UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 31, 1994
TRIARC COMPANIES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-2207 38-0471180
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(State or other (Commission (I.R.S. Employer
jurisdiction of File No.) Identification No.)
incorporation of
organization)
900 Third Avenue
New York, New York 10022
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (212) 230-3000
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(Former name or former address, if
changed since last report)
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Item 5. Other Events.
On August 31, 1994, Southeastern Gas Company, a wholly-owned
subsidiary of Southeastern Public Service Company, a wholly-owned
subsidiary of the Registrant, completed the sale of its oil and gas
business (other than the assets and the business of Houston Oil and
Gas, Inc.) to Eastern States Oil & Gas, Inc. for $17 million in
cash, subject to certain post-closing adjustments. A copy of the
press releases and the definitive purchase agreement with respect
to the sale are being filed herewith as exhibits and are
incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits
2.1 Purchase and Sale Agreement, dated as of August 5, 1994,
between Southeastern Gas Company and Eastern States Oil
& Gas, Inc.
99.1 Press release dated August 22, 1994
99.2 Press release dated August 31, 1994
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
TRIARC COMPANIES, INC.
Date: September 12, 1994 By: Joseph A. Levato
Joseph A. Levato
Executive Vice President and
Chief Financial Officer
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Exhibit Index
Exhibit
No. Description Page No.
- -------- ------------ --------
2.1 Purchase and Sale Agreement, dated 4
as of August 5, 1994, between
Southeastern Gas Company and Eastern
States Oil & Gas, Inc. (the exhibits
to the Purchase and Sale Agreement,
which primarily set forth the specific
assets being transferred pursuant thereto,
are not included herewith because the
exhibits do not contain information which
is material to an investment decision and
which is not otherwise disclosed in the
Purchase and Sale Agreement. The Registrant
will furnish supplementally a copy of any
omitted exhibit to the Commission upon
request)
99.1 Press release dated August 22, 1994 41
99.2 Press release dated August 31, 1994 43
PAGE
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EXHIBIT 2.1
PURCHASE AND SALE AGREEMENT
THIS AGREEMENT, dated as of August 5, 1994, is between
Southeastern Gas Company, a Delaware corporation, hereinafter
referred to as "Seller", with offices at 505 Capital Street,
Charleston, West Virginia 25301, and Eastern States Oil & Gas,
Inc., a Virginia corporation, hereinafter referred to as "Buyer",
with offices at 333 North Fairfax Street, Suite 300, Alexandria,
Virginia 22314. Seller and Buyer are sometimes referred to jointly
as "parties" and singularly as "party".
Seller desires to sell and Buyer desires to purchase all of
the Seller's assets and property, including but not limited to the
assets and properties described on the exhibits and that described
below in subparagraphs 1 through 7 inclusive but excluding that
described in subparagraph 8, subject to the terms and conditions
hereinafter set forth and subject to the reservations set out
below:
1) All of Seller's right, title and interest in and to the
oil and gas wells, whether producing, operating, shut-in,
temporarily abandoned, abandoned, presently being used
for injection or disposal of water, standing or
otherwise, described on but not limited to Exhibit A
attached hereto (the "Wells"), together with the oil and
gas leases upon which the Wells are located (the "Well
Sites"), together with tangible personal property located
upon the Well Sites and sales or flow lines used to
gather and market oil or gas produced from the Wells;
2) All of Seller's rights, title and interests, and working
interests, overriding royalty interest and any other
similar interest in and to the oil and gas leases
described on but not limited to Exhibit B attached hereto
together with any amendments, extensions, modifications,
consolidations or unitizations thereof or any other
contractual rights pertaining thereto and any leases or
lease rights unitized therewith in which Seller owns an
interest or has contractual rights (the "Leases")
including the Well Sites and the undeveloped acreage (the
"Undeveloped Acreage").
3) The natural gas gathering/pipeline systems described on
but not limited to Exhibit C attached hereto, and all
equipment and facilities connected to the pipeline
systems and necessary to operate the pipeline systems and
all gas located in the pipeline (the "Pipeline").
4) The surface leases, rights-of-way, licenses, easements,
contractual rights for boring and federal, state, county
and/or township permits and licenses for or related to
the Pipeline or to any sales or flow lines relating to
the Wells, as described on but not limited to Exhibit C
attached hereto, together with all materials owned or
used by Seller in connection with the Pipeline which are
located on the easements, rights of way and licenses, and
all of Seller's rights, without reservation, to use,
maintain and operate any portion of the Pipeline and all
contractual rights relating to or connected with the
Pipeline or operation of the Pipeline (the "Easements").
5) Fee simple title in and to the real estate described on
Exhibit D attached hereto (the "Fee Property").
6) The oil and gas sales and purchase contracts,
transportation agreements, farmouts, joint operating
agreements and participation agreements and any other
contracts listed on Exhibit E attached hereto (the
"Contracts") and all contracts, records, maps, files,
technical data including but not limited to well files,
logs, plats, permits, drilling and completion reports,
studies and reports of a geologic or technical nature,
cores, cuttings, seismic data, geologic maps, land/lease
maps, land/lease records relating to any of the
foregoing.
7) All equipment and supplies (field and office), machinery,
inventory, vehicles, tools, swabbing units, radio and
telephone systems, computers and computer equipment,
warehouses, storage buildings that are related to the
operation and maintenance of the Wells, Leases, Pipeline
and other property, as described on but not limited to
Exhibit F attached hereto (the "Equipment").
8) Specifically excluded from the Assets are: i) all of the
assets and business of Houston Oil and Gas, Inc.; ii) any
breach of contract or other claim or lawsuit or offset
related to the Columbia Gas Transmission Corporation
bankruptcy proceeding; iii) cash, commercial paper,
certificates of deposit and other bank deposits, treasury
bills and other cash equivalents owned by Seller as of
the Effective Date (as defined below); iv) all accounts
receivable arising before the Effective Date; v) life
insurance policies of directors, officers and other
employees of Seller and other insurance policies relating
to the operation of Seller's business except entitlement
to insurance proceeds arising after the Effective Date;
vi) all refunds and credits, if any, of taxes due to
Seller as of the Effective Date; vii) the minute books,
stock transfer books and corporate seals of the Seller;
and viii) Seller's rights under this Agreement.
