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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report: November 10, 1994
Date of Earliest Event Report: November 1, 1994
Ferrellgas Partners, L.P.
Ferrellgas, L.P.
Ferrellgas Finance Corp.
(Exact name of registrants as specified in their charters)
Delaware
(State or other jurisdictions of incorporation or organization)
1-11331 43-1675728
33-53379 43-1676206
33-53379 43-1677595
- - - - - - - --------------------------- -------------------------------------
(Commission File Numbers) (I.R.S. Employer Identification Nos.)
One Liberty Plaza, Liberty, Missouri 64068
- - - - - - - --------------------------------------------------------------------------------
(Address of principal executive offices, including zip code)
(816) 792-1600
- - - - - - - --------------------------------------------------------------------------------
(Registrants' telephone number, including area code)
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ITEM 5. OTHER EVENTS
On November 1, 1994, Ferrellgas, Inc. ("Ferrellgas"), the General
Partner of Ferrellgas Partners, L.P. (the "Master Partnership") and Ferrellgas,
L.P. (the "Operating Partnership"), consummated its previously announced
purchase of all of the capital stock of Vision Energy Resources, Inc. ("Vision")
from Bell Atlantic Enterprises International, Inc. for a cash purchase price of
$45 million. Ferrellgas borrowed all of the funds for such purchase from Bank
of America National Trust & Savings Association ("BofA" and the "BofA
Acquisition Loan"). Ferrellgas believes that Vision is the sixteenth largest
retail marketer of propane in the United States, based on gallons sold, with 33
retail outlets and other facilities located in the states of Florida, Michigan,
Minnesota, North Dakota, South Dakota and Wisconsin.
Immediately following the closing of the purchase of Vision,
Ferrellgas (i) caused Vision and each of its subsidiaries to be merged into
Ferrellgas (except for a trucking subsidiary which dividended substantially all
of its assets to Ferrellgas) and (ii) transferred all of the assets of Vision
and its subsidiaries to the Operating Partnership. In exchange, the Operating
Partnership assumed substantially all of the liabilities, whether known or
unknown, associated with Vision and its subsidiaries and their propane business
(excluding income tax liabilities). In consideration of the retention by
Ferrellgas of the Vision income tax liabilities, the Master Partnership issued
138,392 Common Units to Ferrellgas. The liabilities assumed by the Operating
Partnership included the obligations of Ferrellgas under the BofA Acquisition
Loan. Immediately following the transfer of assets and related transactions
described above, the Operating Partnership repaid the BofA Acquisition Loan with
funds borrowed under the Operating Partnership's existing credit facility with
BofA.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(A) FINANCIAL STATEMENTS OF BUSINESSES ACQUIRED.
It is impracticable to provide the historical financial statements
required by this Item within the time this Current Report on Form 8-K is
required to be filed. Such historical financial statements will be filed as
soon as practicable, but not more than 60 days after this Current Report on Form
8-K is required to be filed.
(B) PRO FORMA FINANCIAL INFORMATION.
It is impracticable to provide the pro forma financial statements
required by this Item within the time this Current
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Report on Form 8-K is required to be filed. Such pro forma financial statements
will be filed as soon as practicable, but not more than 60 days after this
Current Report on Form 8-K is required to be filed.
(C) EXHIBITS.
The Exhibits listed in the Index to Exhibits are filed as part of this
Current Report on Form 8-K.
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SIGNATURES
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.
FERRELLGAS PARTNERS, L.P.
By: FERRELLGAS, INC.
By /s/ Danley K. Sheldon
---------------------
Danley K. Sheldon
Senior Vice President and
Chief Financial Officer
Date: November 10, 1994
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SIGNATURES
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.
FERRELLGAS, L.P.
By: FERRELLGAS, INC.
By /s/ Danley K. Sheldon
---------------------
Danley K. Sheldon
Senior Vice President and
Chief Financial Officer
Date: November 10, 1994
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SIGNATURES
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.
FERRELLGAS FINANCE CORP.
By /s/ Danley K. Sheldon
---------------------
Danley K. Sheldon
Senior Vice President and
Chief Financial Officer
Date: November 10, 1994
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EXHIBIT INDEX
-------------
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<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT
- - - - - - - ------------- ----------------------
<C> <S>
2 Stock Purchase Agreement dated
September 30, 1994 between
Ferrellgas, Inc. and Bell
Atlantic Enterprises
International, Inc.
99 Text of press release issued by
Ferrellgas, Inc. on November 1,
1994
</TABLE>
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STOCK PURCHASE AGREEMENT
between
BELL ATLANTIC ENTERPRISES INTERNATIONAL, INC., as Seller,
and
FERRELLGAS, INC., as Buyer
Dated as of September 30, 1994
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<C> <S> <C>
ARTICLE 1 CERTAIN DEFINITIONS.......................... 1
ARTICLE 2 PURCHASE OF THE SHARES; PURCHASE PRICE; AND
CLOSING...................................... 3
2.1 Purchase of the Shares....................... 3
2.2 Purchase Price 4
2.3 Closing...................................... 4
2.4 Purchase Price Adjustment.................... 4
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF VER AND
SELLER....................................... 6
3.1 Capacity of Seller........................... 6
3.2 Validity and Execution of Agreement.......... 6
3.3 Governmental Consents........................ 6
3.4 Capacity of VER and the Subsidiaries......... 6
3.5 Capitalization of VER; Title to the Shares... 7
3.6 Capitalization of the Subsidiaries........... 7
3.7 Other Subsidiaries........................... 7
3.8 No Conflict.................................. 8
3.9 Financial Statements......................... 8
3.10 Absence of Undisclosed Liabilities........... 8
3.11 Absence of Certain Changes................... 9
3.12 Real Estate.................................. 9
3.13 Inventory.................................... 9
3.14 Registrations................................ 9
3.15 Accounts Receivable.......................... 10
3.16 Litigation................................... 10
3.17 Material Contracts........................... 10
3.18 ERISA and Related Employee Benefit Matters... 11
3.19 Broker's or Finder's Fees.................... 14
3.20 Insurance.................................... 14
3.21 Physical Plant; Liens........................ 14
3.22 Tax Matters.................................. 14
3.23 Compliance with Law.......................... 17
3.24 Intellectual Property........................ 18
3.25 Products Liability........................... 18
3.26 Environmental................................ 18
3.27 Capital Expenditures......................... 19
3.28 Dealings with Affiliates..................... 19
3.29 Bank Accounts................................ 20
</TABLE>
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<TABLE>
<C> <S> <C>
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER...... 20
4.1 Capacity of Buyer............................ 20
4.2 Validity and Execution of Agreement.......... 20
4.3 No Conflict.................................. 20
4.4 Broker's or Finder's Fees.................... 21
4.5 Purchase for Investment...................... 21
4.6 Litigation................................... 21
4.7 Financing.................................... 21
4.8 Solvency of VER.............................. 21
ARTICLE 5 ACTIONS BEFORE THE CLOSING DATE.............. 22
5.1 HSR Act Compliance........................... 22
5.2 Conduct of Business.......................... 22
5.3 Access to VER and the Subsidiaries........... 24
5.4 No Public Announcement....................... 24
5.5 Consents..................................... 24
5.6 No Shopping.................................. 24
5.7 Duty to Advise Seller........................ 25
5.8 Tank Verification............................ 25
5.9 Fulfillment of Conditions.................... 25
ARTICLE 6 ACTIONS AFTER THE CLOSING DATE............... 25
6.1 Further Assurances........................... 25
6.2 Access to Books and Records; Record Retention 25
6.3 No Securities Law Violation.................. 26
6.4 Liabilities and Other Obligations............ 26
6.5 Tank Verification............................ 26
6.6 Employee Benefit Matters..................... 27
6.7 Insurance.................................... 27
ARTICLE 7 CONDITIONS TO OBLIGATION TO CLOSE............ 27
7.1 Obligations of Buyer and Seller.............. 27
7.2 Obligations of Buyer......................... 27
7.3 Obligations of Seller........................ 29
ARTICLE 8 TERMINATION AND REMEDIES..................... 30
8.1 Termination.................................. 30
8.2 Remedies..................................... 30
ARTICLE 9 GENERAL SURVIVAL AND INDEMNIFICATION......... 31
9.1 Survival of Representations.................. 31
9.2 Indemnification by Seller.................... 32
9.3 Indemnification by Buyer..................... 32
9.4 Recoveries................................... 33
9.5 Claims....................................... 33
9.6 Limitations on Indemnification............... 35
9.7 Indemnification as Exclusive Remedy.......... 35
</TABLE>
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<TABLE>
<C> <S> <C>
ARTICLE 10 TAX MATTERS................................. 36
10.1 Consolidated Returns........................ 36
10.2 Liability for Taxes......................... 36
10.3 Indemnification for Taxes................... 37
10.4 Tax Returns................................. 38
10.5 Tax Allocation Arrangements................. 39
10.6 Tax Proceedings............................. 39
10.7 Cooperation and Exchange of Information..... 40
10.8 Survival.................................... 41
10.9 Conflict.................................... 41
10.10 Treatment of Indemnity Payments............. 41
ARTICLE 11 GENERAL PROVISIONS.......................... 41
11.1 Expenses.................................... 41
11.2 Execution in Counterparts; Binding Effect... 41
11.3 Disclaimer.................................. 41
11.4 Confidentiality............................. 42
11.5 Covenant Not To Compete..................... 42
11.6 Governing Law............................... 43
11.7 Consent to Jurisdiction..................... 43
11.8 Notices..................................... 44
11.9 Titles and Headings......................... 45
11.10 Successors and Assigns; Beneficiaries....... 45
11.11 Entire Agreement............................ 46
11.12 Waivers and Amendments...................... 46
11.13 Severability................................ 46
11.14 Counterparts................................ 47
</TABLE>
iii
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made and entered into as of this
30th day of September, 1994, by and between BELL ATLANTIC ENTERPRISES
INTERNATIONAL, INC., a Delaware corporation ("Seller"), and FERRELLGAS, INC., a
Delaware corporation ("Buyer").
BACKGROUND
Seller owns all of the issued and outstanding capital stock ("Shares")
of Vision Energy Resources, Inc., a Delaware corporation ("VER"). VER is a
holding company whose principal assets consist of shares of capital stock of the
Direct Subsidiaries (hereinafter defined). VER was previously a wholly-owned
subsidiary of Metro Mobile CTS, Inc. and became a wholly-owned subsidiary of
Seller immediately after Metro Mobile CTS, Inc. was merged with Bell Atlantic
Investments, Inc., a Delaware corporation and the direct parent of Seller, on
April 30, 1992. Seller now desires to sell the Shares and Buyer desires to
purchase the Shares on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual terms,
conditions and other agreements set forth herein, intending to be legally bound,
the parties hereby agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
1.1 Definitions. As used in this Agreement, the following terms
shall have the meanings set forth below.
(a) "Affiliate" shall mean "affiliate" as such term is defined in and
within the meaning of Rule 405 of the Securities Act of 1933, as amended.
(b) "Agreement" shall mean collectively this "Stock Purchase
Agreement", the Disclosure Schedule, and the confidentiality agreement referred
to in Section 11.4 hereof.
(c) "Bank" shall mean Bank of America National Trust and Savings
Association.
(d) "Business Day" shall mean any day other than a day on which banks
are authorized or required to be closed by law in Philadelphia, Pennsylvania.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Direct Subsidiary(ies)" shall mean Power Fuels, Inc., a North
Dakota corporation, Vision Energy Minnesota,
<PAGE>
Inc., a Minnesota corporation, Vision Energy North Dakota, Inc., a North Dakota
corporation, Vision Energy Wisconsin, Inc., an Iowa corporation, and Werner's
Inc., a Minnesota corporation, in the plural and any of them in the singular.
(g) "Disclosure Schedule" shall mean the letter of even date herewith
from Seller to Buyer containing various disclosures with respect to VER and the
Subsidiaries, and certain exceptions to the representations and warranties of
Seller set forth in this Agreement.
(h) "GAAP" shall mean generally accepted accounting principles in
effect in the United States as of the date of, or for the period covered by,
each consolidated financial statement of VER and the Subsidiaries to which this
Agreement refers, and the requirement that such principles be applied on a
"consistent basis" means that accounting principles observed in the current
period are comparable in all material respects to those applied in the preceding
periods, except as change is permitted or required under or pursuant to such
accounting principles.
(i) "Governmental Authority" shall mean any local, state, federal or
foreign governmental or regulatory authority, body or agency or the staff
thereof.
(j) "HSR Act" shall mean the Hart-Scott-Rodino Anti-Trust Improvements
Act of 1976, as amended, and the rules and regulations promulgated thereunder
from time to time.
(k) "Indirect Subsidiary(ies)" shall mean Vision Energy of Florida,
Inc., a Florida corporation, and Southern Gas Company, a Florida corporation, in
the plural and either of them in the singular.
(l) "Knowledge of Seller" and "best of Seller's knowledge" and "to the
best knowledge of Seller", or words to that effect, shall mean the knowledge,
after due inquiry, of any of the following officers and employees of Seller and
its Affiliates: James H. Brenneman and Dermott O. Murphy; "knowledge of VER"
and "best of VER's knowledge" and "to the best of VER's knowledge", or words to
that effect, shall mean the knowledge, after due inquiry, of any of the officers
of VER and the Subsidiaries with substantial operational or compliance
responsibilities.
(m) "Laws" shall mean all foreign, federal, state and local laws,
statutes, rules, regulations, codes, ordinances, plans, orders, judicial
decrees, writs, injunctions, notices, decisions or demand letters issued,
entered or promulgated pursuant to any foreign, federal, state or local law.
(n) "Lien(s)" shall mean any lien, pledge, mortgage, security
interest, lease, charge, option, right of first
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refusal, easement, servitude, transfer restriction under any shareholder or
similar agreement, or any encumbrance.
(o) "Material Adverse Effect" means any change or effect that is or is
reasonably likely to be materially adverse to the business, operations,
properties (including intangible properties), financial condition or business
prospects of VER and the Subsidiaries, taken as a whole, or of any thereof as
may be specifically provided in this Agreement. Seller may, however, at its
option, include in the Disclosure Schedule or elsewhere items which would not
have a Material Adverse Effect within the meaning of this subsection 1.1(o) in
order to avoid any misunderstanding, and such inclusion shall not be deemed to
be an acknowledgment by Seller that such items would have a Material Adverse
Effect, or to define further the meaning of such term for purposes of this
Agreement.
(p) "Net Working Capital" shall have the meaning set forth in Annex
1.1(p) hereto.
(q) "Subsidiary(ies)" shall mean the Direct Subsidiaries and the
Indirect Subsidiaries in the plural and any one of them in the singular.
(r) "Tax" or "Taxes" shall mean all net income, capital gains, gross
income, gross receipts, sales, use, transfer, ad valorem, franchise, profits,
license, capital, withholding, payroll, employment, excise, goods and services,
severance, stamp, occupation, premium, property, windfall profits, customs,
duties or other taxes, fees or assessments, or other governmental charges of any
kind whatsoever, together with any interest, fines and any penalties, additions
to tax or additional amounts incurred or accrued under applicable Law or
assessed, charged or imposed by any Governmental Authority, provided that any
interest, penalties, additions to tax or additional amounts that relate to Taxes
for any taxable period (including any portion of any taxable period ending on or
before the Closing Date) shall be deemed to be Taxes for such period, regardless
of when such items are incurred, accrued, assessed or imposed.
