NATIONAL PROPANE PARTNERS LP
424B4, 1996-06-27
RETAIL STORES, NEC
Previous: BRE PROPERTIES INC /MD/, 10-Q/A, 1996-06-27
Next: ALGIERS BANCORP INC, 10QSB, 1996-06-27





<PAGE>

<PAGE>
PROSPECTUS
                             6,190,476 COMMON UNITS
                        NATIONAL PROPANE PARTNERS, L.P.
                     REPRESENTING LIMITED PARTNER INTERESTS
                            ------------------------

     The Common Units ('Common Units') offered hereby (the 'Offering') represent
limited partner interests in National Propane Partners, L.P., a Delaware limited
partnership (the 'Partnership'). The Partnership was recently formed to acquire,
own and operate the propane business and assets of its managing general partner,
National  Propane  Corporation  ('National  Propane'  or  the  'Managing General
Partner'), which the Partnership believes  is the fifth largest retail  marketer
of  propane in the  United States. National Propane  is an indirect wholly-owned
subsidiary of Triarc Companies, Inc. ('Triarc').
 
     The Partnership will distribute to its partners, on a quarterly basis,  all
of  its Available  Cash, which is  generally all  cash on hand  at the  end of a
quarter, as  adjusted  for reserves.  The  Managing General  Partner  has  broad
discretion   in  making  cash  disbursements   and  establishing  reserves.  The
Partnership intends,  to  the extent  there  is sufficient  Available  Cash,  to
distribute  to each holder of  Common Units at least  $0.525 per Common Unit per
quarter (the 'Minimum Quarterly  Distribution') or $2.10 per  Common Unit on  an
annualized basis.
                            ------------------------
 
     LIMITED  PARTNER INTERESTS ARE INHERENTLY DIFFERENT FROM CAPITAL STOCK OF A
CORPORATION. PURCHASERS  OF COMMON  UNITS SHOULD  CONSIDER EACH  OF THE  FACTORS
DESCRIBED UNDER 'RISK FACTORS,' STARTING ON PAGE 35, IN EVALUATING AN INVESTMENT
IN THE PARTNERSHIP, INCLUDING BUT NOT LIMITED TO, THE FOLLOWING:
 
 CASH  DISTRIBUTIONS  ARE  NOT  GUARANTEED, WILL  DEPEND  ON  FUTURE PARTNERSHIP
 OPERATING PERFORMANCE  AND  WILL  BE  AFFECTED  BY  THE  FUNDING  OF  RESERVES,
 OPERATING  AND CAPITAL EXPENDITURES AND OTHER  MATTERS WITHIN THE DISCRETION OF
 THE MANAGING  GENERAL  PARTNER, AS  WELL  AS REQUIRED  INTEREST  AND  PRINCIPAL
 PAYMENTS  ON THE  PARTNERSHIP'S DEBT. PRO  FORMA AVAILABLE  CASH FROM OPERATING
 SURPLUS (AS DEFINED IN THE GLOSSARY) GENERATED DURING 1994 AND 1995 WOULD  HAVE
 BEEN  SUFFICIENT  TO COVER  THE MINIMUM  QUARTERLY DISTRIBUTION  ON ALL  OF THE
 OUTSTANDING COMMON UNITS AND  THE RELATED DISTRIBUTION  ON THE GENERAL  PARTNER
 INTERESTS  (AS DEFINED  IN THE GLOSSARY),  BUT WOULD HAVE  BEEN INSUFFICIENT BY
 APPROXIMATELY $0.8  MILLION AND  $5.9 MILLION  TO COVER  THE MINIMUM  QUARTERLY
 DISTRIBUTION  ON THE  SUBORDINATED UNITS (AS  DEFINED IN THE  GLOSSARY) AND THE
 RELATED DISTRIBUTION  ON  THE  GENERAL  PARTNER INTERESTS  IN  1994  AND  1995,
 RESPECTIVELY.
 
                                                     (cover continued on page 3)
                            ------------------------
 
     Prior to the Offering there has been no public market for the Common Units.
See 'Underwriting' for a discussion of the factors considered in determining the
initial public offering price.
 
     The  Common Units  have been  approved for  listing on  the New  York Stock
Exchange under the symbol 'NPL' upon notice of issuance.
                            ------------------------
 
THESE SECURITIES HAVE  NOT BEEN APPROVED  OR DISAPPROVED BY  THE SECURITIES  AND
   EXCHANGE  COMMISSION  OR  ANY  STATE SECURITIES  COMMISSION,  NOR  HAS THE
     SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES  COMMISSION
       PASSED  UPON  THE ACCURACY  OR  ADEQUACY OF  THIS  PROSPECTUS. ANY
                 REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
<TABLE>
<CAPTION>
                                                       PRICE TO              UNDERWRITING DISCOUNTS             PROCEEDS TO
                                                        PUBLIC                 AND COMMISSIONS(1)             PARTNERSHIP(2)
<S>                                           <C>                          <C>                          <C>
Per Common Unit.............................            $21.00                       $1.365                       $19.635
Total(3)....................................         $129,999,996                  $8,450,000                  $121,549,996
</TABLE>
 
(1) The Partnership has  agreed to  indemnify the  several Underwriters  against
    certain liabilities under the Securities Act of 1933. See 'Underwriting.'
 
(2) Before  deducting estimated expenses and  an investment banking advisory fee
    payable by the Partnership  in   an   aggregate  amount of   $3,350,000. See
    'Underwriting.'
 
(3) The  Partnership has  granted the  several Underwriters  a 30-day  option to
    purchase up to an additional 928,571 Common Units to cover  over-allotments.
    If  all  such  Common  Units  are  purchased,  the  total  Price  to Public,
    Underwriting Discounts and Commissions and  Proceeds to Partnership will  be
    $149,499,987, $9,717,499 and $139,782,488, respectively. See 'Underwriting.'
                            ------------------------
 
     The  Common Units are offered by the several Underwriters, subject to prior
sale, when, as and if issued to and
accepted by them, subject  to approval of certain  legal matters by counsel  for
the  Underwriters. The  Underwriters reserve  the right  to withdraw,  cancel or
modify such offer and to reject orders in whole or in part. It is expected  that
delivery of the Common Units will be made in New York, New York on or about July
2, 1996.
                            ------------------------
 
MERRILL LYNCH & CO.

            DONALDSON, LUFKIN & JENRETTE
                  SECURITIES  CORPORATION
 
                        JANNEY MONTGOMERY SCOTT INC.
 
                                  RAUSCHER PIERCE REFSNES, INC.
 
                                            THE ROBINSON-HUMPHREY COMPANY, INC.
                            ------------------------
 
                 The date of this Prospectus is June 26, 1996.
 


<PAGE>

<PAGE>


[Photograph   of  one  of  the  Partnership's  employees  delivering propane  to
customers,  with  a propane delivery truck in the middleground; and a photograph
of one of the Partnership's delivery trucks on a road in the  distance.]






     IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON UNITS AT
A  LEVEL  ABOVE THAT  WHICH MIGHT  OTHERWISE  PREVAIL IN  THE OPEN  MARKET. SUCH
TRANSACTIONS  MAY  BE  EFFECTED  ON  THE   NEW  YORK  STOCK  EXCHANGE,  IN   THE
OVER-THE-COUNTER  MARKET OR  OTHERWISE. SUCH  STABILIZING, IF  COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
 
                                       2



<PAGE>

<PAGE>
(cover continued from page 1)
 
 APPROXIMATELY  $5.5 MILLION OF  THE PARTNERSHIP'S ANNUAL  CASH RECEIPTS WILL BE
 INTEREST PAYMENTS  FROM  TRIARC UNDER  A  $40.7  MILLION LOAN  TO  TRIARC  (THE
 'PARTNERSHIP LOAN'). ON A PRO FORMA BASIS, SUCH AMOUNT REPRESENTS APPROXIMATELY
 31%  OF  THE  PARTNERSHIP'S  AVAILABLE CASH  FROM  OPERATING  SURPLUS  IN 1995.
 CONSEQUENTLY, TRIARC'S FAILURE TO  MAKE INTEREST OR  PRINCIPAL PAYMENTS ON  THE
 PARTNERSHIP  LOAN WOULD ADVERSELY AFFECT THE ABILITY OF THE PARTNERSHIP TO MAKE
 THE MINIMUM QUARTERLY DISTRIBUTION TO ALL UNITHOLDERS. THE PARTNERSHIP LOAN  IS
 RECOURSE TO TRIARC AND IS SECURED BY A PLEDGE BY TRIARC OF ALL OF THE SHARES OF
 CAPITAL  STOCK OF THE  MANAGING GENERAL PARTNER  OWNED BY TRIARC (APPROXIMATELY
 75.7% OF THE  MANAGING GENERAL PARTNER'S  OUTSTANDING CAPITAL STOCK  AS OF  THE
 DATE  OF THIS PROSPECTUS).  SEE 'CASH DISTRIBUTION  POLICY -- PARTNERSHIP LOAN'
 AND 'CERTAIN INFORMATION REGARDING TRIARC.'
 
 THE PARTNERSHIP'S PRO  FORMA TOTAL INDEBTEDNESS  AS A PERCENTAGE  OF ITS  TOTAL
 CAPITALIZATION  WOULD HAVE  BEEN APPROXIMATELY  79.4% AT  MARCH 31,  1996. AS A
 RESULT, THE PARTNERSHIP WILL HAVE INDEBTEDNESS THAT IS SUBSTANTIAL IN  RELATION
 TO  ITS PARTNERS' CAPITAL. FURTHERMORE, THE  MANAGING GENERAL PARTNER MAY CAUSE
 THE PARTNERSHIP  TO INCUR  ADDITIONAL INDEBTEDNESS,  INCLUDING BORROWINGS  THAT
 HAVE  THE PURPOSE OR EFFECT OF ENABLING THE MANAGING GENERAL PARTNER TO RECEIVE
 DISTRIBUTIONS OR HASTENING  THE CONVERSION  OF SUBORDINATED  UNITS INTO  COMMON
 UNITS.
 
 THE  $125 MILLION FIRST MORTGAGE  NOTES (AS DEFINED BELOW)  AND THE $55 MILLION
 BANK CREDIT  FACILITY  (AS  DEFINED  BELOW)  WILL  BE  SECURED  BY  A  LIEN  ON
 SUBSTANTIALLY  ALL  OF  THE ASSETS  OF  THE OPERATING  PARTNERSHIP  (AS DEFINED
 BELOW). IN  THE CASE  OF  A CONTINUING  DEFAULT  BY THE  OPERATING  PARTNERSHIP
 THEREUNDER,  THE LENDERS  WOULD HAVE  THE RIGHT  TO FORECLOSE  ON THE OPERATING
 PARTNERSHIP'S ASSETS,  WHICH  WOULD  HAVE  A MATERIAL  ADVERSE  EFFECT  ON  THE
 PARTNERSHIP.
 
 FUTURE  PARTNERSHIP PERFORMANCE WILL DEPEND UPON THE SUCCESS OF THE PARTNERSHIP
 IN MAXIMIZING PROFITS FROM PROPANE SALES. PROPANE SALES ARE AFFECTED BY,  AMONG
 OTHER  THINGS,  WEATHER  PATTERNS, PRODUCT  PRICES  AND  COMPETITION, INCLUDING
 COMPETITION FROM OTHER ENERGY SOURCES.
 
 HOLDERS OF COMMON UNITS WILL HAVE  ONLY LIMITED VOTING RIGHTS AND THE  MANAGING
 GENERAL  PARTNER WILL  MANAGE AND CONTROL  THE PARTNERSHIP.  SUBJECT TO CERTAIN
 CONDITIONS, THE MANAGING GENERAL PARTNER MAY BE REMOVED ONLY UPON THE  APPROVAL
 OF  THE HOLDERS OF AT  LEAST 66-2/3% OF THE  OUTSTANDING UNITS (INCLUDING THOSE
 UNITS HELD BY THE MANAGING GENERAL PARTNER AND ITS AFFILIATES). IF THE MANAGING
 GENERAL PARTNER IS REMOVED OTHER THAN  FOR CAUSE, THE SUBORDINATION PERIOD  (AS
 DEFINED  IN THE  GLOSSARY) WILL  END, ALL ARREARAGES  ON THE  COMMON UNITS WILL
 TERMINATE AND ANY OUTSTANDING SUBORDINATED UNITS WILL CONVERT INTO COMMON UNITS
 AND THE GENERAL PARTNERS (AS  DEFINED IN THE GLOSSARY)  WILL HAVE THE RIGHT  TO
 CONVERT  THE  GENERAL PARTNER  INTERESTS  INTO COMMON  UNITS  OR TO  RECEIVE IN
 EXCHANGE FOR SUCH INTERESTS, A CASH PAYMENT  EQUAL TO THE FAIR MARKET VALUE  OF
 SUCH INTERESTS.
 
 THE  TAX CONSEQUENCES OF  AN INVESTMENT IN  THE PARTNERSHIP ARE  COMPLEX. IT IS
 ANTICIPATED  THAT  THROUGH   2000,  A  UNITHOLDER   WILL  RECEIVE   SUBSTANTIAL
 DISTRIBUTIONS  THAT WILL REDUCE  SUCH HOLDER'S TAX BASIS,  WITH THE RESULT THAT
 SUCH HOLDER MAY RECOGNIZE SUBSTANTIAL GAIN  AND A RELATED INCOME TAX  LIABILITY
 UPON A SUBSEQUENT SALE OF SUCH HOLDER'S UNITS.
 
 PURCHASERS  OF  COMMON  UNITS IN  THE  OFFERING WILL  EXPERIENCE  IMMEDIATE AND
 SUBSTANTIAL DILUTION IN NET TANGIBLE BOOK VALUE OF $19.83 PER COMMON UNIT  FROM
 THE INITIAL PUBLIC OFFERING PRICE, THE MANAGING GENERAL PARTNER WILL EXPERIENCE
 AN  INCREASE IN NET TANGIBLE BOOK VALUE OF $22.27 PER UNIT AND EACH COMMON UNIT
 WILL HAVE A PRO FORMA NET TANGIBLE BOOK VALUE OF $1.17.
 
 CONFLICTS OF INTEREST MAY  ARISE BETWEEN THE MANAGING  GENERAL PARTNER AND  ITS
 AFFILIATES,  ON THE  ONE HAND,  AND THE PARTNERSHIP  AND THE  HOLDERS OF COMMON
 UNITS, ON THE OTHER. THE  PARTNERSHIP AGREEMENT CONTAINS PROVISIONS THAT  ALLOW
 THE  MANAGING GENERAL PARTNER TO TAKE INTO  ACCOUNT THE INTERESTS OF PARTIES IN
 ADDITION TO  THE  PARTNERSHIP  IN  RESOLVING  CONFLICTS  OF  INTEREST,  THEREBY
 LIMITING  THE MANAGING GENERAL PARTNER'S FIDUCIARY  DUTY TO THE UNITHOLDERS, AS
 WELL AS PROVISIONS THAT MAY RESTRICT THE REMEDIES AVAILABLE TO UNITHOLDERS  FOR
 ACTIONS  THAT MIGHT, WITHOUT SUCH LIMITATIONS, CONSTITUTE BREACHES OF FIDUCIARY
 DUTY. HOLDERS OF COMMON UNITS ARE  DEEMED TO HAVE CONSENTED TO CERTAIN  ACTIONS
 AND  CONFLICTS OF INTEREST THAT MIGHT OTHERWISE BE DEEMED A BREACH OF FIDUCIARY
 OR OTHER DUTIES UNDER APPLICABLE STATE LAW. THE VALIDITY AND ENFORCEABILITY  OF
 THESE TYPES OF PROVISIONS UNDER DELAWARE LAW ARE UNCERTAIN.
 
 PRIOR  TO MAKING  ANY DISTRIBUTION  ON THE  COMMON UNITS,  THE PARTNERSHIP WILL
 REIMBURSE THE MANAGING GENERAL PARTNER AND ITS AFFILIATES (INCLUDING TRIARC) AT
 COST FOR ALL EXPENSES  INCURRED ON BEHALF  OF THE PARTNERSHIP.  ON A PRO  FORMA
 BASIS,  APPROXIMATELY $56.8 MILLION  OF EXPENSES WOULD  HAVE BEEN REIMBURSED BY
 THE PARTNERSHIP TO  THE MANAGING  GENERAL PARTNER  IN 1995.  AFFILIATES OF  THE
 MANAGING  GENERAL PARTNER (INCLUDING TRIARC) MAY PROVIDE CERTAIN ADMINISTRATIVE
 SERVICES FOR THE MANAGING GENERAL PARTNER ON BEHALF OF THE PARTNERSHIP AND WILL
 BE REIMBURSED FOR ALL EXPENSES  INCURRED IN CONNECTION THEREWITH. IN  ADDITION,
 THE MANAGING GENERAL PARTNER AND ITS AFFILIATES MAY PROVIDE ADDITIONAL SERVICES
 TO  THE PARTNERSHIP, FOR WHICH THE  PARTNERSHIP WILL BE CHARGED REASONABLE FEES
 AS DETERMINED BY THE MANAGING GENERAL PARTNER.
 
     The Common Units offered in the Offering will represent an aggregate  55.4%
limited  partner interest  in the  Partnership and  National Propane,  L.P., the
Partnership's subsidiary operating partnership (the 'Operating Partnership'), on
a combined basis (58.8% if the Underwriters' over-
 
                                       3
 


<PAGE>

<PAGE>
allotment option is exercised  in full). The General  Partners will own  General
Partner  Interests representing  an aggregate 4%  unsubordinated general partner
interest in the Partnership and the  Operating Partnership on a combined  basis.
In  addition, the Managing General Partner will own 4,533,638 Subordinated Units
representing an aggregate  40.6% subordinated  general partner  interest in  the
Partnership  and the  Operating Partnership  on a  combined basis  (37.5% if the
Underwriters' over-allotment option  is exercised  in full).  All references  in
this  Prospectus to the General  Partner Interests or to  distributions of 4% of
Available Cash  constitute references  to the  amount of  the General  Partners'
combined  percentage interest in  the Partnership and  the Operating Partnership
exclusive of  any rights  as holder  of Common  Units or  Subordinated Units  or
rights  to receive  Incentive Distributions (as  defined in  the Glossary). Upon
expiration  of  the  Subordination  Period,  Subordinated  Units  will   convert
automatically  into Common  Units on  a one-for-one  basis, and  will thereafter
participate pro rata with the other  Common Units in distributions of  Available
Cash,  thereby  increasing the  amount of  Available Cash  required to  make the
Minimum Quarterly Distribution on the Common Units. Under certain circumstances,
up to 50% of the Subordinated Units  may convert into Common Units prior to  the
expiration of the Subordination Period. All 4,533,638 Subordinated Units held by
the Managing General Partner and its Affiliates (as defined in the Glossary) are
general  partner  interests in  the Partnership  (although the  Managing General
Partner and its  Affiliates may,  at their election,  convert such  Subordinated
Units into limited partner interests at any time) and all Common Units issued in
the Offering or issued upon the conversion of the Subordinated Units are limited
partner  interests. The Common Units and the Subordinated Units are collectively
referred to  herein  as  the  'Units.'  Holders of  the  Common  Units  and  the
Subordinated Units are collectively referred to herein as 'Unitholders.'
 
     To  enhance  the  ability  of the  Partnership  to  distribute  the Minimum
Quarterly Distribution  on the  Common Units  during the  Subordination  Period,
which  will generally  extend at  least through  June 30,  2001, each  holder of
Common Units will be entitled to receive the Minimum Quarterly Distribution plus
any arrearages thereon ('Common Unit  Arrearages') before any distributions  are
made on the outstanding Subordinated Units.
 
