and the status of the confirmatory due diligence
review to date. During the meeting, Purchaser Holdings agreed to amend its
March 18th Proposal by increasing its proposed tender offer price for the
Common Units by $0.10, to $9.60 (the "March 26th Proposal"). At this time,
Purchaser Holdings indicated that it had offered as much aggregate
consideration for the Partnership as it deemed consistent with its business
judgment. The parties also discussed the possibility of Triarc and the
National General Partners incrementally reducing their share of the aggregate
consideration in exchange for a like increase in the tender offer price for
the Common Units. The meeting concluded with Triarc informing Purchaser
Holdings that Triarc would discuss the March 26th Proposal with the Special
Committee.
On April 1, 1999, Triarc informed Purchaser Holdings that Triarc and the
Special Committee had reached agreement on a revised proposal. Under that
revised proposal, Triarc would partially prepay by approximately $14.9 million
the Triarc Note (which would have otherwise been distributed to Triarc without
such pre-payment under the March 26th Proposal) if Purchaser Holdings
increased its proposed tender offer price by a like amount to $12.00 per
Common Unit. The Purchaser accepted the revised proposal because the amount of
the prepayment to National OLP on the Triarc Note equalled the amount of
increased consideration to the holders of Common Units, and, accordingly, the
Purchaser would not be paying any increased aggregate consideration for the
Partnership compared to the March 26th Proposal. At the same time, the
consideration to be paid to Triarc and the National General Partners for their
interests was also decreased by approximately $1 million. Between April 1-4,
1999, the parties continued to negotiate the remaining open issues under the
draft Purchase Agreement, and to resolve the remaining items raised by the
confirmatory due diligence review.
On April 1, 1999, the National Board, on the recommendation of its Special
Committee on such date, unanimously approved and adopted the draft Purchase
Agreement (in the form presented at such meeting with changes approved by
authorized officers), the Offer and the Merger. Prior to this time, the
parties had agreed upon the need to amend the Note Agreements under which the
First Mortgage Notes were sold (the "Note Agreements") prior to execution of
the Purchase Agreement. Accordingly, the parties sought the consent of the
holders of the First Mortgage Notes to an amendment to the prepayment
provisions of the Note Agreements wherein National OLP may prepay the First
Mortgage Notes at a negotiated premium on the date of the Merger ("Amendment
No. 2"). Such consents were obtained and the Purchase Agreement was finalized
on April 5, 1999. On April 5, 1999, the boards of directors of Purchaser
General Partner and Purchaser Holdings each approved the transaction as
contemplated by the Purchase Agreement by unanimous written consent.
Following these approvals and the execution of Amendment No. 2, the Purchase
Agreement was executed and delivered and the transaction was publicly
announced on April 5, 1999. The Offer was formally commenced on the date of
this Offer to Purchase.
12. Purpose of the Offer; The Purchase Agreement; Merger
Purpose. The purpose of the Offer is to acquire control of the entire
aggregate limited partnership interest in the Partnership represented by the
Common Units. Following the Offer, the Purchaser and Purchaser General Partner
intend to acquire, directly or indirectly, (i) any remaining outstanding
Common Units not acquired in the Offer by consummating the Merger and (ii) all
of the general partner interests in the Partnership and all of the general
partner interests and substantially all of the limited partner interests (all
except the 1% Special OLP Interest, as defined below) in the Partnership's
operating partnership, National OLP. The Offer, the Merger and the other
transactions effecting the acquisition of such interests in the Partnership
and in National OLP are being made pursuant to the Purchase Agreement.
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The Purchase Agreement. The following is a summary of the material terms and
conditions of the Purchase Agreement, a copy of which was filed as Exhibit
(c)(i) to the Schedule 14D-1 of the Purchaser, Purchaser General Partner,
Purchaser Holdings and Columbia filed with the Commission. The Purchase
Agreement should be available for inspection and copies should be obtainable
in the manner set forth under "Available Information" in Section 8 of the
Offer to Purchase. The following summary is qualified in its entirety by
reference to the Purchase Agreement.
Agreements to Purchase Acquired Interests; The Merger. On the terms and
subject to the conditions of the Purchase Agreement, the Purchaser, in
addition to making this offer to acquire the Common Units as described in this
Offer to Purchase, has agreed to acquire, directly or indirectly as more fully
described below, (i) 100% of the outstanding subordinated units representing
subordinated general partner interests in the Partnership ("Subordinated
Units"), (ii) 100% of the unsubordinated general partner interests in the
Partnership and 100% of the incentive distribution rights representing general
partner interests in the Partnership, (iii) 100% of the unsubordinated general
partner interests in National OLP, and (iv) substantially all of the limited
partner interests (all of which are referred to herein as the "National OLP
Interests") in National OLP (collectively, the items in clauses (i) through
(iv) above and the Common Units are referred to as the "Acquired Interests").
The Purchase Agreement further provides that following the satisfaction or
waiver of the conditions described below under "Conditions to the Merger", the
Partnership will be merged with and into the Purchaser, and each then
outstanding Common Unit (other than Common Units owned by the Purchaser or any
affiliate of the Purchaser), will be converted into the right to receive an
amount in cash equal to the Offer Price.
The Purchase Agreement provides that, if the Offer is consummated, Triarc
will unconditionally and irrevocably pay $14,883,720 to National OLP under the
Triarc Note, together with interest, calculated based on a rate per annum of
9.44%, for the period from the date of acceptance of Common Units in the Offer
to the closing of the Merger, on a principal amount equal to (x) $2.40
multiplied by (y) the number of Common Units accepted and paid for in the
Offer. Triarc will make such payment immediately prior to the direct or
indirect acquisition of the Acquired Interests and closing of the Merger as
described below. Thereafter, National MGP will cause (i) the Partnership to
redeem (A) all 1% of the unsubordinated general partner interests in the
Partnership owned by National SGP in exchange for the simultaneous
distribution to National SGP of a 0.9798% limited partner interest in National
OLP, (B) all 4,533,638 Subordinated Units and all incentive distribution
rights owned by National MGP in exchange for the simultaneous distribution to
National MGP of a 22.6351% limited partner interest in National OLP and (C)
all 1% of the unsubordinated general partner interest in the Partnership owned
by National MGP (other than a general partner interest valued at $1,000) in
exchange for the simultaneous distribution to National MGP of a 0.9798%
limited partner interest in National OLP, and immediately thereafter, (ii)
National OLP to redeem all of the National OLP Interests owned by National
MGP, other than a 1.0% National OLP Interest (inclusive of the interest in (C)
above) (which, for purposes of determining the aggregate consideration to be
paid to the National General Partners under the Purchase Agreement, shall be
initially valued at $700,000), in exchange for the simultaneous assignment and
distribution to 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.
In addition, the Purchase Agreement provides that, following the foregoing
reorganization, at the closing of the Merger, (x) the Purchaser will purchase
all of the National OLP Interests owned by National SGP for an aggregate
consideration of $686,000, and (y) Purchaser General Partner will purchase (i)
all of the National OLP general partner interests owned by National SGP for an
aggregate consideration of $707,000, and (ii) all of the National OLP general
partner interests owned by National MGP (other than a National OLP general
partner interest valued at $1,000) for an aggregate consideration of $706,000.
The Purchase Agreement further provides that, at the date and time of filing
of a certificate of merger with the Delaware Secretary of State with respect
to the Merger (the "Effective Time"), by virtue of the Merger and without any
action on the part of the Purchaser, the Partnership or any holder of Common
Units, (i) each of the Common Units not owned by the Purchaser or an affiliate
thereof will be converted into the right to receive an amount in cash equal to
the highest amount per Common Unit paid to holders of Common Units in the
Offer,
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(ii) the general partner interest in the Partnership owned by National MGP
will 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 will be converted into one partnership interest of the
Purchaser as the surviving entity in the Merger, with the same rights, powers
and privileges as the interest so converted and will constitute the only
outstanding partnership interests of the Purchaser as the surviving entity.
Purchaser General Partner has agreed that, immediately following the closing
of the Merger, it will purchase the general partner interest valued at $1,000
in National OLP held by National MGP for $1,000 and, as successor general
partner of National OLP, it will cause National OLP to convert the 1.0%
limited partner interest held by National MGP in National OLP into a 1.0%
special limited partner interest in National OLP (the "Special OLP Interest").
The Special OLP Interest to be held by National MGP will have limited voting
rights and will be nontransferable (except to an affiliate of National MGP)
other than as described in the next paragraph.
The Purchase Agreement provides that National MGP may require, at any time
upon prior written notice and subject among other things to the condition that
good title be transferred, that the Purchaser OLP (which, as used herein,
refers to National OLP following the Merger) purchase all (but not less than
all) of the Special OLP Interest for cash in an amount equal to the fair
market value of the Special OLP Interest as of the date of such notice, as
determined by a nationally recognized independent appraiser or investment
banking firm selected by Purchaser General Partner. The Purchase Agreement
further provides that Purchaser General Partner may require, at any time upon
written notice to National MGP, that National MGP sell to the Purchaser OLP
all (but not less than all) of the Special OLP Interest and deliver good title
thereto in consideration of (i) the payment of the cash price as provided in
the immediately preceding sentence, 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 National MGP resulting from a decrease in
its share of Indemnified Debt (as hereinafter defined), multiplied by (B) a
fraction, the numerator of which is the Effective Tax Rate (as defined in the
Purchase Agreement) and the denominator of which is one minus the Effective
Tax Rate.
Vote Required to Approve Merger. The Merger will require the approval of the
holders of a majority of the outstanding Common Units, including the Common
Units owned by the Purchaser, and a majority of the
outstanding Subordinated Units, all of which Subordinated Units are held by
National MGP. If the Minimum Condition is satisfied and the Offer is
consummated, upon admission to the Partnership as a limited partner, the
Purchaser will be able to approve the Merger without the vote of any other
holder of Common Units.
Under the Purchase Agreement, the Purchaser has agreed to execute a consent,
as the holder of greater than a majority of the Common Units following
consummation of the Offer, and National MGP has agreed to execute a consent,
as holder of all the Subordinated Units, to approve the Merger and all other
transactions contemplated by the Purchase Agreement.
If the Merger is consummated, holders of Common Units of the Partnership who
elected not to tender their Common Units in the Offer will have their
interests in the Common Units converted into the right to receive the same
amount of cash consideration in exchange for each Common Unit as they would
have received in the Offer.
Conditions to the Offer. The Purchase Agreement provides that,
notwithstanding any other provision of the Offer, the Purchaser will not be
required to accept for payment or pay for any 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 Common Units tendered, if (i)
the Minimum Condition has not been satisfied, (ii) any applicable waiting
period under the HSR Act has not expired or been terminated prior to the
expiration of the Offer or (iii) at any time on or after the date of the
Purchase Agreement, and prior to the acceptance for payment of Common Units,
any of the conditions described in paragraphs (a) through (k) of Section 14 of
this Offer to Purchase exists.
Conditions to the Purchase of Acquired Interests. The Purchase Agreement
provides that the obligations of the Purchaser and Purchaser General Partner
to purchase the Acquired Interests owned by the Partnership, the National
General Partners and Triarc (collectively with National Sales and Service Inc.
("NSSI"), the "National
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Parties") are subject to the satisfaction or waiver of certain conditions,
including the following: (i) the reorganization of the Partnership as
described above in the second paragraph under "Agreements to Purchase Acquired
Interests; The Merger" having been completed; (ii) the Purchase Agreement, the
Merger and the other transactions contemplated under the Purchase Agreement
having been approved and adopted by the affirmative vote of at least a
majority of the outstanding Common Units voting as a class and at least a
majority of the outstanding Subordinated Units voting as a class, to the
extent required; (iii) 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
being in effect and no action or proceeding being pending which could
reasonably be expected to result in such an order or injunction; (iv) the
representations and warranties of the National Parties in the Purchase
Agreement regarding corporate and partnership authority, enforceability of the
Purchase Agreement and good and valid title to the Acquired Interests being
true and correct as of the date of closing of the Merger as though made as of
such date; (v) the Purchaser having previously accepted for payment and paid
for all validly tendered Common Units pursuant to the Offer; and (vi) National
OLP concurrently prepaying all of its First Mortgage Notes and the
approximately $13 million under its acquisition line under the Bank Facility
(the "Acquisition Line").
Conditions to the Merger. The Purchase Agreement provides that the
obligations of the parties to effect the Merger are subject to the
satisfaction or waiver of certain conditions, including the following: (i)
good and valid title to the Acquired Interests owned by the National Parties
having been conveyed to the Purchaser and Purchaser General Partner pursuant
to the Purchase Agreement, free and clear of any liens, claims or
encumbrances; (ii) the Purchase Agreement, the Merger and the other
transactions contemplated under the Purchase Agreement having been approved
and adopted by the affirmative vote of at least a majority of the outstanding
Common Units voting as a class and at least a majority of the outstanding
Subordinated Units voting as a class, to the extent required; (iii) 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 being in effect and no action or proceeding
being pending which could reasonably be expected to result in such an order or
injunction; (iv) the representations and warranties of the National Parties in
the Purchase Agreement regarding corporate and partnership authority and
enforceability of the Purchase Agreement being true and correct as of the date
of closing of the Merger as though made as of such date; provided, that this
clause (iv) is only a condition to the obligations of the Purchaser Parties;
and (v) the Purchaser having previously accepted for payment and paid for all
validly tendered Common Units pursuant to the Offer.
No Solicitation. The Purchase Agreement provides that each of the National
Parties (on behalf of itself and its affiliates, including the Partnership and
National OLP) will 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
Partnership or National OLP, or (c) any other transaction similar to the
transactions contemplated by the Purchase Agreement (collectively, the
"National Possible Alternatives"), and 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 the Purchase Agreement remains
in effect, (i) solicit, initiate, encourage (including by way of furnishing
information or assistance), conduct discussions with or 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 the Purchase
Agreement by the Special Committee or the National Board.
Notwithstanding the foregoing provisions, prior to the consummation of the
Offer, Triarc, the Partnership, National SGP, National MGP and National OLP
will be entitled to take any action otherwise prohibited by the
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provisions of the Purchase Agreement described in the previous paragraph 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 the provisions described in the previous paragraph, (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 the Purchase Agreement, taken
as a whole, to the holders of Common Units other than 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 National MGP's or the National Board's fiduciary duties to
holders of Common Units under applicable law; provided, that none of National
MGP, National SGP, the Partnership or National OLP may execute a binding
agreement to effect a National Superior Transaction unless the Purchase
Agreement has first been terminated in accordance with the applicable terms
thereof. The Purchase Agreement further provides that Triarc, National MGP (on
behalf of itself, the Partnership, National OLP and National SGP) and the
Partnership 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 will 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.
Termination of Purchase Agreement. The Purchase Agreement may be terminated
at any time prior to the date on which the Purchaser accepts for payment, and
pays for, Common Units in the Offer (a) by Purchaser General Partner and
National MGP upon their mutual written agreement; (b) by (i) the Purchaser, if
the Offer expires or is terminated or withdrawn in accordance with its terms
as set forth in Section 1 of this Offer to Purchase without any Common Units
being purchased thereunder or as a result of the occurrence or existence of
any condition set forth in Section 14 of this Offer to Purchase but subject to
the terms of the Offer as set forth in Section 1 of this Offer to Purchase; or
(ii) National MGP, if the Offer is terminated, or has not been commenced in
accordance with the terms of the Purchase Agreement within five business days
of the date of the Purchase Agreement, or if the Purchaser has not purchased
Common Units validly tendered and not withdrawn pursuant to the Offer in
accordance with the terms of the Purchase Agreement within 90 days after
commencement of the Offer; or (iii) the Purchaser if, as a result of the
occurrence or existence of any condition set forth in Section 14 of this Offer
to Purchase, the Offer has not been commenced in accordance with the terms of
the Purchase Agreement within 60 days of the date of the Purchase Agreement;
provided, however, that the party seeking to terminate the Purchase Agreement
pursuant to this clause (b) and its affiliated parties are not in material
breach of any of its representations, warranties or covenants contained in the
Purchase Agreement; (c) by National MGP 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 the
provisions of the Purchase Agreement described in the second paragraph of "No
Solicitation" above, withdraws, modifies, qualifies or changes in a manner
adverse to the Purchaser its recommendation that the holders of Common Units
tender their Common Units in the Offer; and (d) by National MGP, if the
Purchaser has provided a notice to National MGP that a change in applicable
tax laws has occurred and National MGP notifies the Purchaser in writing that
the relevant tax law change would adversely affect the tax deferral for the
benefit of National MGP sought to be achieved by the provisions described
below under "Agreement with Respect to Tax Matters."
The Purchase Agreement may also be terminated at any time prior to the
closing of the Merger by either Purchaser Holdings or National MGP if the
closing of the Merger has not occurred by the date that is 210 days after
purchase of the Common Units pursuant to the Offer; provided, however, that no
party whose breach of the
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Purchase Agreement has caused the failure to so close will have the right to
so terminate the Purchase Agreement.
Termination and Outside Date Breakage Fees; Fees and Expenses. If the
Purchase Agreement is terminated in accordance with the provisions described
under clause (c) of the first paragraph of "Termination of Purchase Agreement"
above, the Partnership will have the obligation to pay or cause to be paid
promptly (but in no event more than three days after the Purchase Agreement is
so terminated) to the Purchaser a fee of $3.0 million in cash.
In the event that (i) the Purchase Agreement is terminated in accordance
with the provisions described under clause (c) of the first paragraph of
"Termination of Purchase Agreement" above, and (ii) within the twelve months
following such termination a National Possible Alternative is consummated
which is more beneficial than the transactions contemplated by the Purchase
Agreement, taken as a whole, to the holders of Common Units other than
National MGP and its affiliates, then the Partnership 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 Partnership pursuant
to the immediately preceding paragraph). If any such transaction does not
involve the acquisition of substantially all of the interests in or assets of
the Partnership or National OLP, then the calculation of the amount to be paid
in excess of amounts paid pursuant to the immediately preceding paragraph will
be adjusted on a pro rata basis.
In the event that the Purchase Agreement is terminated pursuant to the
provision discussed in the last paragraph under "Termination of Purchase
Agreement" above or is terminated upon mutual agreement of the parties, on the
date of such termination Triarc has agreed to unconditionally and irrevocably
pay to the Purchaser, as an inducement for the Purchaser Parties to enter into
the Purchase 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, and (ii) interest on such amount, calculated based on a rate per
annum of 9.44%, for the period from the date the Common Units are accepted and
paid for in the Offer to such date of termination.