(s) "Treasury Regulation" shall mean a regulation issued by the
Treasury Department pursuant to the Code and in effect or proposed as of
December 31, 1993, and any successor thereto.
ARTICLE 2
PURCHASE OF THE SHARES; PURCHASE PRICE; AND CLOSING
2.1 Purchase of the Shares. On the terms and subject to the
conditions set forth in this Agreement, at the Closing (hereinafter defined)
Seller agrees to sell, transfer, assign,
3
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convey and deliver to Buyer, and Buyer agrees to purchase, acquire and accept
from Seller, all of the Shares.
2.2 Purchase Price. The consideration for the Shares shall be
$45.0 million, subject to adjustment after Closing pursuant to Sections 2.4 and
6.5 hereof ("Purchase Price"). Buyer will pay the amount of $45.0 million to
Seller at the Closing by bank wire transfer in immediately available funds to
one or more accounts, all as designated in writing by Seller to Buyer not less
than three (3) Business Days before the Closing Date (hereinafter defined).
2.3 Closing. The consummation of the purchase and sale of the
Shares ("Closing") shall be held at 10:00 a.m. (local time) on the later to
occur of November 1, 1994 (subject to the satisfaction of the conditions set
forth in Article 7) or the fifth Business Day after all conditions to the
respective obligations of the parties set forth in Article 7 hereof (other than
those that are intended to be satisfied only at the Closing) have been
satisfied, at the offices of Seller, 1717 Arch Street, Philadelphia,
Pennsylvania, or at such other time, date and place as shall be mutually agreed
upon by the parties (such date and time being referred to herein as the "Closing
Date"). Each party hereto agrees to use its best efforts promptly to satisfy
the conditions to Closing to be satisfied by it in order to expedite the
Closing.
2.4 Purchase Price Adjustment.
(a) As soon as practicable after the Closing, but in no event later
than sixty (60) days after the Closing, Buyer shall cause to be prepared and
delivered to Seller an unaudited consolidated balance sheet of VER and the
Subsidiaries as of the Closing Date, without giving effect to the consummation
of the transactions contemplated hereby (other than satisfaction of the
indebtedness of VER and the Subsidiaries to Bell Atlantic Financial Services,
Inc.) and any financing of such transactions arranged by Buyer ("Closing Date
Balance Sheet"). The Closing Date Balance Sheet shall be prepared in accordance
with GAAP, consistent with the application thereof in the preparation of the
Balance Sheets (as defined in Section 3.9 hereof).
(b) Subject to the remainder of this subsection (b), within forty (40)
Business Days after delivery to Seller of the Closing Date Balance Sheet,
whichever of the following is applicable shall occur: (i) if Net Working Capital
as shown by the Closing Date Balance Sheet exceeds the Target Amount
(hereinafter defined), Buyer shall pay to Seller in immediately available funds
a sum equal to the amount, if any, by which Net Working Capital as shown by the
Closing Date Balance Sheet exceeds the sum of the Target Amount and the Margin
Amount (hereinafter defined), with interest thereon as hereinafter described, or
(ii) if the Target Amount exceeds Net Working Capital as shown by the Closing
Date Balance Sheet, Seller shall pay to Buyer in immediately available
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funds a sum equal to the amount, if any, by which Net Working Capital as shown
by the Closing Date Balance Sheet is less than the difference between the Target
Amount and the Margin Amount, with interest thereon as hereinafter described.
In either case, the amount due shall include interest on such excess or
deficiency for the period from the Closing Date to the date of payment
calculated at the rate per annum, compounded semiannually, equal to the rate of
interest announced by Bank as its prime rate or base rate in effect on the
Closing Date. If Seller in good faith disagrees with any amounts reflected in
the Closing Date Balance Sheet, then Seller shall deliver notice of such
disagreement ("Notice of Disagreement") to Buyer within thirty (30) Business
Days after delivery of the Closing Date Balance Sheet to Seller, which Notice of
Disagreement shall set forth in reasonable detail the basis for Buyer's
disagreement and Seller's calculation of Net Working Capital. If Seller has not
delivered to Buyer a Notice of Disagreement by the day specified in the next
preceding sentence, then the Closing Date Balance Sheet shall be final and
binding upon Seller and Buyer as of the next following day. Upon delivery of a
Notice of Disagreement, payment of any amount payable by Seller or Buyer
pursuant to the first sentence of this subsection (b) shall be delayed, with
interest accruing thereon as stated above, until all disagreements between
Seller and Buyer relating to the Closing Date Balance Sheet have been resolved
as provided in this subsection (b), and upon such resolution such payment shall
be made by Seller or Buyer, as the case may be, within five (5) Business Days
thereafter. If Seller delivers a Notice of Disagreement to Buyer, Seller and
Buyer shall attempt to resolve all disagreements between them relating to the
Closing Date Balance Sheet, but if they are not able to do so within thirty (30)
Business Days after the date of delivery of the Notice of Disagreement, then
within five (5) Business Days thereafter Seller and Buyer shall select a
nationally recognized accounting firm with no material relationship with Buyer,
Seller or any of their Affiliates ("Accounting Referee") and mutually acceptable
to Buyer and Seller to determine, as between either Buyer's calculation or
Seller's calculation of Net Working Capital, which is more nearly correct and to
establish such calculation as the calculation for purposes of the Purchase Price
adjustment herein. The Accounting Referee must choose either Seller's
calculation or Buyer's calculation of Net Working Capital. Within sixty (60)
days after Buyer and Seller select the Accounting Referee, the Accounting
Referee shall deliver its written determination to Buyer and Seller, which
determination, absent bad faith or manifest fraud, shall be final, binding and
conclusive upon Seller and Buyer. The scope of the Accounting Referee's
engagement shall not require an audit of the Closing Date Balance Sheet and
shall be limited to resolution of those items of disagreement that are set forth
in the Notice of Disagreement and that Seller and Buyer have not previously
resolved, but only as they affect the calculation of Net Working Capital. The
fees, costs and expenses of the Accounting Referee, if any, will be shared
equally by Seller and Buyer.
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(c) As used in this Section 2.4, the following terms shall
have the meanings set forth below.
(i) "Target Amount" shall mean an amount equal to
$4,528,000.
(ii) "Margin Amount" shall mean $450,000.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF VER AND SELLER
Seller represents and warrants to Buyer, effective as of the date
hereof, as follows:
3.1 Capacity of Seller. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to enter into this Agreement
and perform its obligations hereunder. The execution, delivery and performance
by Seller of this Agreement is within its corporate power and has been duly
authorized by all necessary corporate action on the part of Seller.
3.2 Validity and Execution of Agreement. This Agreement has
been duly executed and delivered by Seller and, assuming due authorization,
execution and delivery by Buyer, constitutes the valid and binding obligation of
Seller enforceable against it in accordance with its terms, subject to the
qualification that enforcement of the rights and remedies created hereby is
subject to (i) bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting the rights and remedies of creditors and (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law).
3.3 Governmental Consents. Except (i) for applicable
requirements of the HSR Act, (ii) any consent, action or filing required solely
because of Buyer's participation in the transactions contemplated hereby and
(iii) as otherwise disclosed in Section 3.3 of the Disclosure Schedule, the
execution, delivery and performance of this Agreement by Seller does not require
any consent from, action by or in respect of, or filing with, any court,
arbitrator or Governmental Authority, except for such filings as are ordinarily
made and such consents as are ordinarily obtained following the Closing Date in
the usual course of business.
3.4 Capacity of VER and the Subsidiaries. VER is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware. Each Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each of VER and the Subsidiaries has all requisite corporate
power to own its
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properties and carry on its business as now being conducted and is duly
qualified to do business in each jurisdiction in which the nature of its
business or properties makes such qualification necessary. The jurisdictions
where each of VER and the Subsidiaries is so qualified are set forth in Section
3.4 of the Disclosure Schedule. Complete and correct copies of the Certificates
of Incorporation and By-Laws, each as amended to the date hereof, for each of
VER and the Subsidiaries have been made available to Buyer.
3.5 Capitalization of VER; Title to the Shares. The authorized
capital stock of VER consists of 1,000 shares of common stock, $1.00 par value
per share, of which 100 shares, constituting the Shares, are issued and
outstanding. The Shares have been validly issued, are fully paid and
nonassessable, and have not been issued in violation of any preemptive rights of
stockholders. The Shares are owned on the date of this Agreement beneficially
and of record by Seller and will be owned beneficially and of record on the
Closing Date by Seller, free and clear of any Liens. No options, warrants or
other rights to acquire, sell or issue shares of capital stock of VER, whether
upon conversion of other securities or otherwise, are outstanding. The transfer
and delivery of the Shares by Seller to Buyer as contemplated by this Agreement
will transfer good and marketable title to the Shares to Buyer, free and clear
of all Liens, except for any Liens created or permitted to exist by or on behalf
of Buyer.
3.6 Capitalization of the Subsidiaries. The authorized capital
stock of the Subsidiaries is as set forth in Section 3.6 of the Disclosure
Schedule. All of the issued and outstanding shares of capital stock of each of
the Subsidiaries have been validly issued, are fully paid and non-assessable,
and have not been issued in violation of any preemptive rights of stockholders.
The issued and outstanding shares of capital stock of each of the Direct
Subsidiaries are owned on the date of this Agreement beneficially and of record
by VER and will be owned on the Closing Date beneficially and of record by VER
free and clear of any Liens. All of the issued and outstanding capital stock of
the Indirect Subsidiaries are owned beneficially and of record on the date of
this Agreement as described in Section 3.6 of the Disclosure Schedule and will
be so owned on the Closing Date free and clear of any Liens. No options,
warrants or other rights to acquire, sell or issue shares of capital stock of
any of the Subsidiaries, whether upon conversion of other securities or
otherwise, are outstanding.
3.7 Other Subsidiaries. Except for VER's ownership of the
capital stock of the Direct Subsidiaries and certain Direct Subsidiaries'
ownership of capital stock of the Indirect Subsidiaries, neither VER nor any
Subsidiary, either directly or indirectly, owns an equity interest in any other
corporation, partnership or other entity. Except for the Subsidiaries, VER has
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no Affiliate whose liabilities or obligations will be assumed by Buyer.
3.8 No Conflict. Except as set forth in Section 3.8 of the
Disclosure Schedule, neither the execution and delivery of this Agreement nor
the performance by Seller of the transactions contemplated herein will (i)
violate or conflict with any of the provisions of the certificates of
Incorporation or By-Laws of Seller, VER or the Subsidiaries; (ii) violate or
constitute a default, or require notice and/or consent, under any mortgage,
indenture, deed of trust, lease, contract, agreement, license or other
instrument required to be set forth in Sections 3.12 or 3.17 of the Disclosure
Schedule, or any order, judgment or ruling of any court, arbitrator or
Governmental Authority to which Seller, VER or any Subsidiary is a party or by
which any of their property is bound; (iii) result in the creation of any Lien
upon the Shares or any of the assets of VER or any Subsidiary; or (iv) assuming
compliance with the laws and requirements described in Section 3.3 hereof and
Section 3.3 of the Disclosure Schedule, violate any provision of any Laws
applicable to VER or any Subsidiary. This Section 3.8 relates only to the sale
of the Shares by Seller to Buyer and does not relate to any merger,
consolidation or other transaction with respect to VER or any of the
Subsidiaries which Buyer might contemplate, or which might otherwise occur after
completion of the Closing.
3.9 Financial Statements. Complete copies of (i) the unaudited
consolidated balance sheets of VER and the Subsidiaries as of June 30, 1994, and
December 31, 1993 ("Balance Sheets"), and (ii) the unaudited consolidated
statements of income of VER and the Subsidiaries for the six (6) months ended
June 30, 1994, and the year ended December 31, 1993 ("Income Statements") have
been made available to Buyer by Seller. Except as disclosed in the Balance
Sheets, the Income Statements, Section 3.9 of the Disclosure Schedule or this
Section 3.9, (i) the Balance Sheets and the Income Statements have been prepared
by Seller in accordance with GAAP except for the requirements thereof for
footnote disclosure as of their respective dates, (ii) the Balance Sheets fairly
present, in all material respects, the consolidated financial position of VER
and the Subsidiaries in accordance with GAAP except for the requirements thereof
for footnote disclosure, and (iii) the Income Statements fairly present, in all
material respects, the consolidated results of operations of VER and the
Subsidiaries in accordance with GAAP except for the requirements thereof for
footnote disclosure for the respective periods presented in the Income
Statements (except that the Income Statement for the six-month period ended June
30, 1994, is subject to normal recurring audit adjustments, which would not in
the aggregate be material).
3.10 Absence of Undisclosed Liabilities. Except as (i) reflected
elsewhere in this Agreement, (ii) shown in Section 3.10 of the Disclosure
Schedule or (iii) reflected in the Balance Sheets, neither VER nor any of the
Subsidiaries has any material
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liabilities or obligations of any nature, whether absolute, accrued, contingent
or otherwise, of a type and nature that would be required to be reported,
reflected or reserved for in a consolidated balance sheet of VER and the
Subsidiaries prepared in accordance with GAAP.
3.11 Absence of Certain Changes. Except as set forth in Section
3.11 of the Disclosure Schedule, since June 30, 1994, there has not been (a) any
material adverse change in the business, prospects, financial condition,
earnings or operations of business of VER and the Subsidiaries taken as a whole;
(b) any damage, destruction or loss (other than ordinary wear and loss), whether
covered by insurance or not, material to the properties of VER and the
Subsidiaries taken as a whole; (c) any declaration, setting aside or payment of
any dividend whether in cash, stock or property with respect to VER's capital
stock, or any redemption or other acquisition of such stock by VER; (d) except
as consistent with past practice, any increase in the compensation payable or to
become payable by VER or any of the Subsidiaries to its employees or any
adoption or amendment of or increase in any bonus, insurance, pension or other
employee benefit plan, payment or arrangement made to, for or with any such
employees; (e) any entry by VER or any of the Subsidiaries into any material
commitment or transaction, including, without limitation, any borrowing or
capital expenditure other than in accordance with the Schedule of Capital
Expenditures in Section 3.27 of the Disclosure Schedule; (f) any change by VER
in accounting methods, practices or principles; (g) any material termination or
waiver of any rights of value to the business of VER or any Subsidiary; (h) any
other material transaction or event other than in the ordinary course of
business of VER or any Subsidiary; or (i) any agreement or understanding made or
entered into to do any of the foregoing.
3.12 Real Estate. Section 3.12 of the Disclosure Schedule sets
forth a description of all real property owned or leased by VER and the
Subsidiaries. All such owned properties are free and clear of all Liens except
for (i) those Liens set forth in Section 3.12 of the Disclosure Schedule; (ii)
those Liens which do not, in the aggregate, materially impair the use of any
parcel; (iii) Liens for Taxes not yet delinquent; and (iv) Liens of carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the ordinary
course of business for sums not yet delinquent.
3.13 Inventory. On the Closing Date the inventory of the
Subsidiaries (absent conditions beyond their control) shall be at a level
necessary to conduct their businesses in the ordinary course.
3.14 Registrations. To the best of Seller's and VER's knowledge,
except as set forth in Section 3.14 of the Disclosure Schedule, VER and the
Subsidiaries have all registrations, licenses, permits and other authorizations
issued by or required
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from any governmental authority or regulatory agency (state, local, federal or
foreign) and necessary for their businesses as presently conducted
("Registrations"), except where the failure to have any such Registration would
not have a Material Adverse Effect. Set forth in Section 3.14 of the Disclosure
Schedule is a list which contains, to the best of Seller's and VER's knowledge,
all material Registrations owned by or licensed to any of the Subsidiaries.