     The  sale of the Common Units offered  in the Offering is subject to, among
other things, the concurrent completion of  a private placement by the  Managing
General  Partner  of  $125 million  aggregate  principal amount  of  8.54% First
Mortgage Notes due  June 30, 2010  (the 'First Mortgage  Notes'). The  Operating
Partnership  will assume  the Managing  General Partner's  obligations under the
First Mortgage Notes in connection with  the conveyance by the General  Partners
of  substantially all of their assets (which assets will not include an existing
intercompany note from Triarc, approximately  $59.3 million of the net  proceeds
from  the issuance of the  First Mortgage Notes and  certain other assets of the
General Partners) to the Operating Partnership. The First Mortgage Notes will be
secured by  a mortgage  on substantially  all  of the  assets of  the  Operating
Partnership. See 'The Transactions' and 'Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Description of Indebtedness.'
 
     The  Partnership will furnish or make available to record holders of Common
Units (i)  within  120  days  after  the  close  of  each  fiscal  year  of  the
Partnership,  an  annual report  containing audited  financial statements  and a
report thereon by its  independent public accountants, and  (ii) within 90  days
after  the  close of  each fiscal  quarter  (other than  the fourth  quarter), a
quarterly  report  containing  unaudited  summary  financial  information.   The
Partnership  will also  furnish each Unitholder  with tax  information within 90
days after the close of each calendar year.
 
                                       4



<PAGE>

<PAGE>
                               TABLE OF CONTENTS
 
<TABLE>
<S>                                                          <C>
PROSPECTUS SUMMARY........................................     6
    National Propane Partners, L.P........................     6
    Summary Historical and Pro Forma Consolidated
      Financial and Operating Data........................    23
    The Offering..........................................    26
    Summary of Tax Considerations.........................    32
RISK FACTORS..............................................    35
    Risks Inherent in the Partnership's Business..........    35
    Risks Inherent in an Investment in the Partnership....    37
    Conflicts of Interest and Fiduciary Responsibility....    44
    Tax Risks.............................................    46
THE TRANSACTIONS..........................................    50
USE OF PROCEEDS...........................................    51
CAPITALIZATION............................................    52
DILUTION..................................................    53
CASH DISTRIBUTION POLICY..................................    54
    General...............................................    54
    Quarterly Distributions of Available Cash.............    55
    Distributions from Operating Surplus during
      Subordination Period................................    55
    Distributions from Operating Surplus after
      Subordination Period................................    57
    Incentive Distributions -- Hypothetical Annualized
      Yield...............................................    57
    Distributions from Capital Surplus....................    58
    Adjustment of Minimum Quarterly Distribution and
      Target Distribution Levels..........................    59
    Distributions of Cash Upon Liquidation................    59
    Cash Available for Distribution.......................    61
    Partnership Loan......................................    63
CERTAIN INFORMATION REGARDING TRIARC......................    66
SELECTED HISTORICAL AND PRO FORMA CONSOLIDATED FINANCIAL
  AND OPERATING DATA......................................    73
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
  CONDITION AND RESULTS OF OPERATIONS.....................    75
    General...............................................    75
    Results of Operations.................................    76
    Liquidity and Capital Resources.......................    79
    Initial Public Offering of Common Units and Other
      Transactions........................................    81
    Contingencies.........................................    82
    Description of Indebtedness...........................    83
    Effects of Inflation..................................    86
    Recently Issued Accounting Pronouncements.............    87
BUSINESS AND PROPERTIES...................................    88
    General...............................................    88
    Operating Strategy....................................    89
    Strategies for Growth.................................    90
    Industry Background...................................    91
    Products, Services and Marketing......................    92
    Propane Supply and Storage............................    93
    Pricing Policy........................................    95
    Competition...........................................    95
    Properties............................................    96
    Trademarks and Tradenames.............................    97
    Government Regulation.................................    97
    Employees.............................................    99
    Litigation and Contingent Liabilities.................    99
    Transfer of the Partnership Assets....................    99
MANAGEMENT................................................   101
    Partnership Management................................   101
    Directors and Executive Officers of the Managing
      General Partner.....................................   102
    Reimbursement of Expenses of the Managing General
      Partner.............................................   103
    Executive Compensation................................   103
    Cash Incentive Plans..................................   105
    Triarc's 1993 Equity Participation Plan...............   106
    Unit Option Plan......................................   107
    Compensation of Directors.............................   109
    Employment Arrangements with Executive Officers.......   109
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
  MANAGEMENT..............................................   111
    Ownership of Triarc Common Stock by the Directors and
      Executive Officers of the Managing General
      Partner.............................................   111
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............   112
    Rights of the General Partners........................   112
    Transactions Involving Triarc and its Affiliates......   112
    Partnership Note......................................   113
CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITY........   113
    Conflicts of Interest.................................   113
    Fiduciary Duties of the General Partners..............   117
DESCRIPTION OF THE COMMON UNITS...........................   119
    The Units.............................................   119
    Transfer Agent and Registrar..........................   119
    Transfer of Common Units..............................   119
THE PARTNERSHIP AGREEMENT.................................   121
    Organization..........................................   121
    Special General Partner...............................   121
    Purpose...............................................   122
    Capital Contributions.................................   122
    Power of Attorney.....................................   122
    Limited Liability.....................................   122
    Issuance of Additional Securities.....................   123
    Amendment of Partnership Agreement....................   124
    Merger, Sale or Other Disposition of Assets...........   126
    Termination and Dissolution...........................   126
    Liquidation and Distribution of Proceeds..............   126
    Withdrawal or Removal of the General Partners.........   127
    Transfer of General Partners' Interests and Right to
      Receive Incentive Distributions and Conversion of
      Units held by the Managing General Partner into
      Limited Partner Interests...........................   128
    Limited Call Right....................................   129
    Meetings; Voting......................................   129
    Status as Limited Partner or Assignee.................   130
    Non-citizen Assignees; Redemption.....................   130
    Indemnification.......................................   130
    Books and Reports.....................................   131
    Right to Inspect Partnership Books and Records........   131
    Reimbursement for Services............................   131
    Change of Management Provisions.......................   132
    Registration Rights...................................   132
UNITS ELIGIBLE FOR FUTURE SALE............................   132
TAX CONSIDERATIONS........................................   133
    Legal Opinions and Advice.............................   134
    Tax Rates and Changes in Federal Income Tax Laws......   135
    Partnership Status....................................   135
    Limited Partner Status................................   137
    Tax Consequences of Unit Ownership....................   137
    Allocation of Partnership Income, Gain, Loss, and
      Deduction...........................................   139
    Tax Treatment of Operations...........................   140
    Disposition of Common Units...........................   143
    Uniformity of Units...................................   145
    Administrative Matters................................   146
    State, Local and Other Tax Considerations.............   149
INVESTMENT IN THE PARTNERSHIP BY EMPLOYEE BENEFIT PLANS...   150
UNDERWRITING..............................................   151
LEGAL MATTERS.............................................   153
EXPERTS...................................................   153
ADDITIONAL INFORMATION....................................   154
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS................   F-1
Appendix A -- Form of Amended and Restated Agreement of
  Limited Partnership of National Propane Partners,
  L.P.....................................................   A-1
Appendix B -- Form of Application for Transfer of Common
  Units...................................................   B-1
Appendix C -- Glossary of Certain Terms...................   C-1
</TABLE>
 
                                       5



<PAGE>

<PAGE>
                               PROSPECTUS SUMMARY
 
     The  following summary  is qualified in  its entirety by  the more detailed
information and historical and pro  forma financial data appearing elsewhere  in
this  Prospectus  and  should  be  read  only  in  conjunction  with  the entire
Prospectus. Unless  otherwise  specified,  the information  in  this  Prospectus
assumes that the Underwriters' over-allotment option is not exercised. Except as
the  context otherwise requires, references to  or descriptions of operations of
the Partnership  include the  operations of  the Operating  Partnership and  any
other  subsidiary operating partnership or corporation and the operations of the
Partnership's predecessor, National Propane. For  ease of reference, a  glossary
of  certain terms  used in  this Prospectus  is included  as Appendix  C to this
Prospectus. Capitalized terms  not otherwise  defined herein  have the  meanings
given in the glossary.
 
                        NATIONAL PROPANE PARTNERS, L.P.
 
     The Partnership, a Delaware limited partnership recently formed to acquire,
own  and  operate  the  business  and assets  of  National  Propane,  is engaged
primarily in (i) the retail marketing of propane to residential, commercial  and
industrial,  and agricultural customers and to dealers (located primarily in the
Northeast) that resell propane to residential and commercial customers and  (ii)
the  retail marketing of propane-related  supplies and equipment, including home
and commercial  appliances. The  Partnership believes  it is  the fifth  largest
retail  marketer of propane in  terms of volume in  the United States, supplying
approximately 250,000 active retail and wholesale customers in 24 states through
its 165 service centers located in  23 states. The Partnership's operations  are
concentrated  in the Midwest, Northeast, Southeast  and Southwest regions of the
United  States.  The  retail  propane  sales  volume  of  the  Partnership   was
approximately  150 million gallons in 1995.  In 1995, approximately 48.6% of the
Partnership's retail sales  volume was  to residential customers,  34.2% was  to
commercial  and industrial  customers, 6.3%  was to  agricultural customers, and
10.9% was  to dealers.  Sales to  residential customers  in 1995  accounted  for
approximately 64% of the Partnership's gross profit on propane sales, reflecting
the higher margin nature of this segment of the market. Approximately 90% of the
tanks used by the Partnership's retail customers are owned by the Partnership.
 
     National  Propane was incorporated in 1953  under the name Conservative Gas
Corporation. In April 1993, there was a  change of control of the parent of  the
Partnership  (the 'Acquisition').  Since the Acquisition,  the Partnership's new
management team, headed by  Ronald D. Paliughi, who  became President and  Chief
Executive  Officer  of  National  Propane  in  April  1993,  has  implemented an
operating plan designed to make  the Partnership more efficient, profitable  and
competitive.
 
     Since  the Acquisition, the Partnership's  management has: (i) consolidated
nine separately branded businesses  into a single company  with a new,  national
brand  and  logo; (ii)  consolidated eight  regional  offices into  one national
headquarters;  (iii)  installed   the  Partnership's   first  system-wide   data
processing   system;  (iv)   implemented  system-wide   pricing,  marketing  and
purchasing strategies, thereby reducing the cost duplication and purchasing  and
pricing  inefficiencies associated with the Partnership's formerly decentralized
structure; and (v) centralized  and standardized accounting, administrative  and
other  corporate services. As a result of these initiatives, the Partnership has
become more efficient  and competitive,  and believes  it is  now positioned  to
capitalize  on opportunities  for business  growth, both  internally and through
acquisitions.
 
     Although management has focused primarily on implementing the new operating
plan, the Partnership has acquired five propane businesses since November  1993,
resulting  in an increase in volume  sales of approximately 13.4 million gallons
annually. Four  of these  acquired businesses  operate in  the Midwest  and  one
operates in the Southwest.
 
     The  Partnership believes that its competitive strengths include: (i) gross
profit and operating margins  that it believes  to be among  the highest of  the
major   retail  propane  companies  whose   financial  statements  are  publicly
available; (ii) the concentration of its  operations in colder regions (such  as
the upper Midwest and Northeast), high margin regions (such as the Northeast and
Florida),  and regions experiencing  population growth (such  as Florida and the
Southwest); (iii)  an  experienced  management team;  (iv)  a  well-trained  and
motivated  work force; and (v) an  effective pricing management system. However,
the propane  industry is  highly  competitive and  includes  a number  of  large
national  firms  that may  have greater  financial or  other resources  or lower
operating costs than the Partnership.
 
                                       6
 


<PAGE>

<PAGE>
BUSINESS STRATEGY
 
     The Partnership's  business strategy  is to  (i) increase  its  efficiency,
profitability  and competitiveness  by building  on the  efforts it  has already
undertaken to  improve  pricing  management, marketing  and  purchasing  and  to
further  consolidate its operations  and (ii) increase  its market share through
strategic acquisitions and internal growth.
 
     Key  elements   of  this   strategy  include   (i)  continuing   with   the
implementation  of centralized price monitoring, (ii) strengthening its image as
a reliable, full service, nationwide  propane supplier, (iii) further  improving
its  propane purchasing  and storage, thereby  making more efficient  use of its
system-wide storage  capacity and  (iv)  further consolidating  its  operations,
where  appropriate. In addition,  because the retail  propane industry is mature
and overall demand  for propane  is expected to  involve little  growth for  the
foreseeable  future, acquisitions are expected to be an important element of the
Partnership's business strategy. The Partnership intends to take two  approaches
to  acquisitions:  (i)  primarily  to  build on  its  broad  geographic  base by
acquiring smaller, independent competitors that operate within the Partnership's
existing  geographic  areas  and  incorporating  them  into  the   Partnership's
distribution  network and  (ii) to  acquire propane  businesses in  areas in the
United States outside of its current geographic base where it believes there  is
growth  potential  and  where an  attractive  return  on its  investment  can be
achieved. The Partnership recently entered into a letter of intent to acquire  a
propane  business for $0.8 million; however, consummation of this transaction is
subject  to   customary  closing   conditions  and   completion  of   definitive
documentation,  and  no assurance  can be  given that  this acquisition  will be
completed. Although the Partnership expects to continue to evaluate a number  of
propane  distribution companies, including regional  and national firms, as part
of its  ongoing  acquisition  program,  except as  described  in  the  preceding
sentence,  the Partnership does  not have any  present agreements or commitments
with respect to any acquisition. There can be no assurance that the  Partnership
will  identify attractive acquisition candidates in  the future, will be able to
acquire such candidates  on acceptable terms,  or will be  able to finance  such
acquisitions.  If the Partnership is able to  make acquisitions, there can be no
assurance that such acquisitions will  not dilute earnings and distributions  or
that  any  additional  debt  incurred  to  finance  such  acquisitions  will not
adversely affect  the  ability  of  the Partnership  to  make  distributions  to
Unitholders.  In addition, to the extent that warm weather adversely affects the
Partnership's operating  and  financial  results, the  Partnership's  access  to
capital  and its  acquisition activities  may be  limited. The  Managing General
Partner has broad discretion in making acquisitions and it is expected that  the
Managing  General  Partner  generally  will  not  seek  Unitholder  approval  of
acquisitions.
 
     In order to facilitate the Partnership's acquisition strategy, concurrently
with the closing of  the Offering, the Operating  Partnership will enter into  a
$55  million bank credit facility (the  'Bank Credit Facility'), including a $40
million facility to be used for acquisitions and improvements (the  'Acquisition
Facility'). See 'Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Description of Indebtedness.' The Partnership will also
have  the  ability  to  fund acquisitions  through  the  issuance  of additional
partnership interests. See 'The Partnership Agreement -- Issuance of  Additional
Securities.'
 
     In  addition to  pursuing expansion  through acquisitions,  the Partnership
intends to pursue internal growth at its existing service centers and to  expand
its  business by opening  new service centers. The  Partnership believes that it
can attract  new customers  and expand  its market  base by  providing  superior
service,  introducing innovative  marketing programs and  focusing on population
growth areas.
 
GENERAL
 
     The Partnership is engaged  primarily in the  domestic retail marketing  of
propane   and  propane-related  supplies  and   equipment,  including  home  and
commercial appliances.
 
     Propane, a by-product of natural gas processing and petroleum refining is a
clean-burning energy source recognized for its transportability and ease of  use
relative  to alternative forms  of stand-alone energy.  The Partnership's retail
customers fall into four broad categories: residential customers, commercial and
industrial customers, agricultural customers  and dealers (located primarily  in
the  Northeast)  that resell  propane to  residential and  commercial customers.
Residential customers use  propane primarily for  space heating, water  heating,
cooking and clothes drying. Commercial and
 
                                       7
 


<PAGE>

<PAGE>
industrial customers use propane for commercial applications such as cooking and
clothes  drying  and industrial  uses  such as  fueling  over-the-road vehicles,
forklifts and stationary engines, firing furnaces, as a cutting gas and in other
process applications.  Agricultural customers  use propane  for tobacco  curing,
crop drying, poultry brooding and weed control.
 
     Propane competes primarily with natural gas, electricity and fuel oil as an
energy  source, principally on the basis of price, availability and portability.
Propane serves as  an alternative  to natural gas  in rural  and suburban  areas
where  natural gas is unavailable or portability of product is required. Propane
is generally  more expensive  than natural  gas on  an equivalent  BTU basis  in
locations  served by natural  gas, although propane  is sold in  such areas as a
standby fuel for  use during  peak demand  periods and  during interruptions  in
natural gas service. Propane is generally less expensive to use than electricity
for  space heating, water heating, clothes  drying and cooking. Although propane
is similar to fuel  oil in certain applications  and market demand, propane  and
fuel  oil compete to a lesser extent primarily because of the cost of converting
from one to the other.
 
     The Partnership  distributes  propane  through  a  nationwide  distribution
network  integrating  165  service  centers  in  23  states.  The  Partnership's
operations are  located  primarily  in the  Midwest,  Northeast,  Southeast  and
Southwest  regions of the United States. No single customer accounted for 10% or
more of the Partnership's revenues  in 1995. Historically, approximately 66%  of
the  Partnership's  retail propane  volume has  been  sold during  the six-month
period from October through  March, as many customers  use propane for  heating.
Consequently,   sales,  gross  profits  and   cash  flows  from  operations  are
concentrated in the Partnership's first and fourth fiscal quarters. In 1995,  on
a  pro forma basis, the  Partnership would have had  net income of approximately
$10.9 million, and on an historical basis, had a net loss of approximately  $0.6
million.  For information regarding  pro forma adjustments  to the Partnership's
historical operating data, see 'Selected  Historical and Pro Forma  Consolidated
Financial   and  Operating  Data'  and  the  pro  forma  consolidated  financial
statements and notes thereto included elsewhere in this Prospectus.
 
     The Partnership also sells,  leases and services  equipment related to  its
propane  distribution business. In the residential market, the Partnership sells
household appliances  such  as cooking  ranges,  water heaters,  space  heaters,
central  furnaces and clothes dryers, as  well as less traditional products such
as barbecue equipment and gas logs.
 
     In addition to its  165 service centers,  the Partnership owns  underground
storage  facilities in  Hutchinson, Kansas  and Loco  Hills, New  Mexico, leases
above ground storage facilities in  Crandon, Wisconsin and Orlando, Florida  and
owns  or leases  smaller storage  facilities in  other locations  throughout the
United States. As of May 31, 1996, the Partnership's total storage capacity  was
approximately 33 million gallons (including approximately one million gallons of
storage  capacity currently leased  to third parties).  As of May  31, 1996, the
Partnership had a fleet of 7 transport truck tractors and approximately 400 bulk
delivery trucks,  400  service  and  light  trucks  and  150  cylinder  delivery
vehicles.
 
     The principal executive office of the Partnership is located at Suite 1700,
IES Tower, 200 1st Street, S.E., Cedar Rapids, Iowa 52401-1409 and its telephone
number is (319) 365-1550.
 
RISK FACTORS
 
     Limited  partner interests are inherently  different from the capital stock
of a corporation, although many of  the business risks to which the  Partnership
will  be  subject are  similar to  those that  would be  faced by  a corporation
engaged in a similar business. Prospective purchasers of the Common Units should
consider the following risk  factors in evaluating an  investment in the  Common
Units:
 
RISKS INHERENT IN THE PARTNERSHIP'S BUSINESS
 
      Weather conditions, which can vary substantially from year to year, have a
      significant  impact  on  the  demand  for  propane  for  both  heating and
      agricultural purposes. Many customers of  the Partnership rely heavily  on
      propane  as a heating fuel. Accordingly, the  volume of propane sold is at
      its highest during the  six-month peak heating  season of October  through
      March  and is  directly affected  by the  severity of  the winter weather.
      Historically, approximately 66% of the Partnership's retail propane volume
      has   been    sold   during    this    peak   heating    season.    Actual
 
                                       8
 


<PAGE>

<PAGE>
      weather  conditions, therefore, may significantly affect the Partnership's
      financial performance. Furthermore, despite the fact that overall  weather
      conditions  may be normal, variations in weather in one or more regions in
      which the Partnership operates can  significantly affect the total  volume
      of  propane sold by  the Partnership and,  consequently, the Partnership's
      results of operations.
 