The Purchase Agreement further provides that the Partnership and National
OLP will pay all fees and expenses relating to (i) the Partnership's filings
with the Commission, (ii) obtaining the consent of the holders of National
OLP's First Mortgage Notes (except as provided in Amendment No. 2) and (iii)
up to an aggregate of $1.5 million of the fees and expenses of the Special
Committee and its advisors and of certain appraisal and asset valuation
services with respect to the assets of National OLP.
Conduct of Business by the Partnership and the National MGP Pending the
Merger. The Partnership has agreed that during the period from the date of the
Purchase Agreement to the Effective Time, it will (and National MGP has agreed
to cause the Partnership, National OLP and NSSI to), among other things, (i)
maintain its assets and properties in good working order and condition and
operate its business in the ordinary course as was being conducted prior to
the execution of the Purchase Agreement, (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 governmental agency; (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 cause 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) 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 closing of the Merger.
The Purchase Agreement further provides that, from the date of the Purchase
Agreement until the Effective Time, the Partnership will not (except as
otherwise contemplated by the Purchase Agreement) (and National
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MGP will cause the Partnership, National OLP and NSSI not to), without first
obtaining the written consent of Purchaser General Partner, which consent will
not be unreasonably withheld or delayed: (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 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 Partnership and National OLP); (vii) incur any indebtedness
for borrowed money (except for borrowings under existing working capital
facilities up to an aggregate of $l.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 $l.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; (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 tax closing agreement, (C) settle or compromise any
material claim, action, suit, litigation, proceeding, arbitration,
investigation, audit, or controversy relating to taxes other than as otherwise
set forth in the Purchase Agreement 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.
In the Purchase Agreement, National MGP covenants that from the date of the
Purchase Agreement until the Effective Time, (i) it will use its commercially
reasonable efforts to retain its employees related to the operation of the
Partnership and 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 National MGP regarding such prospective hire, (iv) 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 otherwise set forth in the Purchase Agreement, 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, (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 the Partnership's at cost reimbursement obligation for
employee services and (vii) it will not permit NSSI to do any of the
foregoing.
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The National Parties further agreed in the Purchase Agreement that they
will, and will cause National OLP to: (a) keep Amendment No. 2 to the Note
Agreements 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 the Note Agreements without
the prior written consent of the Purchaser which shall not be unreasonably
withheld. As discussed above in Section 11, in Amendment No. 2 the lenders
agreed to the prepayment option wherein National OLP may prepay the First
Mortgage Notes at a negotiated premium on the date of the Merger. Prepayment
of the First Mortgage Notes and the amounts under the Acquisition Line is a
condition to the obligations of the Purchaser and Purchaser General Partner to
purchase the Acquired Interests.
Employees and Employee Benefits. Under the Purchase Agreement, the parties
agreed that all employees of National MGP in connection with the business of
the Partnership and National OLP will be offered employment by the Purchaser
Parties. The parties further agreed that the Purchaser will assume all costs
of severance relating to such employees under National MGP employee retention
program, under certain employment and severance agreements and will assume any
amounts related to payments under certain stock, phantom stock, unit or
phantom unit plans maintained by National MGP. The Purchaser agreed to assume
all liabilities of the National Parties to, or with respect to, such employees
(or their dependents or beneficiaries) related to or based upon their
employment with the National Parties. The Purchaser also agreed to assume any
and all of National MGP's and the National Parties' obligations under certain
collective bargaining agreements existing at the Effective Time with respect
to such employees.
In connection with any withdrawal liability under Section 4201(a) of ERISA
by reason of the consummation of the transactions under the Purchase
Agreement, the parties have agreed that the Purchaser has the option in its
sole discretion to either (i) enter into an agreement with the National
Parties under Section 4204 of ERISA pursuant to which it will contribute to
the multiemployer plans to which the National Parties had an obligation to
contribute with respect to such employees of National MGP immediately prior to
the Effective Time, for substantially the same number of contribution base
units for which the National Parties had an obligation to contribute for each
of such multiemployer plans or (ii) pay directly the amount of any withdrawal
liability incurred in connection with such multiemployer plans by reason of
the consummation of the transactions under the Purchase Agreement where no
agreement referred to in clause (i) above was effected, except if such
liability is caused by the failure of any National Party to satisfy the
requirements of Section 4204 of ERISA.
If the Purchaser completely or partially withdraws from any such
multiemployer plan during the first five plan years beginning after the
Effective Time, the National Parties agreed in the Purchase Agreement to 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. National MGP also agreed in the Purchase Agreement to
take no action that would reasonably be expected to result in increased
severance cost obligations to the Purchaser or its affiliates without the
prior written consent of Purchaser General Partner, which shall not be
unreasonably withheld, except as permitted as described under "Conduct of
Business by the Partnership and National MGP Pending the Merger" above.
Under the Purchase Agreement, the Purchaser and the Purchaser OLP agreed to
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 the foregoing
employee-related provisions of the Purchase Agreement.
Agreements with Respect to Indemnification of National General Partners,
Triarc and Directors and Officers. Pursuant to the Purchase Agreement, the
Purchaser, Purchaser Holdings and Purchaser General Partner have agreed that,
from and after the closing of the Merger, they will (and will cause the
Purchaser OLP
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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 Partnership Agreement and Section 7.7 of the
National OLP partnership agreement, from and against all losses, costs,
damages, expenses (including reasonable attorneys fees), liabilities and
claims (collectively, "Losses") arising or resulting from or relating to the
Partnership, 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 sections in such partnership agreements, except in each case
for Losses for which National MGP is indemnifying the Purchaser and its
affiliates under the Purchase Agreement; provided, that such indemnification
will not be limited to payments out of the assets of the Partnership or the
Purchaser OLP.
The Purchaser, Purchaser Holdings and Purchaser General Partner have also
agreed that, from and after the closing of the Merger, they will (and will
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 arising or resulting from, or
relating to (a) certain expenses of or relating to the Partnership's and
National OLP's operations incurred by National MGP for which the Partnership
has a reimbursement obligation to National MGP under the Partnership
Agreement; (b) any material breach of the representations or warranties of the
Purchaser Parties in the Purchase Agreement; (c) the conduct of the business
or operations of the Purchaser, the Purchaser OLP, the Partnership, National
OLP or NSSI following the Effective Time; (d) certain litigation matters
described in the Purchase Agreement; and (e) certain real property located in
Marshfield, Wisconsin, except in each case of clauses (a) through (c) for
Losses for which National MGP is indemnifying the Purchaser and its affiliates
as described below.
Agreements with Respect to Indemnification of the Purchaser Parties and
Directors and Officers. Under the Purchase Agreement, National MGP has agreed
that, from and after the closing of the Merger, it will indemnify and hold
harmless Purchaser Holdings and its affiliates, any successors thereto, or any
of the preceding persons who subsequent to the date of the closing of the
Merger 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
Purchaser OLP) with respect to National OLP debt at the closing of the Merger
(consisting of approximately $140 million principal amount of indebtedness)
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 (such indemnity, the
"Debt Indemnity"). National MGP and Triarc have further agreed in the Purchase
Agreement that, from and after the consummation of the Offer, they will
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 (i) any material
breach of the representations or warranties of the National Parties in the
Purchase Agreement relating to organization, existence, powers and
qualification, partnership or corporate authority to enter into the Purchase
Agreement and ownership of the Acquired Interests, or (ii) any claim made by
any holder of indebtedness of National OLP, to the extent relating to any act
or omission of National MGP, Triarc or their affiliates prior to closing of
the Merger, if such claim has been asserted in writing prior to the
consummation of the Offer and does not arise from or relate to the
transactions contemplated by the Purchase Agreement or any action or omission
otherwise requested by the Purchaser.
Agreements with Respect to Tax Matters. Under the Purchase Agreement, from
the date of closing of the Merger until the expiration of the Debt Indemnity,
the Purchaser agreed that it will not, and Purchaser Holdings agreed that it
will cause the Purchaser, Purchaser General Partner and Purchaser OLP not to,
without the prior written consent of National MGP, (i) except as required by
applicable law (as defined therein), implement or adopt any material change in
the Purchaser OLP's current federal income tax methods, principles or
elections to be specifically identified by the National Parties, (ii) sell or
otherwise dispose of any assets of the Purchaser
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OLP (except as otherwise agreed) if such sale or disposition would result in
greater than $5,000,000 of gain per year on a cumulative basis permitting
carry-forwards, to be allocable to National MGP pursuant to Section 704(c) of
the Code; or (iii) increase as of any date following the date of closing of
the Merger the Section 704 carrying value of the assets contributed to
National OLP by National MGP and National SGP, as provided therein. In the
event that either the Purchaser or the Purchaser OLP breaches covenant (i),
(ii) or (iii) of this paragraph, subject to certain limits contained in the
Purchase Agreement, Purchaser Holdings, Purchaser General Partner and the
Purchaser OLP agreed to indemnify National MGP, in an amount equal to the sum
of (x) (A) the incremental gain recognized as a result of such breach, as
calculated therein, 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 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.
Purchaser Holdings and Purchaser General Partner further agreed, following
the Effective Time and until the termination of the Debt Indemnity, to cause
the Purchaser OLP not to (a) prepay, defease, purchase or otherwise retire any
of the Indemnified Debt, except as provided therein, (b) modify any of the
Indemnified Debt so as to eliminate or limit the recourse liability of
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 (as defined therein), take or fail to take any other action
that would result in the share of the Indemnified Debt which is allocated to
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 National MGP's adjusted tax basis in its interest in the
Purchaser OLP, as adjusted following the Effective Time and as so identified
by National MGP ("MGP's Basis"); provided, however, that such covenants will
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
National MGP for purposes of Section 752 of the Code to be reduced by an
amount in excess of MGP's Basis at all times until termination of the Debt
Indemnity. In addition, Purchaser Holdings and Purchaser General Partner have
agreed to 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, the amount of Indemnified Debt which is
allocable to National MGP for purposes of Section 752 of the Code will not be
reduced by an amount exceeding National MGP's Basis. The Purchase Agreement
provides that following the Effective Time and until the termination of the
Debt Indemnity, (i) Purchaser Holdings and Purchaser General Partner will
cause the Purchaser OLP to use all commercially reasonable efforts to not take
or omit to take any action, if such action or omission would constitute a
breach of, or give rise to a default or event of default under, any
Indemnified Debt, and (ii) National MGP will 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. The
Purchase Agreement further provides that, in the event that before termination
of the Debt Indemnity, National MGP's share of the Indemnified Debt for
purposes of Section 752 of the Code is reduced by an amount in excess of
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 the Purchase Agreement, subject to certain limits contained in
the Purchase Agreement, Purchaser Holdings, Purchaser General Partner and the
Purchaser OLP agreed to indemnify National MGP in an amount equal to the sum
of (x) (A) the gain recognized by National MGP resulting from a decrease in
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
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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.
Notwithstanding the foregoing, the Purchase Agreement provides that no
indemnity will be provided by any Purchaser Party to National MGP with respect
to any Losses arising under the foregoing tax indemnity provisions to the
extent that any such Losses or any portion thereof are attributable to (i) the
Internal Revenue Service determining National MGP is not a partner with
respect to the Purchaser OLP or the Debt Indemnity is not recognized as an
obligation by 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 National MGP with or into Triarc or an affiliate of
Triarc, or any transfer of the Acquired Interests prior to the closing of the
Merger permitted by the Purchase Agreement, results in the recognition by
National MGP, National SGP or any transferee thereof 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 the Purchase Agreement.
National MGP and the Purchaser agreed in the Purchase Agreement that, at any
time until the expiration of the Debt Indemnity, the fair market value of the
assets of National OLP will be determined in accordance with an appraisal
conducted by a valuation firm (the "Original Appraiser") prior to closing of
the Merger, performed in a manner consistent with the assumptions and
methodologies used by such firm in its appraisal of the assets upon formation
of National OLP; provided that, if such appraisal places the value of the
depreciable and amortizable assets at less than $117 million, the Purchaser
may cause an appraisal of such assets to be performed by an independent,
nationally recognized appraiser selected by it. If the second appraisal places
the value of such assets at $130 million or less, National MGP and the
Purchaser will, for all tax and Code Section 704 book purposes, utilize such
value. If the second appraisal places the value of such assets at more than
$130 million, the value placed on such assets by the first appraisal shall be
utilized for all tax and Code Section 704 book purposes. The preliminary
appraisal conducted by the Original Appraiser resulted in a value for such
assets at the low end of the $117-$130 million range, which if confirmed in
the final report, would eliminate the need for a second appraisal.
Upon the terms and subject to the limits of a guaranty agreement, Columbia
has agreed to guarantee the Purchaser Parties' indemnification obligations for
any breaches of the tax-related provisions described in the first and second
paragraphs under "Agreements with Respect to Tax Matters" above, for a
specified maximum amount, which maximum amount declines according to a
schedule over the 15 year term of such guaranty.
Consents, Approvals and Filings. The Purchase Agreement provides that each
of the parties thereto will 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
the Purchase Agreement, including but not limited to making all required
regulatory filings and applications and obtaining 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 Merger and other transactions contemplated by the Purchase
Agreement and to otherwise fulfill the conditions to the consummation of the
Purchase Agreement.
The Purchase Agreement further provides that, during the period from the
date of the Purchase Agreement to the Effective Time, the parties will use
commercially reasonable efforts to obtain any consents necessary to transfer
title to, and shall use their respective commercially reasonable efforts to
transfer title to, any assets used primarily in the business of the
Partnership or the National OLP (whether owned by the Partnership or National
MGP, but excluding the capital stock of any subsidiaries of National MGP)
including, but not limited to, any tradenames, intellectual property rights,
real property rights or personal property rights, from National MGP, National
SGP and the Partnership to National OLP. If any such consents are not
obtained, National MGP will use its commercially reasonable efforts to take
such other action as may be necessary to provide the Purchaser
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OLP with rights to such assets substantially equivalent to those held by
National MGP, National SGP and the Partnership.
National MGP and Purchaser General Partner also agreed to cooperate in (a)
causing National MGP, the Partnership and 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, (b) effectuating the issuance, assignment or transfer, as promptly
as is reasonably possible on or after the Effective Time, of all licenses or
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 permits.
Representations and Warranties. The Purchase Agreement contains various
customary representations and warranties of the parties thereto. These include
representations and warranties of the Partnership, the National General
Partners and Triarc with respect to, among other things, the following
matters: (i) organization, existence, powers and qualification, (ii)
partnership or corporate authority to enter into the Purchase Agreement, (iii)
the filings of the Partnership made with the Commission, (iv) the financial
statements of the Partnership, (v) the documents relating to the Offer, (vi)
the absence of certain material adverse changes, (vii) ownership of the
Acquired Interests, (viii) non-contravention of the Purchase Agreement with
certain laws, agreements or orders, (ix) absence of defaults under certain
agreements or orders, (x) completeness of documents provided, (xi) brokerage
arrangements, (xii) undisclosed liabilities, (xiii) absence of certain
litigation, (xiv) compliance with laws, and (xv) certain environmental, labor,
insurance, intellectual property, employee benefits and tax matters.
The Purchaser, Purchaser General Partner and Purchaser Holdings have also
made certain representations and warranties with respect to, among other
things, the following matters: (i) organization, existence, powers and
qualification, (ii) partnership or corporate authority to enter into the
Purchase Agreement, (iii) non-contravention of the Purchase Agreement with
certain laws, agreements or orders, (iv) absence of defaults under certain
agreements, (v) the documents relating to the Offer, (vi) the sufficiency of
funds to acquire the Acquired Interests, and (vii) brokerage arrangements.
Access to Information. Under the Purchase Agreement, from the date of the
Purchase Agreement to the Effective Time or until the Purchase Agreement is
terminated as provided therein, each of National MGP and the Partnership will
provide, and National MGP will cause 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 will 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 that access and disclosure would violate the terms of
any Agreement to which any National Party or National OLP is bound or any
applicable law or regulation. Each of the Purchaser Parties has agreed, until
the closing of the Merger, to maintain the confidentiality of any data or
information so acquired in accordance with the terms of an existing
Confidentiality Agreement between Purchaser Holdings and Triarc.
Information Statement; Agreement to Execute Written Consents. The Purchase
Agreement provides that as soon as practicable following the purchase of all
Common Units validly tendered and not withdrawn pursuant to the Offer, if
required by applicable law, National MGP will file an information statement
(the "Information Statement") with the Commission under the Exchange Act, and
will use its commercially reasonable efforts to have the Information Statement
cleared by the Commission. Purchaser General Partner and National MGP further
agreed to cooperate with each other in the preparation of any Information
Statement, and National MGP agreed to notify Purchaser General Partner of the
receipt of any comments of the Commission with respect to any Information
Statement and of any requests by the Commission for any amendment or
supplement thereto or for additional information and agreed to provide to
Purchaser General Partner promptly copies of all correspondence between
National MGP or any representative of National MGP and the Commission.
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Under the Purchase Agreement, the Purchaser has agreed to execute a consent,
on the first business day following expiration of twenty calendar days from
the date of mailing of the Information Statement, as the holder of the
majority of the Common Units, and National MGP has agreed to so execute a
consent, as the holder of all of the Subordinated Units, to approve all of the
transactions contemplated by the Purchase Agreement.
Amendment; Binding Effect and Assignment. The Purchase Agreement provides
that no supplement, modification or waiver of the Purchase Agreement will be
binding unless executed in writing by the party to be bound thereby. The
parties agreed that the Purchase Agreement will be binding upon and inure to
the benefit of the parties thereto and their respective successors and
permitted assigns; but neither the Purchase Agreement nor any of the rights,
benefits or obligations thereunder may be assigned, by operation of law or
otherwise, by any party thereto without the prior written consent of either
Purchaser General Partner or National MGP, as applicable, other than as set
forth therein. Nothing in the Purchase Agreement, express or implied, is
intended to confer upon any person or entity other than the parties thereto
and their respective successors and permitted assigns any rights, benefits or
obligations thereunder.
Options to Purchase Common Units. National MGP has informed the Purchaser
that effective upon the Merger, all outstanding options to purchase Common
Units under National MGP's 1996 Common Unit Option Plan will be canceled for
no consideration to holders of options, given that the exercise price for the
options, set at the time of granting of the options, is well in excess of the
consideration to be received by any holders of outstanding Common Units in the
Merger.
