MANAGEMENT AGREEMENT
THIS AGREEMENT, dated May 17, 1995, is made and entered into
among Empire Gas Corporation, a Missouri corporation ("Empire"),
Northwestern Growth Corporation, a South Dakota corporation ("NGC"), and SYN
Inc., a Delaware corporation ("SYN"), with respect to the following facts:
A. Empire, NGC and SYN have entered into that certain
Agreement Among Initial Stockholders and SYN Inc., dated May 17, 1995 (the
"Stock Agreement"), which, among other things, requires this Agreement to be
made for the reasons recited in the Stock Agreement (such recitals being
incorporated herein by this reference).
B. SYN and NGC, immediately following the execution of
this Agreement, will be entering into that certain Purchase and Sale
Agreement, dated as of May 17, 1995, with ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Synergy Group
Incorporated (with its subsidiaries, "Synergy"), and S&J Investments (the
"Synergy Acquisition Agreement"), providing for the acquisition by SYN of
Synergy (the "Synergy Acquisition").
C. This Agreement is essential to the ability of SYN
to finance and consummate the Synergy Acquisition, and to manage the assets
and business to be acquired by the Synergy Acquisition.
NOW, THEREFORE, in consideration of the premises and the
agreements exchanged herein, the parties hereto agree as follows:
ARTICLE 1: ENGAGEMENT TO PLAN AND MANAGE
SYN, on behalf of itself and its subsidiaries, and for the
benefit of its stockholders (of which NGC is a principal one), hereby
engages Empire to perform the planning and management of the assets and
business operations of SYN and its subsidiaries (the "Management Services"),
and Empire hereby accepts such engagement and agrees to perform the
Management Services, subject to the direction of the Board of Directors of
SYN (the "Board") and in accordance with the terms of this Agreement.
ARTICLE 2: BUSINESS PLAN; BUDGET
Section 2.01 Initial Business Plan. The parties hereto
have developed a business plan, a copy of which is attached as Exhibit A to
this Agreement ("Initial Plan"), for the conduct of business operations of
SYN and its subsidiaries after the completion of the Synergy Acquisition
(the "SYN Operations"), showing:
(a) The general longer-term objectives (to be
accomplished in a three to five year period of time);
(b) The preliminary detailed plans for conducting the
SYN Operations through the end of SYN's fiscal year ending June 30, 1996
("fiscal 1996"), including the plant, facilities and equipment (at various
locations), and the personnel staffing at the locations, needed to carry on
the SYN Operations for the balance of fiscal 1996 following the Synergy
Acquisition and during the longer term of the plan; and
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(c) Capitalized reserves for (i) transition costs
including such items as costs of meetings with personnel at the outlets and
branches acquired in the Synergy Acquisition, retail mailings and other
items, not to exceed $500,000 in the aggregate, and (ii) costs of shutting
down Synergy's facility at Farmingdale, New York, offering severance to
Synergy employees and incorporating Synergy's operations into Empire's
facilities in Lebanon, Missouri.
Section 2.02 Initial Budget. The parties hereto have
developed a budget ("Initial Budget") for the conduct of the SYN Operations
for the balance of fiscal 1996 following the Synergy Acquisition in
accordance with the Initial Plan. A copy of the Initial Budget is attached
as Exhibit B to this Agreement.
Section 2.03 Updated and Amended Business Plans and
Budgets. At least 30 days prior to June 30, 1996 and at least 30 days prior
to each June 30 thereafter until the term of this Agreement expires or is
terminated (hereinafter sometimes referred to as the "end of the term of
this Agreement"), Empire will develop, in consultation with NGC, and obtain
the approval of the Board of:
(a) An updated version of the Initial Plan (or of the
most recent previously updated version thereof) to provide a
detailed business plan for the SYN Operations for the 18
months following such June 30 and a longer-term business
plan for the three- to five-year period following such June
30 (the Initial Plan or updated version thereof in effect at
a given time, including all amendments thereto up to such
time, is hereinafter referred to as the "Applicable Plan");
and
(b) An updated version of the Initial Budget (or of the
most recent previously updated version thereof) to provide a
budget for the conduct of the SYN Operations for the 18
months following such June 30, (the Initial Budget or
updated version thereof in effect at a given time for a
particular period, including all amendments thereto up to
such time, is hereafter referred to as the "Applicable
Budget").