      Propane is a  commodity, the  market price of  which is  often subject  to
      volatile  changes  in  response  to  changes  in  supply  or  other market
      conditions. Because rapid increases in  the wholesale cost of propane  may
      not  be immediately  passed on to  customers, such  increases could reduce
      gross profits. Except for occasional  opportunistic buying and storage  of
      propane  during periods of low demand,  the Partnership has not engaged in
      any significant  hedging activities  with respect  to its  propane  supply
      requirements, although it may do so in the future.
 
      The  domestic retail propane  business is highly  competitive, and some of
      the Partnership's competitors may be larger or have greater financial  and
      other  resources  or  lower  operating  costs  than  the  Partnership.  In
      addition, propane is  sold in  competition with other  sources of  energy,
      some of which are less costly for equivalent energy values.
 
      The  domestic  retail  propane  industry is  mature,  and  the Partnership
      foresees only  limited  growth  in  total  demand  for  the  product.  The
      Partnership  expects the overall  demand for propane  to remain relatively
      constant over the next several  years, with year-to-year industry  volumes
      being affected primarily by weather patterns. Therefore, the growth of the
      Partnership's  propane business  depends in large  part on  its ability to
      acquire other  retail distributors.  There can  be no  assurance that  the
      Partnership will identify attractive acquisition candidates in the future,
      will  be able to  acquire such candidates  on acceptable terms  or will be
      able to finance  such acquisitions.  If the  Partnership is  able to  make
      acquisitions,  there can be  no assurance that  such acquisitions will not
      dilute earnings and distributions or that any additional debt incurred  to
      finance  such acquisitions  will not adversely  affect the  ability of the
      Partnership to make distributions to Unitholders.
 
      The Partnership's  operations are  subject to  the operating  hazards  and
      risks   normally   associated  with   handling,  storing   and  delivering
      combustible liquids  such as  propane. As  a result,  the Partnership  has
      been,  and  will  likely continue  to  be,  a defendant  in  various legal
      proceedings and litigation arising in the ordinary course of business.  In
      addition,  the Partnership  will assume certain  contingent liabilities of
      National Propane,  including certain  potential environmental  remediation
      costs  at  properties currently  owned by  National Propane.  Although the
      Partnership intends to  self insure (as  National Propane currently  does)
      and  maintain  such insurance  policies  as the  Managing  General Partner
      believes are  reasonable  and  prudent,  future  claims  or  environmental
      liabilities not covered by insurance or indemnification, or a large number
      of  claims incurred by the  Partnership in the future  that are within the
      Partnership's self insured retention, may  have a material adverse  effect
      on  the  business,  results of  operations  or financial  position  of the
      Partnership, including  the  Partnership's  ability to  make  the  Minimum
      Quarterly Distribution.
 
RISKS INHERENT IN AN INVESTMENT IN THE PARTNERSHIP
 
      Cash  distributions to  Unitholders are  not guaranteed  and may fluctuate
      based upon the Partnership's performance. Cash distributions are dependent
      primarily on cash  flow and  not on  profitability, which  is affected  by
      non-cash  items. Therefore, cash distributions  may be made during periods
      when the Partnership  records losses and  may not be  made during  periods
      when  the Partnership records  profits. In addition,  the Managing General
      Partner may establish reserves that  reduce the amount of Available  Cash.
      Due  to the  seasonal nature of  the Partnership's  business, the Managing
      General Partner anticipates that it may make additions to reserves  during
      certain  of the Partnership's  fiscal quarters in  order to fund operating
      expenses, interest  payments  and  cash  distributions  to  partners  with
      respect to future fiscal quarters. As a result of these and other factors,
      there   can  be  no   assurance  regarding  the   actual  levels  of  cash
      distributions by the Partnership.
 
      The amount of Available Cash  from Operating Surplus needed to  distribute
      the  Minimum Quarterly Distribution for four  quarters on the Common Units
      and Subordinated Units to be
 
                                       9
 


<PAGE>

<PAGE>
      outstanding immediately after the Offering and the related distribution on
      the   General   Partner   Interests   is   approximately   $23.5   million
      (approximately  $13.0 million for  the Common Units,  $9.5 million for the
      Subordinated Units and  $1.0 million for  the General Partner  Interests).
      The  amount of pro  forma Available Cash  from Operating Surplus generated
      during 1995 was approximately $17.6  million. Such amount would have  been
      sufficient  to  cover  the  Minimum Quarterly  Distribution  for  the four
      quarters in  such year  on all  of the  outstanding Common  Units and  the
      related distribution on the General Partner Interests, but would have been
      insufficient  by approximately $5.9 million to cover the Minimum Quarterly
      Distribution on the Subordinated Units and the related distribution on the
      General Partner Interests.
 
      Approximately $5.5 million of the Partnership's annual cash receipts  will
      be  interest payments from  Triarc under the  Partnership Loan, which will
      bear interest at  an annual  rate of  13.5%. On  a pro  forma basis,  such
      amount  represents approximately  31% of the  Partnership's Available Cash
      from Operating Surplus in 1995. Because  Triarc is a holding company,  its
      ability  to meet  its cash  requirements (including  required interest and
      principal payments on  the Partnership  Loan) is  primarily dependent  (in
      addition  to  its cash  on hand)  upon cash  flows from  its subsidiaries,
      including loans and  cash dividends and  reimbursement by subsidiaries  to
      Triarc  in connection with  its providing certain  management services and
      payments by subsidiaries under certain  tax sharing agreements. Under  the
      terms  of various  indentures and credit  arrangements, Triarc's principal
      subsidiaries are currently unable to pay  any dividends or make any  loans
      or advances to Triarc. In addition, the Partnership Loan does not restrict
      Triarc's ability to sell, convey, transfer or encumber the stock or assets
      of any of its subsidiaries (other than certain limitations with respect to
      the  Managing  General  Partner and  Southeastern  Public  Service Company
      ('SEPSCO')) or its ability to dispose of its cash on hand or other assets.
      Triarc's cash on  hand as  of May  31, 1996,  after giving  effect to  the
      closing of the Offering, would have been approximately $210.0 million. The
      Partnership  believes that such  amount of cash on  hand, plus payments or
      distributions from certain of Triarc's subsidiaries, will enable Triarc to
      have adequate cash  resources to  meet its short  term cash  requirements,
      including  required interest payments  on the Partnership  Loan. See 'Cash
      Distribution  Policy  --  Partnership   Loan'  and  'Certain   Information
      Regarding  Triarc.' However,  there can be  no assurance  that Triarc will
      continue to  have cash  on hand  or that  it will  in the  future  receive
      sufficient  payments or  distributions from  its subsidiaries  in order to
      enable it to satisfy its obligations under the Partnership Loan.  Triarc's
      failure  to make interest or principal payments under the Partnership Loan
      would adversely affect the ability of the Partnership to make the  Minimum
      Quarterly   Distribution  to  all  Unitholders.  In  addition,  Triarc  is
      permitted to prepay the Partnership Loan under certain circumstances.  The
      prepayment  by Triarc of all or a  portion of the Partnership Loan and the
      failure by  the  Partnership to  reinvest  such  funds in  a  manner  that
      generates  an equivalent amount of annual  cash flow could have an adverse
      effect on the Partnership's ability to make distributions to  Unitholders.
      The  Partnership Loan is recourse to Triarc  and is secured by a pledge by
      Triarc of  all of  the shares  of capital  stock of  the Managing  General
      Partner  owned  by Triarc  (approximately  75.7% of  the  Managing General
      Partner's outstanding capital stock  as of the  date of this  Prospectus).
      See   'Cash  Distribution   Policy  --  Partnership   Loan'  and  'Certain
      Information Regarding Triarc.'
 
      On a pro forma basis  as of March 31,  1996, assuming consummation of  the
      transactions  contemplated  by  this Prospectus,  the  Partnership's total
      indebtedness as a percentage of  its total capitalization would have  been
      approximately  79.4%. As a  result, the Partnership  will be significantly
      leveraged and will have  indebtedness that is  substantial in relation  to
      its  partners'  capital.  The  principal  and  interest  payable  on  such
      indebtedness and  compliance with  the requirements  of such  indebtedness
      with respect to the maintenance of reserves will reduce the cash available
      to  make distributions  on the  Units. Although  the Partnership  does not
      intend to draw on the Bank Credit  Facility at the time of the closing  of
      the  Offering, future borrowings could result in a significant increase in
      the Partnership's leverage. Furthermore, the Managing General Partner  may
      cause   the  Partnership  to   incur  additional  indebtedness,  including
      borrowings that  have  the purpose  or  effect of  enabling  the  Managing
      General  Partner to receive  distributions or hastening  the conversion of
      Subordinated Units into Common Units.
 
                                       10
 


<PAGE>

<PAGE>
      The First Mortgage Notes and the Bank Credit Facility will be secured by a
      lien on substantially all of the  assets of the Operating Partnership.  In
      the  case of a continuing default  by the Operating Partnership under such
      indebtedness, the  lenders  would  have  the right  to  foreclose  on  the
      Operating Partnership's assets, which would have a material adverse effect
      on  the Partnership.  In addition, the  First Mortgage Notes  and the Bank
      Credit Facility contain provisions relating to change of control. If  such
      provisions   are  triggered,  such  outstanding  indebtedness  may  become
      immediately due. In such event, there is no assurance that the Partnership
      would be able  to pay the  indebtedness, in which  case the lenders  would
      have  the right to foreclose on  the Operating Partnership's assets, which
      would have a material adverse effect on the Partnership.
 
      The Partnership's  assumptions  concerning  future  operations,  including
      assumptions   that  normal   weather  conditions   will  prevail   in  the
      Partnership's  operating  areas,  may   not  be  realized.  Although   the
      Partnership   believes  its  assumptions   are  reasonable,  whether  such
      assumptions are realized is not, in many cases, within the control of  the
      Partnership.  Significant variances between  the Partnership's assumptions
      and actual conditions,  particularly with respect  to weather  conditions,
      could have a significant impact on the business of the Partnership.
 
      The  Managing General Partner will manage and operate the Partnership, and
      holders of  Common  Units  will  have no  right  to  participate  in  such
      management  and operation. Holders  of Common Units will  have no right to
      elect the Managing General Partner on an annual or other continuing basis,
      and will  have  only  limited  voting  rights  on  matters  affecting  the
      Partnership's business.
 
      Purchasers of Common Units in the Offering will experience substantial and
      immediate  dilution in net  tangible book value of  $19.83 per Common Unit
      from the initial public offering price, the Managing General Partner  will
      experience  an increase in net tangible book  value of $22.27 per Unit and
      each Common Unit will have a pro forma net tangible book value of $1.17.
 
      Prior to making any distribution on the Common Units, the Partnership will
      reimburse the  Managing  General  Partner and  its  Affiliates  (including
      Triarc) at cost for all expenses incurred on behalf of the Partnership. On
      a pro forma basis, approximately $56.8 million of expenses would have been
      reimbursed  by the  Partnership to the  Managing General  Partner in 1995.
      Affiliates of the Managing General Partner (including Triarc) may  provide
      certain administrative services for the Managing General Partner on behalf
      of  the Partnership  and will be  reimbursed for all  expenses incurred in
      connection therewith. In  addition, the Managing  General Partner and  its
      Affiliates  may provide additional services  to the Partnership, for which
      the Partnership  will be  charged  reasonable fees  as determined  by  the
      Managing General Partner.
 
      Subject to certain limitations, the Partnership may issue additional Units
      or  other interests  in the  Partnership, the  effect of  which may  be to
      dilute the interests of  holders of Common Units  in distributions by  the
      Partnership  and to make it more difficult for a person or group to remove
      the Managing General Partner  as general partner  or otherwise change  the
      management of the Partnership.
 
      The  Managing General Partner will have the  right to acquire all, but not
      less than all, of the outstanding Common Units at a price generally  equal
      to the then current market price of the Common Units in the event that not
      more  than 20% of the  outstanding Common Units are  held by persons other
      than the  Managing General  Partner and  its Affiliates.  Consequently,  a
      Unitholder  may have its Common Units  purchased from him even though such
      holder does not desire to sell them,  and the price paid may be less  than
      the amount such Unitholder would desire to receive upon such sale.
 
      The  Partnership Agreement contains certain provisions that may discourage
      a person or group from attempting  to remove the Managing General  Partner
      as  general partner or otherwise change the management of the Partnership.
      The Partnership Agreement provides that if the Managing General Partner is
      removed other than for  Cause (as defined in  the Glossary) and the  Units
      held  by the General Partners and their  Affiliates are not voted in favor
      of such removal, the Subordination Period will end, all arrearages on  the
      Common  Units will terminate  and all outstanding  Subordinated Units will
      convert   into   Common    Units   and   the    General   Partners    will
 
                                       11
 


<PAGE>

<PAGE>
      have  the right to convert the General Partner Interests into Common Units
      or to receive, in exchange for  such interests, cash payment equal to  the
      fair  market  value  of  such interests.  The  Managing  General Partner's
      current ownership interest in the Partnership precludes any vote to remove
      the Managing General Partner without its consent. Further, the Partnership
      Agreement provides that  if any person  or group other  than the  Managing
      General Partner and its Affiliates acquires beneficial ownership of 20% or
      more of the outstanding Units of any class, such person or group will lose
      voting  rights  with respect  to all  of  its Units.  The effect  of these
      provisions may be  to diminish the  price at which  the Common Units  will
      trade under certain circumstances.
 
      Prior  to the  Offering, there  has been no  public market  for the Common
      Units. The initial  public offering price  for the Common  Units has  been
      determined   through  negotiations  among  Triarc,  the  Partnership,  the
      Managing General Partner and the  representatives of the Underwriters.  No
      assurance  can be given as to the  market prices at which the Common Units
      will trade.
 
      Under certain  circumstances, holders  of Common  Units could  lose  their
      limited   liability  and  could  become   liable  for  amounts  improperly
      distributed  to   them   by   the  Partnership.   See   'The   Partnership
      Agreement -- Limited Liability.'
 
      The  Partnership  may be  unable to  obtain consents  with respect  to the
      transfer of  certain  assets  and  property of  National  Propane  to  the
      Partnership.  The failure to  obtain such consents  could adversely affect
      the business of the Partnership.
 
      The holders of the  Common Units have not  been represented by counsel  in
      connection with the Offering, including the preparation of the Partnership
      Agreement or the other agreements referred to herein.
 
      The  propane  industry  consists  of a  small  number  of  national retail
      marketers and a larger  number of regional companies.  From time to  time,
      these  national and regional retail  marketers, including the Partnership,
      have in the  past engaged  and may in  the future  engage, in  discussions
      concerning  acquisitions,  dispositions  and  combinations  of operations.
      While the Partnership is  not currently engaged  in negotiations with  any
      national or regional marketer concerning any such acquisition, disposition
      or  combination,  there  can  be  no  assurance  that  in  the  future the
      Partnership  will  not   engage  in  any   such  negotiations  or   pursue
      opportunities to engage in any such transaction. In addition, although any
      merger,  consolidation or  combination involving the  Partnership, and any
      sale, exchange or disposition of all  or substantially all of its  assets,
      would  require the  approval of  a Unit  Majority under  the terms  of the
      Partnership Agreement, the  Partnership and the  General Partners are  not
      restricted   under  the  Partnership  Agreement  from  engaging  in  other
      transactions that  may  not require  the  prior  consent or  vote  of  the
      Unitholders  and  that  could  result  in  a  change  of  control  of  the
      Partnership. If any  of such transactions  were deemed to  be a change  of
      control  under the First  Mortgage Notes or the  Bank Credit Facility, the
      Partnership would be required  to offer to redeem  all of the  outstanding
      First  Mortgage Notes at a premium and to repay all indebtedness under the
      Bank Credit Facility. As a result,  the occurrence of a change of  control
      could have a material adverse effect on the Partnership and its ability to
      pay the Minimum Quarterly Distribution to the Unitholders.
 
      The Partnership believes that its success has been and will continue to be
      dependent  to a significant  extent upon the efforts  and abilities of its
      senior management team.  The failure  by the Managing  General Partner  to
      retain  members of its  senior management team  could adversely affect the
      Partnership's ability to build  on the efforts  undertaken by its  current
      management   to  increase   the  efficiency   and  profitability   of  the
      Partnership.
 
CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITY
 
      The Managing  General Partner  and its  Affiliates may  have conflicts  of
      interest  with  the  Partnership  and the  holders  of  Common  Units. The
      Partnership Agreement permits the Managing General Partner to consider, in
      resolving conflicts of interest, the  interests of parties (including  the
      General  Partner and its  Affiliates) other than  the Unitholders, thereby
      limiting  the  Managing   General  Partner's  fiduciary   duties  to   the
      Partnership  and the Unitholders. The  discretion given in the Partnership
      Agreement to  the  Managing  General Partner  in  resolving  conflicts  of
      interest  may significantly limit the ability of a Unitholder to challenge
      what might
 
                                       12
 


<PAGE>

<PAGE>
      otherwise be a breach of fiduciary  duty under Delaware law. In  addition,
      holders  of Common Units  are deemed to have  consented to certain actions
      that might  otherwise be  deemed  conflicts of  interest  or a  breach  of
      fiduciary  duty.  The  validity  and  enforceability  of  these  types  of
      provisions under Delaware law are uncertain.
 
      The Partnership Agreement provides that any borrowings by the  Partnership
      shall  not constitute a  breach of any  duty owed by  the Managing General
      Partner, including borrowings that have the purpose or effect of  enabling
      the  Managing  General  Partner  to  receive  Incentive  Distributions  or
      hastening the conversion of the Subordinated Units into Common Units.
 
      The Partnership Agreement  permits the Managing  General Partner to  merge
      with  and into Triarc (the 'Triarc  Merger') without the prior approval of
      any Unitholder. The  Partnership Note  will contain a  covenant of  Triarc
      that,  in the event of a Triarc Merger, Triarc will concurrently therewith
      pledge as security for the Partnership Loan certain assets of the Managing
      General Partner. See 'Cash Distribution Policy -- Partnership Loan.'
 
      The Partnership Agreement does not prohibit the Partnership from  engaging
      in  roll-up  transactions. Although  the Managing  General Partner  has no
      present intention  of  causing  the  Partnership to  engage  in  any  such
      transaction,  it is possible it will do so  in the future. There can be no
      assurance that a  roll-up transaction  would not have  a material  adverse
      effect on a Unitholder's investment in the Partnership.
 
      The  Managing General Partner (unless merged with and into Triarc) and the
      Special General Partner (as defined  in the Glossary) are prohibited  from
      conducting  any  business  or  having  any  operations  other  than  those
      incidental to  serving as  general  partners of  the Partnership  and  the
      Operating  Partnership  so  long  as  they  are  general  partners  of the
      Partnership. The Partnership  Agreement does not  restrict the ability  of
      Affiliates of the Managing General Partner (other than the Special General
      Partner)  to  engage in  any  activities, except  for  the retail  sale of
      propane to  end  users in  the  continental United  States.  The  Managing
      General  Partner's Affiliates (other than the Special General Partner) may
      compete with the Partnership in other propane related activities, such  as
      trading,  transportation, storage  and wholesale  distribution of propane.
      Further, in the  event of the  Triarc Merger the  ability of the  Managing
      General  Partner to  engage in activities  other than  those incidental to
      serving as  a  general  partner  of  the  Operating  Partnership  and  the
      Partnership  and to compete  in other propane  related activities, such as
      trading, transportation, storage and  wholesale distribution, will not  be
      restricted.  Furthermore,  the  Partnership  Agreement  provides  that the
      Managing General Partner and its Affiliates have no obligation to  present
      business opportunities to the Partnership.
 