Except as set forth in Section 3.14 of the Disclosure Schedule and except as may
have resulted from, or as may be attributable to, installation of, or failure to
maintain, propane tanks by current agents of VER and the Subsidiaries under the
Agent Wholesale Contracts (defined in Section 3.17 hereof) listed in Section
3.17 of the Disclosure Schedule and by persons who previously acted as agents
for VER, the Subsidiaries and their predecessors (including transferors of
assets or businesses to VER and the Subsidiaries), and by Laverne and/or Bonnie
Reible (as (an) employee(s) of VER) to the best of Seller's and VER's knowledge,
the Subsidiaries are in substantial compliance with all, and are not in material
violation of any, and have not received any written notice of material violation
of any Registration, which non-compliance or violation has not been corrected
and would result in a Material Adverse Effect.
3.15 Accounts Receivable. Except as set forth in Section 3.15 of
the Disclosure Schedule, (i) the accounts receivable to be reflected on the
Balance Sheet as of June 30, 1994 have arisen in the ordinary course of business
for goods sold and delivered or services performed, and (ii) the reserves for
items doubtful of collection as reflected on the Balance Sheet as of June 30,
1994, are adequate based on historical experience. There are no terms or
conditions in any applicable sales contract granting or permitting payment to be
made in excess of 60 days except as set forth in Section 3.15 of the Disclosure
Schedule and except the VIP and any other level payment plans.
3.16 Litigation. Except as set forth in Section 3.16 of the
Disclosure Schedule, there is no suit, action, investigation or proceeding
pending or, to the best knowledge of VER and Seller, threatened against VER or
any Subsidiaries nor is there any judgment, decree, injunction, rule or order of
any court, Governmental Authority or arbitrator outstanding against VER or any
Subsidiary. There is no lawsuit or legal, administrative or regulatory
proceeding or investigation pending or, to the best of VER's and Seller's
knowledge, threatened against Seller, VER or any of the Subsidiaries which
challenges the legality of this Agreement or the transactions contemplated
hereby.
3.17 Material Contracts. Except for (a) Employee Benefit Plans
(as defined in Section 3.18 hereof) as set forth in Section 3.18 of the
Disclosure Schedule, (b) leases and agreements for real property as set forth
in Section 3.12 of the Disclosure Schedule, (c) agreements among VER and the
Subsidiaries, and (d) contracts and leases with customers substantially in the
form of
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any of the contracts and leases attached to the Disclosure Statement as Exhibit
A and other customer contracts and leases with customers that do not impose
obligations on any of the Subsidiaries materially greater than those set forth
in such forms, Section 3.17 of the Disclosure Schedule sets forth without
duplication, all of the following material written contracts to which VER or any
Subsidiary is a party or which affect the assets of VER or any Subsidiary: (i)
contracts for the purchase or sale of propane requiring aggregate payments in
any one year to or by VER or any Subsidiary in excess of $25,000 (unless such
contract may be canceled by VER or any Subsidiary upon not more than thirty (30)
days' notice or the price thereunder is not fixed) and other contracts requiring
aggregate payments in any one year to or by VER or any Subsidiary in excess of
$100,000 (unless such contract may be canceled by VER or any Subsidiary upon not
more than thirty (30) days' notice); (ii) contracts and other agreements with
any labor union or association representing any employee; (iii) joint venture
and partnership agreements; (iv) contracts or other agreements under which
either VER or any Subsidiary agrees to indemnify any person for, or to share,
any material Tax liability of any person; (v) contracts and other agreements
containing covenants of either VER or any Subsidiary not to compete in any line
of business or with any person in any geographical area; (vi) contracts and
other agreements relating to the borrowing of money, (vii) guarantees of
obligations of the Subsidiaries made by VER, and (viii) contracts relating to
the sale of propane through independent agents ("Agent Wholesale Contracts").
Except as set forth in Section 3.17 of the Disclosure Schedule, neither VER nor
any Subsidiary is in default in any material respect of any of their obligations
under any contract listed therein.
3.18 ERISA and Related Employee Benefit Matters.
(a) Welfare Benefit Plans. Section 3.18(a) of the Disclosure Schedule
lists each "employee welfare benefit plan" (within the meaning of Section 3(1)
of the Employee Retirement Income Security Act of 1974 ("ERISA")) maintained by
VER or to which VER contributes or is required to contribute, including any
multiemployer plan ("Welfare Benefit Plan") and sets forth as of the most recent
valuation date the amount of any payment made and to be made, stated separately,
by VER with respect to any Welfare Benefit Plan for the plan year during which
the Closing is to occur. Any liability for amounts due or accrued with respect
to any Welfare Benefit Plan are disclosed in accordance with Section 3.10 of
this Agreement. VER does not maintain or participate in any Welfare Benefit
Plan to which Section 505 of the Code applies. Without limiting the foregoing,
Exhibit 3.18(a) discloses any obligations of VER or any Subsidiary to provide
retiree health benefits to current or former employees of VER or any Subsidiary.
(b) Pension Benefit Plans. Section 3.18(b) of the Disclosure Schedule
lists each "employee pension benefit plan" (within the meaning of Section 3(2)
of ERISA) maintained by VER or
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to which VER contributes or is required to contribute, including any
multiemployer plan ("Pension Benefit Plan"). All costs of the Pension Benefit
Plans have been provided for on the basis of consistent methods and, if
applicable, in accordance with sound actuarial assumptions and practices that
are acceptable under ERISA. VER does not maintain or contribute to (nor is it
required to contribute to) any Pension Benefit Plan that is subject to Title I,
Part 3 of ERISA (concerning "funding") and there are no unsatisfied obligations
with respect to any such Pension Benefit Plans. With respect to each Pension
Benefit Plan that is not subject to Title I, Part 3 of ERISA, Section 3.18(b) of
the Disclosure Schedule sets forth as of the valuation date (i) the amount of
any liability of VER for any contributions due with respect to such Pension
Benefit Plan and (ii) the amount of any contribution paid and to be paid, stated
separately, by VER with respect to such Pension Benefit Plan for the plan year
during which the Closing is to occur.
(c) Compliance with Applicable Law. All of the Pension Benefit Plans,
Welfare Benefit Plans, any related trust agreements, annuity contracts, and
other funding instruments, comply with the provisions of ERISA and the Code and
all other statutes, orders, governmental rules and regulations applicable to
such Welfare benefit Plans and Pension Benefit Plans. VER has performed all of
its obligations currently required to have been performed under all Welfare
Benefit Plans and Pension Benefit Plans. There are no actions, suits or claims
(other than routine claims for benefits) pending or threatened against or with
respect to any Welfare Benefit Plans, Pension Benefit Plans or the assets of
such plans, and, to the best knowledge of Seller and VER, no facts exist that
could give rise to any actions, suits or claims (other than routine claims for
benefits) against such plans or the assets of such plans. Each Pension Benefit
Plan is qualified in form and operation under Section 401(a) of the Code, the
Internal Revenue Service has issued a favorable determination letter with
respect to each Pension Benefit Plan, and, to the best knowledge of Seller and
VER, no event has occurred that will give rise to a disqualification of any
Pension Benefit Plan under Code section 401(a). To the best knowledge of Seller
and VER, no event has occurred that will or could subject any Welfare Benefit
Plan or Pension Benefit Plan to tax under Section 511 of the Code.
(d) Administration of Plans. Each Welfare Benefit Plan and each
Pension Benefit Plan has been administered to date in compliance with the
requirements of ERISA and the Code. No plan fiduciary of any Welfare Benefit
Plan or Pension Benefit Plan has engaged in (i) any transaction in violation of
Section 406(a) or (b) of ERISA, or (ii) any "prohibited transaction" (within the
meaning of Section 4975(c)(1) of the Code) for which no exemption exists under
Section 408 of ERISA or Section 4975(d) of the Code.
(e) Title IV Plans. With respect to each Pension Benefit Plan which
is subject to the provisions of Title IV of
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ERISA in which VER (for purposes of this subsection VER shall include each trade
or business, whether or not incorporated, which is a member of a group of which
VER is a member and which is under common control within the meaning of Section
414 of the Code and the regulations thereunder) participates or has
participated, (i) VER has not withdrawn from any such Pension Benefit Plan that
is a multiemployer plan, and the liability to which VER would become subject
under ERISA if VER were to withdraw completely from all multiemployer plans in
which it currently participates is not in excess of $100,000 as of the most
recent valuation date applicable thereto, (ii) VER has not filed a notice of
intent to terminate any such Pension Benefit Plan or adopted any amendment to
treat such Pension Benefit Plan as terminated, (iii) the Pension Benefit
Guaranty Corporation has not instituted proceedings to terminate any such
Pension Benefit Plan, (iv) no other event or condition has occurred that
constitutes grounds under Section 4042 of ERISA for the termination of, or the
appointment of a Trustee to administer, any such Pension Benefit Plan, (v) all
required premium payments to the Pension Benefit Guaranty Corporation have been
paid when due, and (vi) no "reportable event" (as described in Section 4043 of
ERISA and the regulations thereunder) has occurred with respect to said Pension
Benefit Plan.
(f) Other Employee Benefit Plans and Agreements. Section 3.18(f) of
the Disclosure Schedule lists each profit sharing, deferred compensation, bonus,
stock option, stock purchase, pension, retainer, consulting, retirement, welfare
or other incentive plan or agreement, fringe benefit program or employment
agreement not terminable on 30 days or less written notice, and any other
employee benefit plan, agreement, arrangement, or commitment not listed in
Sections 3.18(a)-(e) of the Disclosure Schedule that is maintained by VER to
which VER contributes or is required to contribute.
(g) Copies of Plans. Copies of each Welfare Benefit Plan; each
Pension Benefit Plan, related trust agreements, annuity contracts and other
funding instruments; each plan, agreement, arrangement, and commitment referred
to in subsection (f) of this Section; favorable determination letters; annual
reports (Form 5500 series) required to be filed with any governmental agency for
each Welfare Benefit Plan and each Pension Benefit Plan for the most recent
three plan years, including, without limitation, all schedules thereto and all
financial statements with attached opinions of independent accountants; current
summary plan descriptions for all Welfare Benefit Plans and Pension Benefit
Plans; and actuarial reports as of the last valuation date for each Pension
Benefit Plan that is subject to Title IV of ERISA have been provided or will be
provided to Buyer within ten (10) days after this Agreement is executed.
(h) Continuation Coverage Requirements for Health Plans. All group
health plans of VER (including any plans of affiliates of VER that must be taken
into account under Section
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4980B of the Code) have been operated in compliance with the group health plan
continuation coverage requirements of Section 4980B of the Code and Title I,
Part 6 of ERISA.
3.19 Broker's or Finder's Fees. Neither VER nor Seller has
authorized any person to act as a broker, a finder or in any similar capacity in
connection with the transactions contemplated by this Agreement, other than
Colmen Capital Advisors, Inc., whose fees and expenses with respect to such
transactions shall be the sole responsibility of Seller.
3.20 Insurance. Section 3.20 of the Disclosure Schedule sets
forth information relating to insurance of VER and the Subsidiaries maintained
in the regular course of their businesses, which constitutes a true and correct
list of their currently maintained insurance policies, including a description
of the type of coverage, name of insurer, term of policy, limits of liability,
deductibles, and annual premiums for the current year. All such policies are in
full force and effect and are sufficient for compliance with workers
compensation Laws.
3.21 Physical Plant; Liens. Except as set forth in Section 3.21
of the Disclosure Schedule and except for propane tanks maintained and to be
maintained by agents of VER and the Subsidiaries pursuant to the Agent Wholesale
Contracts listed in Section 3.17 of the Disclosure Schedule, and by Laverne
and/or Bonnie Reible (as (an) employee(s) of VER), the plant, machinery,
equipment, furniture, leasehold improvements, fixtures, vehicles, structures,
and any related capitalized items that are owned by VER or any Subsidiary and in
each case material to the business of the Subsidiaries, are in good operating
condition and repair, subject to normal wear and tear, and are adequate and
sufficient for the operation of the businesses of the Subsidiaries as currently
conducted, and are owned by VER and the Subsidiaries free and clear of all Liens
except for (i) those Liens set forth in Section 3.12 of the Disclosure Schedule;
(ii) Liens for Taxes not yet delinquent; (iii) Liens of landlords, carriers,
warehousemen, mechanics, materialmen and repairmen incurred in the ordinary
course of business for sums not yet delinquent; or (iv) Liens of a character
that do not materially impair the assets or properties of the Subsidiaries or
interfere in any material fashion with the use thereof as they are used in the
businesses of the Subsidiaries.
3.22 Tax Matters. For the purposes of this Section 3.22 and
Article 10 hereof, VER shall be deemed to include any predecessor of VER or any
person or entity from which VER incurs a liability for Taxes as a result of any
transferee liability. Except as stated in Section 3.22 of the Disclosure
Schedule:
(a) Each of VER and the Subsidiaries has duly and timely filed (and
prior to the Closing Date will duly and timely file) true, correct and complete
Tax returns, reports or estimates, all prepared in accordance with applicable
Laws, for all years and
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periods (and portions thereof) and for all jurisdictions (whether federal,
state, local or foreign) in which any such returns, reports or estimates were
due, either separately or as a member of an affiliated group (as defined in
Section 1504 of the Code) or any other combined, consolidated, affiliated or
unitary tax group of which VER or any of the Subsidiaries is or has been a
member (an "Affiliated Group"). All Taxes shown as due and payable on such
returns, reports and estimates have been paid, and there is no current liability
for any Taxes due and payable in connection with any such returns. All Taxes
not yet due and payable have been fully accrued on the books of VER and the
Subsidiaries and adequate reserves have been established therefor; the charges,
accruals and reserves for Taxes provided for on the financial statements
delivered or to be delivered pursuant to Sections 3.9, 5.8 and 7.2(i) are
adequate; and there are no unpaid assessments for additional Taxes for any
period nor is there any basis therefor. Complete and accurate copies of all
federal, state and foreign Tax returns filed by or with respect to VER and the
Subsidiaries for the past five (5) years and for all periods for which the
applicable statute of limitations is still open have been made available to
Buyer and will be made available to Buyer within ten (10) days of the later of
(i) the date when this Agreement is executed or (ii) the date the return is
filed.
(b) None of VER or the Subsidiaries is a party to any joint venture,
partnership, tax partnership or other arrangement that could be treated as a
partnership for federal income tax purposes.
(c) Each of VER and the Subsidiaries has (i) withheld all required
amounts from its employees, agents, contractors and nonresidents and remitted
such amounts to the proper agencies; (ii) paid all employer contributions and
premiums and (iii) filed all federal, state, local and foreign returns and
reports with respect to employee incomes tax withholding, and social security
and unemployment taxes and premiums, all in compliance with the withholding tax
provisions of the Code, as in effect for the applicable year or any prior
provision thereof and other applicable Laws.
(d) The federal income tax returns of VER and the Subsidiaries have
been examined by the Internal Revenue Service (the "IRS"), or have been closed
by the applicable statute of limitations, for the periods indicated on Section
3.22 of the Disclosure Schedule. No deficiencies or reassessments for any Taxes
have been proposed, asserted or assessed against or with respect to VER or any
of the Subsidiaries by any federal, state, local or foreign taxing authority.