No Dissenters' Rights. Holders of Common Units will not have appraisal
rights as a result of the Offer or the Merger.
Timing of Merger. The exact timing and details for the Merger will depend
upon legal requirements and a variety of other factors. Although the Purchaser
has agreed to cause the Merger to be consummated on the terms and subject to
the conditions set forth above, there can be no assurance as to the timing of
the Merger.
Effect of Inability to Consummate the Merger. Pursuant to the Purchase
Agreement, following the consummation of the Offer and subject to other
conditions, the Partnership will be merged with and into the Purchaser
following the approval of the Merger by the holders of a majority of the
outstanding Common Units and Subordinated Units, each voting as a class. See
"Vote Required to Approve Merger" above.
If Purchaser Holdings controls more than 50% of the outstanding Common Units
following the consummation of the Offer but the Merger is not consummated,
holders of Common Units of the Partnership, other than those affiliated with
Purchaser Holdings, will lack sufficient voting power to cause actions to be
taken under the Partnership Agreement which require majority approval. If for
any reason following completion of the Offer, the Merger is not consummated,
Purchaser Holdings, Purchaser General Partner and the Purchaser reserve the
right, subject to any applicable legal restrictions, to acquire additional
Common Units through private purchases, market transactions, tender or
exchange offers or otherwise on terms and at prices that may be more or less
favorable than those of the Offer or, subject to any applicable legal
restrictions, to dispose of any or all Common Units acquired by the Purchaser.
Going Private Transactions. The Merger would have to comply with any
applicable Federal law operative at the time of its consummation. Rule 13e-3
under the Exchange Act is applicable to certain "going private" transactions.
The Purchaser does not believe that Rule 13e-3 will be applicable to the
Merger unless the Merger is consummated more than one year after the
termination of the Offer. If applicable, Rule 13e-3 would require, among other
things, that certain financial information concerning the Partnership and
certain information relating to the fairness of the Merger and the
consideration offered to Common Unit holders be filed with the Commission and
disclosed to Common Unit holders prior to consummation of the Merger.
Plans for the Partnership. During the Offer and through consummation of the
Offer and the Merger, Purchaser Holdings and Purchaser General Partner intend
to further review the Purchaser's (as successor to the
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Merger with the Partnership) and the Purchaser OLP's (i.e., National OLP
following the Merger) business, assets, capitalization and management with a
view to optimizing the Purchaser's potential growth and profitability and will
take such actions as they deem appropriate under the circumstances then
existing.
Except as otherwise described in this Offer to Purchase, including under
"The Purchase Agreement" above in this Section 12, the Purchaser, Purchaser
General Partner and Purchaser Holdings have no current plans or proposals that
would relate to, or result in, any extraordinary transaction involving the
Partnership, such as a merger, reorganization or liquidation involving the
Partnership, a sale or transfer of a material amount of assets of the
Partnership, any material change in the Partnership's capitalization or
distribution policy or any other material change in the Partnership's
business, structure or management.
13. Distributions
Under the Purchase Agreement, the Partnership has agreed that it will not,
without the consent of the Purchaser General Partner, which consent shall not
be unreasonably withheld or delayed, declare, set aside or pay any
distributions to its partners, including its Unitholders, 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. As discussed in Section 6 above, none of the
arrearages on quarterly distributions will be paid to Unitholders in
accordance with the terms of the Offer or the Merger.
14. Certain Conditions of the Offer
The Purchaser will not be required to accept for payment or to pay for any
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
Common Units tendered, if (i) the Minimum Condition has not been satisfied,
(ii) any applicable waiting period under the HSR Act has not expired or been
terminated prior to the expiration of the Offer or (iii) at any time on or
after the date of the Purchase Agreement, and prior to the acceptance for
payment of Common Units, any of the following conditions 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
contemplated by the Purchase Agreement (each a "Transaction" and
collectively the "Transactions"), (ii) prohibit or limit ownership or
operation by the Partnership, Purchaser General Partner or the Purchaser of
all or any material portion of the business or assets of the Partnership
and its subsidiaries, taken as a whole, or Purchaser General Partner or any
of its subsidiaries, or compel the Partnership, 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 Partnership, 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 Common Units or
any of the other Acquired Interests, including, without limitation, the
right to vote any Common Units acquired by the Purchaser pursuant to the
Offer, or otherwise on all matters properly presented to the Unitholders,
including, without limitation, the approval and adoption of the Purchase
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 Partnership, 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 Partnership or National OLP;
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(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
Partnership or any subsidiary or affiliate of Purchaser General Partner or
the Partnership 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;
(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 Common Units with any governmental entity shall not have been made, or
all material consents, approvals, authorizations or permits required to be
obtained prior to the acceptance for payment of any Common Units from all
governmental entities in connection with the consummation of the
transactions contemplated by the Purchase 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 the Purchase Agreement or approved or
recommended any National Possible Alternative or any other acquisition of
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 the
Purchase Agreement shall not be true and correct as of the date of the
Purchase 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 in the Purchase Agreement) would not
have or would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect (as defined below);
(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 the Purchase Agreement;
(h) the Purchase Agreement shall have been terminated in accordance with
its terms;
(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 Securities Exchange Act of 1934, as amended) of 33%
or more of the outstanding Common Units;
(j) the Purchaser and National MGP shall have agreed that the Purchaser
shall terminate the Offer or postpone the acceptance for payment of or
payment for Common Units thereunder;
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<PAGE>
(k) since September 30, 1998, and except as publicly disclosed prior to
the date of the Purchase Agreement by the Partnership, 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 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 the Purchaser or Purchaser General Partner 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. Regarding the condition
described in clause (ii) above with respect to any applicable waiting period
under the HSR Act, see Section 15 below.
A "Material Adverse Effect" is defined in the Purchase Agreement as any
material adverse change in, or any material adverse effect on, the assets,
liabilities, properties, business, operations, earnings, results of
operations, business or financial condition of the Partnership, National OLP
and NSSI, taken as a whole or on the ability of the National Parties to effect
the Transactions; 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 Partnership but also affect
other corporations, partnerships, persons or entities who participate or are
engaged in the lines of business in which the Partnership 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 of the
Purchase Agreement by the Partnership or as described in the Purchase
Agreement.
Under certain circumstances set forth in Section 1 of this Offer to
Purchase, the Purchaser must extend the Offer to permit cure, resolution,
elimination or waiver of the conditions set forth in this Section 14. See
Section 1.
15. Certain Legal Matters
Based on a review of publicly available filings made by the Partnership with
the Commission and other publicly available information concerning the
Partnership, none of the Purchaser, Purchaser General Partner, Purchaser
Holdings or Columbia is aware of any license or regulatory permit that appears
to be material to the business of the Partnership and its subsidiaries, taken
as a whole, that might be adversely affected by the Purchaser's acquisition of
Common Units as contemplated herein or of any approval or other action, except
as otherwise described in this Section 15, by any governmental entity that
would be required for the acquisition or ownership of Common Units by the
Purchaser as contemplated herein. Should any such approval or other action be
required, the Purchaser, Purchaser General Partner, Purchaser Holdings and
Columbia currently contemplate that such approval or other action will be
sought. Although, except as otherwise expressly described in this Section 15,
the Purchaser does not presently intend to delay the acceptance for payment of
or payment for Common Units tendered pursuant to the Offer pending the outcome
of any such matter, there can be no assurance that any such approval or other
action, if needed, would be obtained or would be obtained without substantial
34
<PAGE>
conditions or that failure to obtain any such approval or other action might
not result in consequences adverse to the Partnership's business or that
certain parts of the Partnership's business might not have to be disposed of
if such approvals were not obtained or such other actions were not taken or in
order to obtain any such approval or other action. If certain types of adverse
action are taken with respect to the matters discussed below, the Purchaser
could, subject to the terms and conditions of the Purchase Agreement, decline
to accept for payment or pay for any Common Units tendered. See Section 14 for
certain conditions to the Offer.
State Takeover Laws. A number of states throughout the United States have
enacted takeover statutes that purport, in varying degrees, to be applicable
to attempts to acquire securities of corporations that are incorporated or
have assets, stockholders, executive offices or places of business in such
states. In Edgar v. MITE Corp., the Supreme Court of the United States held
that the Illinois Business Takeover Act, which involved state securities laws
that made the takeover of certain corporations more difficult, imposed a
substantial burden on interstate commerce and therefore was unconstitutional.
In CTS Corp. v. Dynamics Corp. of America, however, the Supreme Court of the
United States held that a state may, as a matter of corporate law, and, in
particular, those laws concerning corporate governance, constitutionally
disqualify a potential acquiror from voting on the affairs of a target
corporation without prior approval of the remaining stockholders; provided
that such laws were applicable only under certain conditions. Subsequently, a
number of Federal courts ruled that various state takeover statutes were
unconstitutional insofar as they apply to corporations incorporated outside
the state of enactment.
Based on information supplied by the Partnership and its own review, the
Purchaser does not believe that any state takeover statutes purport to apply
to the Offer or the Merger. The state takeover statutes referred to above are
directed at the acquisition of corporations and not partnerships. The
Purchaser, therefore, does not believe that any such takeover statutes apply
to the Offer or the Merger. None of the Purchaser, Purchaser General Partner,
Purchaser Holdings or Columbia has currently complied with any state takeover
statute or regulation. The Purchaser reserves the right to challenge the
applicability or validity of any state law purportedly applicable to the Offer
or the Merger and nothing in this Offer to Purchase or any action taken in
connection with the Offer or the Merger is intended as a waiver of such right.
If it is asserted that any state takeover statute is applicable to the Offer
or the Merger and an appropriate court does not determine that it is
inapplicable or invalid as applied to the Offer or the Merger, the Purchaser
might be required to file certain information with, or to receive approvals
from, the relevant state authorities, and the Purchaser might be unable to
accept for payment or pay for Common Units tendered pursuant to the Offer, or
be delayed in consummating the Offer or the Merger. In such case, the
Purchaser may not be obligated to accept for payment or pay for any Common
Units tendered pursuant to the Offer.
Antitrust. Although the Purchase Agreement provides that the Merger and
related transactions contemplated therein may not be consummated until any
applicable waiting period under the HSR Act has expired or been terminated
prior to the Expiration Date, the Purchaser has been advised by counsel, based
on non-binding advice from the Premerger Notification Office of the Federal
Trade Commission, that no filing is required since the Merger and related
transactions do not involve the acquisition or transfer of 100% of the
interests in a partnership due to National MGP's retention of the 1% Special
OLP Interest in National OLP. A filing is anticipated upon the exercise of
National MGP's right to sell such interest or Purchaser's right to buy such
interest under the terms of the Purchase Agreement, as described in
"Agreements to Purchase Acquired Interests; The Merger" in Section 12.
16. Fees and Expenses
The Purchaser has retained PaineWebber Incorporated as its financial advisor
in connection with the Offer, including to act as the Dealer Manager and to
provide certain financial advisory services. PaineWebber Incorporated will
receive customary fees, will be reimbursed for certain reasonable out-of-
pocket expenses and will be indemnified against certain liabilities and
expenses in connection therewith, including certain liabilities under the
federal securities laws.
35
<PAGE>
PaineWebber Incorporated has rendered, and is expected to continue to
render, various investment banking and other advisory services to Purchaser
Holdings and its affiliates. PaineWebber Incorporated has received, and will
continue to receive, customary compensation for such services.
The Purchaser has retained Innisfree M&A Incorporated to act as the
Information Agent and ChaseMellon Shareholder Services, L.L.C. to serve as the
Depositary in connection with the Offer. The Information Agent and the
Depositary each will receive reasonable and customary compensation for their
services, be reimbursed for certain reasonable out-of-pocket expenses and be
indemnified against certain liabilities and expenses in connection therewith,
including certain liabilities under the federal securities laws.
Except as set forth above, none of the Purchaser, Purchaser General Partner
or Purchaser Holdings will pay any fees or commissions to any broker or dealer
or other person in connection with the solicitation of tenders of Common Units
pursuant to the Offer. Brokers, dealers, commercial banks and trust companies
will be reimbursed by the Purchaser upon request for customary mailing and
handling expenses incurred by them in forwarding material to their customers.
17. Miscellaneous
This Offer is being made solely by this Offer to Purchase and the related
Letter of Transmittal and is being made to all holders of Common Units. The
Purchaser is not aware of any jurisdiction in which the making of the Offer is
prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer, the Purchaser will make a good faith effort to comply
with such statute. If, after such good faith effort, the Purchaser cannot
comply with such state statute, the Offer will not be made to (nor will
tenders be accepted from or on behalf of) holders of Common Units in such
State. In any jurisdiction where securities or other laws require the Offer to
be made by a licensed broker or dealer, the Offer shall be deemed to be made
on behalf of the Purchaser by one or more registered brokers or dealers
licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF THE PURCHASER, PURCHASER GENERAL PARTNER OR
PURCHASER HOLDINGS NOT CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED.
The Purchaser, Purchaser General Partner, Purchaser Holdings and Columbia
have filed with the Commission the Schedule 14D-1 pursuant to Rule 14d-3 under
the Exchange Act, furnishing certain additional information with respect to
the Offer. Such Schedule and any amendments thereto, including exhibits,
should be available for inspection and copies should be obtainable in the
manner set forth in Sections 8 and 9 (except that they will not be available
at the regional offices of the Commission).
Columbia Propane, L.P.
April 9, 1999
36
<PAGE>
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PURCHASER GENERAL PARTNER, PURCHASER HOLDINGS AND COLUMBIA
The following table sets forth information about the directors and executive
officers of Purchaser General Partner, Purchaser Holdings, which wholly owns
Purchaser General Partner and Columbia, which wholly owns Purchaser Holdings.
Purchaser's sole general partner is Purchaser General Partner.
1. Directors and Executive Officers of Purchaser General Partner.
The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and executive officers
of Purchaser General Partner are set forth below. Unless otherwise indicated,
the business address of each such director and each such executive officer is
9200 Arboretum Parkway, Suite 140, Richmond, VA 23235. Unless otherwise
indicated below, each occupation set forth opposite an individual's name
refers to employment with Purchaser General Partner. All directors and
executive officers listed below are citizens of the United States.
Position with Purchaser General Partner;
Name and Business Address Principal Occupation or Employment;
5-Year Employment History
A. MASON BRENT......... Director of Purchaser General Partner since 1999.
President and Chief Executive Officer of Purchaser
General Partner since 1999. Director and Chief
Executive Officer of Purchaser Holdings since
1996. President of Purchaser Holdings since 1990.
SHARON B. HEATON....... Director of Purchaser General Partner since 1999.
Director of TriStar Gas Technologies, Inc. since
1999. Director (since 1997), Vice President and
Assistant Secretary (since 1998) of Columbia
Insurance Corporation, Ltd. Secretary of the
following Columbia Energy Group subsidiaries since
1998: Columbia Atlantic Trading Corporation,
Columbia Deep Water Services Company, Columbia
Energy Group Capital Corporation and Columbia
Pipeline Corporation. Vice President and Deputy
General Counsel of Columbia Energy Group Service
Corporation since September 1996. Of Counsel,
Latham & Watkins, November 1994 to August 1996.
THOMAS E. PERKINS, Director of Purchaser General Partner since 1999.
JR..................... Vice President of Purchaser General Partner since
1999. Vice President of Purchaser Holdings since
1997. Director, Business Development and
Engineering of Purchaser Holdings since 1995.
Manager of Engineering of Purchaser Holdings, 1991
to 1995.
MARGARET W. BEASLEY.... Assistant Secretary of Purchaser General Partner
since 1999. Secretary of Purchaser Holdings since
1998. Manager, Office Operations of Columbia
Propane Corporation since 1989.
EDWARD D. HARVEY, Assistant Treasurer of Purchaser General Partner
JR..................... since 1999. Assistant Treasurer of Columbia
Finance Corporation since 1999. Assistant
Treasurer of Columbia Petroleum Corporation since
1999. Assistant Treasurer of CNS Microwave, Inc.,
Columbia Network Services Corporation and Columbia
Power Marketing Corporation since 1997. Treasurer
of EnergyNet, L.L.C. since 1997. Alternate
Director of Columbia Insurance Corporation, Ltd.
since 1997. Treasurer of Columbia Insurance
Corporation, Ltd. since 1996. Assistant Treasurer
of
37
<PAGE>
Name and Business Address Position with Purchaser General Partner;
Principal Occupation or Employment;
5-Year Employment History
Columbia Energy Group since 1996. Assistant
Treasurer of Columbia Energy Group Service
Corporation since 1994. Previously, Manager-Lender
Relations in the Finance Department of Columbia
Energy Group Service Corporation.
KENNETH H. MARKS, Secretary of Purchaser General Partner since 1999.
JR.................... Secretary of CNS Microwave, Inc., Columbia Network
Services Corporation and EnergyNet, L.L.C. since
1998. Counsel, Columbia Energy Group Service
Corporation since 1998. Counsel, Reid & Priest,
LLP, 1997 to 1998; Partner, Alexander, Bearden,
Hairston & Marks, LLP, 1991 to 1997.
SHELDON M. NORDIN..... Treasurer of Purchaser General Partner since 1999.
Treasurer of Purchaser Holdings since 1996.
Assistant Treasurer of Purchaser Holdings, 1995 to
1996. Manager, General Accounting of Purchaser
Holdings since 1989.
2. Directors and Executive Officers of Purchaser Holdings.
The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and executive officers of
Purchaser Holdings are set forth below. Unless otherwise indicated, the
business address of each such director and each such executive officer is 9200
Arboretum Parkway, Suite 140, Richmond, VA 23235. Unless otherwise indicated
below, each occupation set forth opposite an individual's name refers to
employment with Purchaser Holdings. All directors and executive officers listed
below are citizens of the United States.
Position with Purchaser Holdings;
Principal Occupation or Employment;
Name and Business Address 5-Year Employment History
A. MASON BRENT........ Director of Purchaser Holdings since 1996. Chief
Executive Officer of Purchaser Holdings since 1996.
President of Purchaser Holdings since 1990.
Director, President and Chief Executive Officer of
Purchaser General Partner since 1999.
JAMES A. MCGEHEE, Director of Purchaser Holdings since 1991. Vice
JR.................... President of Operations of Purchaser Holdings since
1983.