All of the aforesaid property and rights are hereinafter called the
"Assets".
THEREFORE, in consideration of the above and of the covenants
and agreements herein contained, Seller and Buyer agree as follows:
1. Sale and Purchase. Subject to and upon all of the terms
and conditions hereinafter set forth at the Closing (as defined
below), Seller shall sell, transfer, assign, convey and deliver the
Assets to Buyer, and Buyer shall purchase, receive, pay for, accept
and assume all duties and obligations of Seller with respect to the
Assets from Seller, effective as of 12:01 a.m. EST, July 1, 1994
(the "Effective Date"). Seller shall be entitled to all
production, proceeds of production and other proceeds attributable
to periods of time prior to the Effective Date.
2. Sale Price/Deposit. The sale price for the Assets shall
be seventeen million dollars ($17,000,000) ("Sale Price"), with
price adjustments, if any, to be made pursuant to Paragraph 13,
Post-Closing Adjustments, to reflect the expenses and revenues
attributable to the operations of the Assets from the Effective
Date until Closing. The parties acknowledge that approximately
$3.1 million of said Sale Price is allocated to Undeveloped
Acreage. Upon execution of this Agreement, Buyer shall pay to
Seller by wire transfer in immediately available funds five hundred
thousand dollars ($500,000) as a performance deposit ("Deposit").
Said Deposit shall be credited toward the Sale Price at Closing.
3. Seller's Representations. Seller represents and warrants
to Buyer as to the Assets owned by Seller that:
(a) Organization. Seller is a duly organized
corporation validly existing and in good standing under the laws of
the state of Delaware, is duly qualified to carry on business in
the state(s) in which the Assets are located, and has full power
and corporate authority to enter into and perform this Agreement
according to its terms.
(b) Authorization. Seller's execution, delivery and
performance of this Agreement has been duly authorized by all
necessary corporate actions and will not violate or conflict with
any agreement, law, rule, regulation, order, charter, or other
instrument governing either Seller's organization, management,
business affairs or instrument to which Seller is a party or is
bound. This Agreement constitutes Seller's legal, valid and
binding obligation, enforceable in accordance with its terms,
subject, however, to the effects of bankruptcy, insolvency,
reorganization, moratorium and other laws for the protection of
creditors, as well as to general principles of equity, regardless
of whether such enforceability is considered in a proceeding in
equity or at law.
(c) Taxes. As of the date of Closing, to Seller's knowledge,
Seller has paid in full all taxes, assessments and other charges
assessed or imposed on the Assets by any local, state, tribal or
federal taxing authority, other than income or sales taxes, except
those that are not yet due and payable.
(d) Litigation. To Seller's knowledge, with the exception
of: i) disputes related to the New River Company lease, the Raymond
City lease; ii) claims made by Waco Oil & Gas Co., Inc. related to
the transaction contemplated hereby; iii) claims related to any
possible condemnation relating to the construction of a new
sanitary landfill by the City of Huntington; and iv) claims related
to breach of contract associated with the Columbia Gas Transmission
Corporation bankruptcy proceeding ("Columbia"), there is no pending
proceeding, action, suit, claim or investigation threatened in
writing before any federal, tribal, state or other governmental
court, department, board, agency or other instrumentality or any
arbitrator, board of arbitration or similar entity involving Seller
or the Assets. Except for the Orders of the West Virginia Public
Service Commission in and pertaining to Case Nos. 3462, 9508, 9492,
9493, 9506 and the obligations imposed upon Seller thereunder and
by Section 278.485, Kentucky Revised Statutes, and the regulations
and orders promulgated thereunder, including Case Nos. 91 and 342
of the Public Service Commission of Kentucky, there are no orders,
writs, judgments, stipulations, injunctions, decrees,
determinations, awards or other decisions of any court, arbitrator
or governmental authority outstanding against Seller or the Assets
that have or could have, individually or in the aggregate, any
material adverse effect on the ownership or value of the Assets.
Any assets or liabilities which accrue at the conclusion of the
Columbia proceeding as well as the costs associated with the
pursuit of this claim will be retained by Seller.
(e) Title Defects. Other than with respect to claimed
defects related to the New River Company lease and the Raymond City
lease, Seller is the owner of the Assets specified on Exhibits A,
B, C, D, E and F free and clear of all Title Defects. As used in
this Agreement, "Title Defect" shall mean claims, defects in title,
liens or encumbrances, excluding liens for taxes, the payment of
which is not yet due and payable, but including liens for taxes the
payment of which was due before the date hereof.
(f) Preferential Rights. To Seller's knowledge, the Assets
are not encumbered by any preferential rights.
(g) Governmental Licenses. To Seller's knowledge, the
operation of the Assets at Closing will be in material compliance
with governmental licenses, permits, certificates, orders,
approvals and authorizations necessary for the operation of the
Assets. For purposes of this subparagraph, to be deemed "material"
a noncompliance must have an adverse effect on the Assets of at
least $25,000.
4. Buyer's Representations. Buyer represents and warrants
to Seller that:
(a) Organization. Buyer is a duly organized corporation
validly existing and in good standing under the laws of the
Commonwealth of Virginia and has full power and authority to enter
into and perform this Agreement according to its terms.