TAX RISKS
 
      The  availability to a Common Unitholder of federal income tax benefits of
      an  investment  in  the  Partnership  depends,  in  large  part,  on   the
      classification  of the Partnership as a partnership for federal income tax
      purposes. Based  on  certain  representations  by  the  General  Partners,
      Andrews  & Kurth L.L.P.,  special counsel to the  General Partners and the
      Partnership ('Counsel'), is of  the opinion that,  under current law,  the
      Partnership  will be  classified as a  partnership for  federal income tax
      purposes.
 
      No ruling has been requested from the Internal Revenue Service (the 'IRS')
      with respect to  classification of  the Partnership as  a partnership  for
      federal income tax purposes or any other matter affecting the Partnership.
 
      A  Unitholder will be required to pay  income taxes on his allocable share
      of the Partnership's income, whether or not he receives cash distributions
      from the Partnership.
 
      Investment in Units by  certain tax-exempt entities, regulated  investment
      companies  and foreign persons  raises issues unique  to such persons. For
      example, virtually all of the taxable income derived by most organizations
      exempt from federal income  tax (including individual retirement  accounts
      and other retirement plans) from the ownership of a Unit will be unrelated
      business taxable income and thus will be taxable to such a Unitholder.
 
      In  the case  of taxpayers  subject to  the passive  loss rules (generally
      individuals and  closely  held  corporations),  losses  generated  by  the
      Partnership,   if   any,  will   only  be   available  to   offset  future
 
                                       13
 


<PAGE>

<PAGE>
      income generated by the  Partnership and cannot be  used to offset  income
      from  other  activities,  including  passive  activities  or  investments.
      Passive  losses  which  are  not   deductible  because  they  exceed   the
      Unitholder's  income generated by the Partnership  may be deducted in full
      when the Unitholder disposes of  his entire investment in the  Partnership
      in a fully taxable transaction to an unrelated party.
 
      A  Unitholder will be  required to file  state income tax  returns and pay
      state income taxes in  some or all of  the various jurisdictions in  which
      the Partnership does business or owns property.
 
      The  Partnership has been registered  with the IRS as  a 'tax shelter.' No
      assurance can be given that the Partnership will not be audited by the IRS
      or that  tax  adjustments  will  not  be  made.  Any  adjustments  in  the
      Partnership's tax returns will lead to adjustments in the Unitholders' tax
      returns  and  may  lead to  audits  of  the Unitholders'  tax  returns and
      adjustments of items unrelated to the Partnership.
 
     See 'Risk Factors,' 'Cash Distribution Policy,' 'Conflicts of Interest  and
Fiduciary  Responsibility,' 'Description of the  Common Units,' 'The Partnership
Agreement' and 'Tax Considerations' for a more detailed description of these and
other risk  factors and  conflicts  of interest  that  should be  considered  in
evaluating an investment in the Common Units.
 
TRANSACTIONS AT CLOSING
 
     Concurrently  with the closing  of the Offering,  both the Managing General
Partner and the  Special General  Partner will contribute  substantially all  of
their  assets (which assets will not  include an existing intercompany note from
Triarc, approximately $59.3 million of the net proceeds from the issuance of the
First Mortgage Notes and certain other  assets of the Managing General  Partner)
to  the Operating Partnership  (the 'Conveyance') as  a capital contribution and
the Operating Partnership will  assume substantially all  of the liabilities  of
the Managing General Partner and the Special General Partner (other than certain
income tax liabilities), including the First Mortgage Notes and all indebtedness
of  the Managing General Partner outstanding  under the Existing Credit Facility
(as defined below). Immediately thereafter, the Managing General Partner and the
Special General  Partner will  convey  their limited  partner interests  in  the
Operating  Partnership to  the Partnership. As  a result  of such contributions,
each of the Managing General Partner and the Special General Partner will have a
1.0% general partner interest in the  Partnership and a 1.0101% general  partner
interest in the Operating Partnership. In addition, the Managing General Partner
will  receive  in exchange  for its  contribution  to the  Partnership 4,533,638
Subordinated Units and the right to receive the Incentive Distributions.
 
     Also concurrently with the  closing of the  Offering, the Managing  General
Partner  will issue  $125 million aggregate  principal amount  of First Mortgage
Notes to certain institutional investors  in a private placement.  Approximately
$59.3 million of the net proceeds from the sale of the First Mortgage Notes (the
entire net proceeds of which are estimated to be $121.5 million) will be used by
the  Managing General Partner to pay a  dividend to Triarc. The remainder of the
net proceeds from  the sale  of the  First Mortgage  Notes (approximately  $62.2
million)  will be contributed  by the Managing General  Partner to the Operating
Partnership in connection with the Conveyance and will be used by the  Operating
Partnership  to repay (in the manner described  below) a portion of the Managing
General Partner's indebtedness outstanding under  the Revolving Credit and  Term
Loan  Agreement, dated  as of  October 7, 1994,  as amended,  among the Managing
General Partner,  the  Bank  of  New  York,  as  Administrative  Agent,  certain
Co-Agents  and  the several  lending institutions  party thereto  (the 'Existing
Credit Facility')  and  to repay  other  indebtedness of  the  Managing  General
Partner and certain of its subsidiaries outstanding under equipment notes, notes
issued  in connection with acquisitions ('Acquisition Notes') and capital leases
(collectively, 'Other Existing Indebtedness'). First, approximately $30  million
of  such net  proceeds will be  used by  the Operating Partnership  to repay the
indebtedness outstanding under the Existing  Credit Facility which is  evidenced
by  the Refunding Notes (as  defined in the Existing  Credit Facility), and then
the remainder of such net proceeds (approximately $32.2 million) will be used to
repay other indebtedness outstanding under the Existing Credit Facility and $4.9
million of  Other Existing  Indebtedness. The  effective interest  rates on  the
Refunding Notes, the $27.3 million outstanding under the term loan facility, and
the  $4.9 million  of Other Existing  Indebtedness were 7.69%,  8.28% and 8.34%,
respectively, as of May 31, 1996.
 
                                       14
 


<PAGE>

<PAGE>
     After the repayment of the Refunding  Notes and such other indebtedness  as
described  above, the net proceeds of the sale of the Common Units issued in the
Offering (estimated to be approximately  $118.2 million) will be contributed  to
the  Operating Partnership which  will use such proceeds  to repay all remaining
indebtedness under the Existing  Credit Facility, to  make the Partnership  Loan
and  to pay  certain accrued  management fees  and tax  sharing payments  due to
Triarc from the  Managing General Partner.  The effective interest  rate on  the
remaining  $9.2 million outstanding under the  revolving credit facility and the
remaining $56.8 million outstanding under the  term loan facility was 7.85%  and
8.28%, respectively, as of May 31, 1996.
 
     Concurrently  with the closing  of the Offering,  the Operating Partnership
will also enter into the Bank Credit Facility, which will include a $15  million
revolving  credit  facility to  be used  for working  capital and  other general
partnership purposes  (the  'Working  Capital Facility')  and  the  $40  million
Acquisition  Facility. It is  expected that these facilities  will be undrawn at
the  time  of   the  consummation   of  the  transactions   referred  to   above
(collectively,  the  'Transactions'). For  additional information  regarding the
terms  of  the  First  Mortgage  Notes   and  the  Bank  Credit  Facility,   see
'Management's  Discussion  and Analysis  of Financial  Condition and  Results of
Operations -- Description of Indebtedness.' For additional information regarding
the terms of the Partnership Loan, see 'Cash Distribution Policy --  Partnership
Loan.'
 
     The  following  table  sets forth  the  estimated  sources of  funds  to be
received by the Managing General Partner  and the Partnership at the closing  of
the Offering and the estimated related uses of funds as of May 31, 1996.
 
                                       15
 


<PAGE>

<PAGE>
 
<TABLE>
<CAPTION>
                                                                                                            AMOUNT
             SOURCES OF FUNDS                                              USES OF FUNDS                 -------------
- ------------------------------------------      AMOUNT       -----------------------------------------   (IN MILLIONS)
                                             -------------
                                             (IN MILLIONS)
 
<S>                                          <C>             <C>                                         <C>
Gross Proceeds from issuance of First
  Mortgage Notes..........................      $ 125.0      Cash  dividend from  the Managing General      $  59.3
                                                               Partner to Triarc(1)
                                                             Repayment by the Operating Partnership of         62.2
                                                               indebtedness of  the  Managing  General
                                                               Partner  under Existing Credit Facility
                                                               (including  indebtedness  evidenced  by
                                                               Refunding  Notes)  and  Other  Existing
                                                               Indebtedness(2)
                                                             Fees and expenses  to unaffiliated  third          3.5
                                                               parties incurred in connection with the
                                                               issuance  of  the First  Mortgage Notes
                                                               (including Placement Agent fees)
                                                                                                         -------------
     Total................................                                                                  $ 125.0
                                                                                                         -------------
                                                                                                         -------------
 
Gross Proceeds from issuance of Common
  Units...................................      $ 130.0      Repayment by the Operating Partnership of      $  66.0
                                                               indebtedness of  the  Managing  General
                                                               Partner under Existing Credit Facility
                                                             Partnership Loan to Triarc                        40.7
                                                             Payment  by the  Operating Partnership of         11.5
                                                               certain accrued management fees and tax
                                                               sharing payments due from the  Managing
                                                               General Partner to Triarc(2)
                                                             Fees  and expenses  to unaffiliated third         11.8
                                                               parties incurred in connection with the
                                                               issuance of the Common Units (including
                                                               Underwriters' discounts and
                                                               commissions)
                                                                                                         -------------
     Total................................                                                                  $ 130.0
                                                                                                         -------------
                                                                                                         -------------
</TABLE>
 
- ------------
 
(1) In addition to the cash dividend, the Managing General Partner will dividend
    to Triarc a portion ($51.4 million)  of the existing intercompany note  from
    Triarc.  None of such dividends will be subject to tax to Triarc at the time
    of their distribution.
 
(2) An additional $2.2 million  (primarily representing accrued management  fees
    and  tax  sharing  payments  due  Triarc) will  be  paid  to  Triarc  out of
    Partnership cash  on hand  at closing,  and an  additional $0.5  million  of
    Partnership  cash on hand  at closing will  be used to  repay Other Existing
    Indebtedness.
 
                            ------------------------
 
     As set forth  in the  table above,  out of  the aggregate  net proceeds  of
$239.7  million from  the issuance  of the First  Mortgage Notes  and the Common
Units, (i) Triarc will  receive a $59.3 million  cash dividend, a $40.7  million
loan  and $11.5 million of accrued  management fees and tax-sharing payments due
Triarc (or  an aggregate  of $111.5  million)  and (ii)  $128.2 million  of  the
Managing  General Partner's indebtedness under  the Existing Credit Facility and
Other Existing Indebtedness will be repaid.  In addition, Triarc will receive  a
dividend  of  a  portion  ($51.4  million)  of  an  existing  intercompany  note
 
                                       16
 


<PAGE>

<PAGE>
issued to  the  Managing General  Partner  by Triarc,  $2.2  million  (primarily
representing  accrued management fees and tax  sharing payments due Triarc) will
be paid  to Triarc  out of  the Partnership's  cash on  hand at  closing and  an
additional $0.5 million of Other Existing Indebtedness will be repaid out of the
Partnership's cash on hand at closing.
 
     If  the  Underwriters'  over-allotment  option is  exercised  in  full, the
estimated additional net proceeds to the Partnership will be approximately $18.1
million. All of the net proceeds from any such exercise will be retained by  the
Partnership  and  used for  general partnership  purposes. See  'The Partnership
Agreement -- Issuance of Additional Securities.'
 
DISTRIBUTIONS AND PAYMENTS TO THE MANAGING GENERAL PARTNER AND ITS AFFILIATES
 
     The following table summarizes the distributions and payments to be made by
the Partnership to the Managing General Partner and its Affiliates in connection
with the  Transactions  and the  ongoing  operations of  the  Partnership.  Such
distributions and payments were determined by and among affiliated entities and,
consequently,  were not the result of  arm's length negotiations. See 'Conflicts
of Interest and Fiduciary Responsibility.'
 
<TABLE>
<S>                                         <C>
                                                 FORMATION STAGE
The consideration paid to the Managing
  General Partner, the Special General
  Partner, Triarc and their Affiliates for
  the transfer of the propane business and
  related liabilities of National Propane
  to the Partnership......................  4,533,638 Subordinated Units, an aggregate 4% unsubordinated  general
                                              partner  interest in the Partnership  and the Operating Partnership
                                              on  a  combined   basis  (and  the   right  to  receive   Incentive
                                              Distributions),  and the assumption by the Operating Partnership of
                                              substantially all  of  the  liabilities  of  the  Managing  General
                                              Partner and the Special General Partner, (other than certain income
                                              tax  liabilities),  including  the  First  Mortgage  Notes  and all
                                              indebtedness of the Managing General Partner outstanding under  the
                                              Existing   Credit  Facility.  The  net  proceeds  of  the  Offering
                                              (estimated to be approximately $118.2 million) will be  contributed
                                              to  the Operating Partnership and used by the Operating Partnership
                                              to make  the $40.7  million Partnership  Loan to  Triarc, to  repay
                                              approximately  $11.5  million in  accrued  management fees  and tax
                                              sharing payments due to Triarc (in  addition to $2.2 million to  be
                                              paid  to  Triarc  consisting  primarily of  such  accrued  fees and
                                              payments  and  the  payment  of  $0.5  million  of  Other  Existing
                                              Indebtedness  out of Partnership cash on hand at the closing of the
                                              Transactions) and  to repay  indebtedness of  the Managing  General
                                              Partner assumed by the Operating Partnership in connection with the
                                              Transactions.  In  addition,  the  Managing  General  Partner  will
                                              dividend to Triarc  a portion (approximately  $51.4 million) of  an
                                              existing  intercompany note  and will  dividend approximately $59.3
                                              million in cash  from the  net proceeds of  the sale  of the  First
                                              Mortgage  Notes to Triarc.  The remainder of  the net proceeds from
                                              the sale  of  the  First  Mortgage Notes  will  be  used  to  repay
                                              indebtedness  of the Managing General Partner and its subsidiaries.
                                              Accordingly, substantially all of the net proceeds of this offering
                                              will be  paid  to,  or  otherwise  benefit,  the  Managing  General
                                              Partner,  the Special General Partner, Triarc and their Affiliates.
                                              See 'The Transactions.'
</TABLE>
 
                                       17
 


<PAGE>

<PAGE>
<TABLE>
<S>                                         <C>
                                                OPERATIONAL STAGE
Distributions of Available Cash to the
  General Partners........................  Available Cash will generally be  distributed 96% to the  Unitholders
                                              (including  to  the  Managing  General  Partner  as  holder  of the
                                              Subordinated Units) and 4% to the General Partners, except that  if
                                              distributions  of Available Cash from  Operating Surplus exceed the
                                              Target Distribution Levels (as defined below), the General Partners
                                              will receive a  percentage of such  excess distributions that  will
                                              increase  to up  to approximately  50% of  the excess distributions
                                              above the highest Target Distribution Level. See 'Cash Distribution
                                              Policy.'
Payments to the Managing General Partner
  and its Affiliates......................  Following the Offering, in general,  the management and employees  of
                                              National  Propane  who  currently manage  and  operate  the propane
                                              business and assets to be owned by the Partnership will continue to
                                              manage and  operate  the  Partnership's business  as  officers  and
                                              employees  of the Managing General  Partner and its Affiliates. The
                                              Managing General Partner  will not  receive any  management fee  or
                                              other  compensation  in  connection  with  its  management  of  the
                                              Partnership, but  will be  reimbursed at  cost for  all direct  and
                                              indirect  expenses incurred on behalf of the Partnership, including
                                              the costs  of compensation  and  employee benefit  plans  described
                                              herein  properly  allocable  to  the  Partnership,  and  all  other
                                              expenses necessary or  appropriate to the  conduct of business  of,
                                              and  allocable  to,  the  Partnership. On  a  pro  forma  basis, an
                                              aggregate of  approximately $56.8  million of  expenses would  have
                                              been  reimbursed by the Partnership to the Managing General Partner
                                              in 1995 (comprising approximately $33.0 million in salary,  payroll
                                              tax  and  other  compensation  paid to  employees  of  the Managing
                                              General Partner  and  approximately  $23.8 million  for  all  other
                                              operating expenses).
                                            Affiliates  of the  Managing General  Partner (including  Triarc) may
                                              provide certain administrative  services for  the Managing  General
                                              Partner on behalf of the Partnership and will be reimbursed for all
                                              direct  and indirect expenses incurred  in connection therewith. In
                                              addition, the  Managing  General  Partner and  its  Affiliates  may
                                              provide  additional  services  to the  Partnership,  for  which the
                                              Partnership will be  charged reasonable fees  as determined by  the
                                              Managing General Partner.
                                            See   'Certain   Relationships  and   Related  Transactions'   for  a
                                              description of  other  ongoing arrangements  between  the  Managing
                                              General Partner and its Affiliates and the Partnership.
Withdrawal or removal of the General
  Partners................................  If  the  General Partners  withdraw in  violation of  the Partnership
                                              Agreement or are removed by  the Unitholders for Cause (as  defined
                                              in  the  Glossary), the  successor  general partner  will  have the
                                              option to purchase the General Partner Interests (and the right  to
                                              receive  Incentive Distributions) for  a cash payment  equal to the
                                              fair  market  value  thereof;  if  the  Managing  General   Partner
                                              withdraws  or is removed  without Cause it will  have the option to
                                              require the  successor  general  partner to  purchase  the  General
                                              Partner   Interests   (and   the   right   to   receive   Incentive
                                              Distributions) from the departing General Partners for such  price.
                                              If  the  General  Partner  Interests  (and  the  right  to  receive
                                              Incentive Distributions)  are not  so  purchased by  the  successor
                                              general  partner, the  General Partners  have the  right to convert
                                              such partner  interests into  a  number of  Common Units  equal  in
</TABLE>
 
                                       18
 


<PAGE>

<PAGE>
<TABLE>
<S>                                         <C>
                                              value  to  the  fair  market  value  thereof  as  determined  by an
                                              independent investment banking firm or other independent experts or
                                              to receive cash in exchange for such interests.
                                                LIQUIDATION STAGE
Liquidation...............................  In the event  of any  liquidation of the  Partnership, the  partners,
                                              including  the  General  Partners,  will  be  entitled  to  receive
                                              liquidating  distributions  in  accordance  with  their  respective
                                              capital   account  balances.  See   'Cash  Distribution  Policy  --
                                              Distributions of Cash Upon Liquidation.'
</TABLE>
 
CASH AVAILABLE FOR DISTRIBUTION
 
     Available Cash  will  generally  be  distributed  96%  to  the  Unitholders
(including the Managing General Partner as the holder of Subordinated Units) and
4%  to the General Partners, pro rata, except that if distributions of Available
Cash exceed Target Distribution  Levels (as defined in  the Glossary) above  the
Minimum  Quarterly Distribution, the General Partners will receive an additional
percentage of such excess distributions that will  increase to up to 50% of  the
distributions   above  the   highest  Target   Distribution  Level.   See  'Cash
Distribution  Policy  --  Incentive  Distributions  --  Hypothetical  Annualized
Yield.'
 
