Buyout clause samples

OCIP Holding II LLC (“Holding II”), a Delaware limited liability company and a wholly owned subsidiary of OCI N.V., a Dutch public limited company (together with Holding II, “OCI,” except where the context requires that “OCI” refers only to OCI N.V.), is offering to purchase all of the outstanding common units representing limited partner interests (the “Units”) in OCI Partners LP, a Delaware limited partnership (“OCIP”), not currently held by OCI or its affiliates, at a price of $11.00 per Unit, net to the seller in cash, without interest, less any applicable withholding taxes (the “Offer Price”), upon the terms and subject to the conditions set forth in this Offer to Purchase, the related letter of transmittal and the related notice of guaranteed delivery enclosed with this Offer to Purchase, which, together with any amendments or supplements, collectively constitute the “Offer” described in this Offer to Purchase. On June1, 2018, the last trading day before OCI announced the offer, the closing price of the Units was $10.00 per Unit; therefore the offer price represents a premium of 10% over the closing price of the Units on the trading day prior to the announcement of the Offer and a premium of 16.4% over OCIP’s 90 trading day volume-weighted average Unit price. After the completion of the Offer and subject to the satisfaction or, to the extent permitted, waiver of certain conditions, OCI currently intends to purchase any and all outstanding Units not tendered pursuant to the Offer (other than any such Units held by OCI or its affiliates) (the “Buyout”) pursuant to Section15.1(a) of the First Amended and Restated Agreement of Limited Partnership of OCIP, as amended (the “Partnership Agreement”), at a price per unit equal to the Offer Price, such that upon completion of the Buyout, OCI and its affiliates will collectively beneficially own 100% of the outstanding Units. However, OCI may change its intent and there can be no assurance that OCI will consummate the Buyout. For example, OCI might complete the Offer, but decide not to pursue the Buyout if the Formula Price (as defined below) exceeds the Offer Price.

Yes, assuming that the Minimum Tender Condition is satisfied and the Offer is consummated, OCI currently intends to purchase all of the remaining Units not held by OCI or its affiliates (the “Buyout”) pursuant to Section15.1(a) of the First Amended and Restated Agreement of Limited Partnership of OCIP (the “Partnership Agreement”). However, OCI may change its intent and there can be no assurance that OCI will consummate the Buyout. After such purchase, OCIP will cease to be a public company, the registration of OCIP under the Securities Exchange Act of 1934, as amended, will be terminated, and Units will cease to be quoted on the New York Stock Exchange (the “NYSE”) and OCIP will not be required to file periodic reports with the SEC. In addition, if we waive the Minimum Tender Condition as described herein and consummate the Offer but do not consummate the Buyout, the Units could become ineligible to continue trading on the NYSE or another national securities exchange, and the more limited number of holders of Units could result in a lower liquidity and trading volume in the Units. If the Minimum Tender Condition is waived as described herein and OCI and its affiliates do not own sufficient Units for the consummation of the Buyout, then we may take additional actions in the future to seek to acquire additional Units.

Appraisal rights are not available in connection with the Offer or the Buyout. Unlike the stock of a corporation, the Delaware law governing limited partnerships does not provide for appraisal rights unless such rights are contained in the partnership agreement. The Partnership Agreement does not provide for any rights to appraisal. See “The Offer—Appraisal Rights; “Going-Private” Rules” beginning on page 36.

• the terms of the Offer, which is structured to be non-coercive to holders of Units and includes a condition that there be validly tendered sufficient Units such that, following the closing of the Offer, OCI and its affiliates own at least 78,297,832 Units, representing greater than 90% of the outstanding Units (referred to herein as the Minimum Tender Condition), and is being made directly to the holders of Units without being conditioned upon any requirement that the directors, or a conflicts committee, of OCIP recommend the Offer. The board of directors of OCI also noted that, assuming the Minimum Tender Condition is satisfied, that OCI and its affiliates will own more than 90% of the outstanding Units after the Offer is completed. On that basis, OCI will be entitled to and currently intends to consummate the Buyout, but OCI may change its intent and there can be no assurance that OCI will consummate the Buyout. The board of directors of OCI was aware of and considered the interests that certain executive officers and directors of OCI may have with respect to the Offer in addition to their interests as unitholders, as described in “—Interests of Certain Persons in the Offer and the Buyout” beginning on page 25.

The foregoing discussion summarizes the material factors considered by the board of directors of OCI in its consideration of the Offer and, if applicable, the subsequent Buyout. In view of the wide variety of factors considered by the board of directors of OCI, the amount of information considered and the complexity of these matters, the board of directors of OCI did not find it practicable to, and did not attempt to, rank, quantify, make specific assignments of, or otherwise assign relative weights to the specific factors considered in reaching its determination. In addition, individual members of the board of directors of OCI may have given different weights to different factors. The board of directors of OCI considered these factors as a whole, and in their totality considered them to be favorable to, and support, its determination.