Section 3.22 of the Disclosure Schedule describes the status of any federal,
state, local or foreign tax audits or other administrative proceedings,
discussions or court proceedings that are presently pending with regard to any
Taxes or Tax returns of VER or any of the Subsidiaries (including a description
of all issues raised by the taxing authorities in
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connection with any such audits or proceedings), and no additional issues are
being asserted against or with respect to VER or any of the Subsidiaries in
connection with any existing audits or proceedings.
(e) No agreements or other documents have been executed or filed by or
with respect to VER or any of the Subsidiaries extending the period for
assessment, reassessment or collection of any Taxes, and no powers of attorney
granted by or with respect to VER or any of the Subsidiaries regarding any Taxes
is currently in force.
(f) No closing or other agreements have been entered into by or with
respect to VER or any of the Subsidiaries with any taxing authority which
affects any taxable year of VER or any of the Subsidiaries ending after the
Closing Date. Neither VER nor any of the Subsidiaries is a party to any tax
sharing agreement or similar arrangement for the sharing of tax liabilities or
benefits.
(g) Neither VER nor any of the Subsidiaries has agreed to or is
required to make any adjustment by reason of a change in accounting methods that
affects any taxable year ending after the Closing Date. The IRS has not
proposed any such adjustment or change in accounting methods with respect to VER
or any of the Subsidiaries that affects any taxable year ending after the
Closing Date. No application has been filed by, or is pending with respect to,
VER or any of the Subsidiaries with any taxing authority requesting permission
for any changes in accounting methods that relate to the business or operations
of VER or any of the Subsidiaries and that affects any taxable year ending after
the Closing Date.
(h) No election has been made to have the provisions of Section 341(f)
of the Code apply to VER or any of the Subsidiaries.
(i) There is no contract, agreement, plan or arrangement covering any
employee or former employee of VER or any of the Subsidiaries that, individually
or collectively, could give rise (or in the past has given rise) to the payment
by VER or any Subsidiaries of any amount that is not or would not be deductible
by reason of Code Section 280G.
(j) No asset of VER or any of the Subsidiaries is tax exempt use
property under Section 168(h) of the Code. No portion of the cost of any asset
of VER or any of the Subsidiaries has been financed directly or indirectly from
the proceeds of any tax exempt state or local governmental obligation described
in Section 103(a) of the Code.
(k) None of the assets of VER or any of the Subsidiaries is property
that VER or any of the Subsidiaries is
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required to treat as being owned by any other person pursuant to the safe harbor
lease provisions of former Code Section 168(f)(8). None of the assets of VER or
any of the Subsidiaries is subject to a lease described in Section 7701(h) of
the Code or under any predecessor provision.
(l) None of VER or any of the Subsidiaries currently has or has
previously had a permanent establishment in any foreign country or engages or
has previously engaged in a trade or business in any foreign country. None of
VER, Seller or any of the Subsidiaries is a foreign person within the meaning of
Code Section 1445.
(m) There are no elections in effect made by or with respect to VER or
any of the Subsidiaries pursuant to Section 338 or Section 336(e) of the Code or
the regulations thereunder.
(n) Each of VER and the Subsidiaries has maintained such records in
respect of each transaction, event and item (including as required to support
otherwise allowable deductions and losses) as are required under applicable Law.
(o) Section 3.22 of the Disclosure Schedule sets forth the following:
(i) the basis of VER and the Subsidiaries in their assets, (ii) the basis of VER
in the stock of each of the Subsidiaries (or the amount of any excess loss
account as defined in Treasury Regulation (S)1.1502-19), (iii) the amount of any
net operating loss carryovers and net capital loss carryovers ("Loss
Carryovers") allocable to VER or any of the Subsidiaries, (iv) the amount of any
unused investment or other credits, unused foreign taxes or excess charitable
contributions allocable to VER or any of the Subsidiaries, and (v) the amount of
any deferred gain or loss allocable to VER or any of the Subsidiaries arising
out of any deferred intercompany transaction as defined in Treasury Regulation
(S)1.1502-13.
(p) For purposes of Buyer's right to indemnification pursuant to
Article 10, the representations and warranties in this Section 3.22 shall be
deemed to have been made with no exception for items disclosed on Section 3.22
of the Disclosure Schedule or otherwise.
3.23 Compliance with Law.
(a) To the best knowledge of Seller and VER, Section 3.23 of the
Disclosure Schedule contains a list of all reports of inspections by
representatives of any Governmental Authority of the business and properties of
VER and the Subsidiaries from December 31, 1991, through the date hereof under
OSHA and under all other applicable health and safety Laws and adequate reserves
have been made to deal with all matters described in such reports.
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3.24 Intellectual Property. Each of VER and the Subsidiaries has
good and marketable title to the trademarks, trade names and service marks set
forth in Section 3.24 of the Disclosure Schedule (the "Intellectual Property
Rights"), which are the only such rights used in or necessary for the operation
of its business as currently conducted. All of the Intellectual Property Rights
are free and clear of all Liens and royalty obligations.
3.25 Products Liability. Except as set forth in Section 3.25 of
the Disclosure Schedule, there exist no claims pending or, to the best knowledge
of VER and Seller, threatened against VER or any Subsidiaries for injury to
person or property of its employees or any third parties suffered as a result of
the sale of any product or performance of any service by VER or any
Subsidiaries, including, but not limited to, claims arising out of the nature of
its products or services.
3.26 Environmental.
(a) For purposes of this Section:
(1) "Hazardous Materials" means any hazardous, infectious or toxic
substance, chemical, pollutant, contaminant, emission or waste which is
regulated by any local, state, federal or foreign authority. Hazardous
Materials include, without limitation, anything which is: (i) defined as a
"pollutant" pursuant to 33 U.S.C. (S) 1362(6); (ii) defined as a "hazardous
waste" pursuant to 42 U.S.C. (S) 6921; (iii) defined as a "regulated substance"
pursuant to 42 U.S.C. (S) 6991; (iv) defined as a "hazardous substance" pursuant
to 42 U.S.C. (S) 9601(14); (v) defined as a "pollutant or contaminant" pursuant
to 42 U.S.C. (S) 9601(33); (vi) petroleum; (vii) asbestos; and (viii)
polychlorinated biphenyl.
(2) "Environmental Laws and Regulations" means all limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any Laws relating to pollution or the
environment including, without limitation, (i) the Federal Clean Air Act, 42
U.S.C. (S)(S) 7401 et seq.; (ii) the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. (S)(S) 9601 et seq.; (iii) the
Federal Emergency Planning and Community Right-to-Know Act, 42 U.S.C. (S)(S)
1101 et seq.; (iv) the Federal Insecticide, Fungicide and Rodenticide Act, 7
U.S.C. (S)(S) 136 et seq.; (v) the Federal Water Pollution Control Act, 33
U.S.C. (S)(S) 1251 et seq.; (vi) the Solid Waste Disposal Act, 42 U.S.C. (S)(S)
6901 et seq.; (vii) the Toxic Substances Control Act, 15 U.S.C. (S)(S) 2601 et
seq.; (viii) Laws relating in whole or part to emissions, discharges, releases,
or threatened releases of any Hazardous Material; and (ix) Laws relating in
whole or part to the manufacture, processing, distribution, use, coverage,
disposal, transportation, storage or handling of any Hazardous Material.
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(b) From and after April 30, 1992 through the Closing Date, the
operations and activities of VER and the Subsidiaries have complied and will
comply, and prior to April 30, 1992, to the best knowledge of Seller and VER,
have complied, in all respects, with all Environmental Laws and Regulations.
(c) Except as set forth on Schedule 3.26 of the Disclosure Schedule,
there is no civil, criminal, administrative or other action, suit, demand,
claim, hearing, notice of violation, proceeding, investigation, notice or demand
pending, received, or, to the best knowledge of the VER and the Subsidiaries,
threatened against VER or any Subsidiaries pursuant to any Environmental Laws
and Regulations.
(d) Except as set forth on Schedule 3.26 of the Disclosure Schedule,
neither VER or any of the Subsidiaries has received any notice or indication
from any governmental agency or private or public entity advising it that it is
or may be responsible for any investigation or response costs with respect to a
release, threatened release or cleanup of any Hazardous Materials.
(e) Except as set forth in Section 3.26 of the Disclosure Schedule and
except for tanks used exclusively for the storage of propane, no underground
tanks, piping or subsurface structures of any type exist or have existed on any
real property owned, operated, leased or utilized by VER or any Subsidiary at
any time after April 30, 1992, or, to the knowledge of Seller and VER, any real
property owned, operated, leased or utilized by VER or any Subsidiary at any
time on or prior to April 30, 1992.
(f) Section 3.26 of the Disclosure Schedule contains a list of all
environmental investigations, assessments, audits, studies, tests and related
materials in possession of VER or any Subsidiaries, or known to VER or any
Subsidiaries to exist, which relate to the current or prior operations of VER or
any Subsidiaries or any real property now or previously owned, operated, leased
or utilized by VER or any Subsidiaries.
3.27 Capital Expenditures. Each of VER and the Subsidiaries has
outstanding commitments for capital expenditures as set forth in Section 3.27 of
the Disclosure Schedule which includes a schedule of substantially all monies
disbursed on account of capital expenditures made by VER and the Subsidiaries
between June 30, 1994 and September 7, 1994.
3.28 Dealings with Affiliates. Section 3.28 of the Disclosure
Schedule sets forth a complete list (including the parties) and copies (or a
detailed summary in the case of an oral agreement) of all oral or written
contracts, arrangements or other agreements to which VER and/or any Subsidiary
on one hand is, will be or has been a party at any time from December 31, 1993,
to the Closing Date, and to which Seller and any Affiliate of Seller (other than
VER or any Subsidiary) was or is also a party.
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3.29 Bank Accounts. Section 3.29 of the Disclosure Schedule is a
list of all bank accounts, lock boxes, post office boxes and safe deposit boxes
maintained in the name of or controlled by VER or any Subsidiary and the names
of the persons having access thereto.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller effective as of the date
hereof, as follows:
4.1 Capacity of Buyer. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the state of Delaware
and has all requisite corporate power and authority to enter into this Agreement
and to perform its obligations hereunder. Complete and correct copies of
Certificate of Incorporation and By-Laws, each as amended to the date of
delivery, of Buyer have been delivered to Seller.
4.2 Validity and Execution of Agreement. The execution and
delivery of this Agreement by Buyer and the performance of the transactions
herein contemplated have been duly and validly authorized by all necessary
corporate action on the part of Buyer. The board of directors of Buyer has duly
approved this Agreement and no further corporate action is required for this
Agreement to be enforceable against Buyer or to provide for the funding of its
obligations hereunder. This Agreement has been duly executed and delivered by
Buyer and, assuming due authorization, execution and delivery by Seller,
constitutes the valid and binding obligation of Buyer, enforceable against Buyer
in accordance with its terms, subject to the qualification that enforcement of
the rights and remedies created hereby is subject to (i) bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting the
rights and remedies of creditors, and (ii) general principles of equity
(regardless of whether such enforcement is considered in a proceeding in equity
or at law).
4.3 No Conflict. Neither the execution and delivery of this
Agreement nor the performance of the transactions contemplated herein by Buyer
will (i) violate or conflict with any of the provisions of the Certificate of
Incorporation or By-Laws of Buyer; (ii) violate or constitute a default, or
require notice and/or consent, under any material mortgage, indenture, deed of
trust, lease, contract, agreement, license or other instrument, or any order,
judgment or ruling of any Governmental Authority, to which Buyer is a party or
by which any of its property is bound; (iii) assuming satisfaction of the
requirements set forth in clause (iv) below, violate any provision of law
applicable to Buyer; and (iv) except for requirements, if any, arising out of
any required pre-merger notification and related filings pursuant to the HSR
Act, require any consent, approval, filing or notice under any
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provision of law, statute, rule or regulation, applicable to Buyer, except, with
respect to clauses (ii), (iii) and (iv) hereof, for violations, defaults or
breaches which in the aggregate are not material to Buyer and would not
materially impair its ability to perform any of its obligations hereunder.
4.4 Broker's or Finder's Fees. Any fees or expenses incurred by
Buyer or any of its affiliates payable with respect to any person for acting as
broker, finder or in any other similar capacity in connection with the
transactions contemplated by this Agreement shall be the sole responsibility of
Buyer.
4.5 Purchase for Investment. Buyer acknowledges that the Shares
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under any state or foreign securities laws. Buyer is not
an underwriter, as such term is defined under the Securities Act, and Buyer is
purchasing the Shares solely for investment with no present intention to
distribute any of the Shares to any person.
4.6 Litigation. There is no lawsuit or legal, administrative or
regulatory proceeding or investigation pending or, to the best knowledge of
Buyer, threatened against Buyer which challenges the legality of this Agreement
or the transactions contemplated hereby or which would materially impair its
ability to perform its obligations hereunder.
4.7 Financing. Buyer understands that its obligations under
this Agreement are not in any way contingent upon its obtaining financing for
its obligations hereunder. Buyer has sufficient capital resources presently
available to it, and usable for the transactions contemplated hereby, in order
to consummate such transactions in a timely fashion, and Buyer will have such
resources available at Closing.
4.8 Solvency of VER. After giving effect to the consummation of
the transactions contemplated hereby and any financing of this transaction
arranged by Buyer, VER and the Subsidiaries will be Solvent (hereinafter
defined). For purposes of this Section 4.8 and for purposes of the condition
precedent set forth in Section 7.3(c) hereof, the term "Solvent" means for VER
and the Subsidiaries (on a consolidated basis) that (i) the fair value (on a
going concern basis) of their assets exceeds the total amount of their
liabilities, including contingent liabilities, (ii) the present fair salable
value of their assets is not less than the amount that will be required to pay
the probable liability on their debts as they become absolute and matured, (iii)
they are able to realize on their assets and pay their debts and other
liabilities, contingent obligations and other commitments as they mature in the
normal course of business, (iv) Buyer does not intend for them to, and does not
believe that they will, incur debts or liabilities beyond their ability to pay
as such debts and liabilities mature, and (v) they are not engaged in a
businesses or
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transactions for which their property would constitute unreasonably small
capital after giving due consideration to the prevailing practice in the
industries in which they are engaged. For purposes of the preceding sentence,
in computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability. Seller understands that,
in making this representation and warranty, Buyer has relied and will rely upon
Seller's representations and warranties in Article 3 hereof (including the
Disclosure Schedule and the certificate(s) delivered by Seller pursuant to
Section 7.1 hereof insofar as the Disclosure Schedule and such certificate
relate to such representations and warranties) or elsewhere in this Agreement,
and the information reflected in the June 30, 1994 Balance Sheet.
ARTICLE 5
ACTIONS BEFORE THE CLOSING DATE
Buyer and Seller covenant and agree to take the following actions
between the date hereof and the Closing Date:
5.1 HSR Act Compliance. Seller and Buyer shall each file or
cause to be filed with the Federal Trade Commission and the United States
Department of Justice within five (5) Business Days of the date of this
Agreement, the notifications, if any, required to be filed by its respective
"ultimate parents" under the HSR Act with respect to the transactions
contemplated herein. Each of the parties will use its best efforts to, or to
cause its Affiliates to, make such filings promptly, to respond to any requests
for additional information made by either of such agencies, to cause the waiting
periods under the HSR Act to terminate or expire at the earliest possible date,
and to resist vigorously any assertion that the transactions contemplated hereby
constitute a violation of the antitrust laws, all to the end of expediting
consummation of the transactions contemplated hereby; provided, however, that if
Seller or Buyer or the respective "ultimate parent" of either of them shall
determine in good faith that continuing such resistance is contrary to its best
interests, Seller or Buyer and may, by written notice to the other party,
terminate this Agreement with the effect set forth in Section 8.2(c) hereof.