     Based  on the amount of working capital that the Partnership is expected to
have at the time  it commences operations  in 1996 and  the availability of  the
Working  Capital  Facility, the  Partnership believes  that, if  its assumptions
about operating conditions prove correct, the Partnership should have sufficient
Available Cash from  Operating Surplus to  enable it to  distribute the  Minimum
Quarterly  Distribution on the  outstanding Common Units  and Subordinated Units
and the related distribution  on the General Partner  Interests with respect  to
each  of its  quarters at  least through the  quarter ending  December 31, 1997,
although no  assurance  can  be  given  respecting  such  distributions  or  any
distribution  after such date. The Partnership's belief  is based on a number of
assumptions, including  the  assumptions  that normal  weather  conditions  will
prevail  in the Partnership's operating  areas, that the Partnership's operating
margins will  remain  constant,  that  all required  interest  payments  on  the
Partnership  Loan will be made  by Triarc, and that  market and overall economic
conditions will not change substantially. Although the Partnership believes  its
assumptions  are reasonable, whether  the assumptions are realized  is not, in a
number of cases, within the control  of the Partnership and cannot be  predicted
with any degree of certainty. For example, in any particular year or even series
of  years, weather may deviate substantially  from normal. Therefore, certain of
the Partnership's  assumptions may  prove to  be inaccurate.  As a  result,  the
actual  Available Cash from Operating Surplus generated by the Partnership could
deviate substantially  from  that currently  expected.  See 'Risk  Factors.'  In
addition,   the   terms  of   the   Partnership's  indebtedness   under  certain
circumstances will restrict the ability of the Partnership to distribute cash to
Unitholders. See 'Management's  Discussion and Analysis  of Financial  Condition
and  Results  of Operations  --  Description of  Indebtedness.'  Accordingly, no
assurance can be given that distributions of the Minimum Quarterly  Distribution
or any other amounts will be made. The Partnership does not intend to update the
expression of belief set forth above.
 
     The  amount of Available  Cash from Operating  Surplus needed to distribute
the Minimum Quarterly  Distribution for four  quarters on the  Common Units  and
Subordinated  Units to be outstanding immediately  after the Offering and on the
General Partner Interests  is approximately $23.5  million (approximately  $13.0
million  for the Common Units, $9.5 million  for the Subordinated Units and $1.0
million for the General Partner Interests). If the Underwriters'  over-allotment
option  is exercised in full, such  amounts would be approximately $15.0 million
for the Common Units, $9.5 million  for the Subordinated Units and $1.0  million
for  the  General  Partner Interests,  or  an aggregate  of  approximately $25.5
million.
 
     Pro forma Available Cash from  Operating Surplus generated during 1994  and
1995  (approximately $22.7 million  and $17.6 million,  respectively) would have
been sufficient to cover the Minimum Quarterly Distribution on the Common  Units
and  the related distribution  on the General Partner  Interests, but would have
been insufficient by approximately  $0.8 million and $5.9  million to cover  the
Minimum  Quarterly  Distribution  on  the  Subordinated  Units  and  the related
distribution on the General  Partner Interests in  1994 and 1995,  respectively.
The  decline in pro forma Available Cash from Operating Surplus generated during
1995 was  primarily due  to the  fact  that temperatures  during the  winter  of
1994-95  across the markets served by  the Partnership were substantially warmer
than the prior year. Pro forma  Available Cash from Operating Surplus  generated
during  the twelve  months ended  March 31,  1996 (approximately  $20.0 million)
would have been sufficient  to cover the Minimum  Quarterly Distribution on  the
Common  Units and the related distribution on the General Partner Interests, but
would have been insufficient by approximately $3.5 million to cover the  Minimum
 
                                       19
 


<PAGE>

<PAGE>
Quarterly Distribution on the Subordinated Units and the related distribution on
the General Partner Interests.
 
     Pro  forma Available Cash from Operating Surplus generated during the three
months ended  March  31,  1996  would have  been  approximately  $13.4  million;
however,  because of the  highly seasonal nature  of the Partnership's business,
such amount  is not  indicative of  the actual  amounts of  Available Cash  from
Operating   Surplus  that  will   be  generated  in   subsequent  quarters.  The
Partnership's revenues  and cash  flows have  historically been  highest in  the
first  quarter. Although  such $13.4 million  generated during  the three months
ended March 31, 1996 would have been in excess of the approximately $5.9 million
required to cover the  Minimum Quarterly Distribution on  the Common Units,  the
Subordinated  Units  and  the  related  distributions  on  the  General  Partner
Interests  during  such   quarter,  the  Partnership   would  have   established
significant  reserves for, among other things,  payment of the Minimum Quarterly
Distribution on  the  Common  Units  in  subsequent  quarters  and  future  debt
payments, thereby decreasing the amount of Available Cash from Operating Surplus
that  would  have been  distributed  for such  quarter.  For the  calculation of
Available Cash from  Operating Surplus,  see 'Cash Distribution  Policy --  Cash
Available for Distribution.'
 
     Based on the Partnership's actual results of operations for the four months
ended  April  30,  1996, limited  data  about  operations in  May  1996  and the
Partnership's estimated results  of operations  for the remainder  of 1996,  the
Partnership  believes  that it  will generate  during  1996 Available  Cash from
Operating Surplus  of approximately  $23.5  million, although  there can  be  no
assurance it will generate such amount. The Partnership's belief is based on the
assumptions  about weather, margins and market and economic conditions described
above as they apply  to the remainder  of fiscal 1996. As  a result, the  actual
Available  Cash from  Operating Surplus  generated by  the Partnership  for 1996
could deviate substantially from that currently expected.
 
     The amounts of pro forma Available Cash from Operating Surplus for 1994 and
1995 and for the twelve months and  three months ended March 31, 1996 set  forth
above  were  derived in  part from  the  pro forma  financial statements  of the
Partnership in the manner set forth  in the table entitled 'Pro Forma  Operating
Surplus'   set  forth  in  'Cash  Distribution  Policy  --  Cash  Available  for
Distribution.' The  pro forma  adjustments are  based upon  currently  available
information  and  certain estimates  and  assumptions. The  pro  forma financial
statements  do  not  purport  to  present  the  results  of  operations  of  the
Partnership  had the  Partnership actually commenced  operations as  of the date
indicated. Furthermore, the pro forma financial statements are based on  accrual
accounting  concepts while Available  Cash and Operating  Surplus are defined in
the Partnership Agreement  on a  cash accounting  basis. As  a consequence,  the
amounts  of pro forma  Available Cash from Operating  Surplus shown above should
only be viewed as  a general indication  of the amounts  of Available Cash  from
Operating Surplus that may in fact have been generated by the Partnership had it
been  formed in earlier periods.  Available Cash is defined  in the Glossary and
generally means, with respect to any fiscal quarter of the Partnership, all cash
on hand at  the end of  such quarter less  the amount of  cash reserves that  is
necessary  or appropriate in  the discretion of the  Managing General Partner to
(i) provide for the  proper conduct of the  Partnership's business, (ii)  comply
with  applicable law or  any Partnership debt instrument  or other agreement, or
(iii) provide funds for distributions to Unitholders and the General Partners in
respect of any  one or  more of  the next  four quarters.  Operating Surplus  is
defined  in the  Glossary and refers  generally to  (i) the cash  balance of the
Partnership on  the  date  the  Partnership  commences  operations,  plus  $15.4
million,  plus all  cash receipts of  the Partnership from  its operations, less
(ii) all  Partnership  operating  expenses,  debt  service  payments  (including
reserves  therefor but  not including payments  required in  connection with the
sale of assets or any refinancing with  the proceeds of new indebtedness or  any
equity  offering), maintenance capital expenditures and reserves established for
future Partnership operations. For a more complete definition of Available  Cash
and Operating Surplus, see the Glossary.
 
     In  addition, certain provisions  in the First Mortgage  Notes and the Bank
Credit Facility will,  under certain circumstances,  restrict the  Partnership's
ability  to make distributions to its partners. See 'Management's Discussion and
Analysis of  Financial Condition  and Results  of Operations  -- Description  of
Indebtedness.'
 
     Approximately  $5.5 million of the  Partnership's annual cash receipts will
be interest payments  from Triarc  under the Partnership  Loan. On  a pro  forma
basis,  such amount represents approximately  31% of the Partnership's Available
Cash from Operating Surplus in 1995. Consequently, the Partnership's ability  to
make  the Minimum Quarterly Distribution to  all Unitholders will depend in part
on Triarc's
 
                                       20
 


<PAGE>

<PAGE>
ability to make interest payments under the Partnership Loan. For a  description
of  the Partnership  Loan and  certain information  regarding Triarc,  see 'Cash
Distribution Policy  -- Partnership  Loan'  and 'Certain  Information  Regarding
Triarc,' respectively.
 
PARTNERSHIP STRUCTURE AND MANAGEMENT
 
     The  Partnership's  activities  will  be  conducted  through  the Operating
Partnership and its corporate and partnership subsidiaries. The Managing General
Partner will serve as  the managing general partner,  and National Propane  SGP,
Inc.  (the 'Special General Partner'), a wholly owned subsidiary of the Managing
General Partner,  will  serve  as  the  non-managing  general  partner,  of  the
Partnership  and the Operating Partnership. The Managing General Partner and the
Special General  Partner  are  together  referred  to  herein  as  the  'General
Partners.'  Each of  the General  Partners will own  a 1.0%  and 1.0101% general
partner interest  in each  of  the Partnership  and the  Operating  Partnership,
respectively.  The Partnership will  own a 97.9798%  limited partner interest in
the Operating Partnership. Each of the Managing General Partner and the  Special
General  Partner will own a  2% General Partner Interest  in the Partnership and
the Operating  Partnership  on a  combined  basis. Provided  that  the  Managing
General Partner has not merged with and into Triarc, the Special General Partner
may  convert all or a  portion of its General Partner  Interest into a number of
Units having rights to  distributions of Available  Cash from Operating  Surplus
equal  to the distribution rights with  respect to Available Cash from Operating
Surplus of the General Partner Interest  so converted. References herein to  the
General  Partner Interests or to distributions to  the General Partners of 4% of
Available Cash are references to the  amount of the General Partners'  aggregate
unsubordinated   percentage  interest  in  the  Partnership  and  the  Operating
Partnership on a combined basis.
 
     Following the Offering,  the management and  employees of National  Propane
who  currently manage and operate the propane business and assets to be owned by
the Partnership will generally continue to manage and operate the  Partnership's
business  as  officers and  employees of  the Managing  General Partner  and its
Affiliates. The Partnership will not have any officers or employees of its  own.
The  Managing  General Partner  will  not receive  any  management fee  or other
compensation in connection with its management  of the Partnership, but will  be
reimbursed  by  the Partnership  at cost  for all  direct and  indirect expenses
incurred on behalf of the Partnership,  including the costs of compensation  and
employee  benefit plans described herein  properly allocable to the Partnership,
and all other expenses necessary or  appropriate to the conduct of the  business
of,  and allocable to, the Partnership.  The Partnership Agreement provides that
the Managing General Partner will determine  the expenses that are allocable  to
the  Partnership in  any reasonable  manner determined  by the  Managing General
Partner in its sole discretion.  Affiliates of the General Partners'  (including
Triarc)  may provide administrative services for  the General Partners on behalf
of the  Partnership  and  will  be  reimbursed  for  all  expenses  incurred  in
connection  therewith. In  addition, the  General Partners  and their Affiliates
(including Triarc) may provide additional services to the Partnership, for which
the Partnership will be  charged reasonable fees as  determined by the  Managing
General Partner.
 
UNIT OPTION PLAN
 
     Effective  upon the closing  of the Offering,  the Managing General Partner
will adopt the National Propane Corporation  1996 Unit Option Plan (the  'Option
Plan'),  which  permits the  issuance of  options to  purchase Common  Units and
Subordinated Units and the grant  of Unit appreciation rights ('UARs')  covering
up  to an aggregate of 1,250,000 Common Units and Subordinated Units (subject to
adjustment in certain circumstances) plus an additional number of Units equal to
1% of the  number of  Units outstanding  as of  each December  31 following  the
Option  Plan's effective date which  will be added to  the total number of Units
that may be issued thereafter. The  number of Units available for issuance  will
also  be  increased by  the number  of  Units received  by the  Managing General
Partner as payment of the exercise price  of options and by the number of  Units
purchased  by the  Managing General  Partner from  an amount  equal to  the cash
proceeds received by the Managing General Partner on the exercise of options. It
is not currently  anticipated that any  Options or  UARs will be  granted at  or
prior to the closing of the Offering. See 'Management -- Unit Option Plan.'
 
                                       21
 


<PAGE>

<PAGE>
     The   following  chart  depicts  the  organization  and  ownership  of  the
Partnership, the Operating Partnership and the Operating Partnership's corporate
subsidiary immediately  after giving  effect to  the sale  of the  Common  Units
offered  in  the  Offering. The  percentages  reflected in  the  following chart
represent the approximate ownership interest in each of the Partnership and  the
Operating  Partnership, individually, and  not on an  aggregate basis. Except in
the following chart, the  ownership percentages referred  to in this  Prospectus
(including  those given below in the box entitled 'Effective Aggregate Ownership
of the  Partnership  and  the  Operating  Partnership')  reflect  the  aggregate
ownership of the Partnership and the Operating Partnership on a combined basis.


[GRAPHICAL   REPRESENTATION of  the  ownership  structure  of  the  Partnership,
the Operating Partnership, the General Partners and relevant Affiliates.  Triarc
owns  the  General  Partner  75.7% directly  and  24.3% through its wholly-owned
subsidiary SEPSCO. Each of the General Partner  and the Special General Partner,
its wholly-owned subsidiary,  own  a  1.0% and  1.0101%  unsubordinated  general
partner   interest   in    the  Partnership  and   the   Operating  Partnership,
respectively. The General Partner owns 4,533,638 Subordinated Units representing
a 41.4% general partner  interest  in the Partnership and the Public Unitholders
own 6,190,476 Common Units  representing a 56.6% limited partner interest in the
Partnership. The Partnership  owns  a  97.9798%  limited partner interest in the
Operating Partnership. National Sales  is  a  wholly-owned   subsidiary  of  the
Operating Partnership.]





                                       22



<PAGE>

<PAGE>
SUMMARY  HISTORICAL  AND PRO  FORMA  CONSOLIDATED FINANCIAL  AND  OPERATING DATA
 
     The following  table  sets  forth for  the  periods  and as  of  the  dates
indicated  summary  historical  consolidated financial  and  operating  data for
National Propane and consolidated pro forma financial and operating data for the
Partnership after  giving effect  to the  Transactions. The  summary  historical
consolidated financial data of National Propane presented below are derived from
the  financial statements of National Propane  and should be read in conjunction
with 'Selected Historical  and Pro  Forma Consolidated  Financial and  Operating
Data,'  'Management's Discussion and Analysis of Financial Condition and Results
of Operations' and  the consolidated  financial statements  of National  Propane
included  elsewhere  herein. The  Partnership's  summary consolidated  pro forma
financial data are derived from  the unaudited pro forma condensed  consolidated
financial  statements of the Partnership included elsewhere herein and should be
read in conjunction therewith. The data  for all of the periods presented  below
have been restated to reflect the effects of the June 1995 merger (the 'Merger')
of  Public Gas Company ('Public  Gas') with and into  National Propane as if the
Merger had occurred  on May 4,  1991. This transaction  is described further  in
Note 3 to the accompanying consolidated financial statements.
<TABLE>
<CAPTION>
                                                                                             PARTNERSHIP
                                                      HISTORICAL                            PRO FORMA (b)
                            -------------------------------------------------------------- ---------------
                              FISCAL YEAR ENDED       TEN MONTHS
                                  APRIL 30,             ENDED              YEAR ENDED DECEMBER 31,
                            ----------------------   DECEMBER 31,   -------------------------------------
                              1992          1993       1993 (a)       1994                 1995
                            --------      --------   ------------   --------      -----------------------
                                                (IN THOUSANDS, EXCEPT PER UNIT DATA)
<S>                         <C>           <C>        <C>            <C>           <C>       <C>
STATEMENT OF OPERATIONS
  DATA:
    Operating revenues..... $144,667      $151,931     $119,249     $151,651      $148,983    $ 148,983
    Gross profit...........   35,338        34,565       26,948       41,968        39,924       39,924
    Selling, general and
      administrative
      expenses (other than
      management fees
      charged by
      parents).............   16,776        19,578       16,501       18,657        22,423       23,923
    Management fees charged
      by parents(c)........    3,271         2,328        3,485        4,561         3,000      --
    Facilities relocation
      and corporate
      restructuring........    --            7,647(d)      8,429(d)    --            --         --
    Operating profit
      (loss)...............   15,291         5,012(d)     (1,467)(d)   18,750       14,501       16,001
    Interest expense.......  (17,696)      (16,770)      (9,949)      (9,726)      (11,719)     (11,340)
    Interest income from
      Triarc(e)............   16,334        17,127       10,360        9,751         --           5,500
    Provision for income
      taxes................    5,833         2,624        1,018        7,923         4,291          200
    Extraordinary charge...    --            --          --           (2,116)(f)     --         --
    Cumulative effect of
      change in accounting
      principles...........    --            6,259(g)     --           --            --         --
    Net income (loss)......    9,795         9,135         (347)       9,905          (605)      10,865
    Net income per
      Unit(h)..............                                                                        0.97
BALANCE SHEET DATA (AT
  PERIOD END):
    Working capital
      (deficit)............ $(24,469)(i)  $ 13,163     $  5,479     $   (631)     $ (4,357)
    Due from Triarc(e).....   92,804        65,999       71,172        --            --
    Total assets...........  234,699       218,095      191,955      137,581       139,112
    Long-term debt.........   78,556        67,511       51,851       98,711       124,266
    Stockholders' equity
      (deficit)(e).........   81,666        88,063       88,971      (19,502)      (48,600)
    Partners' capital......    --            --          --            --            --
OPERATING DATA:
    EBITDA(j).............. $ 23,670      $ 13,087     $  5,483     $ 28,774      $ 25,146    $  26,646
    Capital
      expenditures(k)......    7,039         8,290       11,260       12,593        11,013       11,013
    Retail propane gallons
      sold(l)..............  145,708       154,839      117,415      152,335       150,141      150,141
    Operating Surplus
      generated during the
      period(m)............                                                                      17,578
    Reserves(n)............
    Available Cash(m)......
 
<CAPTION>
                                                 PARTNERSHIP
                                                PRO FORMA (b)
                                                -------------
 
                                      THREE MONTHS
                                     ENDED MARCH 31,
                            ---------------------------------
                              1995             1996
                            -------- ------------------------
                          (IN THOUSANDS, EXCEPT PER UNIT DATA)
 
<S>                         <C>      <C>        <C>
STATEMENT OF OPERATIONS
  DATA:
    Operating revenues..... $50,299  $ 59,981     $  59,981
    Gross profit...........  16,437    18,827        18,827
    Selling, general and
      administrative
      expenses (other than
      management fees
      charged by
      parents).............   5,174     5,853         6,228
    Management fees charged
      by parents(c)........     750       750       --
    Facilities relocation
      and corporate
      restructuring........   --        --          --
    Operating profit
      (loss)...............  10,513    12,224        12,599
    Interest expense.......  (2,858 )   (3,138 )      (2,810)
    Interest income from
      Triarc(e)............   --        --            1,375
    Provision for income
      taxes................   3,156     3,847            50
    Extraordinary charge...   --        --          --
    Cumulative effect of
      change in accounting
      principles...........   --        --          --
    Net income (loss)......   4,799     5,517        11,392
    Net income per
      Unit(h)..............                            1.02
BALANCE SHEET DATA (AT
  PERIOD END):
    Working capital
      (deficit)............          $  1,649     $  17,436
    Due from Triarc(e).....             --           40,700
    Total assets...........           147,379       178,362
    Long-term debt.........           123,570       126,193
    Stockholders' equity
      (deficit)(e).........           (43,083 )     --
    Partners' capital......             --           32,823
OPERATING DATA:
    EBITDA(j).............. $12,934  $ 14,825     $  15,200
    Capital
      expenditures(k)......   1,820     1,457         1,457
    Retail propane gallons
      sold(l)..............  51,360    58,425        58,425
    Operating Surplus
      generated during the
      period(m)............                          13,388
    Reserves(n)............                           7,523
    Available Cash(m)......                           5,865
</TABLE>
 
- ------------
 
 (a) In  October 1993 National  Propane's fiscal year ended  April 30 and Public
     Gas' fiscal year ended  February 28 were changed  to a calendar year  ended
     December  31. In  order to  conform the  reporting periods  of the combined
     entities and to select a period deemed to meet the Securities and  Exchange
     Commission  requirement for filing financial statements for a period of one
     year, the ten-month period ended December 31, 1993 ('Transition 1993')  has
     been  presented  above  and  in  the  accompanying  consolidated  financial
     statements.
 