MICHAEL W. Director of Purchaser Holdings since 1996. Senior
O'DONNELL............. Vice President and Chief Financial Officer of
Columbia and Columbia Energy Group Service
Corporation since 1993. Senior Vice President and
Assistant Chief Financial Officer of Columbia and
Columbia Energy Group Service Corporation, 1989 to
1993. Director of Columbia Electric Corporation,
Columbia Gas Transmission Corporation, Columbia LNG
Corporation and Columbia Natural Resources, Inc.
since 1996. Director of CLNG Corporation since
1994.
OLIVER G. RICHARD Director of Purchaser Holdings since 1996.
III*.................. Chairman, President and Chief Executive Officer of
Columbia since April 28, 1995. Chairman, New Jersey
Resources Corporation, 1992 to 1995; President and
Chief Executive Officer, 1991 to 1995. President
and Chief Executive Officer of Northern Natural Gas
Company, 1989 to 1991. Executive Vice President and
Senior Vice President, Enron Gas Pipeline Group,
1987 to 1988. Vice President and General Counsel of
Tenngasco, a subsidiary of
38
<PAGE>
Position with Purchaser Holdings;
Name and Business Address Principal Occupation or Employment;
5-Year Employment History
Tenneco Corporation, 1985 to 1987. Federal Energy
Regulatory Commission Member, 1982 to 1985.
Chairman, Interstate Natural Gas Association of
America; Director, American Gas Association;
member, National Petroleum Council, Virginia
Business Counsel, Battelle Energy Industry Advisory
Committee, and Senior Advisor to the President's
Commission on Year 2000 Conversion.
PETER M. SCHWOLSKY.... Director of Purchaser Holdings since 1996. Senior
Vice President and Chief Legal Officer of Columbia
and Columbia Energy Group Service Corporation since
August 1995. Senior Vice President, June 1995 to
August 1995. Executive Vice President, Law and
Corporate Development of New Jersey Resources
Corporation, 1991 to 1995. Of counsel and then
Partner with Steptoe & Johnson, 1986 to 1991.
MARGARET W. BEASLEY... Assistant Secretary of Purchaser General Partner
since 1999. Secretary of Purchaser Holdings since
1998. Manager, Office Operations of Columbia
Propane Corporation since 1989.
G. T. GWALTNEY........ Vice President of Purchaser Holdings since 1999.
Director, Field Operations of Purchaser Holdings,
1995 to 1998. Regional Manager of Purchaser
Holdings, 1984 to 1995.
FREDERICK G. KOLB..... Vice President of Purchaser Holdings since 1998.
Vice President of CLNG Corporation, Columbia
Electric Corporation, Columbia Electric Gregory
Limited Corporation, Columbia Electric Gregory
Member Corporation, Hawg Hauling & Disposal, Inc.
and Columbia LNG Corporation since 1998. Vice
President of Columbia Natural Resources, Inc. since
1995. Involved in Environmental Protection and Land
Management matters for Columbia Natural Resources,
Inc. and Columbia Gas Transmission Corporation
since 1988.
KENNETH H. MARKS, Secretary of Purchaser General Partner since 1999.
JR.................... Secretary of CNS Microwave, Inc., Columbia Network
Services Corporation and EnergyNet, L.L.C. since
1998. Counsel, Columbia Energy Group Service
Corporation since 1998. Counsel, Reid & Priest,
LLP, 1997 to 1998; Partner, Alexander, Bearden,
Hairston & Marks, LLP, 1991 to 1997.
SHELDON M. NORDIN..... Treasurer of Purchaser General Partner since 1999.
Treasurer of Purchaser Holdings since 1996.
Assistant Treasurer of Purchaser Holdings, 1995 to
1996. Manager, General Accounting of Purchaser
Holdings since 1989.
THOMAS E. PERKINS, Vice President of Purchaser Holdings since 1997.
JR.................... Director and Vice President of Purchaser General
Partner since 1999. Director of Business
Development and Engineering of Purchaser Holdings
since 1995. Manager of Engineering of Purchaser
Holdings, 1991 to 1995.
JAMES W. TROST........ Vice President, Financial Planning of Purchaser
Holdings, 1996 to 1998; Vice President, Strategic
and Financial Planning of Purchaser Holdings from
1990 through 1998.
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<PAGE>
3. Directors and Executive Officers of Columbia.
The name, business address, present principal occupation or employment and
five-year employment history of each of the directors and executive officers
of Columbia are set forth below. Unless otherwise indicated, the business
address of each such director and each such executive officer is 13880 Dulles
Corner Lane, Herndon, VA 20171. Unless otherwise indicated below, each
occupation set forth opposite an individual's name refers to employment with
Columbia. All directors and executive officers listed below are citizens of
the United States.
<TABLE>
<CAPTION>
Name and Business Position with Columbia; Principal Occupation or
Address Employment; 5-Year Employment History
----------------- -----------------------------------------------
<C> <S>
OLIVER G. RICHARD III*.. Chairman, President and Chief Executive Officer of
Columbia since April 28, 1995. Director of Purchaser
Holdings since 1996. Chairman, New Jersey Resources
Corporation, 1992 to 1995; President and Chief
Executive Officer, 1991 to 1995. President and Chief
Executive Officer of Northern Natural Gas Company,
1989 to 1991. Executive Vice President and Senior
Vice President, Enron Gas Pipeline Group, 1987 to
1988. Vice President and General Counsel of
Tenngasco, a subsidiary of Tenneco Corporation, 1985
to 1987. Federal Energy Regulatory Commission Member,
1982 to 1985. Chairman, Interstate Natural Gas
Association of America; Director, American Gas
Association; member, National Petroleum Council,
Virginia Business Council, Battelle Energy Industry
Advisory Committee, and Senior Advisor to the
President's Commission on Year 2000 Conversion.
RICHARD F. ALBOSTA...... Director of Columbia since 1995. Independent
consultant since October 1994. Chairman, President
and Chief Executive Officer of Enserch Environmental
Corporation, an environmental services and
remediation firm, January 1994 to October 1994.
President and Chief Executive Officer, 1986 to 1994
and Chairman, 1990 to 1994 of Ebasco Services, Inc.,
an international consulting, engineering,
construction and environmental services firm.
ROBERT H. BEEBY......... Director of Columbia since 1993. Former Chairman of
the Board of Service America Corporation, a vending
and food service company, 1992 to 1996. President and
Chief Executive Officer of Frito-Lay, Inc., 1989 to
1991 and Pepsi-Cola International, 1984 to 1988.
Director of Church & Dwight Co., Inc.; and ACNielsen
Corporation.
WILSON K. CADMAN........ Director of Columbia since 1993. Private investor
since 1992. Former Chairman, President and Chief
Executive Officer, Kansas Gas & Electric Company.
Retired Vice Chairman of Western Resources, Inc.
Director, El Paso Electric Co., Inc. and Clark/Bardes
Companies.
JAMES P. HEFFERNAN...... Director of Columbia since 1993. Investor and
investment banker since 1996. Managing Director of
Whitman Heffernan Rhein & Co., Inc., investment
advisory and merchant banking firm, 1987 to 1996;
Chief Financial Officer and Director of Danielson
Holding Corporation, 1990 to 1996, and Director of
its subsidiary, Danielson Trust Company, 1993 to
1996; Chairman, Herman's Holdings, Inc., 1993 to
1996; and Chairman, 1995 to 1996, of its subsidiary,
Herman's Sporting Goods, Inc. Director, Herman's
Holdings, Inc. and Herman's Sporting Goods, Inc.;
Trustee, New York Racing Association.
</TABLE>
- --------
* In 1997, in connection with an administrative proceeding by the SEC, Mr.
Richard consented, without admitting or denying the issues identified in the
order, to the entry of a cease-and-desist order by which he agreed to settle
issues related to reports filed with the SEC concerning certain gas sale and
purchase contracts executed in 1992 when he was chairman and chief executive
officer of New Jersey Resources Corporation.
40
<PAGE>
<TABLE>
<CAPTION>
Name and Business Position with Columbia; Principal Occupation or
Address Employment; 5-Year Employment History
----------------- -----------------------------------------------
<C> <S>
KAREN L. HENDRICKS..... Director of Columbia since November 1997. Chairman,
Chief Executive Officer and President of The Baldwin
Piano & Organ Company since January 1997; President
and Chief Executive Officer, November 1994 to January
1997. Executive Vice President and General Manager,
The Dial Corporation, May 1992 to September 1994.
Director, ACNielsen Corporation and The Baldwin Piano
& Organ Company.
MALCOLM T. HOPKINS..... Director of Columbia since 1982. Private investor
since 1984. Retired Vice Chairman, Chief Financial
Officer and Director of the former St. Regis
Corporation. Director of Metropolitan Series Fund,
Inc.; Gemini Air Cargo, Inc.; Great Lakes Pulp & Fibre
Company; and U.S. Home Corporation; Trustee, State
Street Research & Management Company.
J. BENNETT JOHNSTON.... Director of Columbia since 1997. Chairman and Chief
Executive Officer, Johnston and Associates, a
government and business consulting firm in Washington,
D.C. Served in the United States Senate for 24 years
until he retired in January 1997. Former Chairman,
U.S. Senate Committee on Energy and Natural Resources;
former member, U.S. Senate committees on the budget,
appropriations, defense, aging and intelligence.
Director, Chevron Corp. and Freeport McMoRan Copper &
Gold, Inc. President, United States Pacific Economic
Cooperation Council (PECC).
MALCOLM JOZOFF......... Director of Columbia since 1995. Chairman, President &
Chief Executive Officer of The Dial Corporation, a
consumer brands company, since May 1996. Chairman and
Chief Executive Officer of Lenox, Inc., a manufacturer
of consumer durables, 1993 to 1995. Previously
President, Health Care Products and Corporate Group
Vice President, The Proctor and Gamble Company, Inc.
Director, The Dial Corporation.
WILLIAM E. LAVERY...... Director of Columbia since 1985. President Emeritus,
Virginia Polytechnic Institute and State University;
President, 1975 to 1988. Director of First Union Bank
of Virginia/D.C./Maryland and Shenandoah Life
Insurance Company.
GERALD E. MAYO......... Director of Columbia since 1994. Private investor
since 1995. Former Chairman of the Board, Midland Life
Insurance Company (formerly Midland Mutual Life
Insurance Company) (Chairman and President, 1980 to
1995); former Chairman, Midland Financial Services
(Chairman and President, 1994 to 1995). Director,
McKesson HBOC and Dominion Homes Corp. of Columbus,
OH.
DOUGLAS E. OLESEN...... Director of Columbia since 1995. President and Chief
Executive Officer of Battelle Memorial Institute, an
international technology organization, since 1987.
Director, The BFGoodrich Company; Scientific Advances,
Inc.; and Capital Club.
WILLIAM R. WILSON...... Director of Columbia since 1987. Private investor
since 1992. Retired Chairman of the Board and Chief
Executive Officer of Lukens, Inc., manufacturer of
steel and industrial products. Director of Acme Metals
Incorporated and L.F.Driscoll Co.
CATHERINE GOOD ABBOTT.. Chief Executive Officer and President of Columbia Gas
Transmission Corporation and Chief Executive Officer
of Columbia Gulf Transmission Company since January
1996. Principal with Gem Energy Consulting, Inc., 1995
to January 1996. Vice President for various business
units of Enron Corporation, 1985 to 1995.
</TABLE>
41
<PAGE>
<TABLE>
<CAPTION>
Name and Business Position with Columbia; Principal Occupation or
Address Employment; 5-Year Employment History
----------------- -----------------------------------------------
<C> <S>
PATRICIA A. HAMMICK... Senior Vice President, Strategy and Communications of
Columbia since May 1998. Vice President, Natural Gas
Supply Association, 1983 to 1996. Manager, Energy
Liaison of Gulf Oil Exploration and Production Company,
1979 to 1983.
MICHAEL W. O'DONNELL.. Senior Vice President and Chief Financial Officer of
Columbia and Columbia Energy Group Service Corporation
since 1993. Senior Vice President and Assistant Chief
Financial Officer of Columbia and Columbia Energy Group
Service Corporation, 1989 to 1993. Director of
Purchaser Holdings since 1996. Director of Columbia
Electric Corporation, Columbia Gas Transmission
Corporation, Columbia LNG Corporation and Columbia
Natural Resources, Inc. since 1996. Director of CLNG
Corporation since 1994.
PETER M. SCHWOLSKY.... Senior Vice President and Chief Legal Officer of
Columbia and Columbia Energy Group Service Corporation
since August 1995. Senior Vice President, June 1995 to
August 1995. Director of Purchaser Holdings since 1996.
Executive Vice President, Law and Corporate Development
of New Jersey Resources Corporation, 1991 to 1995. Of
counsel and then Partner with Steptoe & Johnson, 1986
to 1991.
</TABLE>
42
<PAGE>
Manually signed facsimile copies of the Letter of Transmittal will be
accepted. The Letter of Transmittal, certificates for Common Units and any
other required documents should be sent or delivered by each Unitholder of the
Partnership or such Unitholder's broker, dealer, commercial bank, trust
Partnership or other nominee to the Depositary at one of its addresses set
forth below.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Hand: By Overnight Delivery:
Post Office Box 3301 120 Broadway, 13th Floor 85 Challenger Road Mail
South Hackensack, NJ New York, NY 10271 Drop-Reorg
07606 Ridgefield Park, NJ
07660
Attn: Reorganization Attn: Reorganization Attn: Reorganization
Department Department Department
Facsimile Transmission (Eligible Institutions Only): (201) 296-4293
Confirm Receipt of Facsimile By Telephone Only: (201) 296-4860
Questions and requests for assistance or for additional copies of this Offer
to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery or
any other tender offer materials may be directed to the Information Agent or
Dealer Manager at their respective addresses and telephone numbers listed
below. You may also contact your broker, dealer, commercial bank, trust
company or other nominee for assistance concerning the Offer.
The Information Agent for the Offer is:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokers call collect: (212) 750-5833
The Dealer Manager for the Offer is:
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Call Toll Free: (800) 548-1775
Banks and Brokers call collect: (212) 713-9924
<PAGE>
EXHIBIT (a)(2)
LETTER OF TRANSMITTAL
To Tender Common Units Representing Limited Partner Interests
in
NATIONAL PROPANE PARTNERS, L.P.
Pursuant to the Offer to Purchase dated April 9, 1999
by
COLUMBIA PROPANE, L.P.,
the managing general partner of which
is a wholly-owned subsidiary of
COLUMBIA PROPANE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME,
ON THURSDAY, MAY 6, 1999, UNLESS THE OFFER IS EXTENDED.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
<TABLE>
<S> <C> <C>
By Mail: By Overnight Delivery: By Hand:
P. O. Box 3301 85 Challenger Road 120 Broadway, 13th Floor
South Hackensack, NJ 07606 Mail Drop-Reorg New York, NY 10271
Attn: Reorganization Department Ridgefield Park, NJ 07660 Attn: Reorganization Department
By Facsimile Transmission: Confirm Receipt of Facsimile
(For Eligible Institutions Only) By Telephone Only:
(201) 296-4293 (201) 296-4860
</TABLE>
Delivery of this Letter of Transmittal to an address other than as set forth
above does not constitute a valid delivery. You must sign this Letter of
Transmittal where indicated below and complete the substitute Form W-9
provided below.
DESCRIPTION OF COMMON UNITS TENDERED
<TABLE>
<CAPTION>
<S> <C>
Total Number of Number of
Name(s) and Address(es) of Registered Holder(s) Common Units Common
(Please Fill In, If Blank, Exactly As Certificate Represented By Units
Name(s) Appear(s) On Certificate(s)) Number(s)(1) Certificate(s)(1) Tendered(2)
</TABLE>
- -------------------------------------------------------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
- -------------------------------------------------------------------------------
(1) Need not be completed by Book-Entry Unitholders.
(2) Unless otherwise indicated, it will be assumed that all Common Units
evidenced by each certificate delivered to the Depositary are being
tendered. See Instruction 4.
<PAGE>
THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE
READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used either if certificates are to be
forwarded herewith or, unless an Agent's Message (as defined in Section 2 of
the Offer to Purchase (as defined below)) is utilized, if delivery of Common
Units (as defined below) is to be made by book-entry transfer to an account
maintained by the Depositary at The Depository Trust Company (the "Book-Entry
Transfer Facility") pursuant to the procedures set forth in Section 2 of the
Offer to Purchase. Unitholders who deliver Common Units by book-entry transfer
are referred to herein as "Book-Entry Unitholders" and other Unitholders are
referred to herein as "Certificate Unitholders". Unitholders whose
certificates for Common Units are not immediately available or who cannot
deliver either the certificates for, or a Book-Entry Confirmation (as defined
in Section 2 of the Offer to Purchase) with respect to, their Common Units and
all other documents required hereby to the Depositary prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase) must tender their
Common Units in accordance with the guaranteed delivery procedures set forth
in Section 2 of the Offer to Purchase. See Instruction 2. DELIVERY OF
DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-
ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE
DEPOSITARY.
[_]CHECK HERE IF TENDERED COMMON UNITS ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE BOOK-
ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN
THE BOOK-ENTRY TRANSFER FACILITY MAY DELIVER COMMON UNITS BY BOOK-ENTRY
TRANSFER):
Name of Tendering Institution: ________________
The Depository Trust Company Account Number: __
Transaction Code Number: ______________________
[_]CHECK HERE IF TENDERED COMMON UNITS ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s): ____________________________________________
Window Ticket Number (if any): _____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution that Guaranteed Delivery: ______________________________
If delivered to Book-Entry Transfer Facility check this box: [_]
The Depository Trust Company Account Number: _______________________________
Transaction Code Number: ___________________________________________________
2
<PAGE>
IF ANY OF THE CERTIFICATES REPRESENTING
COMMON UNITS THAT YOU OWN HAVE BEEN
LOST, DESTROYED OR STOLEN, SEE INSTRUCTION 11.