Empire may amend an Applicable Plan or an Applicable Budget, or both, at any
time and from time to time by preparing such amendment, submitting the same
to the Board with such supporting information as the Board may require, and
obtaining the Board's approval thereof, but no such amendment shall be
effective unless and until approved by the Board.
Section 2.04 Acting within Applicable Plan and Budget.
Empire shall manage the SYN Operations, commencing with the Synergy
Acquisition and continuing thereafter until the end of the term of this
Agreement, in accordance with the Applicable Plan and within the Applicable
Budget, without obtaining approval of the Board of the details of such
management, but subject to approvals by the Board required by law and to the
requirements for approval by the Board specified in Article 9 herein.
Notwithstanding the foregoing:
(a) Empire may take such management action with respect
to the SYN Operations as it may deem advisable to respond
to, and attempt to curtail or avoid material adverse
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consequences resulting from material unplanned adverse
developments when (reasonably) there is adequate time in
which to secure advance approval of such action by the
Board, but in such event the situation and action taken
shall be submitted with reasonable promptness to the Board
for such further action as the Board may then deem
advisable;
(b) In addition to action taken pursuant to preceding
paragraph (a), Empire may cause SYN to make maintenance
capital expenditures which individually exceed the
Applicable Budget for such expenditures or category of
expenditures by not more than $10,000, but only if the Board
is notified prior to, or at, the time of such expenditures,
while such expenditures in excess of such $10,000 limit may
not be made or committed to unless authorized in advance by
the Board; and
(c) If Empire becomes aware that aggregate operating or
administrative expenses likely will be 1% or more in excess
of what is provided for in the then Applicable Budget,
Empire shall promptly notify the Board of such expected
excess.
Section 2.05 Other Action. Any action that needs to be
taken in the performance of the Management Services that is not provided for
in an Applicable Plan or Applicable Budget or otherwise provided for in this
Agreement shall be taken in accordance with Empire's good faith judgment as
to what is in the best interests of SYN and its subsidiaries.
ARTICLE 3: EMPIRE'S SERVICES; KEY MAN INSURANCE
Section 3.01 Effort Required. Empire, under the management
of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. ("▇▇▇▇▇▇▇") as the chief executive officer of
Empire, shall devote sufficient time and resources to reasonably assure
successful performance by Empire for SYN of the Management Services in
accordance with this Agreement.
Section 3.02 Key Man Insurance. To compensate SYN for the
loss of services that would occur in the event of ▇▇▇▇▇▇▇'▇ death, at all
times while this Agreement is in effect SYN may maintain in effect (at SYN's
expense) insurance on the life of ▇▇▇▇▇▇▇ in an amount not less than
$10,000,000, payable to SYN, and ▇▇▇▇▇▇▇ will cooperate by providing
personal information and taking physical examinations as required by the
insurance carrier for issuing and maintaining such insurance coverage. The
cost of such insurance shall not be charged, directly or indirectly, in any
way to Empire or to any of the compensation due Empire under this Agreement.
At the end of the term of this Agreement, or at such earlier time as the
Board determines that SYN no longer needs the insurance coverage provided
for in this Section, ▇▇▇▇▇▇▇ will have the option to purchase ownership of
such insurance policies from SYN for a price equal to any cash surrender
value of the insurance.
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ARTICLE 4: COMPENSATION OF EMPIRE
Section 4.01 Compensation Entitlement. As compensation in
full for Empire's services under this Agreement, SYN shall pay Empire a
Fixed Fee (as defined in Section 4.02 hereof) per annum and a Management Fee
(as defined in Section 4.03 hereof).