                                              (footnotes continued on next page)
 
                                       23





<PAGE>

<PAGE>
(footnotes continued from previous page)
     The selected consolidated financial  and operating data as  of and for  the
     fiscal  years  ended  April 30,  1992  and 1993  ('Fiscal  1993'), however,
     reflect the  former year-ends  of  both National  Propane and  Public  Gas.
     Accordingly,  Fiscal 1993 and  Transition 1993 each  include the results of
     National Propane for the two-month period ended April 30, 1993 as  follows:
     Operating  revenues --  $28,266; Operating  loss --  $(5,190); Net  loss --
     $(3,375) (see Note (d) below).
 
 (b) For a description of the adjustments and assumptions used in preparing  the
     Unaudited  Pro Forma  Condensed Consolidated Financial  and Operating Data,
     see Notes to the Unaudited  Pro Forma Condensed Consolidated Balance  Sheet
     and Statement of Operations included elsewhere herein.
 
 (c) Management  fees  charged  by  parents include  costs  charged  to National
     Propane by Triarc  and to Public  Gas by  SEPSCO, its parent  prior to  the
     Merger.   (See  Note   19  to   the  accompanying   consolidated  financial
     statements).
 
 (d) Includes  certain  significant  pretax  charges  recorded  in  April   1993
     affecting  Fiscal 1993 and  Transition 1993 operating  profit consisting of
     (i) $8.4  million  of  facilities relocation  and  corporate  restructuring
     charges  ($7.6 million  of which affected  both Fiscal  1993 and Transition
     1993 due to National  Propane's April 1993 being  included in both  periods
     and  $0.8 million  of which  affected only  Transition 1993)  and (ii) $0.5
     million of  allocated  costs of  a  payment  to the  Special  Committee  of
     Triarc's  Board of  Directors ($0.4 million  of which  affected both Fiscal
     1993 and Transition 1993).  (See Note 20  to the accompanying  consolidated
     financial statements).
 
 (e) In  November 1994, National Propane reclassified its receivable from Triarc
     as a reduction  of stockholders'  equity and began  reserving all  interest
     accrued  subsequent thereto.  Receivables from  SEPSCO are  classified as a
     component of stockholders' equity for all  of the above periods. (See  Note
     13  to the accompanying  consolidated financial statements).  The pro forma
     due from parent is classified as an  asset because it will be evidenced  by
     an interest-bearing note with a fixed maturity.
 
 (f) The  extraordinary charge represents the  write-off of unamortized deferred
     financing  costs  and  original  issue  discount,  net  of  income   taxes,
     associated with the early extinguishment of debt.
 
 (g) The  cumulative  effect of  change in  accounting principles  resulted from
     National Propane's adoption of Statement of Financial Accounting  Standards
     No.  109 ('SFAS No.  109'), 'Accounting for Income  Taxes' effective May 1,
     1992.
 
 (h) See Note  (f)  of  Notes  to Unaudited  Pro  Forma  Condensed  Consolidated
     Statement  of Operations included elsewhere  herein for details relating to
     the calculation of net income per Unit.
 
 (i) Reflects the classification of $35.0  million of long-term debt, which  was
     repaid in Fiscal 1993, as a current liability.
 
 (j) EBITDA  is  defined  as  operating  profit  (loss)  plus  depreciation  and
     amortization (excluding amortization of  deferred financing costs).  EBITDA
     should  not be considered as an alternative  to net income (as an indicator
     of operating performance) or as an  alternative to cash flow (as a  measure
     of  liquidity or ability to service debt  obligations) and is not a measure
     of performance or financial  condition under generally accepted  accounting
     principles,   but  provides  additional   information  for  evaluating  the
     Partnership's ability  to distribute  the Minimum  Quarterly  Distribution.
     Cash  flows  in  accordance with  generally  accepted  accouting principles
     consist of  cash  flows  from  (i)  operating,  (ii)  investing  and  (iii)
     financing  activities.  Cash flows  from  operating activities  reflect net
     income  (loss)  (including  charges  for  interest  and  income  taxes  not
     reflected  in  EBITDA), adjusted  for (i)  all  non-cash charges  or income
     (including, but not  limited to,  depreciation and  amortization) and  (ii)
     changes  in  operating assets  and liabilities  (not reflected  in EBITDA).
     Further, cash  flows  from  investing  and  financing  activities  are  not
     included  in  EBITDA.  For  a  discussion  of  the  Partnership's operating
     performance and cash flows provided  by (used in) operating, investing  and
     financing   activities,  see  'Management's   Discussion  and  Analysis  of
     Financial Condition and Results of Operations.'
 
                                              (footnotes continued on next page)
 
                                       24
 


<PAGE>

<PAGE>
(footnotes continued from previous page)
 
 (k) The Partnership's  capital  expenditures, including  capital  leases,  fall
     generally  into  three  categories: (i)  maintenance  capital expenditures,
     which  include  expenditures  for   replacement  of  property,  plant   and
     equipment,  (ii) growth capital expenditures  for the expansion of existing
     operations  and  (iii)  acquisition  capital  expenditures,  which  include
     expenditures related to the acquisition of retail propane operations.
 
    An  analysis by category for the years  ended December 31, 1994 and 1995 and
    the three months ended March 31, 1995 and 1996 is as follows:
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED            THREE MONTHS
                                                                  DECEMBER 31,          ENDED MARCH 31,
                                                               -------------------     -----------------
                                                                1994        1995        1995       1996
                                                               -------     -------     ------     ------
                                                                            (IN THOUSANDS)
<S>                                                            <C>         <C>         <C>        <C>
Maintenance(1)..............................................   $ 4,228     $ 4,030     $1,064     $  649
Growth......................................................     3,672       4,936        733        808
Acquisition.................................................     4,693       2,047(2)      23       --
                                                               -------     -------     ------     ------
          Total.............................................   $12,593     $11,013     $1,820     $1,457
                                                               -------     -------     ------     ------
                                                               -------     -------     ------     ------
</TABLE>
 
        --------------------
        (1) Includes expenditures not expected  to occur on  an annual basis  as
            follows:  1994 --  $1,790 (primarily  computer hardware  and systems
            installation); 1995 -- $590 (primarily the purchase of an airplane).
        (2) Includes $1,864 of assets purchased  and contributed by Triarc  (see
            Note 19 to the accompanying consolidated financial statements).
 (l) Retail  propane gallons sold  includes sales to  (i) residential customers,
     (ii) commercial and industrial customers, (iii) agricultural customers, and
     (iv) dealers (located primarily  in the Northeast)  that resell propane  to
     residential and commercial customers.
 
(m) For  a more  complete discussion of  pro forma Available  Cash and Operating
    Surplus, see 'Cash Distribution Policy -- Cash Available for Distribution.'
 
 (n) The Partnership  will utilize  reserves  from time  to time  to  facilitate
     future  funding of,  among other things,  maintenance capital expenditures,
     operating expenditures, interest  payments and  distributions to  partners.
     For  example, during the first and  fourth fiscal quarters, the Partnership
     may reserve for operating and capital expenditures to be made in the second
     and third  fiscal  quarters.  These  reserves  for  operating  and  capital
     expenditures  may be  at their  highest at  the end  of the  first quarter,
     assuming  normal  weather  and  operating   conditions,  as  well  as   the
     Partnership's  existing operations. By the end of the fourth quarter, these
     reserves would typically be reduced. In addition, the Partnership generally
     must reserve at the end of the  first and third fiscal quarters 50% of  the
     semiannual  interest on  the First  Mortgage Notes  due at  the end  of the
     second and fourth fiscal  quarters. The approximate  amount required to  be
     reserved for this purpose in such quarters is $2.7 million. The Partnership
     may, however, choose to reserve a full interest payment or $5.4 million, at
     its  discretion. The Partnership is also  required to make reserves for the
     future payment of principal and interest  on the Bank Credit Facility.  See
     'Management's Discussion and Analysis of Financial Condition and Results of
     Operations  -- Description  of Indebtedness.'  Furthermore, the Partnership
     Agreement allows  the  Managing  General Partner,  in  its  discretion,  to
     reserve  for up  to four  quarters of  future distributions  of the Minimum
     Quarterly Distribution to Unitholders. Except  as required by the terms  of
     the Partnership's indebtedness, the extent and timing of these reserves, if
     any,  are  determinable solely  by the  Managing  General Partner  and will
     largely depend on the actual results  of operations of the Partnership  and
     other  factors beyond  the control  of the  Managing General  Partner. As a
     result, the  amount of  such  reserves may  vary substantially  from  those
     described  above and no  assurance can be  given as to  the actual level of
     reserves that will be established with respect to any quarter.
 
                                       25



<PAGE>

<PAGE>
                                  THE OFFERING
 
<TABLE>
<S>                                         <C>
Securities Offered........................  6,190,476  Common Units (7,119,047 Common  Units if the Underwriters'
                                              over-allotment option is exercised in full).
Units to be Outstanding After
  the Offering............................  6,190,476 Common Units representing a 55.4% limited partner  interest
                                              in  the Partnership and 4,533,638 Subordinated Units representing a
                                              40.6% subordinated general partner interest in the Partnership.  If
                                              the  Underwriters'  over-allotment  option  is  exercised  in full,
                                              928,571 additional Common Units will be issued by the  Partnership,
                                              resulting  in  7,119,047  Common Units  and  4,533,638 Subordinated
                                              Units outstanding representing a 58.8% limited partner interest and
                                              a 37.5% subordinated general  partner interest in the  Partnership,
                                              respectively. All 4,533,638 Subordinated Units held by the Managing
                                              General  Partner and  its Affiliates are  general partner interests
                                              (unless the  Managing  General  Partner  or  its  Affiliates  elect
                                              otherwise)  and all Common Units issued in the Offering are limited
                                              partner  interests.  The  Subordinated  Units  will   automatically
                                              convert  into limited  partner interests upon  being converted into
                                              Common Units, and may be  converted into limited partner  interests
                                              earlier  upon the election of the  Managing General Partner and its
                                              Affiliates or upon a transfer to a non-Affiliate.
Distributions of Available Cash...........  The Partnership  will distribute  all of  its Available  Cash  within
                                              approximately  45  days  after  the  end  of  each  quarter  to the
                                              Unitholders (including the Managing General Partner as a holder  of
                                              Subordinated  Units) of record on the applicable record date and to
                                              the General Partners. 'Available Cash' for any quarter will consist
                                              generally of  all cash  on hand  at  the end  of such  quarter,  as
                                              adjusted for reserves. The complete definition of Available Cash is
                                              set  forth in the Glossary. The  Managing General Partner has broad
                                              discretion in making cash disbursements and establishing  reserves,
                                              thereby  affecting  the  amount  of  Available  Cash  that  will be
                                              distributed with respect to any quarter. In addition, the terms  of
                                              the   agreements  governing  the   Partnership's  indebtedness  are
                                              expected to require  that certain  reserves be  maintained for  the
                                              payment  of  principal and  interest.  See 'Risk  Factors  -- Risks
                                              Inherent in an Investment in the Partnership' for a description  of
                                              the  reserves  on  payment  of  principal  and  interest  that  the
                                              Partnership will  be  required  to maintain.  Available  Cash  will
                                              generally  be distributed 96% to Unitholders  and 4% to the General
                                              Partners, pro rata, except that if distributions of Available  Cash
                                              from  Operating Surplus  within a  quarter exceed  specified target
                                              levels in excess of the Minimum Quarterly Distribution the  General
                                              Partners (as holders of the General Partner Interests and the right
                                              to  receive Incentive Distributions), will  receive a percentage of
                                              such excess distributions that  will increase to up  to 50% of  the
                                              excess  distributions above the  highest Target Distribution Level.
                                              On a pro  forma basis,  quarterly distributions  of Available  Cash
                                              would  not  have exceeded  such target  levels and  the Partnership
                                              would not have distributed any such excess payments to the  General
                                              Partners   in  fiscal   1994  and  1995.   See  'Cash  Distribution
                                              Policy  --  Incentive  Distributions  --  Hypothetical   Annualized
                                              Yield.'   The  General  Partners  will  not  be  required  to  make
                                              additional  capital  contributions  to   the  Partnership  or   the
                                              Operating  Partnership in connection with the exercise of the over-
</TABLE>
 
                                       26
 


<PAGE>

<PAGE>
 
<TABLE>
<S>                                         <C>
                                              allotment option, but will nonetheless be entitled to receive 4% of
                                              distributions of Available Cash.
Distributions to Common and
  Subordinated Unitholders................  The Partnership intends, to the extent there is sufficient  Available
                                              Cash from Operating Surplus, to distribute to each holder of Common
                                              Units  at least  the Minimum  Quarterly Distribution  of $0.525 per
                                              Common Unit per quarter. The Minimum Quarterly Distribution is  not
                                              guaranteed  and is subject  to adjustment as  described under 'Cash
                                              Distribution Policy -- Adjustment of Minimum Quarterly Distribution
                                              and Target Distribution Levels.' The Minimum Quarterly Distribution
                                              for the period from the  closing of the Offering through  September
                                              30,  1996  will be  adjusted  based on  the  actual length  of such
                                              period.
                                            With respect to each quarter  during the Subordination Period,  which
                                              will  generally  not  end  prior  to  June  30,  2001,  the  Common
                                              Unitholders will generally  have the right  to receive the  Minimum
                                              Quarterly  Distribution,  plus Common  Unit Arrearages,  before any
                                              distribution of Available  Cash from Operating  Surplus is made  to
                                              the  Subordinated  Unitholders.  This  subordination  feature  will
                                              enhance  the  Partnership's  ability  to  distribute  the   Minimum
                                              Quarterly Distribution on the Common Units during the Subordination
                                              Period. Subordinated Units will not accrue distribution arrearages.
                                              Upon  expiration of the Subordination  Period, Common Units will no
                                              longer  accrue  distribution  arrearages.  See  'Cash  Distribution
                                              Policy.'
Subordination Period......................  The  Subordination Period will  generally extend from  the closing of
                                              the Offering until  the first  day of any  quarter beginning  after
                                              June  30, 2001 in  respect of which  (i) distributions of Available
                                              Cash  from  Operating   Surplus  on  the   Common  Units  and   the
                                              Subordinated  Units with respect  to each of  the three consecutive
                                              four-quarter periods  immediately preceding  such date  equaled  or
                                              exceeded  the sum of  the Minimum Quarterly  Distribution on all of
                                              the outstanding  Common Units  and Subordinated  Units during  such
                                              periods,  (ii) the  Adjusted Operating  Surplus (as  defined in the
                                              Glossary)  generated   during  each   of  the   three   consecutive
                                              four-quarter  periods  immediately preceding  such date  equaled or
                                              exceeded the sum of  the Minimum Quarterly  Distribution on all  of
                                              the outstanding Common Units and Subordinated Units and the related
                                              distribution  on the General Partner Interests during such periods,
                                              and (iii) there  are no  outstanding Common  Unit Arrearages.  Upon
                                              expiration  of the Subordination Period, all remaining Subordinated
                                              Units will convert  into Common  Units on a  one-for-one basis  and
                                              will thereafter participate pro rata with the other Common Units in
                                              distributions  of  Available Cash.  The Partnership  Agreement also
                                              provides that if the Managing General Partner is removed other than
                                              for Cause (as  defined in the  Glossary), the Subordination  Period
                                              will  end and all outstanding  Subordinated Units will convert into
                                              Common Units. See 'Cash  Distribution Policy' and 'The  Partnership
                                              Agreement.'
Early Conversion of Subordinated Units....  A portion of the Subordinated Units will convert into Common Units on
                                              the   first  day  after   the  record  date   established  for  the
                                              distribution in respect of any quarter ending on or after (a)  June
                                              30,  1999  (with respect  to 1,133,410  of the  Subordinated Units,
                                              subject to  adjustment) and  (b)  June 30,  2000 (with  respect  to
                                              1,133,410 Subordinated Units, subject to adjustment), in respect of
</TABLE>
 
                                       27
 


<PAGE>

<PAGE>
 
<TABLE>
<S>                                         <C>
                                              which (i) distributions of Available Cash from Operating Surplus on
                                              the Common Units and the Subordinated Units with respect to each of
                                              the  three consecutive  four-quarter periods  immediately preceding
                                              such date  equaled or  exceeded the  sum of  the Minimum  Quarterly
                                              Distribution   on  all   of  the   outstanding  Common   Units  and
                                              Subordinated Units during such periods, (ii) the Adjusted Operating
                                              Surplus generated during each  of the two consecutive  four-quarter
                                              periods immediately preceding such date equaled or exceeded the sum
                                              of  the Minimum  Quarterly Distribution  on all  of the outstanding
                                              Common Units and Subordinated Units and the related distribution on
                                              the General Partner Interest during  such periods, and (iii)  there
                                              are  no outstanding Common Unit Arrearages; provided, however, that
                                              the early conversion  of the second  tranche of Subordinated  Units
                                              may  not  occur  until  at  least  one  year  following  the  early
                                              conversion of the  first tranche of  Subordinated Units. See  'Cash
                                              Distribution  Policy  --  Quarterly  Distributions  from  Operating
                                              Surplus during Subordination Period.'
 