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Columbia Propane, L.P., a Delaware limited
partnership (the "Purchaser"), which has as its managing general partner CP
Holdings, Inc., a Delaware corporation ("Purchaser General Partner"), which is
a wholly-owned subsidiary of Columbia Propane Corporation ("Purchaser
Holdings"), the above-described common units (the "Common Units") representing
limited partner interests in National Propane Partners, L.P., a Delaware
limited partnership (the "Partnership"), which has as its managing general
partner National Propane Corporation ("National MGP"), at a price of $12.00
per Common Unit, net to the seller in cash, without interest, in accordance
with the terms and subject to the conditions set forth in the Purchaser's
Offer to Purchase dated April 9, 1999 (the "Offer to Purchase"), and this
Letter of Transmittal (which, together with any amendments or supplements
thereto or hereto, collectively constitute the "Offer"), receipt of which is
hereby acknowledged. Purchaser Holdings is a wholly-owned subsidiary of
Columbia Energy Group.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Common Units tendered herewith in accordance
with the terms of the Offer (including, if the Offer is extended or amended,
the terms or conditions of any such extension or amendment), the undersigned
hereby sells, assigns and transfers to, or upon the order of, the Purchaser
all right, title and interest in and to all the Common Units that are being
tendered hereby (and any and all other Common Units or other securities or
rights issued or issuable in respect thereof on or after April 9, 1999), and
irrevocably constitutes and appoints the Depositary the true and lawful agent
and attorney-in-fact of the undersigned with respect to such Common Units (and
any such other Common Units or securities or rights), with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (a) deliver certificates for such Common Units
(and any such other Common Units or securities or rights) or transfer
ownership of such Common Units (and any such other Common Units or securities
or rights) on the account books maintained by the Book-Entry Transfer Facility
together, in any such case, with all accompanying evidences of transfer and
authenticity to, or upon the order of, the Purchaser, upon the receipt by the
Depositary as the undersigned's agent, of the purchase price with respect to
such Common Units; (b) present such units for transfer on the books of the
Partnership, to or upon the order of the Purchaser; and (c) receive all
benefits and to otherwise exercise all rights of beneficial ownership of such
Common Units all in accordance with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Common
Units (and any and all other Common Units or other securities or rights issued
or issuable in respect of such Common Units on or after April 9, 1999) and,
when the same are accepted for payment by the Purchaser, the Purchaser will
acquire good, marketable and unencumbered title thereto, free and clear of all
liens, restrictions, claims and encumbrances and the same will not be subject
to any adverse claim. The undersigned will, upon request, execute any
additional documents deemed by the Depositary or the Purchaser to be necessary
or desirable to complete the sale, assignment and transfer of the tendered
Common Units (and any and all such other Common Units or securities or
rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators, trustees in bankruptcy and legal representatives of the
undersigned and shall not be affected by, and shall survive, the death or
incapacity of the undersigned. Except as stated in the Offer to Purchase, this
tender is irrevocable.
The undersigned hereby irrevocably appoints A. Mason Brent and Thomas E.
Perkins, Jr., and each of them and any other designees of the Purchaser, as
the attorneys-in-fact and proxies of the undersigned, each with full power of
substitution, to vote at any annual, special or adjourned meeting of the
Partnership's Unitholders or otherwise in such manner as each such attorney
and proxy or his substitute shall in his sole discretion deem proper with
respect to, to execute any written
3
<PAGE>
consent concerning any matter as each such attorney and proxy or his
substitute shall in his sole discretion deem proper with respect to, and to
otherwise act as each such attorney and proxy or his substitute shall in his
sole discretion deem proper with respect to, all the Common Units tendered
hereby that have been accepted for payment by the Purchaser prior to the time
any such action is taken and with respect to which the undersigned is entitled
to vote (and with respect to any and all other Common Units or other
securities or rights issued or issuable in respect of such Common Units on or
after April 9, 1999). This appointment is effective when, and only to the
extent that, the Purchaser accepts for payment such Common Units as provided
in the Offer to Purchase. This power of attorney and proxy are coupled with an
interest and are therefore irrevocable and are granted in consideration of the
acceptance for payment of such Common Units in accordance with the terms of
the Offer. Such acceptance for payment shall, without further action, revoke
all prior powers of attorney and proxies appointed by the undersigned at any
time with respect to such Common Units (and any such other Common Units or
securities or rights) and no subsequent powers of attorney or proxies will be
appointed by the undersigned, or be effective, with respect thereto.
The undersigned understands that the Purchaser's acceptance for payment of
Common Units validly tendered pursuant to one of the procedures described in
Section 2 of the Offer to Purchase and in the Instructions hereto will
constitute a binding agreement between the undersigned and the Purchaser upon
the terms and subject to the conditions of the Offer. The undersigned
recognizes that under certain circumstances set forth in the Offer to
Purchase, the Purchaser may not be required to accept for payment any of the
Common Units tendered hereby.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any certificates
for Common Units not tendered or accepted for payment in the name(s) of the
registered holder(s) appearing under "Description of Common Units Tendered".
Similarly, unless otherwise indicated under "Special Delivery Instructions",
please mail the check for the purchase price and/or return any certificates
for Common Units not tendered or accepted for payment (and accompanying
documents, as appropriate) to the address(es) of the registered holder(s)
appearing under "Description of Common Units Tendered". In the event that
"Special Payment Instructions" and/or "Special Delivery Instructions" are
completed, please issue the check for the purchase price and/or return any
certificates for Common Units not tendered or accepted for payment (and any
accompanying documents, as appropriate) in the name of, and/or deliver such
check and/or return such certificates (and any accompanying documents, as
appropriate) to, the person or persons so indicated. Unless otherwise
indicated herein under "Special Payment Instructions", in the case of a book-
entry delivery of Common Units, please credit the account maintained at the
Book-Entry Transfer Facility with respect to any Common Units not accepted for
payment. The undersigned recognizes that the Purchaser has no obligation
pursuant to "Special Payment Instructions" to transfer any Common Units from
the name of the registered holder thereof if the Purchaser does not accept for
payment any of the Common Units so tendered.
4
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if
certificates for Common Units not
tendered or not purchased and/or
the check for the purchase price
of Common Units purchased are to
be issued in the name of someone
other than the undersigned.
Issue check and/or certificate(s)
to:
Name: ____________________________
(Please Print)
Address: _________________________
__________________________________
(Include Zip Code)
Tax Identification or Social
Security Number: _________________
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6 and 7)
To be completed ONLY if
certificates for Common Units not
tendered or not purchased and/or
the check for the purchase price
of Common Units purchased are to
be sent to someone other than the
undersigned or to the undersigned
at an address other than that
shown under "Description of
Common Units Tendered".
Issue check and/or certificate(s)
to:
Name: ____________________________
(Please Print)
Address: _________________________
__________________________________
(Include Zip Code)
Tax Identification or Social
Security Number: _________________
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
5
<PAGE>
SIGN HERE
(Also Complete Substitute Form W-9 Below)
--------------------------------------------------
Signature(s) of Holder(s)
--------------------------------------------------
Signature(s) of Holder(s)
Date: , 1999
(Must be signed by registered holder(s) as name(s) appear(s) on the
certificate(s) for the Common Units or on a security position listing or by
person(s) authorized to become registered holder(s) by certificates and
documents transmitted herewith. If signature is by trustees, executors, agents,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, please provide the
following information and see Instruction 5.)
Name(s):
-------------------------------------------------------------------------
(Please Print)
Capacity (Full Title):
-----------------------------------------------------------------
Address:
-------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.:
----------------------------------------------------------
Tax Identification or
Social Security Number:
--------------------------------------------------------------
Guarantee of Signature(s)
(If Required - See Instructions 1 and 5)
Authorized Signature:
----------------------------------------------------------------
Name:
---------------------------------------------------------------------------
(Please Print)
Title:
---------------------------------------------------------------------------
Name of Firm:
---------------------------------------------------------------------
Address:
-------------------------------------------------------------------------
(Include Zip Code)
Area Code and Telephone No.:
----------------------------------------------------------
Date: , 1999
6
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. Except as otherwise provided below, all
signatures on this Letter of Transmittal must be guaranteed by a financial
institution (including most banks, savings and loan associations and brokerage
houses) which is a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program (an "Eligible Institution"). No signature
guarantee is required on this Letter of Transmittal (a) if this Letter of
Transmittal is signed by the registered holder(s) (which term, for purposes of
this document, shall include any participant in the Book-Entry Transfer
Facility whose name appears on a security position listing as the owner of the
Common Units) of Common Units tendered herewith, unless such holder(s) has
completed either the box entitled "Special Payment Instructions" or the box
entitled "Special Delivery Instructions," or (b) if such Common Units are
tendered for the account of an Eligible Institution. See Instruction 5.
2. Requirements of Tender. This Letter of Transmittal is to be completed by
Unitholders either if certificates are to be forwarded herewith or, unless an
Agent's Message (as defined in Section 2 of the Offer to Purchase) is
utilized, if delivery of Common Units is to be made pursuant to the procedures
for book-entry transfer set forth in Section 2 of the Offer to Purchase. For a
Unitholder validly to tender Common Units pursuant to the Offer, either (a) a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof), together with any required signature guarantees, or, in the case of
a book-entry transfer, an Agent's Message, and any other required documents
must be received by the Depositary at one of its addresses set forth herein
prior to the Expiration Date and either (i) certificates for tendered Common
Units must be received by the Depositary at one of such addresses prior to the
Expiration Date or (ii) Common Units must be delivered pursuant to the
procedures for book-entry transfer set forth herein and a Book-Entry
Confirmation must be received by the Depositary prior to the Expiration Date
or (b) the tendering Unitholder must comply with the guaranteed delivery
procedures set forth below and in Section 2 of the Offer to Purchase. If
certificates are forwarded to the Depositary in multiple deliveries, a
properly completed and duly executed Letter of Transmittal must accompany each
such delivery.
Unitholders whose certificates for Common Units are not immediately
available or who cannot deliver their certificates and all other required
documents to the Depositary or complete the procedures for book-entry transfer
prior to the Expiration Date may tender their Common Units by properly
completing and duly executing the Notice of Guaranteed Delivery pursuant to
the guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase.
Pursuant to such procedure, (a) such tender must be made by or through an
Eligible Institution, (b) a properly completed and duly executed Notice of
Guaranteed Delivery substantially in the form provided by the Purchaser must
be received by the Depositary prior to the Expiration Date and (c) the
certificates for all physically delivered Common Units in proper form for
transfer or a Book-Entry Confirmation with respect to all tendered Common
Units, as well as a properly completed and duly executed Letter of Transmittal
(or facsimile thereof), with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other documents
required by this Letter of Transmittal must be received by the Depositary
within three New York Stock Exchange, Inc. trading days after the date of
execution of the Notice of Guaranteed Delivery as provided in Section 2 of the
Offer to Purchase.
THE METHOD OF DELIVERY OF COMMON UNITS, THIS LETTER OF TRANSMITTAL AND ANY
OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER
FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING UNITHOLDER. COMMON
UNITS WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED,
PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE
ALLOWED TO ENSURE TIMELY DELIVERY.
No alternative, conditional or contingent tenders will be accepted and no
fractional Common Units will be purchased. All tendering Unitholders, by
execution of this Letter of Transmittal (or facsimile thereof), waive any
right to receive any notice of the acceptance of their Common Units for
payment.
7
<PAGE>
3. Inadequate Space. If the space provided herein is inadequate, the
certificate numbers and/or the number of Common Units should be listed on a
separate schedule attached hereto and separately signed on each page in the
same manner as this Letter of Transmittal is signed.
4. Partial Tenders (Applicable to Certificate Unitholders Only). If fewer
than all the Common Units evidenced by any certificate submitted are to be
tendered, fill in the number of Common Units that are to be tendered in the
box entitled "Number of Common Units Tendered". In any such case, new
certificate(s) for the remainder of the Common Units that were evidenced by
the old certificate(s) will be sent to the registered holder, unless otherwise
provided in the appropriate box on this Letter of Transmittal, as soon as
practicable after the acceptance for payment of, and payment for, the Common
Units tendered herewith. All Common Units represented by certificates
delivered to the Depositary will be deemed to have been tendered unless
otherwise indicated.
5. Signatures on Letter of Transmittal, Powers and Endorsements. If this
Letter of Transmittal is signed by the registered holder of the Common Units
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without alteration, enlargement or any change
whatsoever.
If any of the Common Units tendered hereby are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Common Units are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many
separate Letters of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal is signed by the registered holder(s) of the
Common Units listed and transmitted hereby, and payment is to be made to, or
certificates for Common Units not tendered or accepted for payment are to be
issued to, such registered holder(s), then no endorsements of certificates or
separate powers are required.
If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificates for Common Units listed, or if
payment is to be made or certificates for Common Units not tendered or not
accepted for payment are to be issued to a person other than the registered
holder of the certificates surrendered, the tendered certificates must be
endorsed or accompanied by appropriate powers, in either case signed exactly
as the name or names of the registered holders or owners appear on the
certificates, with the signatures on the certificates or powers guaranteed as
aforesaid. Signatures on such certificates or powers must be guaranteed by an
Eligible Institution.
If this Letter of Transmittal or any certificate or power is signed by a
trustee, executor, agent, administrator, guardian, attorney-in-fact, officer
of a corporation or other person acting in a fiduciary or representative
capacity, such person should so indicate when signing, and proper evidence
satisfactory to the Purchaser of such person's authority so to act must be
submitted.
6. Transfer Taxes. Except as otherwise provided in this Instruction 6, the
Purchaser will pay any U.S. Federal, state or local transfer taxes with
respect to the transfer and sale of Common Units to the Purchaser or its order
pursuant to the Offer. If, however, payment of the purchase price is to be
made to, or if certificates for Common Units not tendered or accepted for
payment are to be registered in the name of, any person(s) other than the
registered owner(s), or if tendered certificates are registered in the name of
any person other than the person(s) signing this Letter of Transmittal, the
amount of any transfer taxes (whether imposed on the registered holder(s) or
such person) payable on account of the transfer to such person will be
deducted from the purchase price unless satisfactory evidence of the payment
of such taxes or exemption therefrom is submitted.
EXCEPT AS PROVIDED IN THIS INSTRUCTION 6, IT WILL NOT BE NECESSARY FOR
TRANSFER TAX STAMPS TO BE AFFIXED TO THE CERTIFICATES LISTED IN THIS LETTER OF
TRANSMITTAL.
7. Special Payment and Delivery Instructions. If a check is to be issued
and/or certificates for Common Units not tendered or not accepted for payment
are to be returned in the name of a person other than the signer of this
Letter of Transmittal or if a check is to be sent and/or such certificates are
to be returned to a person other than the signer of this Letter of Transmittal
or to an address other than that shown in this Letter of Transmittal, the
appropriate boxes on this Letter of Transmittal must be completed. Any
Unitholder(s) delivering Common Units by book-entry transfer may request that
Common Units not accepted for payment be credited to such account maintained
at the Book-Entry Transfer Facility as such Unitholder(s) may designate.
8
<PAGE>
8. Waiver of Conditions. Subject to the terms of the Offer, the Purchaser
reserves the absolute right in its sole discretion to waive any of the
specified conditions of the Offer, in whole or in part, at any time and from
time to time.
9. 31% Backup Withholding. Under U.S. Federal income tax law, a Unitholder
whose tendered Common Units are accepted for payment is required to provide
the Depositary with such Unitholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below. If the Depositary is not provided with
the correct TIN or an adequate basis for exemption, the Internal Revenue
Service may subject the Unitholder or other payee to a $50 penalty and such
payments may be subject to a 31% backup withholding.
Certain Unitholders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, the Unitholder must submit a Form W-8, signed under penalties of
perjury, attesting to that individual's exempt status. A Form W-8 can be
obtained from the Depositary. See the enclosed "Guidelines for Certification
of Taxpayer Identification Number on Substitute Form W-9" for more
instructions.
If backup withholding applies, the Depositary is required to withhold 31% of
any such payments made to the Unitholder or other payee. Backup withholding is
not an additional income tax. Rather, the tax liability of persons subject to
backup withholding will be reduced by the amount of tax withheld, provided
that the required information is given to the Internal Revenue Service. If
withholding results in an overpayment of taxes, a refund may be obtained from
the Internal Revenue Service.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
Unitholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
Unitholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold 31% on all payments made prior to the time a properly certified TIN
is provided to the Depositary. However, such amounts will be refunded to such
Unitholder if a TIN is provided to the Depositary within 60 days.
The Unitholder is required to give the Depositary the TIN (e.g., social
security number or employer identification number) of the record owner of the
Common Units or of the last transferee appearing on the transfers attached to,
or endorsed on, the Common Units. If the Common Units are in more than one
name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
10. Requests for Assistance or Additional Copies. Requests for additional
copies of the Offer to Purchase, this Letter of Transmittal, the Notice of
Guaranteed Delivery and the Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9 and questions or requests for
assistance should be directed to the Information Agent or the Dealer Manager
at their respective addresses and telephone numbers set forth below.
11. Lost, Destroyed or Stolen Certificates. If any certificate representing
Common Units has been lost, destroyed or stolen, the Unitholder should
promptly call American Stock Transfer & Trust Co. at (800) 937-5449. The
Unitholder will then be instructed as to the steps that must be taken in order
to replace the certificate. This Letter of Transmittal and related documents
cannot be processed until the procedures for replacing lost, destroyed or
stolen certificates have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF, PROPERLY
COMPLETED AND DULY EXECUTED, TOGETHER WITH CERTIFICATES (OR BOOK-ENTRY
CONFIRMATION) AND ALL OTHER REQUIRED DOCUMENTS, OR THE NOTICE OF GUARANTEED
DELIVERY, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS
DEFINED HEREIN).
9
<PAGE>
PAYER'S NAME: ChaseMellon Shareholder Services, L.L.C., Depositary
- --------------------------------------------------------------------------------
SUBSTITUTE Name _________________________________________________
Form W-9 Address _______________________________________________
Department of (Number and Street)
the Treasury --------------------------------------------------
Internal (City) (State) (Zip Code)
Revenue --------------------------------------------------------
Service
---------------------
Social Security
Number(s)
Part 1 - PLEASE PROVIDE OR __________________
YOUR TIN IN THE BOX AT
RIGHT AND CERTIFY BY Employer
SIGNING AND DATING BELOW. Identification
Payer's Request for Taxpayer Identification Number ("TIN")Number(s)
(If awaiting TIN
write "Applied For")
Part 2 - For Payees Exempt from Backup Withholding
see the enclosed Guidelines and complete as
instructed therein.