5.2 Conduct of Business. Except as otherwise contemplated by
this Agreement, pending the Closing, Seller shall cause VER and the Subsidiaries
to operate and carry on its businesses in all material respects only in the
ordinary course consistent with past practices and, without limiting the
generality of the foregoing, pending the Closing:
(a) Preservation of Business. Seller shall cause VER and the
Subsidiaries to use its best efforts to preserve the properties, assets and
goodwill of its businesses.
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(b) Prohibited Changes. Except for, or in connection with, the
settlement of any claim, lawsuit or administrative or regulatory proceeding
pending or hereafter brought against VER or any Subsidiary for an amount no
greater than $100,000, and except as otherwise contemplated by this Agreement,
Seller shall prevent VER and each of the Subsidiaries from taking any of the
following actions without the prior written approval of Buyer, which approval
shall not be unreasonably withheld (except with respect to actions referred to
in clauses (iv), (v), (vi) and (xi) below for which approval may be withheld for
any reason or for no reason):
(i) Sell, consume or otherwise dispose of any assets material to any
such company, except in the ordinary course of business consistent with past
practice; or
(ii) Enter into any contract or commitment of any kind material to any
such company, except in the ordinary course of business; or
(iii) Mortgage, pledge or subject to Liens any assets material to any
such company, except Liens permitted by Sections 3.12 and 3.21 hereof; or
(iv) Amend the Certificate of Incorporation or By-Laws of any such
company; or
(v) Issue any capital stock of VER or the Subsidiaries or make any
change in the issued and outstanding capital stock of such companies; issue any
warrant, option or other right to purchase shares of the capital stock of any
such company or any security convertible into the capital stock of any such
company; or redeem, purchase or otherwise acquire any shares of the capital
stock of any such company; or
(vi) Declare any dividend on, or make any distribution with respect
to, the capital stock of VER; or
(vii) Assume, incur or guarantee any obligation or liability for
borrowed money, other than in the ordinary course of business consistent with
past practice; or
(viii) Cancel any debts owed to any such company, except for
compromises of trade debt in the ordinary course of business consistent with
past practice; or
(ix) Make any changes in its accounting methods, principles or
practices; or
(x) Make any increase, except as consistent with past practice, in the
wages, salaries, compensation, pension or other benefits payable to any
executive officer of any such company; or
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(xi) Merge into or consolidate with any other corporation or person,
or change the character of its business; or
(xii) Make any capital expenditures, or commitments with respect
thereto, except as set forth in Section 3.27 of the Disclosure Schedule, nor
prepay any debt or obligation in excess of $100,000 (except for satisfaction of
the indebtedness of VER and the Subsidiaries to Bell Atlantic Financial
Services, Inc. and for prepaying trade accounts payable in the normal course of
business to take advantage of cash discounts).
5.3 Access to VER and the Subsidiaries. Seller shall afford,
and cause VER and the Subsidiaries to afford, to Buyer and its representatives
reasonable access during normal business hours to the officers, directors,
agents, offices, properties and financial and other records of VER and the
Subsidiaries and furnish to Buyer and its representatives such additional data
and information as it may from time to time reasonably request concerning VER
and the Subsidiaries.
5.4 No Public Announcement. Neither Buyer and its Affiliates
nor Seller and its Affiliates shall make any public announcement or disclosure
concerning the transactions contemplated by this Agreement without the prior
written approval of the other party or parties, except as required by law or as
permitted by the next succeeding sentences. If any party or any of its parent
companies determines upon advice of counsel that a public announcement or
disclosure is required by applicable securities laws or regulations or stock
exchange regulations, such party may make the announcement or disclosure
provided it first consults with the other party or parties hereto so that the
parties may coordinate concurrent public announcements and/or other disclosures.
In addition, the parties shall jointly prepare press releases disclosing the
sale of VER to Buyer, for release immediately upon executing this Agreement and
immediately after the Closing.
5.5 Consents. Promptly after the execution of this Agreement,
Buyer and Seller agree to cooperate for the purpose of obtaining prior to
Closing the governmental and other third party consents listed in Annex 5.5
hereto.
5.6 No Shopping. Seller and each of its agents and
representatives shall not directly or indirectly solicit, initiate or encourage
the initiation of inquiries or proposals from, provide confidential information
to or participate in any discussions or negotiations with, any corporation,
partnership, or other person, entity or group (other than Buyer and its
officers, employees, representatives, advisors and agents) concerning any direct
or indirect acquisition of the Shares or all or any material portion of the
assets of VER and any of the Subsidiaries. Seller will immediately advise Buyer
of, and communicate to Buyer the terms of, any such inquiry or proposal received
by Seller.
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5.7 Duty to Advise Seller. In the event that prior to Closing
Buyer becomes aware of any fact, circumstance or condition which shows that any
representation and warranty of Seller contained in Article 3 hereof was not true
and correct in any material respect as of the date of execution of this
Agreement or is not true in any material respect at any time thereafter, Buyer
shall advise Seller of such fact, circumstance or condition prior to Closing.
5.8 Tank Verification. Buyer, working with Seller and employees
of VER and the Subsidiaries, shall, as and to the extent practicable and
commercially reasonably, commence and proceed with the tank verification process
described in Section 6.5 hereof and Annex 6.5 hereto between the date hereof and
the Closing.
5.9 Fulfillment of Conditions. Each party hereto will make all
commercially reasonable steps necessary or desirable, and proceed diligently and
in good faith, to satisfy each condition to the obligations of other party's
hereto contained in this Agreement and will not take or fail to take any action
that could reasonably be expected to result in the nonfulfillment of any such
condition.
ARTICLE 6
ACTIONS AFTER THE CLOSING DATE
In addition to its obligations elsewhere provided in this Agreement,
Buyer and Seller covenant and agree to take the following actions after the
Closing Date:
6.1 Further Assurances. Buyer and Seller shall each cooperate
with the other parties hereto, and execute and deliver, or cause to be executed
and delivered, all such other instruments, including instruments of conveyance,
assignment and transfer, and take all such other actions as such party may
reasonably be requested to take by any other party hereto from time to time,
consistent with the terms of this Agreement in order to effectuate the
provisions and purposes of this Agreement.
6.2 Access to Books and Records; Record Retention.
(a) From and after the Closing Date, Buyer shall cause VER and the
Subsidiaries to make its books and records containing information with respect
to periods prior to the Closing Date available for inspection by representatives
of Seller at any time during regular business hours and to permit Seller to make
such copies thereof, at the expense of Seller, as such representatives may
reasonably request.
(b) For so long as may be required by law or governmental regulation
but in any event not less than (i) ten (10) years for environmental matters,
(ii) the period provided in Section 10.5 hereof for Tax matters, and (iii) three
(3) years for
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other matters, Buyer shall cause VER and the Subsidiaries not to destroy or give
up possession of any original or final copy of any of the books and records
(including computerized records) relating to such matters prior to the Closing
Date, without first offering Seller the opportunity, at Seller's expense, to
obtain such original or final copy or a copy thereof.
(c) Buyer shall use its best efforts to afford Seller and its
representatives access to the employees of VER and the Subsidiaries who were
employees of VER and the Subsidiaries at the Closing Date as Seller shall
reasonably request for its proper corporate purposes, including, without
limitation, the defense of legal proceedings. Such access may include
interviews or attendance at depositions or legal proceedings. All out-of-pocket
expenses (excluding wages and salaries) reasonably incurred by Buyer, VER or the
Subsidiaries in connection with attendance at depositions or legal proceedings
shall be paid or promptly reimbursed by Seller. Seller shall use its best
efforts to avoid unreasonable interruption of the business of Buyer in the
exercise of its rights hereunder.
6.3 No Securities Law Violation. Buyer shall not take any
action subsequent to the Closing with respect to the Shares or the stock of any
of the Subsidiaries which will result in, or create, violations of the
securities laws of the United States of America or any state or political
subdivision thereof.
6.4 Liabilities and Other Obligations. Seller agrees all
liabilities and obligations set forth in Annex 6.4, shall be Seller's sole
obligation and responsibility and that Buyer is not assuming any such liability
or obligation and Buyer shall have no responsibility therefor.
6.5 Tank Verification. Annex 6.5 sets forth the criteria and
procedures by which the propane tanks owned by VER and the Subsidiaries on the
Closing Date will be verified by Buyer and its agents before and after the
Closing Date. All such propane tanks shall be verified by December 31, 1995,
provided that any tank that has not by December 31, 1995, been actually verified
as either meeting or not meeting the criteria set forth on Annex 6.5 shall be
deemed to have been verified as meeting such criteria. As soon as practicable
after completing the verification procedures, Buyer shall deliver to Seller a
written statement that shows in detail the tanks that could not be verified,
including the size and location of each such tank. Seller shall have the right
to audit and take other reasonable steps to verify Buyer's determination.
Seller agrees to pay to Buyer an amount equal to (a) the aggregate value
(determined on the basis of the costs per tank set forth in Annex 6.5 hereto) of
all tanks that cannot be verified less (b) $1,237,595.50. The aggregate amount
paid by Seller to Buyer under this Section 6.5 shall constitute a reduction of
the Purchase Price.
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6.6 Employee Benefit Matters. Effective as of the Closing Date,
Buyer shall adopt a separation pay plan reasonably acceptable to Seller covering
persons who are employees of VER and the Subsidiaries as of the Closing Date and
thereafter maintain such plan in effect for one (1) year. Buyer agrees, to the
fullest extent permitted by applicable law, that (a) all employees of VER and
the Subsidiaries shall be entitled to participate in the employee benefit plans,
including group health, life and disability plans, presently maintained by Buyer
(true and correct copies of which have been furnished by Buyer to Seller) for at
least one (1) year following the Closing Date, (b) Buyer will not amend such
employee benefit plans or permit any such plan to be amended in any way
materially detrimental to the employees of VER and the Subsidiaries during the
one-year period following the Closing Date, except for general and uniform
changes applying to all employees covered by such plans, (c) all service of an
employee with VER or any Subsidiary (or any predecessor of either VER or any
Subsidiary) shall be recognized by Buyer for all employee benefit purposes, and
(d) all deductibles, waiting periods, limitations with respect to pre-existing
conditions and all other conditions applicable to employees of VER and the
Subsidiaries under the employee benefit plans of Buyer shall be waived. Nothing
herein shall obligate Buyer to employ any current Employees of VER or any
Subsidiary after the Closing.
6.7 Insurance. On and after the Closing Date, Buyer will insure
the business and properties of VER and the Subsidiaries in such forms and
amounts that Buyer deems adequate in its reasonable judgment and against such
risks for which insurance is required by law or, in Buyer's reasonable judgment,
by sound business practice.
ARTICLE 7
CONDITIONS TO OBLIGATION TO CLOSE
7.1 Obligations of Buyer and Seller. The obligations of Buyer
and Seller to consummate the transactions contemplated by this Agreement shall
be subject to the expiration or termination of the waiting periods (including
any extensions thereof) under the HSR Act, and to the condition that neither
Buyer nor Seller shall be subject to any injunction or temporary restraining
order against consummation of the transactions contemplated hereby. Buyer and
Seller agree to provide at Closing such good standing certificates, certified
copies of certificates of incorporation, bylaws and corporate resolutions,
incumbency certificates, resignations of members of the board of directors (but
not officers) of VER and the Subsidiaries, and such other certificates or
documents reasonably requested by another party hereto and customary for
transactions of the size and nature contemplated hereby.
7.2 Obligations of Buyer. Except as otherwise provided in this
Section 7.2, the obligation of Buyer to consummate the
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transactions contemplated hereby shall be subject to the satisfaction of the
following conditions at or prior to Closing:
(a) Warranties and Performance of Seller. The representations and
warranties made by Seller herein shall be true and correct on the date of this
Agreement and on the Closing Date with the same effect as though made on such
date and Seller shall have performed and complied with all agreements, covenants
and conditions required by this Agreement to be performed and complied with by
them prior to the Closing Date, except in each case where any such inaccuracy or
failure would not have a Material Adverse Effect.
(b) Certain Stock Certificates. Seller shall have tendered to Buyer
one or more certificates evidencing all the Shares duly endorsed or accompanied
by duly executed stock powers (in blank) and with any required transfer stamps
affixed.
(c) Certain Indebtedness. VER shall have caused all indebtedness of
VER and the Subsidiaries to Bell Atlantic Financial Services, Inc. to be
satisfied in full and delivered to Buyer evidence of satisfaction of such
obligations.
(d) Consents and Approvals. All consents from and filings with
Governmental Authorities and other third parties listed on Annex 5.5 hereto
shall have been obtained and delivered to Buyer.
(e) No Adverse Change. There shall have been no adverse change since
June 30, 1994, in the business, prospects, financial condition, earnings or
operations of VER's or any Subsidiary's business the result of which would be a
Material Adverse Effect.
(f) No Proceeding or Litigation. No action, suit or proceedings
before any court, arbitrator or Governmental Authority shall have been commenced
or threatened, and no investigation by any Governmental Authority shall have
been commenced or threatened against any of the VER, Seller or Buyer or any of
its respective principals, officers or directors seeking to restrain, prevent or
change the transactions contemplated hereby or questioning the validity or
legality of any of such transactions or seeking damages in connection with any
of such transactions.
(g) Financial Condition at Closing. Except (i) for liabilities set
forth in the Balance Sheet dated June 30, 1994, (ii) accounts payable incurred
and liabilities accrued in the ordinary course of business of VER and the
Subsidiaries consistent with past practices, and (iii) as otherwise disclosed in
Section 3.10 of the Disclosure Schedule, VER and the Subsidiaries shall not owe
any debt at the Closing Date. The term "debt" means notes payable and the
short-term and long-term portions of any and all debt or obligations, including
capitalized lease obligations.
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(i) Audited Balance Sheet. Seller shall have delivered to Buyer the
audited consolidated balance sheet and related statement of income as of
December 31, 1993 and for the year then ended prepared by Coopers & Lybrand.
Such Audited Balance Sheet shall not be materially different from the December
31, 1993 Balance Sheet. Seller shall have delivered to Buyer the unaudited
consolidated balance sheet and related statement of income as of September 30,
1994 and for the nine months then ended.
7.3 Obligations of Seller. The obligation of Seller to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction of the following conditions at or prior to Closing:
(a) Buyer's Warranties and Performance. The representations and
warranties made by Buyer herein shall be true and correct in all material
respects on the date of this Agreement and on the Closing Date with the same
effect as though made on such date; Buyer shall have performed and complied in
all material respects with all agreements, covenants and conditions required by
this Agreement to be performed and complied with by it prior to the Closing
Date.
(b) Delivery of Funds. Buyer shall have tendered the Purchase Price
to Seller in the manner provided in Section 2.2 hereof.
(c) Solvency Certificate. Simultaneously with the Closing, Buyer
shall have caused to be prepared and delivered to Seller a certificate, duly
executed by an appropriate officer of Buyer and in form and substance reasonably
satisfactory to Seller, to the effect that based upon the September 30, 1994
Balance Sheet and Seller's representations and warranties in Article 3 hereof,
and after giving effect to the transactions contemplated by this Agreement and
the financing arranged by Buyer, VER and the Subsidiaries (on a consolidated
basis) are Solvent.