(b) Authorization. Buyer's execution, delivery and
performance of this Agreement have been duly authorized by all
necessary corporate actions and will not conflict with or violate
any agreement, law, rule, regulation, order, charter or other
instrument governing Buyer's organization, management, business
affairs or instrument to which Buyer is a party or is bound. This
Agreement constitutes Buyer's legal, valid and binding obligation,
enforceable in accordance with its terms, subject, however, to the
effects of bankruptcy, insolvency, reorganization, moratorium and
other laws for the protection of creditors, as well as to general
principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(c) Condition of the Assets. SUBJECT TO ALL THE TERMS
AND CONDITIONS OF THIS AGREEMENT, BUYER AGREES TO PURCHASE THE
ASSETS AS IS, WHERE IS, WITHOUT ANY KIND OF WARRANTY OR
REPRESENTATION AS TO THE MERCHANTABILITY OF SAME OR ITS FITNESS FOR
ANY PARTICULAR PURPOSE OR ANY OTHER REPRESENTATION OR WARRANTY
OTHER THAN THOSE REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED
IN THIS AGREEMENT.
5. Escrow Amount.
(a) Seller shall hold $750,000 of the Sale Price in
escrow (the "Escrow Amount") for purposes, but not by way of
limitation, of indemnifying the Buyer to the extent and as set
forth in Paragraph 10 below. The Escrow Amount shall be maintained
at a bank mutually acceptable to Buyer and Seller and subject to an
escrow agreement consistent with the terms set forth on Exhibit G
hereto (the "Escrow Terms"). For purposes of this Agreement, the
"Escrow Agreement" shall mean an agreement, in form satisfactory to
Buyer, Seller and the escrow agent named therein, which provides
for the establishment of the Escrow Amount and contains the Escrow
Terms. On the date thirty (30) days after the first anniversary of
the Closing date, the Escrow Amount shall be reduced to five
hundred thousand dollars ($500,000), and $250,000 plus all accrued
interest on the entire Escrow Amount shall be released from escrow
to Seller by wire transfer in immediately available funds unless
within thirty (30) days after such first anniversary date Seller
shall have received written proof from Buyer evidencing claims or
expenditures in excess of $500,000 to remediate, defend against or
correct matters which would otherwise be a basis of a Claim (as
defined in Paragraph 10 below).
(b) In the event Buyer asserts a Title Defect, and,
pursuant to Paragraph 10, Seller is required to indemnify Buyer but
fails to do so within thirty (30) days after Seller's receipt of
Buyer's Claim relating to such Title Defect, Buyer shall have the
option of delivering a notice to Seller for Seller's execution,
which notice requests a withdrawal of the required amount from the
Escrow Amount in accordance with and pursuant to the Escrow
Agreement. In the event Seller disputes all or any portion of
Buyer's Claim relating to such Title Defect, Seller shall the right
not to execute such notice and shall notify Buyer of such dispute.
6. Information and Access.
(a) Buyer and its authorized representatives, shall have
at their sole risk, cost and expense, at any reasonable time(s)
before Closing, and so long as Buyer and its authorized
representatives do not interfere with the normal course of
operation of the Seller: i) physical access to the Leases, Fee
Property, Undeveloped Acreage, Contracts, Pipeline, Wells and
Equipment included in the Assets that Seller presently operates;
and ii) access, with copying privileges, to all raw geological,
production, engineering and other records, and to all contract,
land, title and lease records, to the extent such data and records
are in Seller's possession and relate to the Assets. In the event
that Closing does not occur for any reason, Buyer will return all
documents, including all copies and extracts thereof, to Seller
immediately upon Seller's request thereof and all information that
had been delivered to Buyer or to which Buyer was given access
shall be deemed confidential and will be treated as such by Buyer
in accordance with the Confidentiality Agreement executed by the
Parties and dated May 25, 1994.
(b) After Closing, Buyer shall grant to Seller and
Seller's authorized representatives, reasonable access to all
relevant books and records of Buyer for the purpose of closing out
the Seller's books and accounts, closing up the Seller's business,
and responding to and otherwise dealing with all Claims, so long as
Seller (or its representatives) do not interfere with the normal
course of operation of the Buyer.
7. Conditions of Closing by Buyer. The obligation of Buyer
to close is subject to the satisfaction of the following
conditions:
(a) Buyer shall have had reasonable access during normal
business hours to all data and records obligated to be provided to
Buyer, so long as Buyer and its authorized representatives do not
interfere with the normal course of operation of the Seller.
(b) All representations of the Seller contained in this
Agreement shall be true, correct, and not misleading in any
material respect, and Seller shall have performed and satisfied all
agreements and covenants in all material respects required by this
Agreement to be performed and satisfied by Seller. For purposes of
this subparagraph, for a misrepresentation or non-performance of
any agreement or covenant to be "material" its effect on the Assets
must be in excess of two hundred thousand dollars ($200,000). This
definition of material shall only apply to this subsection 7(b) and
shall have no effect on any other paragraph in this Agreement.
(c) Buyer shall have received a written opinion from
Kay, Casto, Chaney, Love & Wise, counsel to Seller, dated the
Closing date, addressed to Buyer, confirming that as of the Closing
date Seller has obtained Federal Energy Regulatory Commission and
Environmental Protection Agency, state and local governmental and
regulatory approvals, if any, necessary for the operation of the
Assets in their current manner and for the transactions
contemplated hereby. It is understood and agreed by the parties
hereto that the transfer to Buyer of Seller's permits as
permittee/operator of the Assets will not have occurred as of the
Closing date and that Seller and Buyer will cooperate with each
other after the Closing date to transfer all relevant permits.
(d) Seller shall have duly executed and delivered the
Escrow Agreement.
8. Conditions of Closing by Seller. The obligation of
Seller to close is subject to the satisfaction of the following
conditions:
(a) All representations and warranties of Buyer
contained in this Agreement shall be true, correct, and not
misleading in any material respect, and Buyer shall have performed
and satisfied all agreements and covenants in all material respects
required by this Agreement to be performed and satisfied by Buyer.
For purposes of this subparagraph, for a misrepresentation or non-
performance of any agreement or covenant to be "material" its
effect on the Assets must be in excess of two hundred thousand
dollars ($200,000).
(b) Buyer shall have sufficient funds to pay the Sale
Price in the manner set forth at Paragraph 9.