Section 4.02 Fixed Fee. The Fixed Fee (the amount of which
for each fiscal year of SYN, or part thereof, will be included in the
Applicable Budget for such period), is intended to cover Empire's operating
overhead in performing its services under this Agreement. The Fixed Fee
shall be paid by SYN to Empire in equal monthly installments in advance,
upon commencement of Empire's services and thereafter on the first day of
each month, and shall be at the initial annual rate of $3,250,000 for the
period commencing with the commencement of Empire's services under this
Agreement and ending June 30, 1996, and for each 12-month period or portion
thereof thereafter until the end of the term of this Agreement the annual
rate of the Fixed Fee shall increase by the percentage increase in the
Consumer Price Index. All Items For All Urban Consumers, U.S. City Average
(1982-84 = 100), as of the start of such period as determined by the index
number for the month most recently published by the U.S. Department of Labor
or any successor governmental agency handling such publication, as of the
start of the period, compared to 151.4 (which is such index figure for the
month of March, 1995), but no reduction in the annual rates of the Fixed Fee
shall be made if a decrease in such Consumer Price Index figure shall occur.
In addition to the foregoing adjustments in the Fixed Fee related to changes
in such Consumer Price Index, the Fixed Fee shall be adjusted in an amount
approved by the Board to reflect Empire's increased fixed operating overhead
reasonably attributable to increases in SYN's business resulting from
acquisitions and start-ups of business locations after the Synergy
Acquisition is completed. In the event of changes in the basis for such
Consumer Price Index, or such index is discontinued, the parties shall amend
this Section 4.02 to provide as closely as possible for the same adjustment
mechanism, using the changed basis or a different published index, as
appropriate.
Section 403. Management Fee. The Management Fee, an
estimate of which for each fiscal year shall be included n the Applicable
Budget for such period, shall be at the annual rate of $500,000 per annum
payable by SYN to Empire in equal monthly installments in advance upon
commencement of Empire's services and thereafter on the first day of each
month, plus a sum (the "Additional Amount") equal to 10% of the amount by
which the EBITDA for SYN and its subsidiaries, on a consolidated basis,
exceeds the amount shown below for each period indicated, with the
Additional Amount for each such period to be paid by SYN to Empire within 90
days after the end of such period or at such earlier time as the final
calculation of the Additional Amount for such period is completed:
$17,500,000 for the period ending June 30, 1996;
$18,000,000 for the 12 months ending June 30, 1997;
$18,300,000 for the 12 months ending June 30, 1998;
$18,600,000 for the 12 months ending June 30, 1999; and
$18,900,000 for the 12 months ending June 30, 2000;
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For purposes of this Agreement, "EBITDA" means earnings before interest,
taxes, depreciation and amortization for a specified period for the
specified corporation, or the specified group of corporations on a
consolidated basis, or the specified business locations, determined from
financial statements for such corporation or corporations or business
locations prepared on the basis of generally accepted accounting principles,
consistently applied.
ARTICLE 5: COMPETITION BETWEEN EMPIRE AND SYN
Section 5.01 Overlapping Market Areas. As promptly as is
reasonably possible, Empire and SYN shall use their best efforts to exchange
those outlets of Empire and SYN that are designated in Exhibit C attached to
this Agreement as having overlapping, competing market areas, by having some
of the SYN outlets listed on such Exhibit C transferred to Empire and some
of the Empire outlets listed on such Exhibit C transferred to SYN, such that
upon completion of these transfers, the SYN outlets transferred to Empire
will have EBITDA (as defined in Section 4.03 herein) and assets equivalent
(with immaterial exceptions) in value to the Empire outlets transferred to
SYN, and the overlapping, competing nature of the market areas shown on
Exhibit C will be eliminated by such transfers. Any shortfall of EBITDA or
asset value to either party from such transfers shall be compensated by
either a transfer of assets or a cash payment, the amount of which is to be
negotiated between NGC and SYN, as one party, and Empire, as the other
party.
Section 5.02 Non-Competition; Acquisitions.
(a) While this Agreement is in effect and for a period
one year thereafter, Empire and SYN will not solicit
customers and employees from each other.
(b) Until the end of the term of this Agreement and for
a period of two years thereafter, Empire and SYN shall not
compete in each others area of interest for new customers
within such area. Regarding individual acquisitions of
retail propane businesses greater than $7,500,000 which any
party hereto desires to make before the end of the term of
this Agreement, such acquisitions shall e owned jointly by
Empire and SYN in relation to the capital provided for such
acquisition or such other arrangements as can be negotiated
by such parties on a case by case basis, but acquisitions
less than $7,500,000 shall be pursued first by the
individual entity with operations closest to the acquired
property, or if not successfully pursued by such party, then
jointly by Empire and SYN together, based on capital
provided, and if not successfully pursued by those two
parties, then by whichever (Empire or SYN) was not such
first party.