--------------------------------------------------------
Certification - Under penalties of perjury, I certify
that:
(1) The number shown on this form is my correct
Taxpayer Identification Number (or a Taxpayer
Identification Number has not been issued to me
and either (a) I have mailed or delivered an
application to receive a Taxpayer Identification
Number to the appropriate Internal Revenue
Service ("IRS") or Social Security Administration
office or (b) I intend to mail or deliver an
application in the near future. I understand that
if I do not provide a Taxpayer Identification
Number within sixty (60) days, 31% of all
reportable payments made to me thereafter will be
withheld until I provide a number), and
(2) I am not subject to backup withholding because
(a) I am exempt from backup withholding, (b) I
have not been notified by IRS that I am subject
to backup withholding as a result of a failure to
report all interest or dividends or (c) the IRS
has notified me that I am no longer subject to
backup withholding.
Certification Instructions - You must cross out
item (2) above if you have been notified by the
IRS that you are subject to backup withholding
because of underreporting interest or dividends on
your tax return. However, if after being notified
by the IRS that you were subject to backup
withholding you received another notification from
the IRS that you are no longer subject to backup
withholding, do not cross out item (2). (Also see
instructions in the enclosed Guidelines).
- --------------------------------------------------------------------------------
Part 3 -
SIGNATURE: __________________________________________________ Awaiting
TIN [_]
NAME: _______________________________________________________
DATE: _______________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW
THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU WROTE "APPLIED FOR"
IN THE SPACE PROVIDED FOR THE TIN IN PART 3 OF SUBSTITUTE FORM W-9.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification
Number has not been issued to me, and either (1) I have mailed or delivered
an application to receive a Taxpayer Identification Number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office, or (2) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a Taxpayer
Identification Number by the time of payment, 31% of all reportable
payments made to me will be withheld but that such amounts will be refunded
to me if I then provide a Taxpayer Identification Number within sixty (60)
days.
Signature ____________________________ Date ______________________, 1999
10
<PAGE>
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective addresses and telephone
numbers below. Requests for additional copies of the Offer to Purchase, the
related Letter of Transmittal and all other tender offer materials may be
directed to the Information Agent or the Dealer Manager. Copies will be
furnished promptly at the Purchaser's expense. No fees or commissions will be
paid to any broker or dealer or any other person (other than the Information
Agent and the Dealer Manager) for soliciting tenders of Common Units pursuant
to the Offer.
The Information Agent for the Offer is:
INNISFREE M&A INCORPORATED
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokers call collect: (212) 750-5833
The Dealer Manager for the Offer is:
PAINEWEBBER INCORPORATED
1285 Avenue of the Americas
New York, New York 10019
Call Toll-Free: (800) 548-1775
Banks and Brokers call collect: (212) 713-9924
<PAGE>
EXHIBIT (a)(3)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF COMMON UNITS REPRESENTING LIMITED PARTNER INTERESTS
IN
NATIONAL PROPANE PARTNERS, L.P.
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer
(as defined below) if common units representing limited partner interests (the
"Common Units") in National Propane Partners, L.P., a Delaware limited
partnership (the "Partnership"), are not immediately available or if the
procedures for book-entry transfer cannot be completed on a timely basis or
time will not permit all required documents to reach the Depositary prior to
the Expiration Date (as defined in Section 1 of the Offer to Purchase). This
form may be delivered by hand or transmitted by facsimile transmission or
mailed to the Depositary and must include a guarantee by an Eligible
Institution (as defined in Section 2 of the Offer to Purchase). See Section 2
of the Offer to Purchase.
The Depositary for the Offer is:
ChaseMellon Shareholder Services, L.L.C.
By Mail: By Hand: By Overnight Delivery:
P. O. Box 3301 120 Broadway, 85 Challenger Road
South Hackensack, NJ 13th Floor Mail Drop-Reorg
07606 New York, NY 10271 Ridgefield Park, NJ
Attn: Reorganization Attn: Reorganization 07660
Department Department
By Facsimile Transmission: Attn: Reorganization
Department
Confirm Receipt of
(For Eligible Institutions Only) Facsimile By Telephone
(201) 296-4293 Only:
(201) 296-4860
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS
SET FORTH ABOVE OR TRANSMISSION HEREOF VIA FACSIMILE TRANSMISSION OTHER THAN
AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature on a
Letter of Transmittal is required to be guaranteed by an Eligible Institution
under the instructions thereto, such signature guarantee must appear in the
applicable space provided in the signature box on the Letter of Transmittal.
1
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to Columbia Propane, L.P., a Delaware limited
partnership (the "Purchaser"), which has as its managing general partner CP
Holdings, Inc., which is a wholly-owned subsidiary of Columbia Propane
Corporation ("Purchaser Holdings"), upon the terms and subject to the
conditions set forth in the Purchaser's Offer to Purchase, dated April 9, 1999
(the "Offer to Purchase") and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer"), receipt of which is hereby acknowledged, the number of Common
Units specified below, pursuant to the guaranteed delivery procedures set
forth in Section 2 of the Offer to Purchase. Purchaser Holdings is a wholly-
owned subsidiary of Columbia Energy Group.
Number of Common Units: _______________________________________________________
Name(s) of Common Unit Record Holder(s): ______________________________________
- -------------------------------------------------------------------------------
(Please Print)
Certificate Nos. (if available): ______________________________________________
- -------------------------------------------------------------------------------
Address(es): __________________________________________________________________
Zip Code: _____________________________________________________________________
Area Code and Tel. No.: _______________________________________________________
[_] Check box if Common Units will be tendered by book-entry transfer.
The Depository Trust Company Account Number: __________________________________
Signature(s) _____________________________
--------------------------------
Dated: ___________________________________
2
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a participant in the Security Transfer Agents Medallion
Program, the New York Stock Exchange Medallion Signature Guarantee Program or
the Stock Exchange Medallion Program, hereby (i) represents that the above-
named person(s) "own(s)" the Common Units tendered hereby within the meaning
of Rule 14e-4 under the Securities Exchange Act of 1934, as amended ("Rule
14e-4"), (ii) represents that such tender of Common Units complies with Rule
14e-4, and (iii) guarantees to deliver to the Depositary either the
certificates representing the Common Units tendered hereby, in proper form for
transfer, or to deliver Common Units pursuant to the procedure for book-entry
transfer into the Depositary's account at The Depository Trust Company (the
"Book Entry Transfer Facility"), in any such case together with a properly
completed and duly executed Letter of Transmittal, or a manually signed
facsimile thereof, with any required signature guarantees, or an Agent's
Message (as defined in the Offer to Purchase), and any other documents
required by the Letter of Transmittal, within three New York Stock Exchange,
Inc. trading days after the date hereof.
The Eligible Institution that completes this form must communicate this
guarantee to the Depositary and must deliver the Letter of Transmittal and
certificates for Common Units to the Depositary within the time period shown
herein. Failure to do so could result in a financial loss to such Eligible
Institution.
Name of Firm: _________________________________________________________________
- -------------------------------------------------------------------------------
(Authorized Signature)
Address: ______________________________________________________________________
Zip Code: _____________________________________________________________________
Name: _________________________________________________________________________
Title: ________________________________________________________________________
Area Code and Tel. No.: _______________________________________________________
Dated: ________________________________________________________________________
NOTE: DO NOT SEND CERTIFICATES FOR COMMON UNITS WITH THIS NOTICE. COMMON UNIT
CERTIFICATES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
3
<PAGE>
EXHIBIT (a)(4)
Offer to Purchase for Cash
All Outstanding Common Units
Representing Limited Partner Interests
in
NATIONAL PROPANE PARTNERS, L.P.
at
$12.00 Net Per Common Unit
by
COLUMBIA PROPANE, L.P.,
the managing general partner of which
is a wholly-owned subsidiary of
COLUMBIA PROPANE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MAY 6, 1999, UNLESS THE OFFER IS EXTENDED.
April 9, 1999
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:
We have been appointed by Columbia Propane, L.P., a Delaware limited
partnership (the "Purchaser"), which has as its managing general partner CP
Holdings, Inc., a Delaware corporation ("Purchaser General Partner"), which is
a wholly-owned subsidiary of Columbia Propane Corporation ("Purchaser
Holdings"), to act as Dealer Manager in connection with the Purchaser's offer
to purchase all outstanding common units representing limited partner
interests (the "Common Units") in National Propane Partners, L.P., a Delaware
limited partnership (the "Partnership"), at $12.00 per Common Unit, net to the
seller in cash, without interest, upon the terms and subject to the conditions
set forth in the Purchaser's Offer to Purchase dated April 9, 1999 (the "Offer
to Purchase"), and the related Letter of Transmittal (which, together with any
supplements or amendments thereto, collectively constitute the "Offer").
Holders of Common Units ("Unitholders") whose certificates for such Common
Units ("Certificates") are not immediately available or who cannot deliver
their Certificates and all other required documents to the Depositary (as
defined below) prior to the Expiration Date (as defined in Section 1 of the
Offer to Purchase), or who cannot complete the procedures for book-entry
transfer on a timely basis, must tender their Common Units according to the
guaranteed delivery procedures set forth in Section 2 of the Offer to
Purchase. Purchaser Holdings is a wholly-owned subsidiary of Columbia Energy
Group.
Please furnish copies of the enclosed materials to those of your clients for
whom you hold Common Units registered in your name or in the name of your
nominee. Enclosed herewith are copies of the following documents:
1. Offer to Purchase, dated April 9, 1999;
2. Letter of Transmittal to be used by Unitholders accepting the Offer;
3. The letter to Unitholders from National Propane Corporation, the managing
general partner of the Partnership ("National MGP");
4. A printed form of letter that may be sent to your clients for whose
account you hold Common Units in your name or in the name of your nominee,
with space provided for obtaining such client's instructions with regard to
the Offer;
<PAGE>
5. Notice of Guaranteed Delivery to be used to accept the Offer if neither
of the two procedures for tendering the Common Units set forth in the Offer to
Purchase can be completed on a timely basis; and
6. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE. PLEASE NOTE
THAT THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK
CITY TIME, ON MAY 6, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to a Purchase Agreement dated as of April
5, 1999 (the "Purchase Agreement") among the Purchaser, Purchaser General
Partner, Purchaser Holdings, the Partnership, National MGP, National Propane
SGP, Inc., the special general partner of the Partnership, and Triarc
Companies, Inc., the indirect parent of the general partners of the
Partnership. Pursuant to the Purchase Agreement, following the consummation of
the Offer and the satisfaction or waiver of certain conditions, the
Partnership will be merged with and into the Purchaser, with the Purchaser
surviving the merger (the "Merger"). On the effective date of the Merger, each
outstanding Common Unit not tendered in the Offer (other than those held by
direct or indirect wholly-owned subsidiaries of Purchaser General Partner)
will be converted into the right to receive $12.00 per Common Unit, net to the
seller in cash, without interest, as set forth in the Purchase Agreement and
described in the Offer to Purchase.
THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN VALIDLY
TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT NUMBER OF
COMMON UNITS THAT CONSTITUTES AT LEAST A MAJORITY OF THE THEN OUTSTANDING
COMMON UNITS OF THE PARTNERSHIP ON A FULLY DILUTED BASIS. THE OFFER IS ALSO
SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS SET FORTH IN THE OFFER TO
PURCHASE. SEE SECTIONS 1, 14 AND 15 OF THE OFFER TO PURCHASE.
THE BOARD OF DIRECTORS OF NATIONAL MGP, MANAGING GENERAL PARTNER OF THE
PARTNERSHIP (THE "NATIONAL BOARD"), ACTING ON THE RECOMMENDATION OF THE
SPECIAL COMMITTEE OF THE NATIONAL BOARD, HAS UNANIMOUSLY APPROVED AND ADOPTED
THE PURCHASE AGREEMENT, THE OFFER AND THE MERGER, AND HAS DETERMINED THAT THE
OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS OF THE UNITHOLDERS
AND RECOMMENDS THAT THE UNITHOLDERS ACCEPT THE OFFER AND TENDER THEIR COMMON
UNITS.
In all cases, payment for Common Units accepted for payment pursuant to the
Offer will be made only after timely receipt by ChaseMellon Shareholder
Services, L.L.C. (the "Depositary") of (a) certificates for (or a timely Book-
Entry Confirmation (as defined in the Offer to Purchase) with respect to) such
Common Units, (b) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed with any required signature guarantees, or, in the
case of a book-entry transfer effected pursuant to the procedure set forth in
Section 2 of the Offer to Purchase, an Agent's Message (as defined in the
Offer to Purchase), and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering Unitholders may be paid at different times
depending upon when certificates for Common Units or Book-Entry Confirmations
with respect to Common Units are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF
THE COMMON UNITS, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
If Unitholders wish to tender, but it is impracticable for them to forward
their Certificates or other required documents prior to the Expiration Date or
to comply with the book-entry transfer procedures on a timely basis, a tender
may be effected by following the guaranteed delivery procedures specified in
Section 2 of the Offer to Purchase.
<PAGE>
None of the Purchaser, Purchaser General Partner or Purchaser Holdings will
pay any fees or commissions to any broker or dealer or other person (other
than the Dealer Manager, the Information Agent and the Depositary as described
in the Offer to Purchase) in connection with the solicitation of tenders of
Common Units pursuant to the Offer. However, you will be reimbursed upon
request for customary mailing and handling expenses incurred by you in
forwarding the enclosed offering materials to your customers.
The Purchaser will pay any U.S. Federal, state or local transfer taxes with
respect to the transfer and sale of Common Units to the Purchaser or its order
pursuant to the Offer, except as otherwise provided in Instruction 6 to the
Letter of Transmittal.
Any inquiries you may have with respect to the Offer should be directed to
the Information Agent or the Dealer Manager at their respective addresses and
telephone numbers set forth on the back cover of the enclosed Offer to
Purchase.
Additional copies of the enclosed material may be obtained from the
Information Agent at the address and telephone numbers set forth on the back
cover of the enclosed Offer to Purchase.
Very truly yours,
PaineWebber Incorporated
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF THE PURCHASER, PURCHASER GENERAL PARTNER,
PURCHASER HOLDINGS, THE DEPOSITARY, THE INFORMATION AGENT, THE DEALER MANAGER
OR ANY AFFILIATE OF ANY THEREOF OR AUTHORIZE YOU OR ANY OTHER PERSON TO GIVE
ANY INFORMATION OR USE ANY DOCUMENT OR MAKE ANY STATEMENTS ON BEHALF OF ANY OF
THEM WITH RESPECT TO THE OFFER OTHER THAN THE ENCLOSED DOCUMENTS AND THE
STATEMENTS CONTAINED THEREIN.
<PAGE>
EXHIBIT (a)(5)
Offer to Purchase for Cash
All Outstanding Common Units
Representing Limited Partner Interests
in
NATIONAL PROPANE PARTNERS, L.P.
at
$12.00 Net Per Common Unit
by
COLUMBIA PROPANE, L.P.,
the managing general partner of which
is a wholly-owned subsidiary of
COLUMBIA PROPANE CORPORATION
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT,
NEW YORK CITY TIME, ON THURSDAY, MAY 6, 1999, UNLESS THE OFFER IS EXTENDED.
April 9, 1999
To Our Clients:
Enclosed for your consideration are an Offer to Purchase dated April 9, 1999
(the "Offer to Purchase"), and a related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute
the "Offer") relating to an offer by Columbia Propane, L.P., a Delaware
limited partnership (the "Purchaser"), which has as its managing general
partner CP Holdings, Inc., a Delaware corporation ("Purchaser General
Partner"), which is a wholly-owned subsidiary of Columbia Propane Corporation
("Purchaser Holdings"), to purchase all outstanding common units representing
limited partner interests (the "Common Units") in National Propane Partners,
L.P., a Delaware limited partnership (the "Partnership"), at $12.00 per Common
Unit, net to the seller in cash, without interest, upon the terms and subject
to the conditions set forth in the Offer to Purchase and the Letter of
Transmittal. Holders of Common Units ("Unitholders") whose certificates for
such Common Units ("Certificates") are not immediately available or who cannot
deliver their Certificates and all other required documents to the Depositary
(as defined in Section 1 of the Offer to Purchase) prior to the Expiration
Date (as defined in Section 1 of the Offer to Purchase), or who cannot
complete the procedures for book-entry transfer on a timely basis, must tender
their Common Units according to the guaranteed delivery procedures set forth
in Section 2 of the Offer to Purchase. Purchaser Holdings is a wholly-owned
subsidiary of Columbia Energy Group.
WE ARE (OR OUR NOMINEE IS) THE HOLDER OF RECORD OF COMMON UNITS HELD BY US
FOR YOUR ACCOUNT. A TENDER OF SUCH COMMON UNITS CAN BE MADE ONLY BY US AS THE
HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL
IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED TO TENDER
COMMON UNITS HELD BY US FOR YOUR ACCOUNT.
We request instructions as to whether you wish to tender any of or all the
Common Units held by us for your account, pursuant to the terms and conditions
set forth in the Offer.
<PAGE>
Your attention is invited to the following:
1. The tender price is $12.00 per Common Unit, net to the seller in cash,
without interest, upon the terms and subject to the conditions set forth in
the Offer.
2. The Offer is being made for all outstanding Common Units.
3. THE OFFER IS CONDITIONED UPON, AMONG OTHER THINGS, THERE HAVING BEEN
VALIDLY TENDERED AND NOT WITHDRAWN PRIOR TO THE EXPIRATION OF THE OFFER THAT
NUMBER OF COMMON UNITS THAT CONSTITUTES AT LEAST A MAJORITY OF THE THEN
OUTSTANDING COMMON UNITS OF THE PARTNERSHIP ON A FULLY DILUTED BASIS. THE
OFFER IS ALSO SUBJECT TO CERTAIN OTHER TERMS AND CONDITIONS SET FORTH IN THE
OFFER TO PURCHASE. SEE SECTIONS 1, 14 AND 15 OF THE OFFER TO PURCHASE.
4. THE BOARD OF DIRECTORS OF NATIONAL PROPANE CORPORATION, MANAGING GENERAL
PARTNER OF THE PARTNERSHIP (THE "NATIONAL BOARD"), ACTING ON THE
RECOMMENDATION OF THE SPECIAL COMMITTEE OF THE NATIONAL BOARD, HAS UNANIMOUSLY
APPROVED AND ADOPTED THE PURCHASE AGREEMENT, THE OFFER AND THE MERGER, AND HAS
DETERMINED THAT THE OFFER AND THE MERGER ARE FAIR TO AND IN THE BEST INTERESTS
OF THE UNITHOLDERS AND RECOMMENDS THAT THE UNITHOLDERS ACCEPT THE OFFER AND
TENDER THEIR COMMON UNITS.