(c) Buyer shall have delivered to Seller a certificate,
executed by a senior officer of Buyer, dated the Closing date,
certifying: i) as to the fulfillment of the conditions specified in
Paragraphs 8(a) and 8(b); and ii) that Buyer has obtained all
federal, state and local governmental and regulatory approvals
necessary, if any, in connection with the transactions contemplated
hereby.
(d) Buyer shall have duly executed and delivered the
Escrow Agreement.
9. Closing.
(a) Closing shall occur on or before August 31, 1994
provided that all Conditions of Closing have been satisfied or
waived. Closing shall occur at 10:00 a.m., EST at the offices of
Buyer at 333 North Fairfax Street, Suite 300, Alexandria, Virginia
22314, or at such other time and place as Seller and Buyer may
mutually agree in writing (the "Closing").
(b) At Closing, with regard to the Leases, Wells,
Equipment, Pipelines and Contracts, Seller shall execute,
acknowledge and deliver (i) an Assignment and Bill of Sale pursuant
to which Seller transfers and assigns the Assets other than the Fee
Property to Buyer and Buyer accepts and assumes the Assets and
covenants and undertakes to comply with all of the Seller's
obligations under or in any way related to the Assets, including,
without limitation, the Leases and (ii) such other conveyance
documents as may be reasonably requested by Buyer. At Closing,
with regard to the Fee Property, Seller shall execute and deliver
deeds pursuant to which Seller transfers and assigns the Fee
Property to Buyer, and Buyer accepts and assumes the Fee Property
and covenants and undertakes to comply with all of the Seller's
obligations under or in any way related to the Fee Property.
(c) At Closing, Buyer shall deliver to Seller by wire
transfer in immediately available funds the total Sale Price minus
the Deposit.
(d) As soon as reasonably practical after Closing, Buyer
and Seller shall execute all necessary forms to be filed with all
federal, state and local governments concerning the change of
ownership or operatorship of the Assets and reasonably necessary to
effect (i) the transfer of all permits relating to the Assets and
(ii) the release of all Seller's bonds pertaining to the Assets,
and Seller shall submit same for filing to such agencies at Buyer's
expense and Buyer shall deliver to Seller evidence of any
appropriate plugging bonds, surety letters, or letter of credit
acceptable to such authorities to authorize Buyer's right to
conduct operations, if applicable.
10. Assumption of Liabilities and Indemnities.
(a) As used in this Agreement, "Claims" shall mean all
claims, demands, causes of action (including but not limited to
personal injury, wrongful death, unfair labor practices and
environmental matters), liabilities, damages, penalties and
judgments of any kind or character and all costs and fees in
connection therewith, including without limitation reasonable fees
and expenses of attorneys, technical experts and expert witnesses;
it is understood that Claims shall include claims based upon or
arising out of Title Defects.
(b) Subject to this Paragraph 10, each party hereto
shall indemnify, defend, and hold the other party harmless from and
against any and all Claims resulting from any nonperformance,
inaccuracy or breach of any of their respective representations or
warranties or agreements, or the nonfulfillment of any of their
respective obligations or covenants contained in this Agreement or
any document delivered pursuant to this Agreement.
(c) Subject to this Paragraph 10, Buyer shall indemnify,
defend and hold Seller harmless from and against any and all Claims
relating to or resulting from Buyer's operation or ownership of the
Assets after the Closing date or any breach by Buyer of the Escrow
Agreement.
(d) Subject to this Paragraph 10, Seller shall
indemnify, defend and hold Buyer harmless from and against any and
all Claims relating to or resulting from Seller's operation or
ownership of the Assets before the Closing date, or any breach by
Seller of the Escrow Agreement.
(e) In the event of that a Title Defect to a Fee
Property, a Well or a Lease other than the New River Company lease
and the Raymond City lease is discovered and notice thereof is
delivered to Seller on or prior to the first anniversary of the
Closing date, and the Claim arising from such Title Defect is not
covered by insurance to the extent proceeds of such insurance are
actually received by Buyer; and singularly or in the aggregate
exceeds $200,000 (after the application of all insurance proceeds),
Seller shall indemnify the Buyer against such Title Defect(s),
subject to this Paragraph 10(e) and notwithstanding the
Indemnification Deductible provided for in subparagraph (f) below.
Seller shall have the opportunity to cure the Title Defect(s)
within thirty (30) days after written notice from Buyer advising
Seller of the nature of and details about the Title Defect(s). In
the event Seller cannot or elects not to cure the Title Defect(s)
within the thirty day cure period, Seller shall indemnify Buyer and
hold Buyer harmless for Buyer's Claim arising from the Title
Defect, which Claim the parties hereto agree shall be equal to the
excess of (1) the dollar value allocated to such Well, Lease or
Fee Property as identified on Exhibits A, B and D respectively over
(2) the sum of $200,000 and all insurance proceeds actually
received by Buyer; provided, however, in the event such Title
Defect is a partial Title Defect to a Lease other than the New
River Company lease and the Raymond City lease, Buyer's Claim
arising from such partial Title Defect shall be an amount equal to
the excess of (1) the product of (A) the value allocated to such
Lease or Fee Property as identified on Exhibits B and D
respectively, and (B) an amount, expressed as a fraction, which
represents the degree of the partial Title Defect, as mutually
agreed to by the parties hereto over (2) the sum of $200,000 and
all insurance proceeds actually received by Buyer. It being
understood that if a Title Defect is covered by insurance, to the
extent proceeds of such insurance are actually received by Buyer,
or such a Title Defect or Defects is/are less than or equal to,
singularly or in the aggregate, $200,000 (after the application of
all insurance proceeds), then i) the Sale Price shall not be
adjusted or otherwise affected in any way, ii) such Title Defect(s)
shall be the sole responsibility of Buyer, and iii) Seller shall
not be obligated to indemnify Buyer for any such Title Defect(s).