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ARTICLE 6: ACCOUNTING SYSTEM; ACCOUNTANTS
Section 6.01 Accounting System. At all times until the end
of term of this Agreement, Empire will:
(a) Cause SYN and its subsidiaries to implement and
maintain a system of accounting for the assets, liabilities,
operations and cash flows of SYN and its subsidiaries, and
internal controls over accounting and financial matters for
SYN and its subsidiaries, similar to the system and controls
maintained by Empire for itself, or, if requested by the
Board, as the Board shall reasonably require; and in
connection with the foregoing, Empire shall cause SYN to
provide NGC with such financial statements and reports with
respect to assets, liabilities, operations and developments
affecting the business or assets of SYN and its
subsidiaries, as NGC may require (taking into account the
accounting and reporting requirements of NGC's parent
corporation, Northwestern Public Service Company); and
(b) Cause SYN to engage a so-called "Big Six" firm of
independent public accountants (or whatever, at the time, is
the equivalent of the present Big Six) approved by the Board
to make quarterly reviews and annual audits of SYN and its
subsidiaries; but to the most efficient extent possible,
Empire shall cause SYN to engage ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇
("BK&D") to perform detailed compliance work to assist the
designated firm of independent accountants in completing the
quarterly reviews and annual audits.
Section 6.02 Audit or Review. At all times until the end
of the term of this Agreement, Empire will allow the Board and its
authorized representatives, upon at least seven-days' prior notice to, and
in coordination with, the President and Chief Executive Officer of SYN, to
audit or review the books of account and records of all kinds kept for SYN,
inspect SYN's properties, consult with SYN's personnel and with Empire's
personnel involved in Empire's performance of services under this Agreement,
and generally to observe and monitor the operation, management and
accounting for SYN's business and assets; provided, however, that such
review and/or audit shall not last longer than five business days unless
Empire is in default under this Agreement. Such reviews shall be restricted
to no more than once a month at the home office of SYN, as maintained by
Empire, through June 30, 1996 and quarterly thereafter, and unrestricted at
all of SYN's retail locations. All reports resulting from these audits or
reviews shall be promptly furnished to the Board.
ARTICLE 7: INSURANCE FOR SYN
In addition to the key man insurance which SYN may maintain
pursuant to Section 3.02 herein, at all times while this Agreement is in
effect insurance covering liability exposures of SYN and its Board, with
types and amounts of coverages as shall be approved by the Board, shall be
obtained and maintained for SYN and its subsidiaries (at SYN's expense, and
at no cost to Empire) by Empire as part of the Management Services. Empire
shall be named as a co-insured under such coverages. The cost of such
insurance shall be included in each Applicable Budget.
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ARTICLE 8: ATTENDANCE OF EMPIRE'S BOARD MEETINGS
At all times while this Agreement is in effect, NGC will
designate a representative who may, as invited, be allowed to attend
quarterly meetings of Empire's Board of Directors and to receive copies of
all information supplied by Empire to the members of its Board of Directors
for such meetings.