(d) Directors Releases. VER and the Subsidiaries shall have delivered
to Seller releases in favor of the former directors of each such corporation in
form and content reasonably satisfactory to Seller.
(e) No Proceeding or Litigation. No action, suit or proceedings
before any court, arbitrator or Governmental Authority shall have been
commenced, or threatened, and no investigation by any Governmental Authority
shall have been commenced, or threatened, against VER, Seller or any Subsidiary
or any of its respective principals, officer or directors, seeking to restrain,
prevent or change the transactions contemplated hereby or questioning the
validity or legality of any of such transactions or seeking damages in
connection with any of such transactions.
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ARTICLE 8
TERMINATION AND REMEDIES
8.1 Termination. Anything in this Agreement to the contrary
notwithstanding:
(a) Default. In the event that either Buyer, Seller or VER shall fail
to file under the HSR Act as provided in Section 5.1 hereof, or in the event
Buyer shall fail to consummate Closing except as permitted under Sections 7.1
and 7.2 hereof, or in the event that Seller shall fail to consummate Closing
except as permitted under Sections 7.1 and 7.3 hereof, then the non-defaulting
party, after affording the defaulting party a five-day period after notice in
which to cure such breach or default, shall have the right, in addition to the
other rights specified in Section 8.2 below, to terminate this Agreement by
written notice given to the other parties hereto.
(b) Upset Date. If the Closing shall not have occurred on or before
11:59 p.m., Philadelphia time, on December 31, 1994, then, unless otherwise
agreed to in writing by the parties hereto, this Agreement shall terminate at
11:59 p.m., Philadelphia time, on December 31, 1994.
(c) Legal Restraint. Buyer or Seller may, by written notice to the
other party, terminate this Agreement (i) in the circumstances set forth in
Section 5.1 hereof, or (ii) if, on the date set forth in Section 8.1(b) hereof,
there is in effect a preliminary or permanent injunction enjoining the sale,
transfer or delivery of the Shares.
8.2 Remedies.
(a) Specific Performance. Subject to Section 8.2(d) hereof, if Buyer
or Seller desires to proceed with the Closing despite any failure or refusal of
the other party of the type described in Section 8.1(a) hereof, the party who
desires to proceed shall have the right to pursue the remedy of specific
performance.
(b) Damages. Subject to compliance with the terms of Section 8.2(d)
hereof, if the failure or refusal of Buyer or Seller to consummate the Closing
constitutes a breach of this Agreement, either party shall have the right to sue
for damages theretofore suffered and sustained.
(c) Effect of Termination. Except as set forth in Section 8.2(b)
above, upon any proper termination of this Agreement by either Buyer or Seller
or pursuant to Section 8.1(b) hereof, thereafter no party hereto will have any
rights, duties, liabilities or obligations of any kind or nature whatsoever
against any other party hereto based upon either this Agreement or the
transactions contemplated hereby, except in each case the
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obligations of each party for its own expenses incurred in connection with the
transactions contemplated by this Agreement as provided in Section 11.1, the
obligations of each party with respect to confidentiality set forth in Section
11.4 hereof, the obligations under Section 11.7 in the event of a dispute as to
the propriety of such termination, the governing law under Section 11.6 and the
notice provision under Section 11.8.
(d) Cure Period. If either Buyer or Seller seeks any form of relief
referred to in Sections 8.2(a) or 8.2(b) hereof, such party shall, as a
condition to the right to seek such relief, afford the defaulting party hereto a
five-day period to effect reasonable cure of such breach or default. This
subsection (d) shall not be construed to require a second notice and cure period
in addition to the period provided in Section 8.1(a) hereof.
ARTICLE 9
GENERAL SURVIVAL AND INDEMNIFICATION
9.1 Survival of Representations.
(a) Except (i) as otherwise provided in Article 10 hereof with respect
to Tax matters; and (ii) for all representations and warranties made pursuant to
Sections 3.1, 3.2, 3.5, 3.6, 3.7 (which shall never expire), the representations
and warranties made by Seller in Article 3 hereof (including the Disclosure
Schedule and the certificate delivered in accordance with Section 7.1 hereof,
insofar as the Disclosure Schedule and such certificate relate to such
representations and warranties) or elsewhere in this Agreement shall survive
until the second anniversary of the Closing (for purposes of this Article 9,
"Cut-Off Date"). Notwithstanding any provision of this Agreement to the
contrary (other than the provisions of Section 9.1(a)(ii) above and Article 10
hereof), no claim for incorrect representation or breach of warranty under this
Agreement and no claim for indemnification under Section 9.2(iii) may be
brought, and no arbitration or litigation with respect thereto commenced, with
respect to any representation or warranty, or the portions of the Disclosure
Schedule and any certificate relating to such representation or warranty or with
respect to any failure or deficiency described in Section 9.2(iii), and Seller
shall have no obligation with respect thereto, unless written notice thereof
specifying with particularity the incorrect representation or breach of warranty
claimed shall have been delivered to Seller before the Cut-off Date. Nothing in
the foregoing sentence shall prevent or limit any claims or actions commenced
after the Cut-off Date for matters for which notice was delivered prior to the
Cut-off Date.
(b) Except (i) as otherwise provided in Article 10 hereof with respect
to Tax matters; and (ii) for all representations and warranties made pursuant to
Sections 4.1, 4.2, 4.5 (which shall never expire), the representations and
warranties made by
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Buyer in Article 4 hereof (including the certificates delivered in accordance
with Section 7.1 hereof insofar as such certificates relate to such
representations and warranties) shall survive until the Cut-Off Date.
Notwithstanding any provision of this Agreement to the contrary (other than the
provisions of Section 9.1(b)(ii) above and Article 10 hereof), no claim for
incorrect representation or breach of warranty under this Agreement may be
brought, and no arbitration or litigation with respect thereto commenced, with
respect to any representation or warranty and any certificate relating to such
representation or warranty, and Buyer shall have no obligation with respect
thereto, unless written notice thereof specifying with particularity the
incorrect representation or breach of warranty claimed shall have been delivered
to Buyer before the Cut-Off Date. Nothing in the foregoing sentence shall
prevent or limit any claims or actions commenced after the Cut-off Date for
matters for which notice was delivered prior to the Cut-off Date.
9.2 Indemnification by Seller. Except as otherwise limited by
this Article 9 and except with respect to Tax matters governed by Article 10
hereof, from and after the Closing Date, Seller shall assume the defense of, and
indemnify and hold Buyer, Buyer's affiliates and its directors, officers and
employees (collectively, the "Buyer Group") harmless from, any and all losses,
damages, costs and expenses (including, without limitation, court costs and
reasonable outside attorneys and accountants fees) (hereinafter individually a
"Loss" and collectively, "Losses") suffered or incurred by any member of the
Buyer Group that arise out of or result from (i) any breach of any
representation or warranty by VER or Seller contained in this Agreement, or the
portions of the Disclosure Schedule and any certificate relating to such
representation and warranty; (ii) a breach of any other covenant or agreement by
Seller contained in this Agreement; or (iii) prior to the Closing Date: (A) the
failure of VER or the Subsidiaries to have and be in compliance with any
Registration, (B) the failure by VER or the Subsidiaries to comply with any Laws
relating to the business of VER or the Subsidiaries; or (C) the failure of any
propane tank or installation to be in safe working order and in compliance with
applicable Laws and industry standards, provided that no indemnification shall
be available with respect to any such failure that is continued as a course of
business by Buyer after the Closing Date, and provided further, however, such
obligation to indemnify and hold harmless shall not apply unless Buyer shall
have given timely written notice to Seller of such failure in accordance with
Sections 9.1 and 9.5 hereof.
9.3 Indemnification by Buyer.
(a) Except as otherwise limited by this Article 9 and except with
respect to Tax matters governed by Article 10, Buyer shall assume the defense
of, and indemnify and hold Seller, Seller's affiliates and its directors,
officers and employees (for purposes of this Article 9, collectively, the
"Seller Group")
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harmless from, any and all Losses suffered or incurred by any member of the
Seller Group after the Closing Date that relate to, or arise out of or in
connection with (i) the operation of the assets or businesses of, conduct of
employees of (including former employees), or ownership of, VER or the
Subsidiaries; (ii) the breach of any representation or warranty made by Buyer
contained in Article 4 hereof; provided, however, such obligation to indemnify
and hold harmless shall not apply unless Seller shall have given timely written
notice to Buyer of such breach of representation or warranty in accordance with
Sections 9.1 and 9.5 hereof; and (iii) the breach of any other covenant or
agreement by Buyer contained in this Agreement.
(b) The Seller Group's rights to indemnification pursuant to this
Section 9.3 shall be governed by the provisions of Sections 9.4, 9.5 and 9.7 as
if they had been restated in this Section 9.3 with references to "Buyer Group"
changed to "Seller Group" and references to "Seller" changed to "Buyer."
9.4 Recoveries. The amount of any payment with respect to a
Loss for which any member of the Buyer Group shall be entitled to
indemnification under this Article 9 shall be limited as follows: (i) the extent
to which the aggregate sum of any payments constituting the Loss which are not
required to be made to a third party for more than twelve (12) months following
the date upon which the amount and Seller's responsibility therefor is
determined, shall be discounted to its present value, with such present value
being computed as of the date of such determination by using a discount rate,
compounded annually, equal to the rate of interest then announced by Bank as its
prime or base rate; provided, however, that the indemnified member of the Buyer
Group may elect instead to have such payments constituting the Loss paid by
Seller as they become due; (ii) there shall be netted from such payment the
amount of any insurance proceeds or other cash receipts paid to the Buyer Group
as an offset against such Loss (and no right of subrogation shall accrue
hereunder to any insurer); and (iii) there shall be netted from such payment the
amount paid to the Buyer Group pursuant to any indemnification from any
unrelated party with respect to such Loss.
9.5 Claims.
(a) Buyer shall promptly give Seller written notice of any matter
which any member of the Buyer Group has determined has given or could give rise
to a right of indemnification under this Article 9 stating the amount of the
Loss, if known, and the method of computation thereof, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed. The obligations and
liabilities of Seller under this Article 9 with respect to Losses arising from
claims of any third party (including, without limitation, claims by any
Governmental Authority) that are subject to the indemnification provided for in
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this Article 9 ("Third Party Claims") shall be governed by and be contingent
upon the additional terms and conditions set forth in subsection (b) below.
(b) If any member of the Buyer Group shall receive notice of any Third
Party Claim, Buyer shall give Seller prompt written notice thereof and shall
permit Seller, at its option, to participate in the defense of such Third Party
Claim by counsel of Seller's own choosing and at Seller's own expense. If
Seller acknowledges in writing its obligation to indemnify the member of the
Buyer Group under this Article 9 against any Loss that may result from such
Third Party Claim (subject to the limitations set forth in Section 9.6 hereof,
if applicable), then Seller shall be entitled, at its option, to assume and
control the defense of such Third Party Claim at its expense and through counsel
of its choice, if it gives prompt written notice of its intention to do so to
Buyer. However, if the member of the Buyer Group elects not to defend against
such Third Party Claim, then Buyer shall promptly so notify Seller and Seller
shall thereupon again be entitled, at its option, to assume and control the
defense of such Third Party Claim at its expense and through counsel of its
choice; provided, however, that in such circumstances Seller shall not be
required to acknowledge its obligation to indemnify the member of the Buyer
Group in respect of such Third Party Claim. If Seller exercises its right to
undertake the defense against any such Third Party Claim as provided above,
Buyer shall cooperate with Seller and cause the other members of the Buyer Group
to cooperate with Seller in such defense and make available to Seller, at
Seller's expense, all pertinent records, materials and information in its
possession or under its control relating thereto as is reasonably requested by
Seller. Similarly, if Buyer is conducting the defense against any such Third
Party Claim, Seller shall cooperate with Buyer and cause the other members of
the Seller Group to cooperate in such defense and make available to Buyer, at
Buyer's expense, all such records, materials and information in its possession
or under its control relating thereto as is reasonably requested by Buyer.
Seller may not settle any Third Party Claim without the written consent of
Buyer, which consent shall not be unreasonably withheld.
(c) Seller shall be subrogated to any and all defenses, claims or set
offs which any member of the Buyer Group asserted or could have asserted against
the third party making a Third Party Claim. Buyer shall execute and deliver and
cause the other members of the Buyer Group to execute and deliver to Seller such
documents as may be necessary to establish by way of subrogation the ability and
right of Seller to assert such defenses, claims or setoffs against any third
party making a Third Party Claim.
(d) In addition to any other remedy, Buyer shall be entitled, but
shall not be obligated, to offset all such claims for Losses against any
obligation of Buyer to Seller now or hereafter existing.
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9.6 Limitations on Indemnification. Notwithstanding anything to the
contrary contained in this Agreement, the obligations of Seller to provide
indemnification under this Agreement shall be subject to the following
limitations (in addition to the limitations set forth in Article 10 hereof):
(a) Seller shall have no liability, nor be subject to any claim under
this Agreement, with respect to any inaccuracy in, or incompleteness of, or any
breach of any representation, warranty, covenant or agreement contained in this
Agreement or any failure or deficiency of the type described in Section 9.2(iii)
unless and until the amount of Losses suffered or sustained by the Buyer Group
exceeds $2,000,000 ("Basket Amount") in the aggregate. Seller shall have no
liability, nor be subject to any claim under this Agreement, with respect to any
inaccuracy in or incompleteness of, or any breach of any representation,
warranty, covenant or agreement contained in this Agreement or any failure or
deficiency of the type described in Section 9.2(iii) unless and until the amount
of Losses suffered or sustained by the Buyer Group resulting from such
inaccuracy, incompleteness, breach or failure exceeds $10,000 ("Per Claim
Threshold"). Subject to the Per Claim Threshold, the Buyer Group shall be
entitled to receive indemnity payments (subject, however, to the other
provisions of this Article 9 or Article 10 hereof, as applicable) in the
aggregate amount of all Losses including the Basket Amount. The Per Claim
Threshold and the Basket Amount shall not apply to Seller's obligations pursuant
to Sections 6.4 and 6.5.
(b) In no event shall Seller's direct out-of-pocket expenses and costs
paid in respect of the Losses and amounts paid pursuant to Article 10 exceed
$25,000,000 (the "Indemnification Cap").
(c) If Seller is required to indemnify any member of the Buyer Group
pursuant to this Article 9 or Article 10 hereof, Seller shall be responsible to
indemnify such member only to the extent of actual costs or expenses incurred on
a dollar-for-dollar basis. IN NO EVENT SHALL SELLER BE LIABLE FOR INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES, nor shall there be double counting of any
item of Loss, expense, cost or offset.
9.7 Indemnification as Exclusive Remedy. Except where
indemnification is expressly provided elsewhere in this Agreement, the
indemnification provided in this Article 9 shall, to the extent permitted by
law, be the sole and exclusive post-Closing remedy available, under contract,
tort or any other legal theory, to Buyer for any breach of any representation or
warranty by or on behalf of Seller contained in this Agreement.