No assertion of a Title Defect shall be made by Buyer, and Seller
shall not be obligated to indemnify Buyer hereunder, with respect
to the New River Company lease or the Raymond City lease.
(f) Subject only to subparagraph (e) above: i) Seller
shall have no indemnification obligation with respect to any Claims
asserted by Buyer which are covered by insurance, to the extent
proceeds of such insurance are actually received by Buyer, ii)
Seller shall not be obligated to indemnify Buyer for any Claims
unless and until the aggregate amount of all Claims exceeds
$750,000 (the "Indemnification Deductible"), whereupon Seller shall
only be obligated to pay all amounts for indemnification in excess
of the Indemnification Deductible. It is agreed and understood
that costs actually incurred by Buyer to remediate or defend
against or correct A) Seller's noncompliance with Governmental
Licenses as described in Paragraph 3(g) which are less than $25,000
shall nevertheless be counted toward this Indemnification
Deductible amount up to an aggregate of $25,000 and B) Title
Defect(s) which is/are not covered by insurance and which is/are,
singularly or in the aggregate, less than or equal to $200,000
(after the application of all insurance proceeds) shall be counted
toward the Indemnification Deductible up to an aggregate of
$200,000.
(g) Buyer's Claim(s), including Claims resulting from or
arising out of Title Defects, for indemnification must be presented
to the Seller in writing: i) not later than one (1) year after the
date of Closing for Claim(s) identified by the Buyer's
investigation; and ii) not later than two (2) years after the date
of Closing for Claims(s) brought or initiated by third-parties.
Buyer's right to indemnity hereunder for any Claim or Title Defect
i) identified by the Buyer's investigation shall terminate on the
first anniversary of the Closing date, and ii) related to Claims or
Title Defects brought or initiated by third-parties shall terminate
on the second anniversary of the Closing date
(h) Notwithstanding anything herein to the contrary,
Seller's obligation to indemnify Buyer for all Claims (including
Claims for Title Defects), shall not exceed the Net Sale Price (as
herein defined) in the aggregate. "Net Sale Price" shall mean the
excess of the Sale Price over all sums and monies paid by Seller to
Buyer pursuant to Paragraph 10 hereof. In the event that Seller's
obligation to indemnify Buyer would, but for the provisions of the
immediately preceding sentence, exceed the Net Sale Price, Seller
shall reimburse Buyer for Buyer's Claim(s) up to the Net Sale Price
and Buyer may, at its option, re-assign to Seller all of the Assets
previously assigned to Buyer.
(i) Buyer agrees to give to the Seller prompt written
notice of any proceeding brought, threatened, asserted or commenced
against Buyer to which the indemnification provided in this
Agreement relates and agrees further not to make any admission or
effect any settlement with respect to such proceeding without the
prior written consent of the Seller. If any proceeding shall be
brought, threatened, asserted, or commenced against Buyer to which
the indemnification provided in this Agreement relates, the Seller
shall have the right at its own expense to undertake the defense of
any such proceeding by written notice given to Buyer at any time
before the final disposition thereof and the Seller shall further
have the right in its sole discretion to settle any such proceeding
by the payment of damages to the complainant.
(j) Seller agrees to indemnify, defend and hold Buyer
harmless from and against any and all Claims resulting from any
claim made by Waco Oil & Gas Co., Inc. ("Waco") related to the
transactions contemplated hereby. It is expressly understood that
Seller's obligation under this subparagraph (j) are not subject to
the Indemnification Deductible but shall be subject to all other
provisions of this Paragraph 10.
Seller's obligations under this subparagraph (j)
shall be guaranteed by Southeastern Public Service Company
("SEPSCO"), the Seller's parent company, which guaranty shall (x)
be evidenced by a guaranty agreement in form and substance
satisfactory to Buyer, Seller and SEPSCO, and (y) provide that the
guaranty and SEPSCO's obligations thereunder shall terminate on the
earlier of (1) the six month anniversary of the Closing date if
Waco does not deliver to Seller any written notice of a Claim by
Waco related to the transactions contemplated hereby prior to such
six month anniversary date, and (2) the date on which Seller's
indemnification obligation for such Claim by Waco terminates as
provided for in Paragraph 10(g).
(k) In the event Buyer asserts a Claim and Seller is
required to indemnify Buyer as provided in this Paragraph 10,
Seller agrees to make such indemnification payment to Buyer within
thirty (30) days after Seller's receipt of Buyer's Claim(s).
11. Interim Operations.
(a) During the period from the execution date of this
Agreement through and including the date of Closing ("Interim
Period"), without the prior written consent of Buyer, Seller will
not: i) cause the Assets to be developed, maintained or operated in
a manner substantially inconsistent with prior operations; ii)
abandon any part of the Assets (other than in the ordinary course
of business); iii) commence any operations on any one or more of
the Wells, Leases or Undeveloped Acreage, except emergency
operations, operations required under presently existing
contractual obligations and on-going commitments; iv) drill any
wells; or v) convey or dispose of any part of the Assets (other
than hydrocarbons produced from the Assets in the regular course of
business). Further, Seller shall maintain all insurance now in
effect covering the Assets and will pay or cause to be paid all
costs and expenses in connection with the Assets during the Interim
Period, however, such payments made for costs and expenses incurred
subsequent to the Effective Date shall be for the benefit of Buyer,
and Seller shall be reimbursed such amounts pursuant to Paragraph
13, Post-Closing Adjustments.
(b) During the Interim Period, Seller shall not make any
single expenditure related to the Assets which exceeds $6,000, or
multiple expenditures which in the aggregate exceed $20,000 without
first receiving prior written consent of the Buyer, which consent
shall not be unreasonably withheld. Expenditures related to the
remediation of compressor sites are exempt from this consent
requirement; however, such compressor site expenditures shall be
consistent with the expenditure level cited in the studies prepared
by Seller's consultants.