OCI’s consideration of the factors described above reflects its assessment of the fairness of the Offer Price payable in the Offer and, if applicable, the Buyout to unaffiliated holders of Units (including holders of Units who tender their Units in the Offer as well as holders of Units who decline to tender their Units and whose Units are instead acquired through the Buyout, assuming the Minimum Tender Condition is satisfied) in relation to the going concern value of OCIP on a stand-alone basis. OCI implicitly considered the value of OCIP in a sale as a going concern by taking into account OCIP’s current and anticipated business, financial condition, results of operations, prospects and other forward-looking matters. OCI did not, however, explicitly calculate a stand-alone going concern value of OCIP because OCI believes that going concern value is not an appropriate method of determining the value of the Units for purposes of the Offer and the Buyout. In light of the fact that OCI already has, and will continue to have, control of OCIP, and that OCI remains unwilling to sell its Units, OCI does not believe that it would be appropriate for the Units held by the unaffiliated holders to be valued on a basis that includes a control premium.

OCIP does not as a matter of course make public any financial projections as to future performance, earnings or other results, and is especially wary of making projections for earnings periods due to the unpredictability of the underlying assumptions and estimates. However, the board of directors of OCI was aware of certain non-public financial projections at the time they evaluated the Offer and the Buyout. We have included below a summary of these projections to give OCIP unitholders access to certain non-public information that was considered by the board of directors of OCI in their evaluation of the Offer and the Buyout.

consummation of the Buyout, the interest of OCI and its affiliates in OCIP’s net income will increase to 100%, and OCI will be entitled to all other benefits resulting from OCI’s 100% ownership of OCIP, including all income generated by OCIP’s operations and any future increase in OCIP’s value. If the Offer is completed but not the Buyout, OCI will be entitled to similar benefits proportionate to its increased ownership of OCIP. Similarly, OCI will bear all of the risk of losses generated by OCIP’s operations and any decrease in the value of OCIP after the Offer and the Buyout. Upon consummation of the Buyout, OCIP will become a privately-held limited partnership. Accordingly, former holders of Units will not have the opportunity to participate in the earnings and growth of OCIP after the Offer and the Buyout. Similarly, former holders of Units will not face the risk of losses generated by OCIP’s operations or decline in the value of OCIP after the Offer and the Buyout. If the Buyout provided in the Partnership Agreement cannot be exercised after the Offer is completed, then the Units not tendered and accepted for purchase will remain outstanding and the holders of these Units will continue to participate in the earnings and growth of OCIP and will be subject to potential losses generated by OCIP’s future operations or a decline in the trading price of the Units.

Because OCI is an affiliate of OCIP, the Offer and the Buyout constitute a “going private” transaction for purposes of Rule 13e-3 under the Exchange Act. Rule 13e-3 requires, among other things, that certain financial information concerning OCIP and certain information relating to the fairness of the Offer and the Buyout and the consideration offered to minority holders of Units be filed with the SEC and disclosed to minority holders of Units prior to the consummation of the Buyout. OCI has provided such information in this Offer to Purchase.

OCI does not believe that any state takeover laws purport to apply to the Offer or the Buyout. Accordingly, OCI has not taken any action to comply with any state takeover statute or regulation. OCI reserves the right to challenge the applicability or validity of any state law purportedly applicable to the Offer or the Buyout, and nothing in this Offer to Purchase or any action taken in connection with the Offer or the Buyout is intended as a waiver of such right. If it is asserted that any state takeover statute is applicable to the Offer or the Buyout and if an appropriate court does not determine that it is inapplicable or invalid as applied to the Offer or the Buyout, OCI might be required to file certain information with, or to receive approvals from, the relevant state authorities, and OCI might be unable to accept for payment or pay for Units tendered pursuant to the Offer, or be delayed in consummating the Offer or the Buyout. In such case, OCI may not be obliged to accept for payment or pay for any Units tendered pursuant to the Offer.

• voting and support agreements, pursuant to which Elliott has locked-up an undisclosed amount of the Company’s outstanding common stock in favor of the Proposed Buyout. These provisions and agreements substantially and improperly limit the Board’s ability to investigate and pursue superior proposals and alternatives and, absent judicial intervention, virtually guarantee the consummation of the Proposed Buyout.

Gigamon for an unfair price; and (iv)permit Elliott to acquire Gigamon without Gigamon’s shareholders being fully informed of all material information relating to the Proposed Buyout. In furtherance of this plan and course of conduct, Defendants, and each of them, took the actions as set forth herein.

$ 165,000 $ 2,619,742 $ 12,000 $ 2,769,742 100.Finally, to help secure these benefits, the Board consented to and took part in the execution of voting and support agreements pursuant to which Elliott agreed to vote all shares of Company common stock that it owns in favor of the Proposed Buyout. Interestingly, and contrary to custom, Defendants do not appear to have identified precisely how much of Gigamon’s common stock is subject to these agreements.

(f) Early Buyout. After Seller has purchased an Early Buyout, Seller shall include a notation of such Early Buyout in the monthly report delivered to Buyer as set forth in Section13(d)(iv) hereof. All Mortgage Loans subject to an Agency Claim Process shall designate the Seller on the electronic submission to HUD as payee. Upon receipt of proceeds by Seller in Seller’s HUD designated account, Seller shall transfer funds into the Collection Account within [***], as more particularly set forth in Section5(b) hereof.