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ARTICLE 10
TAX MATTERS
10.1 Consolidated Returns. Seller covenants that for federal income
Tax purposes, VER and the Subsidiaries have been treated and will be treated as
members of the affiliated group (as defined in Section 1504 of the Code) of
corporations of which Bell Atlantic Corporation is the common parent (the "Bell
Atlantic Group") for all periods beginning on April 30, 1992, and ending on or
before the Closing Date ("Consolidated Return Periods"). The Bell Atlantic
Group has included and will include the income of VER and the Subsidiaries
(including any deferred income triggered into income by Treasury Regulation (S)
1.1502-13 and Treasury Regulation (S) 1.1502-14 and any excess loss accounts
taken into income under Treasury Regulation (S) 1.1502-19) on the Bell Atlantic
Group consolidated federal income Tax returns for all Consolidated Return
Periods and has paid or will pay any federal income Taxes attributable to such
income.
10.2 Liability for Taxes.
(a) Seller shall be liable for (1) any Taxes imposed on or incurred
by VER or any of the Subsidiaries for any taxable period (the "Pre-Closing
Period") ending on or before the Closing Date, excluding (i) any Taxes of VER or
any of the Subsidiaries to the extent such Taxes have been appropriately
accrued, reflected or adequately reserved for (other than amounts for deferred
taxes) as a current liability on the Closing Date Balance Sheet, (ii) any Taxes
attributable to events occurring or income recognized after the Closing Date and
(iii) any Taxes caused by, or arising from, an actual or deemed election under
Section 338 of the Code (including, without limitation, an actual or deemed
election under Section 338(h)(10) of the Code) with respect to the purchase of
the Shares, (2) any federal income Taxes imposed on VER or any of the
Subsidiaries pursuant to Treasury Regulation (S) 1.1502-6 (or any similar
provision of state, local or foreign law) with respect to the taxable income of
any member of the Bell Atlantic Group (other than VER or the Subsidiaries) or
any other person for any taxable period, as transferee or successor, by contract
or otherwise, and (3) any capital gains, income, gross receipts, excise,
transfer or similar Tax liabilities arising from the sale of the Shares. The
liability for foreign, state or local income Taxes imposed on or incurred by VER
or the Subsidiaries for any taxable period which begins on or before the Closing
Date and ends after the Closing Date shall be allocated between Seller and Buyer
in the same manner as taxable income is reported for that taxable period for
federal income tax purposes. In the case of ad valorem, franchise (other than
such taxes that are a substitute for income taxes) and similar taxes that are
imposed for a taxable period beginning before and ending after the Closing Date,
the portion attributable to the Pre-Closing Period shall be determined by
prorating such Taxes for the taxable period on a daily basis.
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(b) Buyer shall be liable for (1) any Taxes imposed on or incurred by
any member of the Bell Atlantic Group caused by, or arising from, an actual or
deemed election under Section 338 of the Code (including, without limitation, an
actual or deemed election under Section 338(h)(10) of the Code) with respect to
the purchase of the Shares, (2) any Taxes imposed on or incurred by VER or the
Subsidiaries for any taxable period (the "Post-Closing Period") beginning after
the Closing Date, and (3) any foreign, state or local Taxes imposed on or
incurred by VER or the Subsidiaries which are not the liability of Seller
pursuant to Section 10.2(a).
(c) Each party shall be entitled to any refunds (whether by payment,
credit, offset or otherwise) in respect to any Taxes for which such party is
liable under this Article 10; provided, however, that any refund (or comparable
benefit resulting from a reduction of Tax liability) arising out of the
carryback of a loss or credit incurred by VER or the Subsidiaries in a Post-
Closing Period which is carried back to a Pre-Closing Period shall be the
property of Buyer. Each party hereto and its affiliates shall cooperate with
the other party and its affiliates in order to permit the party entitled to the
refund to take all necessary steps to claim any such refund. Any such refund
received after the Closing by either party or its affiliates to which the other
party is entitled shall be paid to such other party within thirty days after its
receipt.
(d) Seller and Buyer agree that, for purposes of all required returns
or reports with respect to Taxes, the amount of the unused minimum tax credit,
if any, under Section 53 of the Code attributable to VER and the Subsidiaries
that may be carried forward to taxable periods ending after the Closing Date
shall, unless otherwise required by law or regulations, be determined in
accordance with the principles of Treasury Regulation (S) 1.1502-79, by
comparing the separate unused minimum tax credit carryforward of VER and the
Subsidiaries with the sum of the separate unused minimum tax credit
carryforwards of all members of the Bell Atlantic Group that have unused minimum
tax credits.
(e) The Bell Atlantic Group will not elect to retain any net operating
loss carryovers or capital loss carryovers of VER or any of the Subsidiaries
under Proposed Treasury Regulation (S) 1.1502-20(g) or any similar provision of
Law.
10.3 Indemnification for Taxes.
(a) Seller hereby indemnifies Buyer against and agrees to pay all
Taxes imposed and all costs and expenses, including, without limitation,
litigation costs and attorneys' and accountants' fees and expenses incurred (all
herein referred to as "Tax Losses") as a result of:
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(1) Any liability for or any claim, notice of deficiency or assessment
by any Government Authority for any Taxes imposed on Buyer and its affiliates,
including VER and the Subsidiaries, that are the responsibility of Seller
pursuant to Section 10.2(a); and
(2) Any misrepresentation or breach of any warranty or obligation of
Seller set forth in Section 3.22 or this Article 10; provided, however, that
Seller's indemnity obligation for any misrepresentation or breach of any
warranty regarding the amount of any Loss Carryovers of VER or any of the
Subsidiaries shall be reduced to the extent of any tax benefits realized by
Buyer and its affiliates, including VER and the Subsidiaries, as a result of any
corresponding increase in the basis of the assets of VER and the Subsidiaries
attributable to any reduction in the amount of such Loss Carryovers.
(b) Buyer hereby indemnifies Seller against all Tax Losses resulting
from:
(1) Any liability for or any claim, notice of deficiency or assessment
by any Government Authority for any Taxes imposed on Seller and its affiliates
that are the responsibility of Buyer under Section 10.2(b); and
(2) Any breach of any obligation of Buyer set forth in this Article
10.
(c) Except as otherwise provided in this Article 10, any amount to
which a party is entitled under this Article 10 shall be promptly paid to such
party by the party obligated to make such payment following written notice to
the party so obligated that the Taxes to which such amount relates have been
paid or incurred and that provides details supporting the calculation of such
amount; provided, however, that no payment of any such amount is required to be
made by Seller during any period when Seller is exercising its contest rights
under Section 10.6.
(d) Seller's liability for indemnification pursuant to Section
10.3(a)(2) shall be subject to the Per Claim Threshold requirements of Section
9.6(a) and shall be included in and subject to the Indemnification Cap
requirements of Section 9.6(b).
10.4 Tax Returns.
(a) Buyer shall prepare, or cause VER and the Subsidiaries to prepare,
and submit to Seller all returns or reports of VER and the Subsidiaries (and any
partnerships in which VER or any of the Subsidiaries owns an interest and has
responsibility for preparing and filing returns or reports) for Taxes for any
Pre-Closing Period and for which the due date (with regard to waivers or
extensions) of any such return or report is subsequent to the Closing Date. Any
such return or report shall be
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prepared on a basis consistent with returns and reports prepared with respect to
VER and the Subsidiaries for prior taxable periods unless otherwise required by
applicable law or regulations and shall be submitted to Seller not later than
(i) in the case of any federal or state income tax return, ninety days after the
Closing Date and (ii) in the case of any other return or report, thirty days
before the due date (with regard to waivers or extensions) of such return or
report. Seller is responsible for filing or causing to be filed with the
appropriate Governmental Authorities any such returns or reports and for
preparing and filing with the appropriate Governmental Authorities any other
returns or reports of VER or any of the Subsidiaries (including returns or
reports for any partnership referred to above) for Taxes for Pre-Closing
Periods. Buyer and its affiliates, including VER and the Subsidiaries, shall
cooperate with Seller and its affiliates and shall make available all necessary
records and timely take all action necessary to allow Seller and its affiliates
to file, or prepare and file, as the case may be, the returns and reports
described in this paragraph (including, without limitation, providing or causing
to be provided to Seller or its affiliates any powers of attorney that Seller
shall request for the purpose of filing any such return or reports).
(b) Buyer and its affiliates, including VER and the Subsidiaries, are
responsible for preparing and filing with the appropriate Governmental
Authorities all returns or reports that relate to the Taxes of VER or any of the
Subsidiaries other than those described in paragraph (a) of this Section 10.4.
10.5 Tax Allocation Arrangements. Effective as of the Closing, all
liabilities and obligations between VER and the Subsidiaries on the one hand and
Seller and its affiliates on the other hand under any tax allocation agreement
or arrangement in effect prior to the Closing shall be extinguished in full, and
any liabilities or rights existing under any such agreement or arrangement shall
cease to exist and shall no longer be enforceable. Seller and its affiliates
shall execute any documents necessary to effectuate the provisions of this
Section 10.5.
10.6 Tax Proceedings. In the event Buyer or any of its affiliates,
including VER and the Subsidiaries, receives any written communication regarding
any pending or threatened examination, claim, adjustment or other proceeding
with respect to the liability of VER or any of the Subsidiaries for any Taxes
which Seller is or may be liable under this Article 10, Buyer shall within ten
days notify Seller in writing thereof; provided, however, that the failure to
provide such notice shall not release Seller from of its obligations under this
Article 10 except to the extent Seller or its affiliates are materially
prejudiced by such failure. As to any such Taxes for which Seller is or may be
liable under this Article 10, Seller shall at its expense control, or settle the
contest of, such examination, claim, adjustment or other proceeding, unless it
notifies Buyer in writing within ten days
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after receipt of the notice described in the immediately preceding sentence that
it desires not to do so. Buyer and its affiliates, including VER and the
Subsidiaries, shall cooperate fully with Seller in handling any such tax audit,
administrative tax proceeding, or tax litigation. Buyer will provide, or cause
to be provided to Seller or its designee, necessary authorizations, including
powers of attorney, to control any proceedings which Seller is entitled to
control pursuant to this Section 10.6. In addition, regardless of which party
is responsible for the payment of the Tax, no tax audit, administrative tax
proceeding, or tax litigation which may affect a tax return of Seller or its
affiliates for any Pre-Closing Period shall be finally concluded by Buyer or its
affiliates, including VER and the Subsidiaries, without the prior consent of
Seller, which consent shall not be unreasonably withheld. Further, regardless
of which party is responsible for the payment of the Tax, no tax audit,
administrative tax proceeding, or tax litigation which may effect a tax return
of Buyer and its affiliates, including VER and the Subsidiaries, for any period
ending after the Closing Date shall be finally concluded by Seller or its
affiliates without the prior consent of Buyer, which consent shall not be
unreasonably withheld.
10.7 Cooperation and Exchange of Information. The parties will
provide each other with such cooperation and information as they may reasonably
request of each other in preparing or filing any return, amended return or claim
for refund, in determining a liability or a right to refund or in conducting any
audit or other proceeding in respect of Taxes imposed on the parties or its
respective affiliates. Buyer and its affiliates will preserve and retain all
returns, schedules, work papers and other documents relating to any such
returns, claims, audits or other proceedings until the expiration of the
statutory period of limitations (with regard to waivers and extensions) of the
taxable periods to which such documents relate and until the final determination
of any payments which may be required with respect to such periods under this
Agreement and shall make such documents available to representatives of Seller
and its affiliates upon reasonable notice and at reasonable times, it being
understood that such representatives shall be entitled to make copies of any
such books and records as they shall deem necessary. Buyer further agrees to
permit representatives of Seller and its affiliates to meet with employees of
Buyer and its affiliates, including VER and the Subsidiaries, on a mutually
convenient basis in order to enable such representatives to obtain additional
information and explanations of any documents provided pursuant to this Section
10.7. Buyer shall make available, or cause VER or the Subsidiaries to make
available, to the representatives of Seller and its affiliates sufficient work
space and facilities (to the extent available) to perform the activities
described in the two preceding sentences. Any information obtained pursuant to
this Section 10.7 shall be kept confidential, except as may be otherwise
necessary in connection with the filing of returns or claims for refund or in
conducting any audit or other proceeding. Each of the parties
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shall provide the cooperation and information required by this Section 10.7 at
its own expense.
10.8 Survival. Notwithstanding anything to the contrary in this
Agreement, the parties' representations, warranties, covenants, agreements,
rights and obligations with respect to any matter covered by Section 3.22 or
this Article 10 shall survive the Closing and shall not terminate until one day
after the expiration of the statutes of limitations (including all waivers or
extensions) applicable to any liability which could arise as a result of or with
respect to such matter.
10.9 Conflict. In the event of a conflict between the provisions of
this Article 10 and any other provisions of this Agreement, the provisions of
this Article 10 shall control.
10.10 Treatment of Indemnity Payments. Solely for all Tax
purposes, any payments to or from Seller from or to Buyer pursuant to this
Article 10 shall be treated by Buyer and Seller as purchase price adjustments.
ARTICLE 11
GENERAL PROVISIONS
11.1 Expenses. Except as provided in Section 8.2(b) hereof, all fees,
commissions and other expenses incurred by Buyer, Seller or VER in connection
with the negotiation of this Agreement and in preparing to consummate the
transactions contemplated hereby, including the fees and expenses of its
respective counsel and other advisors, shall be borne by the party incurring
such fee, commission or expense. Buyer agrees that the fees and expenses of
Coopers & Lybrand in connection with the preparation of the Audited Balance
Sheet shall be paid by VER.
11.2 Execution in Counterparts; Binding Effect. This Agreement may be
executed in one or more counterparts, each of which shall be deemed an original
copy and all of which together shall be considered one and the same agreement,
and shall become a binding agreement when one or more counterparts have been
signed by each party and delivered to the other parties.
11.3 Disclaimer. In connection with Buyer's investigation of VER and
the Subsidiaries, Buyer has received from Seller and its representatives,
including, without limitation, Colmen Capital Advisors, Inc., the Confidential
Information Memorandum (the "Memorandum") and (ii) certain projections,
forecasts and business plan information. Neither Seller nor VER and the
Subsidiaries, nor its representatives, including without limitation, Colmen
Capital Advisors, Inc., makes any express or implied representation or warranty
as to the accuracy or completeness of the information contained in the
Memorandum, or such projections, forecasts or plans. Buyer acknowledges that
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there are uncertainties inherent in attempting to make such projections,
forecasts and plans, that they are familiar with such uncertainties, that Buyer
is taking full responsibility for making its own evaluation of the adequacy and
accuracy of all such information so furnished to it, and that Buyer shall not
have any claim against Seller with respect thereto. Each of Seller, VER and the
Subsidiaries expressly disclaims any and all liability which may be based upon
such information, errors therein or omissions therefrom. BUYER IS ENTITLED TO
RELY SOLELY ON THE REPRESENTATIONS AND WARRANTIES CONTAINED IN THIS AGREEMENT,
AND EXCEPT AS EXPRESSLY SET FORTH THEREIN, SELLER MAKES NO EXPRESS OR IMPLIED
WARRANTIES OF ANY NATURE, INCLUDING THE IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE DISCLAIMED, AND NONE SHALL BE
IMPLIED.
11.4 Confidentiality. All information given by any party hereto to
any other party shall be considered confidential and shall be used only for the
purposes intended. Buyer has previously delivered to Seller a confidentiality
agreement dated as of June 10, 1994, the provisions of which are incorporated
herein by reference and shall continue to apply for the benefit of Seller, VER
and the Subsidiaries as if entirely set forth herein unless and until the
Closing occurs. The provisions of this Section 11.4 and of the confidentiality
agreement referenced in the preceding sentence shall remain in force and effect
notwithstanding any termination of this Agreement under Article 8 hereof.