(c) Seller and Buyer shall promptly notify each other of
any event, circumstance, claim or other matter that could be
considered as a title defect under Paragraph 3(e)(i.e., liens or
encumbrances, other than liens for taxes the payment of which is
not yet due and payable) or environmental violation, of which
Seller or Buyer, as the case may be, become aware between the date
of this Agreement and the date of Closing.
(d) During the Interim Period, Buyer and Seller shall
cooperate fully with each other to obtain all federal, state and
local governmental and regulatory approval necessary in connection
with the transactions contemplated hereby. During and after the
Interim Period, Buyer and Seller shall cooperate fully in
obtaining, preparing, completing and filing all applications,
forms, bonds and such other items as may be necessary to obtain the
transfer of all existing permits from Seller to Buyer and to obtain
a release of all Seller's bonds pertaining to the Assets and
operations associated therewith.
12. Taxes. The Sale Price provided for hereunder is
inclusive of any sales taxes or other taxes in connection with the
sale of Assets pursuant to this Agreement. Seller shall pay any
and all sales tax related to the sale of the Assets.
All taxes (other than ad valorem and income taxes) which
are imposed on or with respect to the production of oil, natural
gas or other hydrocarbons or minerals or the receipt of proceeds
therefrom (including but not limited to severance, production,
excise and windfall profit taxes) shall be apportioned between the
parties based upon the respective shares of production taken by the
parties. Payment or withholding of all such taxes which have
accrued prior to the Effective Date and filing of all statements,
returns and documents pertinent thereto shall be the responsibility
of Seller. Payment or withholding of all such taxes which have
accrued from and after the Effective Date and the filing of all
statements, returns, and documents incident thereto shall be the
responsibility of Buyer.
13. Post-Closing Adjustments.
(a) All receipts pertaining to Gross Revenues, as
hereinafter defined, received by Seller after the Effective Date,
and all invoices related to Gathering and Royalties, Direct Gas
Purchased, and Taxes (as those terms are defined below) from the
Effective Date will accrue to Buyer's account. After Closing, any
Gross Revenues received by Seller shall be promptly turned over to
Buyer. If Seller has received or receives any Gross Revenues
during the period from the Effective Date to Closing and shall have
deposited or retained such receipts, Seller shall account for such
Gross Revenues in accordance with subparagraph (c) below.
Similarly, if Seller has paid any invoices related to Gathering and
Royalties, Direct Gas Purchased, or Taxes from the Effective Date
through Closing, Seller will account for such payments in
accordance with subparagraph (c) below and shall include
documentation that such expenses have been paid.
(b) Any and all Direct Operating Costs, General and
Administrative expenses except for the salary of Marvin Boswell,
Capital Expenditures, Prepaid Expenditures (as these terms are
hereinafter defined) or other cash outlays related to the Assets,
incurred from the Effective Date through Closing shall be for
Seller's account. Buyer shall reimburse Seller for Direct
Operating Costs and General and Administrative expenses, except for
the salary of Marvin Boswell, incurred from the Effective Date up
to and including Closing. Prior to Closing, Seller shall provide
written verification to Buyer that Direct Operating Costs and
General and Administrative expenses have been paid. Seller shall
continue to allocate items to the various accounts as Seller has
historically done, and on a business as usual basis.
(c) As soon as practicable after Closing, but in any
event within ninety (90) days thereafter, Seller shall prepare, in
accordance with this Agreement and (where applicable) in accordance
with generally accepted accounting principles, a statement (the
"Statement") setting forth each item of Gross Revenues, Gathering
and Royalties, Direct Gas Purchased, Taxes and all other credits,
debits, or payments which were incurred or received, as the case
may be, from the Effective Date to Closing, and showing the
calculation of the final settlement based on such Statement (the
"Final Settlement").
(d) Seller shall submit the Statement to Buyer and shall
afford Buyer access to Seller's records pertaining to the
computations contained in the Statement. Within thirty (30) days
after receipt of the Statement, Buyer shall deliver to Seller a
written report containing any changes which Buyer proposes be made
to the Statement. The parties shall agree with respect to the
amounts due pursuant to the Statement not later than fifteen (15)
days after Seller's receipt of Buyer's written report. The date
upon which such agreement is reached shall be herein called the
"Settlement Date". In the event that (i) the Final Settlement is
more than the amount previously paid to Seller, Buyer shall pay to
Seller within five (5) business days after the Settlement Date in
immediately available funds the amount of such difference; or (ii)
the Final Settlement is less than the amount previously paid to
Seller, Seller shall pay to Buyer within five (5) business days
after the Settlement Date in immediately available funds the amount
of such difference.
(e) As used herein: "Gross Revenues" shall mean those
items appearing on Southeastern Public Service Co./Southeastern Gas
Co. Operating Report May 31, 1994 Final ("Operating Report") listed
as accounts 400601 through 400650; "Gathering and Royalties" shall
refer to those items listed as accounts 500360, 500365 and 600460;
"Direct Gas Purchased" shall refer to those items listed as account
500025; "Taxes" shall refer to those items listed as accounts
500260, 500370, and 500505; "Direct Operating Costs" shall refer to
those items listed as accounts 500030 through 500250, and 500265
through 500350, and 500373 through 500382, and 500620 through
500990; "General and Administrative" shall refer to those items
listed as accounts 700076 through 700990 but shall not include the
salary of Marvin Boswell; "Capital Expenditures" shall refer to
those expenditures which, in the ordinary course of Seller's
business, are recorded on the balance sheet of Seller in the fixed
asset category, subject to Seller's normal capitalization policy;
"Prepaid Expenditures" shall refer to those expenditures which, in
the ordinary course of Seller's business, are recorded in the
current asset category of the balance sheet of Seller.