5. The Offer and withdrawal rights will expire at 12:00 Midnight, New York
City time, on May 6, 1999, unless the Offer is extended by the Purchaser. In
all cases, payment for Common Units accepted for payment pursuant to the Offer
will be made only after timely receipt by ChaseMellon Shareholder Services,
L.L.C. (the "Depositary") of (a) certificates for (or a timely Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to) such
Common Units, (b) a Letter of Transmittal (or facsimile thereof), properly
completed and duly executed with any required signature guarantees, or, in the
case of a book-entry transfer effected pursuant to the procedure set forth in
Section 2 of the Offer to Purchase, an Agent's Message (as defined in the
Offer to Purchase), and (c) any other documents required by the Letter of
Transmittal. Accordingly, tendering Unitholders may be paid at different times
depending upon when certificates for Common Units or Book-Entry Confirmations
with respect to Common Units are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF
THE COMMON UNITS, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN
MAKING SUCH PAYMENT.
6. Tendering Unitholders will not be obligated to pay brokerage fees or
commissions to the Dealer Manager, the Depositary or the Information Agent or,
except as otherwise provided in Instruction 6 of the Letter of Transmittal,
transfer taxes on the purchase of Common Units by the Purchaser pursuant to
the Offer. However, federal income tax backup withholding at a rate of 31% may
be required, unless an exemption is available or unless the required tax
identification information is provided. See Instruction 9 of the Letter of
Transmittal.
If you wish to have us tender any or all of your Common Units, please so
instruct us by completing, executing and returning to us the instruction form
on the following page. An envelope to return your instructions to us is
enclosed. If you authorize tender of your Common Units, all such Common Units
will be tendered unless stated otherwise on the instruction form. Your
instructions to us should be forwarded promptly to permit us to submit a
tender on your behalf prior to the expiration of the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Unitholders in any jurisdiction where the making of the Offer or
the acceptance thereof would not be in compliance with the laws of such
jurisdiction. The Purchaser is not aware of any jurisdiction in which the
making of the Offer is prohibited by administrative or judicial action
pursuant to any valid state statute. If the Purchaser becomes aware of any
valid state statute prohibiting the making of the Offer, the Purchaser will
make a good faith effort to comply with such statute. In any jurisdiction
where securities or other laws require the Offer to be made by a licensed
broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
<PAGE>
Instructions with Respect to the
Offer to Purchase All Outstanding Common Units
Representing Limited Partner Interests
in
National Propane Partners, L.P.
The undersigned acknowledges receipt of your letter enclosing the Offer to
Purchase, dated April 9, 1999, of Columbia Propane, L.P., a Delaware limited
partnership, which has as its managing general partner CP Holdings, Inc.,
which is a wholly-owned subsidiary of Columbia Propane Corporation, and the
related Letter of Transmittal, relating to Common Units representing limited
partner interests in National Propane Partners, L.P., a Delaware limited
partnership (the "Common Units"). Columbia Propane Corporation is a wholly-
owned subsidiary of Columbia Energy Group.
This will instruct you to tender the number of Common Units indicated below
held by you for the account of the undersigned on the terms and conditions set
forth in such Offer to Purchase and the related Letter of Transmittal.
Date: , 1999 Number of Common Units
to be Tendered* _____________________
Signature(s) __________________________________________________________________
Please print name(s) __________________________________________________________
Address
(Include Zip Code)
Area Code and Telephone No.
Taxpayer Identification No. or
Social Security No.
* Unless otherwise indicated, it will be assumed that all your Common Units
are to be tendered.
THIS FORM MUST BE RETURNED TO THE BROKERAGE FIRM MAINTAINING YOUR ACCOUNT.
<PAGE>
EXHIBIT (a)(6)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the
Payer.--Social Security numbers have nine digits separated by two hyphens:
i.e. 000-00-0000. Employer identification numbers have nine digits separated
by only one hyphen: i.e. 00-0000000. The table below will help determine the
number to give the payer.
- -----------------------------------------------
<TABLE>
<CAPTION>
Give the NAME AND
For this type of account: SOCIAL
SECURITY
NUMBER of--
- -----------------------------------------------
<S> <C>
1. An individual's account The individual
2. Two or more individuals The actual owner
(joint account) of the account
or, if combined
funds, any one of
the individuals(1)
3. Husband and wife (joint The actual owner
account) of the account
or, if joint funds,
either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Adult and minor (joint The adult or, if
account) the minor is the
only contributor,
the minor(1)
6. Account in the name of The ward, minor,
guardian or committee for a or incompetent
designated ward, minor, or person(3)
incompetent person
7. a. The usual revocable The grantor-
savings trust account trustee(1)
(grantor is also
trustee)
b. So-called trust account The actual
that is not a legal or owner(1)
valid trust under State
law
8. Sole proprietorship The owner(4)
account
- ---------------------------------------
- -----------------------------------------------
<CAPTION>
Give the NAME AND
For this type of account: EMPLOYER
IDENTIFICATION
NUMBER of --
- -----------------------------------------------
<S> <C>
9. A valid trust, estate, or The legal entity
pension trust (Do not furnish
the identifying
number of the
personal
representative or
trustee unless
the legal entity
itself is not
designated in the
account
title.)(5)
10. Corporate account The corporation
11. Religious, charitable, or The organization
educational organization
account
12. Partnership account held The partnership
in the name of the business
13. Association, club, or The organization
other tax-exempt
organization
14. A broker or registered The broker or
nominee nominee
15. Account with the The public entity
Department of Agriculture
in the name of a public
entity (such as a State or
local government, school
district, or prison) that
receives agricultural
program payments
</TABLE>
- ---------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner.
(5) List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER OF SUBSTITUTE FORM W-9
Page 2
Obtaining a Number
If you don't have a TIN or you don't know your number, obtain Internal Revenue
Service Form SS-5, Application for a Social Security Number Card, or Form SS-
4, Application for Employer Identification Number, at your local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
Payees Exempt from Backup Withholding
Payees specifically exempted from backup withholding on ALL payments include
the following:
. A corporation.
. A financial institution.
. An organization exempt from tax under section 501(a) or an individual re-
tirement plan.
. The United States or any agency or instrumentality thereof.
. A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
. A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
. An international organization or any agency, or instrumentality thereof.
. A registered dealer in securities or commodities registered in the U.S. or
a possession of the U.S.
. A real estate investment trust.
. A common trust fund operated by a bank under section 584(a).
. An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
. An entity registered at all times under the Investment Company Act of
1940.
. A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to backup
withholding include the following:
. Payments to nonresident aliens subject to withholding under section 1441.
. Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
. Payments of patronage dividends where the amount received is not paid in
money.
. Payments made by certain foreign organizations.
. Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
. Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is $600 or
more and is paid in the course of the payer's trade or business and you have
not provided your correct taxpayer identification number to the payer.
. Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
. Payments described in section 6049(b)(5) to nonresident aliens.
. Payments on tax-free covenant bonds under section 1451.
. Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER. FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT
TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS,
ALSO SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
Privacy Act Notice--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to the IRS. The IRS uses the numbers for
identification purposes. Payers must be given the numbers whether or not
recipients are required to file tax returns. Payers must generally withhold
31% of taxable interest, dividend, and certain other payments to a payee who
does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
Penalties
(1) Penalty for Failure to Furnish TAXPAYER IDENTIFICATION NUMBER--If you fail
to furnish your taxpayer identification number to a payer, you are subject to
a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) Failure to Report Certain Dividend and Interest Payments--If you fail to
include any portion of an includible payment for interest, dividends, or
patronage dividends in gross income, such failure may be treated as being due
to negligence and will be subject to a penalty of 20% on any portion of an
underpayment attributable to that failure unless there is clear and convincing
evidence to the contrary.
(3) Civil Penalty For False Information With Respect to Withholding--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) Criminal Penalty For Falsifying Information--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
EXHIBIT (a)(7)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Common Units. The Offer is made solely by the Offer to Purchase dated
April 9, 1999, and the related Letter of Transmittal (and any amendments or
supplements thereto) and the Offer is being made to all holders of Common Units.
The Purchaser is not aware of any jurisdiction in which the making of the Offer
is prohibited by administrative or judicial action pursuant to any valid state
statute. If the Purchaser becomes aware of any valid state statute prohibiting
the making of the Offer, the Purchaser will make a good faith effort to comply
with such statute. If, after such good faith effort, the Purchaser cannot comply
with such state statute, the Offer will not be made to (nor will tenders be
accepted from or on behalf of) holders of Common Units in such state. In any
jurisdiction where securities or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on behalf of the
Purchaser by one or more registered brokers or dealers licensed under the laws
of such jurisdiction.
Notice of Offer to Purchase for Cash
All Outstanding Common Units
of
National Propane Partners, L.P.
at
$12.00 Net Per Common Unit
by
Columbia Propane, L.P.
the managing general partner of which
is a wholly-owned subsidiary of
Columbia Propane Corporation
Columbia Propane, L.P., a Delaware limited partnership (the "Purchaser"), which
has as its managing general partner CP Holdings, Inc., a Delaware corporation
("Purchaser General Partner"), which is a wholly-owned subsidiary of Columbia
Propane Corporation ("Purchaser Holdings"), is offering to purchase all the
outstanding common units (the "Common Units") representing limited partner
interests in National Propane Partners, L.P., a Delaware limited partnership
(the "Partnership"), at a price of $12.00 per Common Unit (the "Offer Price"),
net to the seller in cash, without interest, upon the terms and subject to the
conditions set forth in the Offer to Purchase dated April 9, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal (which, together with any
amendments or supplements thereto, collectively constitute the "Offer").
Purchaser Holdings is a wholly-owned subsidiary of Columbia Energy Group.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON THURSDAY, MAY 6, 1999, UNLESS THE OFFER IS EXTENDED.
The Offer is being made pursuant to a Purchase Agreement dated as of April 5,
1999 (the "Purchase Agreement"), among the Purchaser, Purchaser General Partner,
Purchaser Holdings, the Partnership, National Propane Corporation, the managing
general partner of the Partnership ("National MGP"), National Propane SGP, Inc.,
the special general partner of the Partnership and Triarc Companies, Inc., the
indirect parent of the general partners of the Partnership. Pursuant to the
Purchase Agreement, following the consummation of the Offer, the Partnership
will be merged with and into the Purchaser (the "Merger"). On the effective date
of the Merger, each outstanding Common Unit (other than units held by any direct
or indirect wholly-owned subsidiary of Purchaser General Partner) will be
converted into the right to receive $12.00 in cash, without interest. The
Purchase Agreement is more fully described in the Offer to Purchase.
<PAGE>
The Offer is conditioned upon, among other things, there having been validly
tendered and not withdrawn prior to the expiration of the Offer that number of
Common Units that constitutes at least a majority of the then outstanding Common
Units of the Partnership on a fully diluted basis. The Offer is also subject to
certain other terms and conditions set forth in the Offer to Purchase. See
Sections 1, 14 and 15 of the Offer to Purchase.
The Board of Directors of National MGP, Managing General Partner of the
Partnership (the "National Board"), acting on the recommendation of the special
committee of the National Board, has unanimously approved and adopted the
Purchase Agreement, the Offer and the Merger, and has determined that the Offer
and the Merger are fair to and in the best interests of the holders of Common
Units ("Unitholders") and recommends that the Unitholders accept the Offer and
tender their Common Units.
For purposes of the Offer, the Purchaser shall be deemed to have accepted for
payment, and thereby purchased, Common Units validly tendered to the Purchaser
and not properly withdrawn as, if and when the Purchaser gives oral or written
notice to Chase Mellon Shareholder Services, L.L.C. (the "Depositary") of the
Purchaser's acceptance for payment of such Common Units. Upon the terms and
subject to the conditions of the Offer, payment for Common Units accepted for
payment pursuant to the Offer will be made by deposit of the purchase price
therefor with the Depositary, which will act as agent for tendering Unitholders
for the purpose of receiving payment from the Purchaser and transmitting payment
to tendering Unitholders whose Common Units have been accepted for payment. In
all cases, payment for Common Units accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (i) certificates for
such Common Units or timely confirmation of book-entry transfer of such Common
Units into the Depositary's account at the Book-Entry Transfer Facility (as
defined in the Offer to Purchase) pursuant to the procedures set forth in
Section 2 of the Offer to Purchase, (ii) a properly completed and duly executed
Letter of Transmittal (or facsimile thereof), with any required signature
guarantees, or, in the case of a book-entry transfer, an Agent's Message (as
defined in the Offer to Purchase) and (iii) any other documents required by the
Letter of Transmittal. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID BY THE
PURCHASER ON THE PURCHASE PRICE OF THE COMMON UNITS, REGARDLESS OF ANY EXTENSION
OF THE OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The term "Expiration Date" means 12:00 Midnight, New York City time, on May 6,
1999, unless and until the Purchaser shall have extended the period of time
during which the Offer is open, either in its sole discretion or pursuant to the
mandatory extension requirements set forth below, in which event the term
"Expiration Date" shall mean the latest time and date on which the Offer, as so
extended by the Purchaser, shall expire. Pursuant to the terms of the Purchase
Agreement, the Purchaser must extend the Offer from time to time to the extent
necessary to permit cure, resolution, elimination or waiver of the conditions
set forth in Section 14 of the Offer to Purchase; 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 Section 14 of the Offer to
Purchase is not capable of being cured, resolved or eliminated, (y) after the
termination of the Purchase Agreement in accordance with its terms or (z) in any
event, to a date later than 60 days following the commencement of the Offer. In
addition, the Purchaser expressly reserves the right, in its sole discretion, at
any time or from time to time, and regardless of whether or not any of the
events set forth in Section 14 of the Offer to Purchase shall have occurred, (i)
to extend the period of time during which the Offer is open and thereby delay
acceptance for payment of, and the payment for, any Common Units, by giving oral
or written notice of such extension to the Depositary and (ii) subject to the
terms of the Purchase Agreement, to amend the Offer in any other respect by
giving oral or written notice of such amendment to the Depositary. There can be
<PAGE>
no assurance that the Purchaser will exercise its right to extend the Offer
(other than as may be required by applicable law). Any such extension will be
followed by a public announcement thereof no later than 9:00 a.m., New York City
time, on the next business day after the previously scheduled Expiration Date.
During any such extension, all Common Units previously tendered and not
withdrawn will remain subject to the Offer, subject to the right of a tendering
Unitholder to withdraw such Unitholder's Common Units.
Except as otherwise provided below, tenders of Common Units are irrevocable.
Common Units tendered pursuant to the Offer may be withdrawn at any time prior
to the Expiration Date and, unless theretofore accepted for payment and paid for
by the Purchaser pursuant to the Offer, may also be withdrawn at any time after
June 7, 1999. For a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by the Depositary at
one of its addresses set forth on the back cover of the Offer to Purchase and
must specify the name of the person having tendered the Common Units to be
withdrawn, the number of Common Units to be withdrawn and the name of the
registered holder of the Common Units to be withdrawn, if different from the
name of the person who tendered the Common Units. If certificates for Common
Units to be withdrawn have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of such certificates, the serial
numbers shown on such certificates must be submitted to the Depositary and,
unless such Common Units have been tendered by an Eligible Institution as
defined in Section 2 of the Offer to Purchase, the signature on the notice of
withdrawal must be guaranteed by an Eligible Institution. If Common Units have
been tendered pursuant to the procedures for book-entry transfer as set forth in
Section 2 of the Offer to Purchase, any notice of withdrawal must also specify
the name and number of the account at the Book-Entry Transfer Facility to be
credited with the withdrawn Common Units and otherwise comply with the Book-
Entry Transfer Facility's procedures. Withdrawals of tenders of Common Units may
not be rescinded, and any Common Units properly withdrawn will thereafter be
deemed not validly tendered for purposes of the Offer. However, withdrawn Common
Units may be retendered by again following one of the procedures described in
Section 2 of the Offer to Purchase at any time prior to the Expiration Date. All
questions as to the form and validity (including time of receipt) of notices of
withdrawal will be determined by the Purchaser, in its sole discretion, whose
determination will be final and binding.
The Partnership has provided the Purchaser with Unitholder lists and security
position listings for the purpose of disseminating the Offer to Unitholders. The
Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed to Unitholders and furnished to brokers, dealers,
commercial banks, trust companies and similar persons whose names, or the names
of whose nominees, appear on the Unitholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to Unitholders.
The information required to be disclosed by Rule 14d-6(e)(1)(vii) under the
Securities Exchange Act of 1934, as amended, is contained in the Offer to
Purchase and is incorporated herein by reference.
The Offer to Purchase and the related Letter of Transmittal contain important
information that should be read before any decision is made with respect to the
Offer.
Questions and requests for assistance may be directed to the Information Agent
or to the Dealer Manager at their respective addresses and telephone numbers
below. Requests for additional copies of the Offer to Purchase, the related
Letter of Transmittal and all other tender offer materials may be directed to
the Information Agent or to the Dealer Manager. Copies will be furnished
promptly at the Purchaser's expense. No fees or commissions will be paid to any
broker or dealer or any other person (other than the Dealer Manager, the
<PAGE>
Information Agent and the Depositary) in connection with the solicitation of
tenders of Common Units pursuant to the Offer.
The Information Agent for the Offer is:
Innisfree M & A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Call Toll-Free: (888) 750-5834
Banks and Brokers Call: (212) 750-5833 (Collect)
The Dealer Manager for the Offer is:
PaineWebber Incorporated
1285 Avenue of the Americas
New York, New York 10019
Call Toll-Free: (800) 548-1775
Banks and Brokers call collect: (212) 713-9924
April 9, 1999
<PAGE>
EXHIBIT 99.(a)(8)
[LETTERHEAD OF COLUMBIA ENERGY GROUP(SM)]
News Release
For Immediate Release
April 5, 1999 CONTACTS:
Columbia Energy Group
---------------------
R. A. Rankin, Jr. (News Media)
(703) 561-6044
Thomas L. Hughes (Financial Community)
(703) 561-6001
National Propane
----------------
R. Brooks Sherman
(319) 365-1550
COLUMBIA PROPANE TO ACQUIRE NATIONAL PROPANE
FOR $12.00 IN CASH PER COMMON UNIT
Richmond, VA and Cedar Rapids, IA, April 5, 1999 -- Columbia Propane
Corporation (Columbia Propane), a subsidiary of Columbia Energy Group (NYSE:
CG), and National Propane Partners, L.P. (NYSE: NPL) announced today that they
have signed a definitive purchase agreement whereby Columbia Propane will
commence a tender offer to acquire all of the approximately 6.7 million
outstanding common units of National Propane for $12.00 in cash per common unit.