ARTICLE 9: SYN BOARD APPROVAL REQUIRED
The assets and business of SYN and its subsidiaries shall be
managed as provided herein by Empire while this Agreement remains in effect,
subject to the overall direction and supervision by the Board. However,
Empire shall not take for SYN (such term at all times in this Article 9
includes SYN's subsidiaries), or cause SYN to take, any of the following
actions without having obtained the prior approval of the Board:
(a) Sell, lease, transfer or otherwise dispose of, or
enter into any agreement or arrangement for any sale, lease,
transfer or other disposition of assets of SYN, except for
(i) a sale, lease, transfer or other disposition
specifically provided for in the Applicable Budget, or (ii)
the sale of services to customers and the sale or lease of
products in the ordinary course of business of SYN;
(b) Purchase any goods or services from, or sell any
goods or services to, or enter into or amend any agreement
or other transaction with, Empire or any affiliate of Empire
that is not on an arm's-length basis;
(c) Cause SYN to incur any indebtedness for borrowed
money (including, without limitation, any capitalized lease
obligations) or to enter into an agreement for such
borrowing (or leasing) with the exception of seller
financing of the purchase of particular assets;
(d) Mortgage or otherwise ▇▇▇▇▇ ▇ ▇▇▇▇ upon or security
interest in any assets of SYN except liens upon acquired
assets to secure seller financing for the acquisition of
such assets;
(e) Cause SYN to become a surety or guarantor of, or an
accommodation party to, or otherwise become or be
contingently liable for any indebtedness or obligations of
any other party, other than as a result of endorsing to
negotiate payment of instruments received from customers in
payment for goods and services in the ordinary course of
business in amounts less than $50,000;
(f) Cause SYN to enter into any joint venture or
similar relationship or acquire any stock, debt obligations
or other securities of, or loan to or make any investment in
or capital contribution to any other party which is not a
wholly-owned subsidiary of SYN;
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(g) Institute, defend, or settle any legal proceeding
on behalf of SYN, except legal proceedings against SYN shall
be defended and if the matter is partially or wholly covered
by insurance, it may be settled if the settlement payment to
be made by SYN is an amount not exceeding the deductible
under such insurance coverage for such matter and all other
matters not partially or wholly covered by insurance may be
settled if the settlement payment to be made by SYN is an
amount not exceeding $50,000 per matter;
(h) Enter into any new contract for the leasing, as
lessee, of any real or personal property, other than
operating leases entered into in the ordinary course of
business involving a term of not more than one year total or
rental of not more than $50,000, and other than retail
location operating leases;
(i) File or consent to any petition in bankruptcy,
reorganization, liquidation or similar proceeding with
respect to SYN, or seek, consent to or acquiesce in the
appointment of a trustee, receiver or liquidator of SYN, or
of all or any part of the assets of SYN, or make an
assignment for the benefit of SYN's creditors;
(j) Confess a judgment against SYN greater than
$50,000;
(k) Amend, modify, supplement or waive any provision of
any contract, the making of which was approved or required
to be approved by the Board;
(l) Make any employment, severance, consulting or
similar agreement, including any agreement with a labor
union, or amend the same, for SYN with any other party
involving payments by SYN greater than $50,000, or adopt any
employee benefit plan for employees of SYN;
(m) Open or close a primary office, plant or other
business location for SYN, or make an agreement or
commitment of any kind to do so unless it results from the
merger or consolidation with another SYN plant, office or
other business location; or
(n) Take any action in contravention of this Agreement.
ARTICLE 10: DIRECTORS AND OFFICERS
Section 10.01 Directors and Officers of SYN. During the
term of this Agreement, the provisions of Section 5.02 of the Stock
Agreement (which are hereby incorporated herein by this reference) shall be
carried out by Empire and NGC even if the Stock Agreement ceases to be in
effect for any reason.
Section 10.02 Directors and Officers of Subsidiaries. The
directors and officers of subsidiaries of SYN shall be designated by Empire
to enable Empire to achieve an efficient management and administration of
the business and affairs of the subsidiaries.
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ARTICLE 11: TERM; TERMINATION
Section 11.01 Term of This Agreement; Termination. The
term of this Agreement shall be in effect until it expires on June 30, 2000,
or at the end of any fiscal year thereafter if preceded by at least six-
months' written notice by SYN or one-year's written notice by Empire of its
desire to terminate as of such date, unless sooner terminated at the
election of the Board, and upon giving notice to Empire of such election, on
any earlier date in the event of any of the following:
(a) Upon default by Empire under this Agreement which
remains uncured after 30 days written notice of such default
has been given to Empire by SYN or NGC;
(b) Upon any change in ownership of Empire which
results in ▇▇▇▇▇▇▇ having less than voting control (as a
stockholder) of Empire;
(c) Upon the filing or consent to any petition in
bankruptcy, reorganization, liquidation or similar
proceeding with respect to Empire, or the appointment of a
trustee, receiver or liquidator for Empire for all or a
substantial part of its assets, or the making of an
assignment by Empire for the benefit of its creditors;
(d) Upon the failure of SYN and its subsidiaries to
achieve the following cumulative (consolidated) EBITDA
results for the periods beginning with the Synergy
Acquisition and ending on the dates indicated below, as
follows:
(i) for the period ended June 30, 1996,
cumulative EBITDA of at least $14 million;
(ii) for the period ended June 30, 1997,
cumulative EBITDA of at least $29 million;
(iii) for the period ended June 30, 1998,
cumulative EBITDA of at least $45 million;
(iv) for the period ended June 30, 1999,
cumulative EBITDA of at least $62 million;
(v) for the period ended June 30, 2000,
cumulative EBITDA of at least $80 million; and
(vi) for periods (if any) subsequent to June 30,
2000, cumulative EBITDA at the end of each fiscal
year of SYN shall be at least $20,000,000 higher
than at the end of the pervious fiscal year;
(e) If SYN at any time is in default with respect to
more than $1,000,000 of its borrowings;
(f) If Empire at any time is in default with respect to
its outstanding publicly-held bonds;
(g) By mutual agreement of the parties or when required
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by final court order or final award of arbitrators; or
(h) If the stock of SYN, or stock entitling the holder
or holders thereof to cast a majority of the votes in the
general election of directors of SYN, or substantially all
of the assets of SYN, is sold, directly or by merger or
consolidation.