Incentive Distributions...................  If quarterly  distributions  of  Available  Cash  exceed  the  Target
                                              Distribution  Levels,  the  General  Partners  (as  holders  of the
                                              General Partner  Interests  and  the  right  to  receive  Incentive
                                              Distributions  and  not  as  holders  of  Subordinated  Units) will
                                              receive additional distributions of Available Cash that exceed such
                                              Target Distribution Levels as follows:
</TABLE>
 
<TABLE>
<CAPTION>
                                                         MARGINAL
                                                        PERCENTAGE
                                                       INTEREST IN
                                        QUARTERLY     DISTRIBUTIONS
                                       DISTRIBUTION  ----------------
                                          TARGET      UNIT-   GENERAL
                                          AMOUNT     HOLDERS  PARTNERS
                                       ------------  -------  -------
 
<S>                                    <C>           <C>      <C>
Minimum Quarterly Distribution........       $0.525      96%       4%
First Target Distribution.............       $0.577      96%       4%
Second Target Distribution............       $0.665      85%      15%
Third Target Distribution.............       $0.863      75%      25%
Thereafter............................ above $0.863      50%      50%
</TABLE>
 
<TABLE>
<S>                                         <C>
                                            The Target Distribution Levels are based on the amounts of  Available
                                              Cash  from Operating Surplus  distributed that exceed distributions
                                              made with respect to the Minimum Quarterly Distribution and  Common
                                              Unit Arrearages, if any. See 'Cash Distribution Policy -- Incentive
                                              Distributions  -- Hypothetical Annualized Yield.' The distributions
                                              to the General Partners described above  that are in excess of  the
                                              4%  General Partner Interests (and not  as a holder of Subordinated
                                              Units) are  referred to  herein  as the  'Incentive  Distributions'
                                              which  are payable  to the  Managing General  Partner. The Managing
                                              General  Partner  may  transfer  its  right  to  receive  Incentive
                                              Distributions  to one or more Persons (as defined in the Glossary).
                                              On a pro  forma basis,  quarterly distributions  of Available  Cash
                                              would  not  have exceeded  such target  levels and  the Partnership
                                              would not have distributed any such excess payments to the Managing
                                              General Partner in 1994 and 1995.
Adjustment of Minimum Quarterly
  Distribution and Target Distribution
  Levels..................................  The Minimum Quarterly Distribution and the Target Distribution Levels
                                              are  subject  to  downward  adjustments  in  the  event  that   the
                                              Unitholders  receive distributions  of Available  Cash from Capital
                                              Surplus (as defined in the
</TABLE>
 
                                       28
 


<PAGE>

<PAGE>
 
<TABLE>
<S>                                         <C>
                                              Glossary) or legislation is enacted or existing law is modified  or
                                              interpreted by the relevant governmental authority in a manner that
                                              causes the Partnership to be treated as an association taxable as a
                                              corporation or otherwise taxable as an entity for federal, state or
                                              local  income tax  purposes. If,  as a  result of  distributions of
                                              Available Cash from Capital Surplus, the Unitholders receive a full
                                              return of the initial public offering price of the Common Units and
                                              any unpaid Common Unit Arrearages, the additional distributions  of
                                              Available Cash payable to the General Partners will increase to 50%
                                              of  all  amounts  distributed  thereafter.  See  'Cash Distribution
                                              Policy -- General' and ' -- Distributions from Capital Surplus.'
Partnership's Ability to Issue Additional
  Units...................................  The Partnership  Agreement generally  authorizes the  Partnership  to
                                              issue  an unlimited number of  additional limited partner interests
                                              and  other   equity  securities   of  the   Partnership  for   such
                                              consideration  and  on  such  terms  and  conditions  as  shall  be
                                              established by the Managing General Partner in its sole  discretion
                                              without  the approval of the  Unitholders. During the Subordination
                                              Period, however, the  Partnership may not  issue equity  securities
                                              ranking prior or senior to the Common Units or an aggregate of more
                                              than  3,095,238 Common Units or  an equivalent number of securities
                                              ranking on parity  with the  Common Units  (excluding Common  Units
                                              issued  upon exercise  of the  Underwriters' over-allotment option,
                                              upon conversion  of  Subordinated  Units, upon  conversion  of  the
                                              Special  General Partner's combined  unsubordinated general partner
                                              interest or  in connection  with  certain acquisitions  or  capital
                                              additions  and improvements, the repayment of certain indebtedness,
                                              or pursuant to employee benefit plans), in either case without  the
                                              approval  of a Unit Majority (as defined in the Glossary). See 'The
                                              Partnership Agreement -- Issuance of Additional Securities.'
Limited Call Right........................  If at any  time less than  20% of the  issued and outstanding  Common
                                              Units are held by persons other than the General Partners and their
                                              Affiliates, the General Partners (or an Affiliate designated by the
                                              General Partners) may purchase all of the remaining Common Units at
                                              a  price generally  equal to the  then current market  price of the
                                              Common Units.  See  'The  Partnership  Agreement  --  Limited  Call
                                              Right.'
Limited Voting Rights.....................  Unitholders will have only limited voting rights on matters affecting
                                              the   Partnership's  business  as   specified  in  the  Partnership
                                              Agreement. The  approval of  at least  a majority  (and in  certain
                                              cases  a  greater  percentage)  of the  outstanding  Units  will be
                                              required in  such  instances.  The Managing  General  Partner  will
                                              manage   and   operate  the   Partnership.  See   'The  Partnership
                                              Agreement.'
Removal and Withdrawal of the General
  Partners................................  Subject to certain  conditions, the Managing  General Partner may  be
                                              removed upon the approval of the holders of at least 66 2/3% of the
                                              outstanding Units (including Units held by the General Partners and
                                              their Affiliates). A meeting of the holders of the Common Units may
                                              be called only by the Managing General Partner or by the holders of
                                              20%  or more of the outstanding  Common Units. The Managing General
                                              Partner's current ownership interest  in the Partnership  precludes
                                              any  vote to  remove the  Managing General  Partner or  the Special
                                              General Partner  without the  Managing General  Partner's  consent.
                                              Generally, the Special
</TABLE>
 
                                       29
 


<PAGE>

<PAGE>
 
<TABLE>
<S>                                         <C>
                                              General  Partner shall be removed or withdraw as general partner of
                                              the Partnership and the Operating  Partnership upon the removal  or
                                              withdrawal  of the Managing General  Partner. However, upon certain
                                              bankruptcy  related  withdrawal  events  of  the  Managing  General
                                              Partner,  the Special  General Partner  will not  withdraw but will
                                              become  the  managing  general  partner  of  the  Partnership.  The
                                              Managing  General Partner has agreed not to voluntarily withdraw as
                                              managing general  partner  of  the Partnership  and  the  Operating
                                              Partnership  prior to June 30, 2006, subject to limited exceptions,
                                              without obtaining the approval  of a Unit  Majority (as defined  in
                                              the  Glossary) and furnishing an Opinion  of Counsel (as defined in
                                              the Glossary).  See 'The  Partnership  Agreement --  Withdrawal  or
                                              Removal of the General Partners' and ' -- Meetings; Voting.'
Change of Management Provisions...........  Any  person  or  group  (other than  the  General  Partners  or their
                                              Affiliates) that acquires  beneficial ownership of  20% or more  of
                                              the outstanding Units of any class will lose its voting rights with
                                              respect  to all of its Units.  In addition, if the Managing General
                                              Partner  is  removed  as  the  managing  general  partner  of   the
                                              Partnership  other than for Cause and the Units held by the General
                                              Partners and  their  Affiliates are  not  voted in  favor  of  such
                                              removal,  the  Subordination  Period  will  end,  all  Common  Unit
                                              Arrearages will terminate, all outstanding Subordinated Units  will
                                              immediately  convert into Common  Units on a  one-for-one basis and
                                              the General Partners  will have  the right to  convert the  General
                                              Partner  Interests into Common Units or  to receive in exchange for
                                              such interests, cash  payments equal  to the fair  market value  of
                                              such  interests. See  'The Partnership  Agreement --  Withdrawal or
                                              Removal of  the  General  Partners,' '  --  Meetings;  Voting'  and
                                              ' -- Change of Management Provisions.'
Transfer Restrictions.....................  All  purchasers of  Common Units  in the  Offering and  purchasers of
                                              Common Units in the open market  who wish to become Unitholders  of
                                              record must deliver an executed transfer application (the 'Transfer
                                              Application,'  the form of which is  included in this Prospectus as
                                              Appendix B) before the  issuance or transfer  of such Common  Units
                                              will be registered and before cash distributions and federal income
                                              tax allocations will be made to the transferee. See 'Description of
                                              the Common Units -- Transfer of Common Units.'
Distributions Upon Liquidation............  In  the  event  of  any liquidation  of  the  Partnership  during the
                                              Subordination Period, the outstanding Common Units will be entitled
                                              to receive a distribution out of the net assets of the  Partnership
                                              in  preference  to  liquidating distributions  on  the Subordinated
                                              Units to the extent of their Unrecovered Capital (as defined in the
                                              Glossary) and  any unpaid  Common  Unit Arrearages.  Under  certain
                                              circumstances,  there may be  insufficient gain for  the holders of
                                              Common Units to fully recover  all such amounts, even though  there
                                              may  be cash available for  distribution to holders of Subordinated
                                              Units. Following conversion of  the Subordinated Units into  Common
                                              Units,  all Units will be treated  the same upon liquidation of the
                                              Partnership. See 'Cash Distribution Policy -- Distributions of Cash
                                              Upon Liquidation.'
Use of Proceeds...........................  The net proceeds  to the Partnership  from the sale  of Common  Units
                                              offered  in the Offering  are estimated to  be approximately $118.2
                                              million, after deducting underwriting
</TABLE>
 
                                       30
 


<PAGE>

<PAGE>
 
<TABLE>
<S>                                         <C>
                                              discounts and  commissions,  estimated  fees and  expenses  of  the
                                              Offering  and an  investment banking  advisory fee.  As of  May 31,
                                              1996, approximately $66 million  of such proceeds  will be used  to
                                              repay  indebtedness  of  National  Propane  outstanding  under  the
                                              Existing Credit Facility, approximately $40.7 million will be  used
                                              to  make  the Partnership  Loan to  Triarc and  approximately $11.5
                                              million will be used to pay accrued management fees and tax sharing
                                              payments due  to Triarc.  If  the Underwriters'  over-allotment  is
                                              exercised  in full, the  estimated additional net  proceeds will be
                                              approximately $18.1  million.  All of  the  net proceeds  from  the
                                              exercise,  if any, of the  Underwriters' over-allotment option will
                                              be retained by  the Partnership  and used  for general  partnership
                                              purposes.
Listing...................................  The Common Units have been approved for listing on the New York Stock
                                              Exchange, Inc. ('NYSE') upon notice of issuance.
NYSE Symbol...............................  'NPL'
</TABLE>
 
                                       31
 


<PAGE>

<PAGE>
                         SUMMARY OF TAX CONSIDERATIONS
 
     The  tax consequences of  an investment in the  Partnership to a particular
investor will  depend in  part on  the investor's  own tax  circumstances.  Each
prospective  investor should consult a tax  advisor about the federal, state and
local tax consequences  of an  investment in Common  Units. The  following is  a
brief  summary of certain  expected tax consequences of  owning and disposing of
Common Units. The following discussion, insofar as it relates to federal  income
tax  laws,  is based  in  part upon  the opinion  of  Counsel described  in 'Tax
Considerations.'  This  summary   is  qualified  by   the  discussion  in   'Tax
Considerations,'  particularly  the qualifications  on  the opinions  of Counsel
described therein.
 
PARTNERSHIP STATUS
 
     In the opinion of Counsel, the  Partnership will be classified for  federal
income  tax purposes as a partnership, and the beneficial owners of Common Units
will generally  be  considered partners  in  the Partnership.  Accordingly,  the
Partnership  will pay  no federal  income taxes,  but the  Partnership's income,
gains, losses  and deductions  will  be includable  in  the federal  income  tax
returns  of the Unitholders. In general, cash distributions to a Unitholder will
be taxable only if, and  to the extent that, they  exceed the tax basis in  such
Unitholder's Common Units.
 
PARTNERSHIP ALLOCATIONS
 
     In  general, income and  loss of the  Partnership will be  allocated to the
General Partners and the  Unitholders for each taxable  year in accordance  with
their respective percentage interests in the Partnership, as determined annually
and  prorated on a monthly basis  and subsequently apportioned among the General
Partners and the Unitholders of record as  of the opening of the first  business
day  of the month to  which they relate, even  though Unitholders may dispose of
their Units during the  month in question. For  purposes of determining  federal
income  tax liability, a Unitholder will be required to take into account income
generated by the Partnership allocable to such Unitholder for each taxable  year
of  the Partnership ending within or with  the Unitholder's taxable year even if
cash distributions  are  not  made  to such  Unitholder.  As  a  consequence,  a
Unitholder's share of taxable income of the Partnership (and possibly the income
tax payable by such Unitholder with respect to such income) may exceed the cash,
if any, actually distributed to such Unitholder.
 
RATIO OF TAXABLE INCOME TO DISTRIBUTIONS
 
     The  Partnership estimates that a purchaser of Common Units in the Offering
who holds such Common Units through December  31, 2000, will be allocated, on  a
cumulative  basis, an amount of federal taxable income for such period that will
be less  than 30%  of the  cash distributed  with respect  to that  period.  The
Partnership  further estimates  that for  taxable years  after the  taxable year
ending December 31, 2000, the taxable  income allocable to the Unitholders  will
represent  a significantly higher percentage (and could in certain circumstances
exceed the amount) of cash distributed  to them. These estimates are based  upon
the  assumption that the gross income from operations will approximate an amount
required to make the  Minimum Quarterly Distribution with  respect to all  Units
and  other  assumptions  with respect  to  capital expenditures,  cash  flow and
anticipated cash distributions. These estimates and assumptions are subject  to,
among  other things,  numerous business,  economic, regulatory,  competitive and
political uncertainties  which  are  beyond  the  control  of  the  Partnership.
Further,  the estimates are based  on current tax law  and certain tax reporting
positions that the  Partnership intends to  adopt and with  which the IRS  could
disagree.  Accordingly, no assurance can be  given that the estimates will prove
to be correct. The actual percentages could be higher or lower than as described
above and any  differences could  be material.  See 'Tax  Considerations --  Tax
Consequences of Unit Ownership -- Ratio of Taxable Income to Distributions.'
 
BASIS OF COMMON UNITS
 
     A  Unitholder's  initial  tax basis  for  a  Common Unit  purchased  in the
Offering will generally be the amount paid for the Common Units. A  Unitholder's
basis is generally increased by such Unitholder's
 
                                       32
 


<PAGE>

<PAGE>
share  of  Partnership  income  and  decreased  by  such  Unitholder's  share of
Partnership losses and distributions.
 
LIMITATIONS ON DEDUCTIBILITY OF PARTNERSHIP LOSSES
 
     In the  case  of taxpayers  subject  to the  passive  loss rules  (such  as
individuals  and  closely held  corporations),  any Partnership  losses  will be
available only to offset future income  generated by the Partnership and  cannot
be  used to offset income from other activities, including passive activities or
investments. Any  losses unused  by virtue  of  the passive  loss rules  may  be
deducted  when the  Unitholder disposes of  all of  his Common Units  in a fully
taxable transaction  with an  unrelated  party. In  addition, a  Unitholder  may
deduct  such Unitholder's  share of  Partnership losses  only to  the extent the
losses do not exceed such Unitholder's  basis in such Unitholder's Common  Units
or,  in  the  case  of  taxpayers  subject  to  the  'at  risk'  rules  (such as
individuals), the  amount  the  Unitholder  is  at  risk  with  respect  to  the
Partnership's activities, if less than such tax basis.
 
SECTION 754 ELECTION
 
     The Partnership intends to make the election provided for by Section 754 of
the Internal Revenue Code of 1986, as amended (the 'Code'), which will generally
result  in  a Unitholder  being allocated  income  and deductions  calculated by
reference to the  portion of  that Unitholder's purchase  price attributable  to
each asset of the Partnership.
 
DISPOSITION OF COMMON UNITS
 
     A  Unitholder who sells Common  Units will recognize gain  or loss equal to
the difference between the amount realized  and the adjusted tax basis in  those
Common  Units. Thus, distributions of cash  from the Partnership to a Unitholder
in excess of  the income allocated  to such Unitholder  will, in effect,  become
taxable  income if  such Unitholder  sells the  Common Units  at or  above their
original cost. A  portion of the  amount realized (whether  or not  representing
gain) may be ordinary income.
 
STATE, LOCAL AND OTHER TAX CONSIDERATIONS
 
     In  addition to federal income taxes,  Unitholders will be subject to other
taxes, such as state and local  income taxes, unincorporated business taxes  and
estate,  inheritance  or  intangible  taxes  that  are  imposed  by  the various
jurisdictions in which  a Unitholder resides  or in which  the Partnership  does
business  or owns property. Although  an analysis of those  various taxes is not
presented here,  each prospective  Unitholder  should consider  their  potential
impact  on such Unitholder's investment in the Partnership. The Partnership will
initially own property and conduct business  in New York, Florida, Michigan  and
21  other states. A  Unitholder will also  be required to  file state income tax
returns and to pay taxes in various  states and may be subject to penalties  for
failure  to comply with such requirements.  Based on 1995 revenues, the Managing
General  Partner   currently  anticipates   that   substantially  all   of   the
Partnership's   income  will  be  generated   in  Arkansas,  Arizona,  Colorado,
Connecticut,  Florida,  Iowa,  Illinois,  Massachusetts,  Michigan,   Minnesota,
Missouri,  New  Hampshire, New  Mexico,  New York,  and  Wisconsin. Each  of the
states, other  than Florida,  in which  the Managing  General Partner  currently
anticipates  that  a substantial  portion of  the  Partnership's income  will be
generated currently imposes a personal income tax. In certain states, tax losses
may not  produce a  tax  benefit in  the year  incurred  (if, for  example,  the
Partnership  has no income from  sources within that state)  and also may not be
available to offset income in subsequent  taxable years. Some of the states  may
require  the Partnership, or the Partnership may elect, to withhold a percentage
of income from amounts to be distributed  to a Unitholder who is not a  resident
of  that state.  Withholding, the  amount of which  may be  more or  less than a
particular Unitholder's income tax liability to  the state, may not relieve  the
nonresident Unitholder from the obligation to file an income tax return. Amounts
withheld  may  be  treated as  if  distributed  to Unitholders  for  purposes of
determining the amounts distributed by the Partnership. Based on current law and
its estimate of future Partnership operations, the Partnership anticipates  that
any amounts required to be withheld will not be material.
 
                                       33
 


<PAGE>

<PAGE>
     It  is the responsibility of each prospective Unitholder to investigate the
legal and tax consequences, under the  laws of pertinent states and  localities,
of   such  Unitholder's   investment  in  the   Partnership.  Accordingly,  each
prospective Unitholder should consult, and  must depend upon, that  Unitholder's
own  tax counsel or other  advisor with regard to  those matters. Further, it is
the responsibility of each Unitholder to  file all federal, state and local  tax
returns  that may be  required of such  Unitholder. Counsel has  not rendered an
opinion on  the  state  or  local  tax consequences  of  an  investment  in  the
Partnership.
 
OWNERSHIP OF COMMON UNITS BY TAX-EXEMPT ORGANIZATIONS AND CERTAIN OTHER
INVESTORS
 
     An  investment  in  Common  Units  by  tax-exempt  organizations (including
individual retirement accounts and other retirement plans), regulated investment
companies and foreign persons  raises issues unique  to such persons.  Virtually
all  of the Partnership income  allocated to a Unitholder  which is a tax-exempt
organization will be unrelated business taxable income, and thus will be taxable
to such Unitholder; no significant amount of the Partnership's gross income will
be qualifying  income for  purposes  of determining  whether a  Unitholder  will
qualify as a regulated investment company; and a Unitholder who is a nonresident
alien,  foreign corporation  or other foreign  person will be  regarded as being
engaged in a trade or business in the United States as a result of ownership  of
a  Common Unit and thus will be required  to file federal income tax returns and
to pay tax on  such Unitholder's share of  Partnership taxable income. See  'Tax
Considerations  -- Uniformity of  Units -- Tax-Exempt  Organizations and Certain
Other Investors.'
 
TAX SHELTER REGISTRATION
 
     The Code  generally requires  that 'tax  shelters' be  registered with  the
Secretary  of the  Treasury. It  is arguable  that the  Partnership will  not be
subject to  this registration  requirement.  Nevertheless, the  Partnership  has
registered  as a tax shelter  with the IRS. ISSUANCE  OF THE REGISTRATION NUMBER
DOES NOT  INDICATE THAT  AN INVESTMENT  IN THE  PARTNERSHIP OR  THE CLAIMED  TAX
BENEFITS  HAS  BEEN  REVIEWED,  EXAMINED  OR  APPROVED  BY  THE  IRS.  See  'Tax
Considerations -- Administrative Matters -- Registration as a Tax Shelter.'
 
                                       34



<PAGE>

<PAGE>
                                  RISK FACTORS
 
     A prospective investor should carefully consider the risk factors set forth
below  as well  as the  other information  set forth  in this  Prospectus before
purchasing the Common Units offered in the Offering.
 