14. Transition Services
Notwithstanding anything herein to the contrary and in
addition to the provisions of Paragraph 6(b), for a period of
ninety (90) days after Closing, Buyer agrees to grant to Seller or
its authorized representatives reasonable access to all relevant
books and records relative to the Assets for the purpose of closing
out the Seller's books and accounts and closing up the Seller's
business, as long as Seller or its authorized representatives do
not interfere with the normal operations of Buyer. Buyer agrees to
provide, at Seller's expense, payroll, accounting and other data
necessary for the Seller to pay or settle accounts payable bills,
pursue lawsuits and claims and handle inquiries and miscellaneous
tasks as needed on a best efforts basis at no cost to Buyer. In
the event Seller requires any such information for purposes
described herein after the ninety day period, Buyer agrees to make
a reasonable effort to cooperate with Seller by providing the
requested information to Seller so long as such request does not
unreasonably interfere with Buyer's normal business operations. In
the event Buyer incurs expenses in the course of complying with
such a request from Seller, Buyer reserves the right to bill Seller
a reasonable amount for direct out of pocket costs as well as for
costs related to employee's salaries, provided that Buyer shall
notify Seller in writing of such costs prior to Buyer incurring any
costs for such employees.
15. Termination.
(a) Each party to this Agreement shall use its best
efforts in the performance of its obligations under this Agreement
and the satisfaction of all conditions and obligations contained
herein.
(b) This Agreement may be terminated by notice in
writing from the terminating party to the other party prior to
Closing as follows: i) by Seller if the Conditions to Closing set
forth in Paragraph 8 are not satisfied or waived on or before the
Closing date; ii) by Buyer if any of the conditions set forth in
Paragraph 7 are not satisfied or waived on or before the Closing
date; and iii) at any time prior to Closing by the mutual written
agreement of Buyer and Seller.
(c) In the event of termination of the Agreement as
provided in Paragraph 15(b) above, this Agreement shall forthwith
become void and there shall be no liability on the part of any
party hereto, except with respect to the Deposit if Paragraph
15(d), (e) or (f) is applicable, and except that nothing herein
shall relieve any party from liability for any prior willful breach
hereof.
(d) Should Buyer default in a material way in
representation or performance hereunder, of if the purchase and
sale of the Assets is not completed as contemplated herein by
reason of any breach or default or failure to proceed by Buyer
after its Conditions to Closing have been satisfied or waived, the
Seller shall be entitled to retain the Deposit and to pursue any
and all other remedies available to Seller in equity or at law, it
being understood and agreed that the rights set forth in this
Paragraph 15(d) shall be cumulative.
(e) Should Seller default in a material way in
representation or performance hereunder, or if the purchase and
sale of the Assets is not completed as contemplated herein by
reason of any breach or default or failure to proceed by Seller
after their Conditions to Closing have been satisfied or waived,
the Buyer shall, along with any other legal or equitable remedy
available to it and in consideration of having paid the Deposit and
having lost the true value of such amount, be refunded the Deposit
plus interest accruing at a rate of 7% from the date of such
default or breach until the date such Deposit is refunded to Buyer,
it being understood and agreed that the rights set forth in this
Paragraph 15(e) shall be cumulative.
(f) Should Closing not occur for any reason other than
those set forth in subparagraphs (d) or (e) above, the Deposit
shall be returned to the Buyer without interest within ten (10)
days after the termination of this Agreement.
16. Exhibits. Buyer and Seller acknowledge that Exhibits
attached to this Agreement may be incomplete, and in some instances
only formats, though it is the intention of the parties that the
Exhibits list all of Seller's Assets. Seller agrees to prepare and
deliver to Buyer any and all necessary updates to Exhibits A
through F referred to herein as soon as possible but at least
within five (5) days prior to Closing.
17. Broker's Fee. Seller and Buyer each represent and
warrant to the other that neither has incurred liability,
contingent or otherwise, for brokers' or finders' fees in respect
of this Agreement or the transactions contemplated hereby for which
the other party shall have any liability whatsoever.
18. Notices. All communications required or permitted under
this Agreement shall be in writing and any communication or
delivery hereunder shall be deemed to have been fully made if
actually delivered, or if mailed by registered or certified mail,
postage prepaid, to the address as set forth below:
SELLER BUYER
Southeastern Gas Company
c/o TRIARC Companies, Inc. Eastern States Oil & Gas, Inc.
900 Third Avenue 333 N. Fairfax Street, Suite 300
New York, NY 10022 Alexandria, Virginia 22314
Telephone: (212) 230-3075 Telephone: (703) 684-7787
Facsimile: (212) 230-3023 Facsimile: (703) 836-0790
Attention: Eric Kogan Attention: Clifton A. Brown
19. Further Assurance. After Closing each of the parties
shall execute, acknowledge and deliver to the other such further
instruments, and take such other actions as may be reasonably
necessary to carry out the provisions of this Agreement. Buyer and
Seller shall assume all responsibility for notifying the purchaser
of oil and gas production from the Assets, and such other
designated persons who may be responsible for disbursing payments
for the purchase of such production, of the change of ownership of
the Assets.
20. Announcements. Seller and Buyer shall consult with each
other with regard to all press releases and other announcements
issued concerning this Agreement or the transactions contemplated
hereby and, except as may be required by applicable laws or the
applicable rules and regulations of any governmental agency or
stock exchange, neither Buyer nor Seller shall issue any such press
release or other publicity without the prior written consent of the
other party as to the contents of such release, which consent shall
not be unreasonably withheld.
21. Entire Agreement. This Agreement may be supplemented,
altered, amended, modified or revoked by writing only, signed by
both parties. The headings are for guidance only and shall have no
significance in the interpretations of this Agreement. This
Agreement, together with the Escrow Agreement, constitutes the
entire understanding among the parties hereto with respect to the
subject matter hereof, superseding all negotiations, prior
discussions and prior agreements relating to such subject matter.
22. Assignability. This Agreement and the rights and
obligations hereunder shall not be assignable or delegable by
either party hereto without the prior written consent of the other
party unless such assignment occurs by dissolution, merger,
reorganization or sale of all of a party's assets or unless such
assignment is to a wholly-owned subsidiary of Buyer and such
assignee assumes and promises to perform all obligations of Buyer
assigned to it.