The term of this Agreement also may be terminated at the election of Empire
and upon giving notice to NGC and SYN of such election in the event of any
of the following:
(i) Upon default by SYN resulting from non-payment of
the Fixed Fee or the Management Fee to Empire which remains
uncured after 30 days written notice of such default has
been given by Empire to SYN or NGC; or
(ii) If the stock of SYN, or stock entitling the holder
or holders thereof to cast a majority of the votes in the
general election of directors of SYN, or substantially all
of the assets of SYN is sold, directly or by merger or
consolidation; or
(iii) If any of the terms of this Agreement are changed
without the consent of Empire.
Section 11.02 Transition Upon Termination.
(a) Upon expiration or earlier termination of this
Agreement, the parties hereto will cooperate to the fullest
extent possible to facilitate the creation of a staff of
management personnel, and the establishment of facilities
owned or leased by SYN or otherwise available for use by SYN
on terms acceptable to SYN, to enable SYN to plan and manage
its business operations and assets without the services that
would have been provided by Empire under this Agreement had
this Agreement remained in effect; and until that is
accomplished (and the parties hereto shall make a good faith
effort to accomplish it promptly), SYN shall have the use of
the personnel and facilities of Empire that had been devoted
in whole or in part to such planning and management at a
cost not to exceed the amount most recently budgeted
therefor in the last Applicable Budget, or at Empire's cost
in the absence of such budgeted amount.
(b) Notwithstanding the foregoing, in the event this
Agreement is terminated by Empire, SYN shall have up to 18
months (including the 12-months' notice period) to plan and
execute an operational and transition plan for achieving
what is provided for in preceding subsection (a).
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Section 11.03 Puts and Calls
(a) In the event this Agreement is terminated by
Empire, SYN shall have a call right to purchase Empire's
shares of common stock of SYN at a price equal to 100% of
fair market value, determined by appraisal, and Empire shall
have a put right to sell to SYN Empire's shares of common
stock of SYN at a price equal to 90% of fair market value,
determined by appraisal, provided that, in case of a put by
Empire, SYN has adequate liquidity, as reasonably determined
by its Board, to make such purchase.
(b) In the event this Agreement is terminated by SYN,
SYN shall have a call right to purchase Empire's shares of
common stock of SYN at a price equal to 110% of fair market
value, determined by appraisal, and Empire shall have a put
right to sell to SYN Empire's shares of common stock of SYN
at a price equal to 100% of fair market value, determined by
appraisal, provided that in the case of a put by Empire, SYN
has adequate liquidity, as reasonably determined by its
Board, to make such purchase.
(c) For these purposes, fair market value of the shares
of common stock of SYN to be sold and purchased shall be
determined by an appraiser or investment banker selected as
provided in Section 1.04(a)(ii) of the Stock Agreement, with
the appraisal made in accordance with such Section.