3. See our last comment above. Where appropriate throughout the Offer to Purchase, clarify how the Formula Price in the Buyout would be determined if the units no longer trade on the NYSE after the Offer and there were no affiliated purchases during the 90-day period prior to the Buyout. Response: We acknowledge the Staff’s comment and have provided updated disclosure on page 2 of Amendment No.3.

12. Explain why OCI is opining on the fairness of the Buyout, while expressly stating it may not undertake it. Consider whether this confuses shareholders about whether those who do not tender will be cashed out in a second-step Buyout. Response: We acknowledge the Staff’s comment and refer them to our revised disclosure on pages 2, 3 and 8 of Amendment No.3 where OCI expressly states that it will consummate the Buyout, subject to the conditions thereof.

assumptions underlying these analyses. Without this information, as described below, Essendant’s stockholders are unable to fully understand these analyses and, thus, are unable to determine what weight, if any, to place on Citi’s fairness opinion in determining whether to vote their shares in favor of the Proposed Buyout. This omitted information, if disclosed, would significantly alter the total mix of information available to Essendant’s common stockholders.

Proposed Buyout. Accordingly, Plaintiff seeks injunctive and other equitable relief to prevent the irreparable injury that the Company’s stockholders will continue to suffer absent judicial intervention.

The foregoing summary of material financial analyses performed by Baird does not purport to be a complete description of the analyses or data presented by Baird to the Offeror Special Committee. In connection with the review of the Offer and the Buyout by the Offeror Special Committee, Baird performed a variety of financial and comparative analyses, which are not necessarily susceptible to partial analysis or summary description. Selecting portions of the analyses or of the summary described above, without considering the analyses as a whole, could create an incomplete view of the analyses provided to the Offeror Special Committee. In addition, the probability of any assumption occurring in comparison to any other assumption is highly subjective and Baird formed no opinion as to such probabilities. The range of valuations resulting from any particular analysis described above should therefore not be taken to be Baird’s view of the value of the Partnership or the Offeror. No company or partnership used in the above analyses is directly comparable to the Partnership or the Offeror, and no precedent transaction used is directly comparable to the Offer and the Buyout. Further, Baird’s analyses involve complex considerations and judgments concerning financial and operating characteristics and other factors that could affect the acquisition, public trading or other values of the companies or partnerships, or transactions used, including judgments and assumptions with regard to industry performance, general business, economic, market and financial conditions and other matters, many of which are beyond the control of the Partnership or the Offeror.

At the Acceptance Time, the Offeror will have sufficient cash and marketable securities on hand to pay the Offer Price for all of the Units tendered pursuant to the Offer, and on the Closing Date, the Offeror will have sufficient cash and marketable securities on hand to pay the Buyout Price for all of the Units purchased pursuant to the Buyout. However, in order to avoid liquidating marketable securities on hand at potentially unfavorable prices, the Offeror may choose to fund a portion of the Buyout Price with proceeds from the $200 million senior secured revolving credit facility available under the Credit Agreement, dated as of August14, 2013, by and among Center Point Terminal Company, LLC (“Center Point”), a wholly owned subsidiary of the Partnership, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as administrative agent, and the lenders party thereto (the “Credit Agreement”).

The Partnership Agreement specifically grants to the General Partner, if the General Partner and its affiliates hold more than 90% of the total limited partner interests of any class then outstanding, the right to purchase all such limited partner interests then outstanding held by persons other than the General Partner and its Affiliates, at the greater of (x)the current market price and (y)the highest price paid by the General Partner or any of its affiliates for limited partner interests of that class purchased during the 90-day period before exercise, all as described in the Partnership Agreement. The exercise of the right to purchase, which we refer to as the Buyout, is not subject to contractual or other fiduciary standards upon the General Partner (other than as is consistent with the implied contractual covenant of good faith and fair dealing) and can be exercised in the General Partner’s discretion. The Buyout (which is assignable to affiliates of the General Partner) is at the heart of the Offer. Because of OCI’s ownership of approximately 88.25% of the Units, OCI is seeking a minimum of approximately 1.75% of the outstanding Units in the Offer in order to reach the 90% threshold to be able to exercise the Buyout. A recommendation by the Conflicts Committee (as defined below) to holders of Units to tender, or not to tender, into the Offer or an election by the Conflicts Committee not to express a view on the Offer, is not a condition to the Offer or the Buyout. Moreover, although OCI has indicated an intent to exercise the call right upon consummation of the Tender Offer, OCI is not contractually committed to do so.

The Buyout Right. Once OCI owns 90% of the outstanding Units, OCI will be able to consummate the Buyout at a time of OCI’s choosing. OCI needs to acquire in the market only 1,523,692 Units (14.9% of the public float) to be able to consummate the Buyout. OCI could consummate the Buyout at a future date that could result in a price lower than the Offer Price.