11.5 Covenant Not To Compete.
(a) Seller acknowledges that an important part of the consideration
which Buyer will receive in connection with the transactions contemplated hereby
is the goodwill of VER and the Subsidiaries and the confidential information
thereof. In order that Buyer may enjoy the benefits of such goodwill and such
confidential information, subject to subsection (b) of this Section 11.5, Seller
agrees that, for a period of five (5) from the Closing Date in the geographical
markets in which the businesses of VER and the Subsidiaries are currently
conducted, neither Seller nor any affiliate of Seller will, directly or
indirectly, alone or in association with any other person, firm, corporation or
other business organization, engage in the Vision Business (hereinafter
defined).
(b) Notwithstanding subsection (a) of this Section 11.5, (i) Seller
and its Affiliates may own up to 5% of a class of equity securities of a
publicly held company engaged in the Vision Business as an investment and (ii)
Seller and its Affiliates may acquire an interest in the securities or assets of
an entity engaged in the Vision Business, and such business may thereafter
continue to operate, if such acquisition is part of a larger acquisition and
either the assets engaged in the Vision Business constitute no more that 15% of
the total assets acquired (by means of stock or asset acquisition) or the
revenues from such Vision
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Business, for the last fiscal year preceding the acquisition, constitute no more
than 15% of the total revenues from all assets and/or entities acquired.
(c) The "Vision Business" shall mean any of (i) the business of
marketing and selling propane on a retail (residential and/or commercial) or
wholesale basis, (ii) the business of hauling petroleum products and by-products
by truck, or (iii) the sale of appliances and equipment fueled by propane in
connection with (i).
(d) As a separate and independent covenant, Seller agrees that, for a
period of three (3) years from the Closing Date, neither it nor any of its
Affiliates will in any way, directly or indirectly, for the purpose of engaging
in the Vision Business, call upon, solicit, advise or otherwise do, or attempt
to do, business with any customer of VER or any Subsidiary as of the Closing
Date to take away or interfere or attempt to interfere with any custom, trade,
business or patronage of VER or any Subsidiary relating to the Vision Business
(except that any business or entity of the type described in (b)(ii) above may
continue to compete with VER and the Subsidiaries in the ordinary course), or
interfere with or attempt to interfere with any officers, employees,
representatives or agents of VER or any Subsidiary, or induce or attempt to
induce any of them to leave the employ of VER or any subsidiary.
(e) The period of time during which Seller and its Affiliates are
prohibited from engaging in certain activities pursuant to the terms of this
Section 11.5 shall be extended by the length of time, if any, during which
Seller or any of its Affiliates is in breach of the terms of this Section 11.5.
(f) Seller acknowledges that the failure of Seller or any of its
Affiliates to comply with the provisions of this Section 11.5 will result in
irreparable and continuing damage to Buyer for which there will be no adequate
remedy at law and that, in the event of a failure of Seller or any of its
Affiliates so to comply, Buyer and its successors and permitted assigns shall be
entitled to injunctive relief and to such other and further relief as may be
proper and necessary to ensure compliance with the provisions of this Section
11.5.
(g) The parties agree that $100,000 of the Purchase Price is allocable
to the provisions contained in this Section 11.5.
11.6 Governing Law. This Agreement shall be governed by and construed
and enforced in accordance with the laws of the State of Delaware, without
giving effect to the choice-of-law provisions thereof.
11.7 Consent to Jurisdiction. Each of the parties to this Agreement,
acting for itself and for its successors and
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permitted assigns, without regard to domicile, citizenship or residence, hereby
(i) agrees that any suit, action or other legal proceeding arising out of or
relating to this Agreement may be brought in the Court of Common Pleas for the
County of Philadelphia, Commonwealth of Pennsylvania, the Circuit Court for the
County of Clay, State of Missouri, or any court of competent jurisdiction in the
State of Delaware or in the United States District Court for the Eastern
District of the Commonwealth of Pennsylvania, the Western District of the State
of Missouri, or the State of Delaware, (ii) consents to the jurisdiction of each
such court in any such suit, action or proceeding, (iii) waives any objection
that it may have to the laying of venue of any such suit, action or proceeding
in any of such courts and any claim that any such suit, action or proceeding has
been brought in an inconvenient forum, and (iv) agrees that a final judgment in
any such suit, action or proceeding shall be conclusive and may be enforced in
other jurisdictions by suit on the judgment or in any other matter provided by
law.
11.8 Notices. Service of process, and any other notices or other
communications required or permitted under this Agreement shall be given in
writing and delivered personally, sent by confirmed facsimile transmission,
mailed first class or sent by overnight courier guaranteeing next-day delivery,
addressed as follows:
(i) If to Buyer:
FERRELLGAS, INC.
One Liberty Plaza
Liberty, MO 64068
Fax: 816-792-7985
Attention: President
(ii) with a copy to:
Smith, Gill, Fisher & Butts, P.C.
1200 Main Street, Suite 3500
Kansas City, Missouri 64105
Fax: 816-391-7600
Attention: Kendrick T. Wallace, Esq.
If to Seller:
Bell Atlantic Enterprises
International, Inc.
1717 Arch Street
29th Floor East
Philadelphia, PA 19103
Fax: 215-557-7214
Attention: Chairman and CEO
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with a copy to:
Bell Atlantic Corporation
1717 Arch Street
32nd Floor
Philadelphia, PA 19103
Fax: 215-963-9195
Attention: Thomas R. McKeough
Assistant General Counsel
Notices or communications required or permitted under this Agreement shall be
deemed to have been received by the addressee (i) on the date given, if
delivered personally or sent by confirmed facsimile transmission, (ii) five days
after the date of deposit, if mailed by first class mail and (iii) one day after
delivery to a courier, if sent by overnight courier guaranteeing next-day
delivery. Either party may change the person, address or facsimile transmission
number for service of process upon it or delivery of notices or other
communications to it under this Agreement by delivering notice of such change to
the other party in accordance with this Section 11.8.
11.9 Titles and Headings. Titles and headings to Articles and
Sections herein, and the Table of Contents to this Agreement, are inserted for
convenience of reference only and are not intended to be a part of or to affect
the meaning or interpretation of this Agreement.
11.10 Successors and Assigns; Beneficiaries.
(a) This Agreement shall inure to the benefit of, and be binding upon,
the parties hereto and its respective successors and permitted assigns;
provided, however, that no party shall assign any rights or delegate any of the
obligations created under this Agreement without prior written consent of the
other party. Nothing in this Agreement shall confer upon any person or entity
not a party to this Agreement, or the legal representatives of such person or
entity, any rights or remedies of any nature or kind whatsoever under or by
reason of this Agreement. The representations, warranties, covenants and
agreements of Seller contained in this Agreement are for the sole benefit of
Buyer and are not intended to benefit, and may not be relied upon or enforced
by, any other person.
(b) Notwithstanding anything in Section 11.10(a) to the contrary, (i)
Seller acknowledges and agrees that Buyer may transfer or assign its rights and
obligations hereunder to an entity owned or controlled by Buyer including,
without limitation, Ferrellgas, L.P., a Delaware limited partnership for which
Buyer is the general partner ("OLP"); provided that nothing herein shall relieve
Buyer of its obligations hereunder; (ii) Seller consents to said transfer or
assignment to OLP (the "OLP Transfer") and agrees that all representations,
warranties, covenants and conditions of
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Seller contained herein will be for the benefit of, and may be relied upon and
enforced by, OLP after the OLP Transfer, provided that OLP shall, in connection
with the OLP Transfer, become jointly and severally liable to the Seller for the
performance of the covenants and agreements of Buyer hereunder to be performed
from and after the OLP Transfer.
11.11 Entire Agreement. This Agreement represents the entire agreement
and understanding of the parties with reference to the transactions set forth
herein, and no representations or warranties have been made in connection with
this Agreement or the transactions contemplated hereby other than those
expressly set forth herein or in the Disclosure Schedule, certificates and other
documents delivered in accordance herewith. This Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings and
agreements (other than the confidentiality agreement referred to in Section 11.4
hereof) between the parties relating to the subject matter of this Agreement and
all prior drafts of this Agreement, all of which are merged into this Agreement.
No prior drafts of this Agreement and no words or phrases from any such prior
drafts shall be admissible into evidence in any proceeding involving this
Agreement.
11.12 Waivers and Amendments. Each of Seller and Buyer may, but shall
not be obligated to, by written notice to the others (a) extend the time for the
performance of any of the obligations or other actions of the other; (b) waive
any inaccuracies in the representations or warranties of the other contained in
this Agreement; (c) waive compliance with any of the covenants of the other
created under this Agreement; or (e) waive fulfillment of any of the conditions
to its own obligations under this Agreement. The waiver by any party hereto of
a breach of any provision of this Agreement shall not operate or be construed as
a waiver of any subsequent breach, whether or not similar. This Agreement may
be amended, modified or supplemented only by a written instrument executed by
Seller and Buyer.
11.13 Severability. This Agreement shall be deemed severable, and the
invalidity or unenforceability of any term or provision hereof shall not affect
the validity or enforceability of this Agreement or of any other term or
provision hereof.
[The remainder of this page left blank intentionally.]
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11.14 Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute an agreement binding upon all of the
parties hereto, notwithstanding that all such parties are not signatures to the
same counterpart.
IN WITNESS WHEREOF, the parties have executed this Agreement, all as
of the day and year first above written.
SELLER:
BELL ATLANTIC ENTERPRISES
INTERNATIONAL, INC.
/s/James H. Brenneman
By: ________________________________
Name: James H. Brenneman
Title: Vice-President--Operations
and Planning
BUYER:
FERRELLGAS, INC.
/s/ James M. Hake
By: ________________________________
Name: James M. Hake
Title: Vice-President, Acquisitions
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Annex 1.1(p)
NET WORKING CAPITAL
As used in the Agreement, the term "Net Working Capital" shall mean
(A) the aggregate amount of all current assets of VER and the Subsidiaries, less
(B) the aggregate amount of all current liabilities of VER and the Subsidiaries,
as determined in accordance with GAAP on a basis consistent with the preparation
of the Balance Sheets (as defined in Section 3.9 of the Agreement), subject to
the following adjustments:
(a) The reserve for bad debts shall not be reduced below $400,000;
(b) Non-fixed-cost inventory shall be reflected at the lower of cost
or market;
(c) Retiree benefits shall be accrued in accordance with FASB 106;
(d) Adequate reserves for litigation and environmental matters shall
be accrued.
(e) A reserve of $300,000 shall be accrued for post-closing separation
payments.
(f) A reserve for 50% of the fees to be paid to the external auditor
to prepare the Audited Balance Sheet shall be accrued.
(g) To the extent Seller is assuming liabilities for which reserves
exist on VER's or any Subsidiaries' books, such reserves shall be reversed.
(h) Changes in the accruals for state and federal income tax
liabilities (benefits) occurring after June 30, 1994 will be excluded from
the computation of Net Working Capital.
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Annex 5.5
SCHEDULE OF GOVERNMENTAL AND THIRD PARTY CONSENTS
1. Seller will use its best efforts to secure the consent of the
lessors at Sarasota #270 and Tampa #81 to the assignment of the leases to
Ferrellgas, L.P. Failure to secure such consent will not constitute a breach of
Section 5.5. See Disclosure Schedule, Section 3.12, Annex II, p. 5.
2. Seller will secure the consent of the City of Jacksonville Beach,
Florida, to the sale of the stock of VER if such consent is required pursuant to
Ordinance No. 7459. If such consent is required, Seller will use its best
efforts to secure consent to the transfer of such franchise to Ferrellgas, L.P.
Failure to secure such second consent will not constitute a breach of Section
5.5. See Disclosure Schedule, Section 3.14, Item 8(b).
3. All agreements listed on Section 3.28 of the Disclosure Schedule
will be terminated on the Closing Date.
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Annex 6.4
SCHEDULE OF RETAINED OBLIGATIONS AND LIABILITIES
Each of the following obligations and liabilities shall be
retained by Seller:
Tropicana litigation
Clean up costs and other expenses arising from environmental
contamination at the following sites: (1) Green Bay, Wisconsin, (2)
Bradenton, Florida, and (3) Andover, Minnesota.
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VISION TANK COUNT
June 1994
<TABLE>
<CAPTION>
TANK SIZE NUMBER OF TANKS COST PER TANK
- - - - - - - --------- --------------- -------------
<S> <C> <C>
-250 10,068 $ 50
250 5,264 $ 380
251-320 1,698 $ 420
321-500 17,614 $ 720
501-1000 6,307 $1,350
1001-5K 87 $1,500
5001-10K 104 $2,000
</TABLE>
A tank not located on the premises of VER or any Subsidiary will be
deemed to be verified when (1) the delivery person responsible for the delivery
of propane to the address at which the tank is shown to be located on the
records of VER or the Subsidiaries confirms such tank's existence at such
location and (2) VER or the Subsidiary has in its possession a tank lease signed
by the owner of the property on which the tank is located (or such other
evidence of the ownership of the tank by VER or the Subsidiary, acknowledged by
the property owner, as may be reasonably satisfactory to Buyer). Buyer will make
reasonable attempts to obtain tank leases or customer acknowledgments that are
missing prior to seeking reimbursement from Seller. Buyer will inventory all
tanks located on the premises of VER or any Subsidiary.
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EXHIBIT 99
FOR IMMEDIATE RELEASE
Contacts: Ferrellgas Media Relations-Sherlyn Manson (816) 792-7902
Ferrellgas Investor Relations-Theresa Schekirke (816) 792-6826
Bell Atlantic Media Relations-Nancy Stark (215) 963-6777
FERRELLGAS COMPLETES PURCHASE OF
VISION ENERGY RESOURCES, INC.
LIBERTY, Mo. (November 1, 1994) - Ferrellgas, Inc., General Partner of
Ferrellgas Partners, L.P. (NYSE:FGP), announced that it has completed the
purchase of Vision Energy Resources, Inc., a subsidiary of Bell Atlantic
Corporation (NYSE:BEL), at cash purchase price of approximately $45 million.
Immediately following the acquisition, Ferrellgas contributed the Vision
business to Ferrellgas Partners, L.P., making the Partnership the second largest
retail propane marketer in the United States, based on retail gallons sold.
Vision Energy Resources, Inc. was the 16th largest propane retailer in the
United States, operating 33 retail propane outlets in seven states, with sales
of 99.8 million retail and wholesale gallons in 1993. The company served 54,000
residential, industrial/commercial and agricultural customers in Minnesota,
Wisconsin, North Dakota, South Dakota, Michigan, Montana, Iowa and Florida.
These customers will now be served by Ferrellgas Partners, L.P.
"The acquisition of Vision Energy enhances our presence in the North Central
part of the country and enhances productivity and increases efficiencies in the
rapidly growing propane market in Florida," said James E. Ferrell, Ferrellgas
Partners, L.P. Chairman and Chief Executive Officer.
Vision Energy Resources, Inc. was acquired by Philadelphia-based Bell Atlantic
in 1992 as part of that company's acquisition of Metro Mobile CTS, Inc., which
was primarily an owner and operator of cellular systems nationwide.
Prior to this acquisition, Ferrellgas Partners, L.P., through its operating
partnership Ferrellgas, L.P. and General Partner Ferrellgas, Inc., had been the
third largest retail marketer of propane in the United States, with fiscal 1994
sales of 564 million retail gallons of propane to more than 600,000 customers in
45 states and revenues of $526.5 million.