23. Governing Law. This Agreement and other documents
delivered pursuant hereto shall be governed and construed in
accordance with the laws and jurisdiction of the State of New York,
including its principles of conflict of law. Any dispute related
to or associated with a specific Well or other Asset will be
governed in accordance with the laws in the state in which the Well
or Asset is located.
24. Fees and Expenses. All costs and expenses incurred in
connection herewith and the transactions contemplated hereby shall
be borne by the party incurring such cost or expense.
25. Survival of Representations and Warranties. The
representations and warranties included in this Agreement shall
terminate at the Closing; any and all indemnities set forth herein
shall survive for the period set forth in Paragraph 10(g).
26. Buyer's Covenants. Buyer covenants and agrees that on
and after the Closing date, Buyer shall assume and perform the
duties, responsibilities and obligations imposed on Seller on or
prior to the Closing date by and under the orders, statutes and
regulations referenced and disclosed in the second sentence of
Paragraph 3(d) hereof.
EXECUTED as of the date first above mentioned.
SOUTHEASTERN GAS COMPANY EASTERN STATES OIL & GAS, INC.
By: Gilbert Bieger By: Stevens V. Gillespie
-------------------------- ------------------------
Gilbert Bieger Stevens V. Gillespie
Senior Vice President Senior Vice President
of Operations Chief Financial Officer
*SOUTHEASTERN PUBLIC SERVICE COMPANY
By: Eric Kogan
---------------------------
Name: Eric Kogan
Title: Vice President-Corporate Development
*Only for purposes of Paragraph 10(j)
PAGE
<PAGE>
Exhibit A
Exhibit A, which is not included herein, contains a
description of the Wells and Well Sites being sold by Seller to
Buyer. The Registrant will furnish supplementally a copy of
Exhibit A to the Commission upon request.
PAGE
<PAGE>
Exhibit B
Exhibit B, which is not included herein, contains a
description of the Leases being transferred by Seller to Buyer.
The Registrant will furnish supplementally a copy of Exhibit B to
the Commission upon request.
PAGE
<PAGE>
Exhibit C
Exhibit C, which is not included herein, contains a
description of the Pipeline and the Easements being transferred by
Seller to Buyer. The Registrant will furnish supplementally a copy
of Exhibit C to the Commission upon request.
PAGE
<PAGE>
Exhibit D
Exhibit D, which is not included herein, contains a
description of the Fee Property being sold by Seller to Buyer. The
Registrant will furnish supplementally a copy of Exhibit D to the
Commission upon request.
PAGE
<PAGE>
Exhibit E
Exhibit E, which is not included herein, contains a
description of the Contracts being assigned by Seller to Buyer.
The Registrant will furnish supplementally a copy of Exhibit E to
the Commission upon request.
PAGE
<PAGE>
Exhibit F
Exhibit F, which is not included herein, contains a
description of the Equipment being sold by Seller to Buyer. The
Registrant will furnish supplementally a copy of Exhibit F to the
Commission upon request.
PAGE
<PAGE>
Exhibit G
Exhibit G, which is not included herein, contains a
description of the Escrow Terms. The Registrant will furnish
supplementally a copy of Exhibit G to the Commission upon request.
PAGE
<PAGE>
Exhibit 99.1
PRESS RELEASE
Contact: Martin M. Shea FOR IMMEDIATE RELEASE
(212) 230-3175
Triarc Companies' SEPSCO Unit Signs
Definitive Agreement to Sell
Natural Gas and Oil Business
NEW YORK, NY -- August 22, 199 --Triarc Companies, Inc. (NYSE:
TRY)
Triarc Companies' Southeastern Public Service Company
(SEPSCO) unit announced today that its wholly-owned Natural Gas
and Oil subsidiary had signed a definitive agreement to sell
substantially all of its operating assets to Eastern States Oil &
Gas, Inc., a wholly-owned subsidiary of The Eastern Group, Inc.,
for $17 million in cash, subject to certain post-closing
adjustments. This sale, which is subject to certain closing
conditions but not contingent on financing by Eastern States Oil
& Gas, Inc., is expected to close by the end of the month.
SEPSCO intends to sell Houston Oil and Gas, Inc. separately.
The sale is the fifth in a series of transactions to dispose
of, or discontinue, all of SEPSCO's operating businesses and
assets other than SEPSCO's Public Gas subsidiary, a liquefied
petroleum gas business. These sales are part of Triarc's plan to
focus on its four core businesses. SEPSCO is a wholly-owned
subsidiary of Triarc.
SEPSCO's natural gas and oil businesses had sales last year
of about $6 million. The Eastern Group, Inc., a vertically
integrated energy company located in Alexandria, Virginia,
reported revenue totalling approximately $140 million in 1994.
A diversified company with sales in excess of $1 billion,
Triarc is involved in fast food (Arby's), soft drinks (Royal
Crown Cola), textiles (Graniteville), and liquefied petroleum gas
(National Propane).
PAGE
<PAGE>
Exhibit 99.2
PRESS RELEASE
Contact: Martin M. Shea FOR IMMEDIATE RELEASE
(212) 230-3175
Triarc Companies' SEPSCO Unit
Completes Sale of
Natural Gas and Oil Business
NEW YORK, NY -- August 31, 1994 -- Triarc Companies, Inc. (NYSE:
RY)
Triarc Companies' Southeastern Public Service Company
(SEPSCO) unit announced today that its wholly-owned Natural Gas
and Oil subsidiary has completed the sale of substantially all of
its operating assets to Eastern States Oil & Gas, Inc., a wholly-
owned subsidiary of The Eastern Group, Inc., for $17 million in
cash.
A diversified company with sales in excess of $1
billion, Triarc is involved in fast food (Arby's), soft drinks
(Royal Crown Cola), textiles (Graniteville), and liquefied
petroleum gas (National Propane).
<PAGE>