ARTICLE 12: RIGHT OF FIRST REFUSAL
So long as this Agreement is in effect, Empire will require
▇▇▇▇▇▇▇ not to sell or otherwise dispose of the shares of stock of Empire
which he owns (other than to an affiliated entity or related party or to
Empire management personnel, provided that ▇▇▇▇▇▇▇ retains voting control of
Empire), and Empire will not sell or otherwise dispose of all or
substantially all of its business and assets, whether such transactions are
to be done directly or indirectly by means of a merger or consolidation of
Empire with the acquiring entity, without first offering the same for sale
to NGC, on the same terms as are offered by the other party (with full
disclosure of such terms to NGC), and allowing not less than 30 days after
its receipt of the offer for NGC to accept the offer, and if such offer is
accepted by NGC, NGC shall have 90 days in which to complete the purchase on
such terms.
ARTICLE 13: MISCELLANEOUS
Section 13.01 Notices. All notices and other
communications hereunder shall be in writing and shall be deemed to have
been given (a) when delivered in person, (b) one business day after deposit
with a nationally recognized overnight courier service, (c) two business
days after being deposited in the United States mail, postage prepaid, first
class, registered or certified mail, or (d) the business day on which it is
sent and received by facsimile, as follows:
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If to SYN, to: SYN Inc.
c/o Northwestern Growth Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
President and Chief Operating Officer
and to SYN Inc.
c/o Empire Gas Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.,
Chief Executive Officer
If to NGC: Northwestern Growth Corporation
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
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If to Empire: Empire Gas Corporation
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Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., President
or to such other person or address as any party hereto shall specify in
notice in writing given to the other parties hereto.
Section 13.02 Assignment Restricted; Successors and
Assigns. No party hereto may assign its interest in this Agreement without
first obtaining the written consent of the other parties hereto, except that
this Agreement may be assigned by SYN, without obtaining such consents, to
(and in connection with the closing of the acquisition by) an acquirer of
substantially all of the business and assets of SYN and its subsidiaries,
provided that written notice of such assignment is given to the other
parties hereto, and except further that this Agreement may be assigned by
NGC (in connection with the assignment of NGC's shares of common stock of
SYN) to NWPS, or any wholly-owned subsidiary of NWPS, without obtaining such
consents, provided written notice of such assignment is given to the other
parties hereto.
Section 13.03 Severability. Should any provision of this
Agreement for any reason be declared invalid or unenforceable, such decision
shall not affect the validity or enforceability of any of the other
provisions of this Agreement, which remaining provisions shall remain in
full force and effect and the application of such invalid or unenforceable
provision to persons or circumstances other than those as to which it is
held invalid or unenforceable shall be valid and be enforced to the fullest
extent permitted by law.
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Section 13.04 Interpretation. The article and section
headings contained in this Agreement are solely for the purpose of
reference, are not part of the agreement of the parties and shall not in any
way affect the meaning or interpretation of this Agreement.
Section 13.05 Arbitration. Any dispute arising under this
Agreement shall be resolved by arbitration. Each of the parties hereto
agrees (a) that each such arbitration shall be initiated and conducted in
accordance with the rules and procedures of the American Arbitration
Association ("AAA"), (b) to submit all such disputes to the office of the
AAA in charge of arbitrations conducted in the metropolitan area of the City
of Minneapolis, Minnesota, and (c) to have each such arbitration proceeding
conducted in the metropolitan area of the City of Minneapolis, Minnesota,
and (d) to be subject to the jurisdiction of the arbitrators in the City of
Minneapolis, Minnesota upon notice given in accordance with the provisions
of this Agreement that a dispute has been submitted to such office of the
AAA.
Section 13.06 Governing Law. This Agreement shall be
governed by the laws of the State of Delaware (regardless of the laws that
might otherwise govern under applicable principles of conflicts of law) as
to all matters, including but not limited to matters of validity,
construction, effect, performance and remedies.
Section 13.07 Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
collectively shall constitute one and the same agreement.
IN WITNESS HEREOF, the parties hereto have executed this
Agreement as of the date first above written.
Empire Gas Corporation SYN Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
________________________ ____________________________
Its President Title: _________________
Northwestern Growth Corporation
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________
Its President
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Exhibits to Management Agreement
Exhibit A Initial Business Plan (Sec. 2.01)
Exhibit B Initial Budget (Sec. 2.02)
Exhibit C Listing of overlapping market areas of
SYN (Synergy) and Empire