Subject to the terms and conditions of the agreement, Columbia Propane
would also acquire the general partner interests and subordinated unit interests
of National Propane from subsidiaries of Triarc Companies, Inc. (NYSE: TRY).
Approximately $141 million of National Propane's outstanding indebtedness is
expected to be refinanced by Columbia Propane in connection with the
transaction.
The proposed acquisition of National Propane would add more than 210,000
retail and wholesale customers in 24 states, extending Columbia Propane's
presence from the Mid-Atlantic and Northeast to the Southeast, Midwest and
Western regions of the United States. The combination would also result in
Columbia Propane having more than 300,000 customers with operations in 35 states
and the District of Columbia.
"With today's announcement, Columbia Propane is aggressively executing part
of the Group's nonregulated growth strategy," said Oliver G. Richard III,
Chairman, President and CEO, Columbia Energy Group. "The National Propane
acquisition gives Columbia Propane the opportunity to triple the size of its
customer base, and rank among the leading propane companies in the United
States."
- more -
<PAGE>
Columbia
Energy
Group(SM)
Ronald R. Rominiecki, President and Chief Operating Officer of National
Propane, said: "The Columbia Propane transaction will significantly improve
National Propane's growth prospects. At a significant premium to today's closing
market price, the Columbia Propane acquisition is a very attractive transaction
for our common unitholders which our Board fully supports."
The Board of Directors of National Propane's managing general partner,
acting on the recommendation of its Special Committee, has unanimously approved
the Columbia Propane transaction and unanimously recommended that unitholders
tender their common units pursuant to the offer. The Special Committee received
an opinion of Lehman Brothers that, from a financial point of view, the
consideration to be received by the common unitholders in the proposed
transaction is fair to the common unitholders.
The tender offer is the first step of a two-step cash transaction. In the
second step, subject to the terms and conditions of the purchase agreement among
the parties, Columbia Propane would indirectly acquire the general partnership
interests and subordinated unit interests of National Propane from subsidiaries
of Triarc and National Propane would merge into Columbia Propane, L.P.
As part of the second step, any remaining common unitholders of National
Propane would receive, in cash, the same per unit price as that paid to
unitholders who tender their shares pursuant to the tender offer. Triarc would
receive approximately $17.9 million for its acquired interests in National
Propane - $2.1 million in cash and $15.8 million payable in the form of the
forgiveness of indebtedness owed by Triarc to National Propane. Simultaneously,
and as a condition of the closing, Triarc will prepay approximately $14.9
million of such indebtedness.
The managing general partner of National Propane has also agreed to, among
other things, execute a consent, as holder of all the subordinated units, to
approve the merger and other transactions contemplated by the agreement.
Columbia Propane, through its direct and indirect subsidiaries CP
Holdings, Inc. and Columbia Propane, L.P., intends to commence its cash tender
offer for all of the outstanding common units of National Propane at a price of
$12.00 per unit, net to the seller in cash, beginning April 9, 1999. The offer
for the common units will be subject to certain conditions, including there
being validly tendered by the expiration date, and not withdrawn, at least a
majority of the outstanding common units on a fully diluted basis.
The offer will be made only upon and subject to the terms and conditions of
the Offer to Purchase and the related Letter of Transmittal.
- more -
<PAGE>
Columbia
Energy
Group(SM)
National Propane Partners, L.P. has operations concentrated in the
Midwest, Northeast, Southeast and Western regions of the United States and
serves over 210,000 active customers through its 155 full service centers. In
1998, National Propane sold more than 144 million gallons of propane.
Columbia Propane has been a full-service propane supplier since 1941.
Columbia Propane is an operating company of Columbia Energy Group. Columbia
Energy Group, based in Herndon, VA, is one of the nation's leading energy
services companies, with 1998 revenues of nearly $6.6 billion and assets of
about $7 billion. Its operating companies are engaged in all phases of the
natural gas businesses, including exploration and production, transmission,
storage and distribution, as well as commodities marketing, energy management,
propane sales and electric power generation, sales and trading.
- Notes to Follow -
NOTES TO PRESS RELEASE
- ----------------------
1. The statements in this press release that are not historical facts, including
most importantly, information concerning possible or assumed future results of
operations of National Propane and Columbia Propane and statements preceded by,
followed by, or that include the words "may", "believes", "expects",
"anticipates" or the negation thereof, or similar expressions, constitute
"forward-looking statements." All statements which address events or
developments that are expected or anticipated to occur in the future, including
statements relating to the proposed transaction between Columbia Propane and
National Propane, volume and revenue growth, or statements expressing general
optimism about future operating results, are forward-looking statements. Such
forward-looking statements involve risks, uncertainties and other factors which
may cause actual results, performance or achievements of National Propane or
Columbia Propane to be materially different from any future results, performance
or achievements expressed or implied by such forward-looking statements. For
those statements, National Propane and Columbia Propane claim the protection of
the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995. Furthermore, there can be no assurance
that actual results of a combined entity will not differ materially due to
various factors, many of which are beyond the control of Columbia Energy Group
and Columbia Propane, including, but not limited to the supply and demand of
propane. For additional risks and uncertainties, see National Propane's and
Columbia's Securities and Exchange Commission Filings. National Propane and
Columbia will not undertake and specifically decline any obligation to publicly
release the result of any revisions to any forward-looking statements to reflect
events or circumstances after the date of such statements to reflect events or
circumstances after anticipated or unanticipated events.
2. There can be no assurances that the proposed acquisition of National Propane
by Columbia Propane will be consummated.
# # #
<PAGE>
EXHIBIT 99.(a)(9)
[LETTERHEAD OF COLUMBIA ENERGY GROUP(SM)]
News Release
For Immediate Release Contacts;
April 8, 1999 ---------
News Media: R. A. Rankin, Jr.
(703) 561-6044
Financial Community: Thomas L. Hughes
(703) 561-6001
Columbia Petroleum to Acquire
Petroleum and Propane Assets in Pennsylvania
RICHMOND, Va., April 8, 1999 - Columbia Petroleum Corp., a subsidiary of
Columbia Propane Corp. and its parent company, Columbia Energy Group, announced
today that it has signed a definitive agreement to acquire certain propane and
petroleum products assets and associated properties from Carlos R. Leffler, Inc.
and other Leffler entities. While specific terms and conditions were not
disclosed, Columbia Petroleum's investment in the business, including
acquisition costs and subject to certain closing adjustments, is expected to be
in excess of $60 million. Leffler's convenience store assets are not included in
the transaction.
Located in central and eastern Pennsylvania, the propane and petroleum
assets would expand Columbia Energy Group's nonregulated business while
extending its presence into geographic areas considered attractive for growth.
The propane assets would be owned and operated by Columbia Propane when the
transaction closes, most likely within the next 30 to 60 days.
"The Leffler acquisition continues the execution of Columbia Propane's
growth strategy by adding more propane customers as well as a group of petroleum
customers to our nonregulated retail portfolio," said Oliver G. Richard III,
chairman, president and CEO of Columbia Energy Group.
With the transfer of propane assets from Columbia Petroleum (a new
subsidiary of Columbia Propane), Columbia Propane would acquire propane assets,
bulk storage facilities with a capacity of over 1.5 million gallons - including
a pipeline terminal with over 1.2 million gallons of storage on the Texas
Eastern Products Pipeline - a propane distribution fleet and wholesale and
retail operations serving central and eastern Pennsylvania. In 1998, the Leffler
propane business had approximately 12,500 customers and 26 million gallons of
sales and related business.
Columbia Petroleum Corp. would own and operate the petroleum assets,
including five pipeline terminals on the Buckeye/Laurel and Atlantic systems,
bulk storage facilities with a capacity of over 45 million gallons, and a
wholesale and retail petroleum products distribution network serving the eastern
half of Pennsylvania, southeastern New York, Maryland and Delaware. In 1998, the
Leffler petroleum business had approximately 36,000 customers and 373 million
gallons of sales and related business. Products sold by the petroleum business
include fuel oil, various grades of diesel fuel and gasoline, kerosene and
industrial and automotive lubricants.
- more -
<PAGE>
Columbia
Energy
Group(SM)
The Leffler transaction is the second propane acquisition announced by
Columbia this week. On April 5, Columbia Propane signed a definitive purchase
agreement under which it will begin on April 9 a cash tender offer for all of
the approximately 6.7 million common units of National Propane Partners, L.P.
for $12 in cash per unit. In the second step of the National Propane
transaction, and subject to the terms and conditions of the purchase agreement,
including successful completion of the tender offer, Columbia Propane would
indirectly acquire the general partnership interests and subordinated unit
interests of National Propane.
Based on the announced agreement, the approximately $210 million National
Propane transaction involves cash payment to the unitholders, refinancing of
about $141 million in debt, and payment of about $2.1 million to the general
partner. This consideration also reflects the prepayment by the general partner
of approximately $14.9 million of debt. The National Propane transaction is
subject to certain terms and conditions.
With the closing of the Leffler transaction, and if its cash tender offer
and related steps are successfully completed in the recently announced National
Propane transaction, Columbia Propane would serve more than 335,000 customers in
35 states, nearly triple the number of customers it served at the end of 1998.
Both transactions are expected to be mildly accretive to Columbia Energy Group
earnings in the first year of operation.
Headquartered in Richmond, Va., Columbia Propane has been a full-service
propane supplier since 1941, serving commercial, industrial, agricultural and
residential markets. It sold approximately 66.5 million gallons of propane in
1998, serving about 114,000 customers. Columbia Propane is an operating company
of Columbia Energy Group.
Columbia Energy Group, based in Herndon, Va., is one of the nation's
leading energy services companies, with 1998 revenues of nearly $6.6 billion and
assets of about $7 billion. Its operating companies engage in all phases of the
natural gas business, including exploration and production, transmission,
storage and distribution, as well as commodities marketing, energy management,
propane sales and electric power generation, sales and trading.
Information about Columbia Energy Group (NYSE: CG) is available on the
Internet at www.columbiaenergygroup.com.
# # #
This press release contains "forward-looking statements" within the meaning of
the federal securities laws, including statements concerning Columbia Energy
Group's, Columbia Propane's and Columbia Petroleum's plans, objectives and
expected performance. There can be no assurance that actual results will not
differ materially due to various factors, many of which are beyond the control
of Columbia Energy Group, Columbia Propane and Columbia Petroleum, including,
but not limited to, the supply and demand for propane and petroleum, and
successful completion of the proposed National Propane transaction.
<PAGE>
EXHIBIT 99(A)(10)
[LOGO]
Columbia
Energy
Group/SM/
13880 DULLES CORNER LANE
HERNDON, VA 20171-4600
(703) 561-6000
(703) 561-7324 FAX
NEWS RELEASE
For Immediate Release Contacts:
April 9, 1999 News Media: R.A. Rankin, Jr.
(703) 561-6044
Financial Community: Thomas L. Hughes
(703) 561-6001
COLUMBIA PROPANE BEGINS TENDER OFFER
FOR COMMON UNITS OF NATIONAL PROPANE
RICHMOND, Va., April 9, 1999 -- Columbia Propane Corporation (Columbia
Propane) announced today that, through its direct and indirect subsidiaries CP
Holdings, Inc. and Columbia Propane, L.P., it has commenced its previously
announced cash tender offer to acquire all of the approximately 6.7 million
outstanding common units of National Propane Partners, L.P.
The tender offer is being made for $12.00 in cash per common unit, net
to the seller in cash, beginning April 9, 1999. The offer for the common units
is subject to certain conditions, including there being validly tendered by the
expiration date, and not withdrawn, at least a majority of the outstanding
common units on a fully diluted basis. The offer and withdrawal rights will
expire at 12:00 midnight, New York City time, on Thursday, May 6, 1999, unless
the offer is extended.
The offer is made only upon and subject to the terms and conditions of
the Offer to Purchase and the related Letter of Transmittal, which are being
filed today with the Securities and Exchange Commission. PaineWebber
Incorporated is acting as the Dealer Manager and Innisfree M&A Incorporated is
acting as the Information Agent in connection with the offer. Tender offer
materials may be obtained by calling Innisfree toll free at (888) 750-5834.
The tender offer is the first step of a two-step cash transaction which
was announced upon execution of the purchase agreement on April 5. In the second
step, subject to the terms and conditions of the purchase agreement, including
successful completion of the tender offer, Columbia Propane would indirectly
acquire the general partnership interests and subordinated unit interests of
National Propane from subsidiaries of Triarc Companies, Inc., and National
Propane would merge into Columbia Propane, L.P.
As part of the second step, any remaining common unitholders of National
Propane would receive, in cash, the same unit price as that paid to unitholders
who tender their shares under the tender offer.
-more-
<PAGE>
[LOGO]
Columbia
Energy
Group/SM/
Columbia Propane, a subsidiary of Columbia Energy Group, is based in
Richmond, Va. Columbia Energy Group, based in Herndon, Va., is one of the
nation's leading energy services companies, with 1998 revenues of nearly $6.6
billion and assets of about $7 billion. Its operating companies engage in all
phases of the natural gas business, including exploration and production,
transmission, storage and distribution, as well as commodities marketing, energy
management, propane sales and electric power generation, sales and trading.
Information about Columbia Energy Group (NYSE: CG) is available on the Internet
at www.columbiaenergygroup.com.
# # #
This press release contains "forward-looking statements" within the meaning of
the federal securities laws, including statements concerning Columbia Energy
Group's and Columbia Propane's plans, objectives and expected performance. There
can be no assurance that actual results will not differ materially due to
various factors, many of which are beyond the control of Columbia Energy Group
and Columbia Propane, including, but not limited to, the supply and demand for
propane, and successful completion of the proposed National Propane transaction.
<PAGE>
EXHIBIT 99.(c)(1)
========================================================================
PURCHASE AGREEMENT
------------
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.
------------
April 5, 1999
========================================================================
<PAGE>
TABLE OF CONTENTS
ARTICLE I
THE OFFER
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
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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
<PAGE>
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
iii
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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
<PAGE>
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
<PAGE>
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
vi
<PAGE>
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
<PAGE>
Indemnified Debt................................................... 54
Information Statement.............................................. 4
Knowledge of the National MGP...................................... 17
Lehman 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
<PAGE>
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
<PAGE>
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;
<PAGE>
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
changes in the terms and conditions of
2
<PAGE>
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 tendered
National
3
<PAGE>
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) Lehman
Brothers has delivered to the Special Committee a written opinion (the "Lehman
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 Lehman 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 the SEC and disseminated to holders of
National Common Units, in each case as and to the extent required by
4
<PAGE>
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.
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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 of Section 5.2 and to Section 5.9) or the National OLP Partnership
Agreement or of the partnership agreement of
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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,
Greene & MacRae, 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 Moody's Investors Services, Inc.
or Standard & Poor's Corporation, respectively, or in deposit accounts,
certificates of deposit or banker's acceptances of, repurchase or reverse
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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 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
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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 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
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Limited Partner Interest, free and clear of all liens, claims and other
encumbrances and (ii) any waiting periods under the Hart-Scott-Rodino 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.
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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
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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.
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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.
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(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
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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.
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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. Thomas 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.
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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 otherwise connected with (1)
Environmental and Health and Safety Laws or (2) Hazardous
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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.
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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 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
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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 3.2 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.
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
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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 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
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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 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").
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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.
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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
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,
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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 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
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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;
(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,
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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) 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.
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(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 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
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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.
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
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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 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
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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 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.
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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.
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
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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 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
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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 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.
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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.
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
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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 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
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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 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
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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.
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,
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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 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
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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 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 Lehman Brothers Inc. in connection with
the Lehman 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, Andrews & Kurth L.L.P. in connection with the negotiation,
drafting, execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby,
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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.
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
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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 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
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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.
(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.
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(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.
(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.
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(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.
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.
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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.
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"):
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(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.
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.
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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.
(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).
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(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 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.
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(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.
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
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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 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
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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 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.
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(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.
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,
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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
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
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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.
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
200 1st Street SE
Suite 1700
Cedar Rapids, Iowa 52401
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Attention: President
Telecopy: (800) 354-9213
with a copy to:
Triarc Companies, Inc.
280 Park Avenue
New York, NY 10017
Attention: Brian L. Schorr, Esq.
Telecopy: (212) 451-3216
with a copy to:
Andrews & Kurth L.L.P.
805 Third Avenue
New York, NY 10022
Attention: Mike Rosenwasser, Esq.
Telecopy: (212) 850-2929
If to any of the Purchaser Parties, addressed to:
Columbia Propane Corporation
c/o Columbia Energy Group
13880 Dulles Corner Lane
Herndon, VA 20171
Attention: Mark A. Cleaves
Telecopy: (703) 561-7311
with a copy to:
Columbia Propane Corporation
c/o Columbia Energy Group
13880 Dulles Corner Lane
Herndon, VA 20171
Attention: Legal Department
Telecopy: (703) 561-7303
and
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, NY 10019
Attention: Robert S. Rachofsky
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Telecopy: (212) 424-8500
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, (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. 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.
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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.
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.
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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.
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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/ Ronald R. Rominiecki
----------------------------------------
Name: Ronald R. Rominiecki
Title: President and Chief Operating
Officer
NATIONAL PROPANE CORPORATION
By: /s/ Ronald R. Rominiecki
----------------------------------------
Name: Ronald R. Rominiecki
Title: President and Chief Operating
Officer
NATIONAL PROPANE SGP, INC.
By: /s/ Ronald R. Rominiecki
----------------------------------------
Name: Ronald R. Rominiecki
Title: President and Chief Operating
Officer
TRIARC COMPANIES, INC.
By: /s/ Eric D. Kogan
----------------------------------------
Name: Eric D. Kogan
Title: Executive Vice President --Corporate
Development
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COLUMBIA PROPANE CORPORATION
By: /s/ A. Mason Brent
----------------------------------------
Name: A. Mason Brent
Title: President and CEO
COLUMBIA PROPANE L.P.
By: CP Holdings, Inc.
Its General Partner
By: /s/ A. Mason Brent
----------------------------------------
Name: A. Mason Brent
Title: President and CEO
CP HOLDINGS, INC.
By: /s/ A. Mason Brent
----------------------------------------
Name: A. Mason Brent
Title: President and CEO
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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;
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(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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