RISKS INHERENT IN THE PARTNERSHIP'S BUSINESS
 
WEATHER CONDITIONS AFFECT THE DEMAND FOR PROPANE
 
     Weather conditions, which can vary substantially from year to year, have  a
significant  impact on the demand for  propane for both heating and agricultural
purposes. Many customers of the Partnership rely heavily on propane as a heating
fuel. Accordingly,  the volume  of propane  sold is  at its  highest during  the
six-month  peak heating season of October through March and is directly affected
by the severity of  the winter weather. Historically,  approximately 66% of  the
Partnership's  retail  propane volume  has been  sold  during this  peak heating
season. Actual  weather  conditions,  therefore, may  significantly  affect  the
Partnership's financial performance. For example, warm weather during the winter
of 1994-95 significantly decreased the overall demand for propane, and adversely
affected  the Partnership's operating income. Furthermore, despite the fact that
overall weather conditions may be normal,  variations in weather in one or  more
regions  in which  the Partnership operates  can significantly  affect the total
volume of propane sold by  the Partnership and, consequently, the  Partnership's
results  of  operations. Variations  in the  weather in  the Midwest,  where the
majority of the Partnership's retail volume is sold, and in the Northeast, where
the Partnership  has  a  greater  concentration  of  higher  margin  residential
accounts,  will generally have a greater  impact on the Partnership's EBITDA and
operating  income  than  variations  in  the  weather  in  other  markets.   See
'Management's  Discussion  and Analysis  of Financial  Condition and  Results of
Operations.'
 
THE PARTNERSHIP WILL BE SUBJECT TO PRICING AND INVENTORY RISK
 
     The retail propane  business is  a 'margin-based' business  in which  gross
profits  depend  on  the  excess  of sales  prices  over  propane  supply costs.
Consequently, the Partnership's  profitability will be  sensitive to changes  in
wholesale propane prices. Propane is a commodity, and as such, its unit price is
subject  to volatile changes  in response to  changes in supply  or other market
conditions. The Partnership will have  no control over these market  conditions.
Consequently, the unit price of propane purchased by the Partnership, as well as
other  propane marketers,  can change  rapidly over a  short period  of time. In
general, product supply contracts permit suppliers to charge posted prices (plus
transportation costs) at the time of delivery or the current prices  established
at  major storage points such  as Mont Belvieu, Texas,  or Conway, Kansas. Since
rapid increases in the wholesale cost  of propane may not be immediately  passed
on  to customers, such  increases could reduce  the Partnership's gross profits.
See ' -- The Retail Propane Business Is Highly Competitive.'
 
     Propane  is   available  from   numerous  sources,   including   integrated
international  oil companies, independent  refiners and independent wholesalers.
The Partnership purchases propane from a variety of suppliers pursuant to supply
contracts or  on the  spot market.  In 1995,  approximately 81%  of the  propane
purchased by the Partnership was produced domestically and approximately 19% was
produced  in Canada. To  the extent that the  Partnership purchases propane from
foreign (including Canadian) sources,  its propane business  will be subject  to
risks  of disruption  in foreign supply.  The Partnership  generally attempts to
minimize inventory risk by  purchasing propane on  a short-term basis.  However,
the Partnership has on occasion purchased, and may in the future purchase, large
volumes  of propane during  periods of low demand,  which generally occur during
the summer months, at  the then current  market price, for  storage both at  its
service  centers and  in the Partnership's  major storage  facilities for future
resale. As  of  May 31,  1996,  the  Partnership's total  storage  capacity  was
approximately 33 million gallons (including approximately one million gallons of
storage   capacity  currently  leased  to  third  parties).  See  'Business  and
Properties --  Properties.'  Because  of the  potential  volatility  of  propane
prices,  the market price  for propane could  fall below the  price at which the
Partnership purchased  propane held  in inventory,  thereby adversely  affecting
gross  margins or  sales or  rendering sales  from such  inventory unprofitable.
Except for the occasional opportunistic buying described above, the  Partnership
has  not  engaged in  any  significant hedging  activities  with respect  to its
 
                                       35
 


<PAGE>

<PAGE>
propane supply requirements, although it may do so in the future. See  'Business
and Properties -- Propane Supply and Storage.'
 
THE RETAIL PROPANE BUSINESS IS HIGHLY COMPETITIVE
 
     The  Partnership's business  is highly competitive.  Competition within the
propane distribution industry stems primarily from three types of  participants:
larger multi-state marketers, local independent marketers and farm cooperatives.
Some  of the Partnership's  competitors may be larger  or have greater financial
and other resources or  lower operating costs  than the Partnership.  Generally,
warmer-than-normal   weather  further  intensifies   competition.  In  addition,
competitive conditions vary  by region. Currently,  competition is  particularly
intense  in the Midwest, while the Partnership faces relatively less competition
in the Northeast and Southeast.
 
     Most of  the  Partnership's  service centers  compete  with  several  other
marketers  or  distributors and  certain service  centers  compete with  a large
number  of  marketers  or   distributors.  The  principal  factors   influencing
competition  with other retail  marketers are price,  reliability and quality of
service, responsiveness  to customer  needs and  safety concerns.  Each  service
center  operates in  its own  competitive environment,  as retail  marketers are
typically located in close proximity to customers to lower the cost of providing
service. Service  centers  located  in the  Midwest  face  particularly  intense
competition  in the retail  market as retail customers  in that region generally
use higher  volumes  of  propane  and are  therefore  more  sensitive  to  price
fluctuations  than customers located in other  regions. Of the Partnership's 165
service centers, 73 are located in the Midwest where approximately 47.4% of  the
Partnership's total retail propane volume was sold in 1995.
 
THE RETAIL PROPANE BUSINESS IS MATURE AND THE PARTNERSHIP'S ABILITY TO GROW
LARGELY DEPENDS UPON ACQUIRING OTHER RETAIL DISTRIBUTORS
 
     The  retail propane industry  is mature, and  the Partnership foresees only
limited growth in total retail demand  for propane. The Partnership expects  the
overall  demand for propane to remain  relatively constant over the next several
years, with year-to-year  industry volumes being  affected primarily by  weather
patterns. Moreover, as a result of long-standing customer relationships that are
typical  in the  retail home  propane industry,  the inconvenience  of switching
tanks and suppliers and propane's higher cost than certain other energy sources,
such as natural gas, the Partnership may experience difficulty in acquiring  new
retail  customers. Therefore, while the Partnership's business strategy includes
opening new  locations,  adding  new retail  customers  and  retaining  existing
customers, the ability of the Partnership's propane business to grow will depend
in large part on its ability to acquire other retail distributors.
 
     In  making acquisitions of other  retail distributors, the Partnership will
have to  compete with  other companies,  some of  which may  be larger  or  have
greater  financial or other  resources than the  Partnership. In addition, there
can be no assurance  that the Partnership  will identify attractive  acquisition
candidates  in the future, will be able to acquire such candidates on acceptable
terms, or will be able to finance such acquisitions. If the Partnership is  able
to  make acquisitions, there can be no assurance that such acquisitions will not
dilute earnings and  distributions on  the Units,  or that  any additional  debt
incurred  to finance acquisitions will not affect the ability of the Partnership
to make distributions  on the  Units. Moreover,  the Partnership  is subject  to
certain   debt  incurrence   covenants  in  certain   agreements  governing  its
indebtedness that might restrict the Partnership's ability to incur indebtedness
to  finance  acquisitions.  For  additional  information  regarding  such   debt
incurrence  covenants  and  the  Partnership's  availability  under  the Working
Capital Facility and the Acquisition Facility, see 'Management's Discussion  and
Analysis  of  Financial Condition  and Results  of  Operations --  Liquidity and
Capital Resources' and '  -- Description of Indebtedness.'  Also, to the  extent
that  warm weather adversely  affects the Partnership's  operating and financial
results, the Partnership's access to capital and its acquisition activities  may
be limited.
 
                                       36
 


<PAGE>

<PAGE>
THE RETAIL PROPANE BUSINESS FACES COMPETITION FROM ALTERNATIVE ENERGY SOURCES
 
     Propane  is sold in competition with other sources of energy, some of which
are less  costly  for equivalent  energy  value. The  Partnership  competes  for
customers   against  suppliers  of  electricity,   natural  gas  and  fuel  oil.
Electricity is a  major competitor of  propane, but propane  generally enjoys  a
competitive   price  advantage  over  electricity.   Propane  is  generally  not
competitive with  natural  gas in  those  areas  where natural  gas  is  readily
available because natural gas is a significantly less expensive source of energy
than  propane. The  gradual expansion of  the nation's  natural gas distribution
systems has resulted in the availability of natural gas in areas that previously
depended upon propane.  To a lesser  extent, the Partnership  also competes  for
customers  against  suppliers  of  fuel oil.  In  addition,  the  development of
alternative energy sources may have an  adverse effect on the operations of  the
Partnership. See 'Business and Properties -- Competition.'
 
ENERGY EFFICIENCY AND TECHNOLOGY TRENDS MAY AFFECT DEMAND
 
     The   national  trend  toward   increased  conservation  and  technological
advances, including installation of improved  insulation and the development  of
more  efficient furnaces and other heating  devices, has adversely affected, and
may continue to adversely  affect, demand for propane  by retail customers.  The
Partnership  cannot predict  the effect of  future conservation  measures or the
effect  that  any  technological  advances  in  heating,  conservation,   energy
generation or other devices might have on its operations.
 
THE PARTNERSHIP IS SUBJECT TO OPERATING AND LITIGATION RISKS WHICH MAY NOT BE
COVERED BY INSURANCE
 
     The Partnership's operations are subject to the operating hazards and risks
normally  associated with  handling, storing and  delivering combustible liquids
such as  propane. As  a  result, the  Partnership has  been,  and is  likely  to
continue  to be, a defendant in various legal proceedings and litigation arising
in its ordinary course of business.  The Partnership intends to self-insure  (as
National  Propane currently does) and  maintain insurance policies with insurers
in such amounts and with such coverages and deductibles as the Managing  General
Partner  believes are reasonable and prudent. However, there can be no assurance
that such  insurance  will be  adequate  to  protect the  Partnership  from  all
material  expenses related  to potential  future claims  or that  such levels of
insurance will be available in the future at economical prices. Moreover,  there
can  be no  assurance that future  claims within  the Partnership's self-insured
retention will not, individually  or in the aggregate,  have a material  adverse
effect on the business of the Partnership.
 
     The Partnership will assume the liabilities of National Propane for certain
potential   environmental   remediation  costs,   primarily  costs   related  to
remediation of coal tar contamination at the Partnership's Marshfield, Wisconsin
facility. The Partnership believes the  contamination of such property  occurred
during  its use as a coal gasification plant  by a previous owner. To the extent
that there are any environmental liabilities unknown to the Partnership or  that
known  environmental liabilities result  in material costs  in excess of amounts
accrued or  any environmental  laws are  made more  stringent, there  can be  no
assurance  that  the  Partnership's results  of  operations or  ability  to make
distributions to Unitholders will not  be materially and adversely affected.  In
addition, future claims or environmental liabilities not covered by insurance or
indemnification,  or a large number of claims incurred by the Partnership in the
future that are within  the Partnership's self-insured  retention, could have  a
material  adverse effect  on the  business, results  of operations  or financial
position of  the Partnership  and the  ability of  the Partnership  to make  the
Minimum  Quarterly  Distribution.  See 'Business  and  Properties  -- Government
Regulation' and ' -- Litigation and Contingent Liabilities.'
 
RISKS INHERENT IN AN INVESTMENT IN THE PARTNERSHIP
 
CASH DISTRIBUTIONS ARE NOT GUARANTEED AND MAY FLUCTUATE WITH PARTNERSHIP
PERFORMANCE
 
     Although the Partnership will distribute  all of its Available Cash,  there
can be no assurance regarding the amounts of Available Cash that the Partnership
will generate. The actual amounts of
 
                                       37
 


<PAGE>

<PAGE>
Available  Cash will  depend upon  numerous factors,  including profitability of
operations, required principal and interest payments on the Partnership's  debt,
interest  payments from Triarc on the Partnership Loan, the cost of acquisitions
(including  related  debt  service  payments),  restrictions  contained  in  the
Partnership's  debt instruments, the  issuance of debt  and equity securities by
the  Partnership,  fluctuations  in   working  capital,  capital   expenditures,
adjustments  in reserves, prevailing economic conditions and financial, business
and other  factors,  a  number  of  which may  be  beyond  the  control  of  the
Partnership.  Cash distributions are dependent primarily on cash flow and not on
profitability,  which   is  affected   by   non-cash  items.   Therefore,   cash
distributions may be made during periods when the Partnership records losses and
may  not be made during periods when the Partnership records profits. The amount
of Available  Cash  from Operating  Surplus  needed to  distribute  the  Minimum
Quarterly  Distribution for four  quarters on the  Common Units and Subordinated
Units to  be outstanding  immediately  after the  Offering  and on  the  General
Partner  Interests is  approximately $23.5 million  (approximately $13.0 million
for the Common Units, $9.5 million  for the Subordinated Units and $1.0  million
for  the General Partner Interests).  If the Underwriters' over-allotment option
is exercised in full, such amounts would be approximately $15.0 million for  the
Common  Units, $9.5 million for the Subordinated  Units and $1.0 million for the
General Partner Interests, or an  aggregate of approximately $25.5 million.  Pro
forma  Available  Cash from  Operating Surplus  generated  during 1994  and 1995
(approximately $22.7 million  and $17.6 million,  respectively) would have  been
sufficient  to cover the Minimum Quarterly Distribution for the four quarters in
each such  year  on  all  of  the  outstanding  Common  Units  and  the  related
distribution  on the General Partner Interests, but would have been insufficient
by approximately $0.8 million  and $5.9 million to  cover the Minimum  Quarterly
Distribution  on  the Subordinated  Units and  the  related distribution  on the
General Partner Interests in 1994 and 1995, respectively. In addition,  assuming
that  no interest  payments were  made by  Triarc on  the Partnership  Loan, the
amount of pro forma Available Cash from Operating Surplus generated during  1994
and  1995  would  have  been  approximately  $17.2  million  and  $12.1 million,
respectively. The $17.2 million generated in 1994 would have been sufficient  to
cover the Minimum Quarterly Distribution for the four quarters in 1994 on all of
the outstanding Common Units and the related distribution on the General Partner
Interests,  but  the  $12.1  million  generated  during  1995  would  have  been
insufficient by  approximately  $1.4  million to  cover  the  Minimum  Quarterly
Distribution  for the four quarters  in 1995 on all of  the Common Units and the
related distribution on the General Partner Interests. See ' -- A Portion of the
Partnership's Cash  Receipts  will  be  Interest Payments  from  Triarc  on  the
Partnership  Loan' and 'Cash  Distribution Policy --  Partnership Loan.' In 1994
and 1995, on a pro forma basis, quarterly distributions of Available Cash  would
not  have exceeded any  Target Distribution Level and  the Partnership would not
have made any Incentive Distributions to the Managing General Partner.
 
     The Partnership Agreement gives the Managing General Partner discretion  in
establishing  reserves for the proper conduct of the Partnership's business that
will affect the  amount of Available  Cash. Due  to the seasonal  nature of  the
Partnership's  business, the Managing General Partner  expects that it will make
additions to  reserves  during  certain  quarters in  order  to  fund  operating
expenses  and  distributions  to partners  with  respect to  other  quarters. In
addition, the  Partnership will  be required  to make  reserves for  the  future
payment  of principal and  interest on the  First Mortgage Notes  and in certain
instances for the future payment of principal and interest under the Bank Credit
Facility. See 'Management's Discussion and  Analysis of Financial Condition  and
Results   of  Operations  --  Description   of  Indebtedness.'  The  Partnership
anticipates that  reserves for  interest on  the First  Mortgage Notes  will  be
established   at  approximately  $2.7  million  at  each  March  and  September,
commencing September, 1996  and the  reserves will be  eliminated when  interest
payments  are made on  the First Mortgage  Notes in June  and December. The $2.7
million reserved  for  interest  would  be approximately  11.5%  (10.6%  if  the
Underwriters'  over-allotment  option is  exercised in  full)  of the  amount of
Available Cash needed to distribute the Minimum Quarterly Distribution for  four
quarters  on  the Common  Units  and the  Subordinated  Units to  be outstanding
immediately after the Offering  and on the  General Partner Interests.  Reserves
for  repayment of principal on  the First Mortgage Notes  are not required until
September 2002 and then will equal 25%,  50% and 75%, respectively, of the  next
installment  of principal at each September, December and March and the reserves
will be eliminated when principal payments are made on the First Mortgage  Notes
in  June. The $3.75  million reserved quarterly for  principal payments would be
approximately  16.0%  (14.7%  if  the  Underwriters'  over-allotment  option  is
 
                                       38
 


<PAGE>

<PAGE>
exercised  in full)  of the  amount of Available  Cash needed  to distribute the
Minimum Quarterly Distribution  for four quarters  on the Common  Units and  the
Subordinated  Units to be outstanding immediately  after the Offering and on the
General Partner Interests. Furthermore,  the First Mortgage  Notes and the  Bank
Credit  Facility will  limit the  Operating Partnership's  ability to distribute
cash to the Partnership.  Distributions from the  Operating Partnership will  be
the  Partnership's primary source  of Available Cash.  Subsequent refinancing of
the First  Mortgage  Notes  or  the  Bank Credit  Facility,  as  well  as  other
indebtedness incurred by the Partnership, may have similar or even more limiting
restrictions.  As a result of these and other factors, there can be no assurance
regarding the actual levels  of cash distributions by  the Partnership, and  the
Partnership's  ability to distribute cash may be limited during the existence of
any events of default under any of the Partnership's debt instruments.
 
A PORTION OF THE PARTNERSHIP'S CASH RECEIPTS WILL BE INTEREST PAYMENTS FROM
TRIARC ON THE PARTNERSHIP LOAN
 
     Approximately $5.5 million of the  Partnership's annual cash receipts  will
be  interest  payments  from  Triarc under  the  Partnership  Loan,  which bears
interest at an annual rate of 13.5%. On a pro forma basis such amount represents
approximately 31% of the Partnership's Available Cash from Operating Surplus  in
1995.  Consequently,  Triarc's  failure  to  make  interest  payments  under the
Partnership Loan would adversely affect the  ability of the Partnership to  make
the Minimum Quarterly Distribution to all Unitholders. Assuming that no interest
payments  were made by Triarc  on the Partnership Loan,  the amount of pro forma
Available Cash  from Operating  Surplus generated  during 1995  would have  been
insufficient  by  approximately  $1.4  million to  cover  the  Minimum Quarterly
Distribution on the  Common Units and  the related distribution  on the  General
Partner Interests.
 
     Because  Triarc  is  a  holding  company,  its  ability  to  meet  its cash
requirements  (including  required  interest  and  principal  payments  on   the
Partnership  Loan) is primarily dependent (in addition to its cash on hand) upon
cash flows  from  its  subsidiaries,  including loans  and  cash  dividends  and
reimbursement by subsidiaries to Triarc in connection with its providing certain
management  services  and payments  by  subsidiaries under  certain  tax sharing
agreements. Under  the  terms of  various  indentures and  credit  arrangements,
Triarc's  principal subsidiaries  are currently unable  to pay  any dividends or
make any loans or advances to Triarc. In addition, the Partnership Loan does not
restrict Triarc's ability  to sell, convey,  transfer or encumber  the stock  or
assets  of any of its subsidiaries (other  than the Managing General Partner and
SEPSCO), or its ability to dispose of its cash on hand or other assets. Triarc's
cash on hand  as of  May 31, 1996,  after giving  effect to the  closing of  the
Offering, would have been approximately $210.0 million. The Partnership believes
that  such amount of cash  on hand, plus distributions  from certain of Triarc's
subsidiaries, will enable  Triarc to have  adequate cash resources  to meet  its
short  term  cash  requirements,  including required  interest  payments  on the
Partnership Loan.  See  'Cash  Distribution  Policy  --  Partnership  Loan'  and
'Certain  Information Regarding Triarc.' However, there can be no assurance that
Triarc will continue to have cash on hand or that in the future it will  receive
sufficient  distributions from its subsidiaries in order to enable it to satisfy
its obligations under the Partnership Loan. Also, the Partnership Loan does  not
limit  Triarc's ability to, and there can  be no assurances that Triarc will not
in the future,  incur indebtedness  and other  obligations that  will rank  pari
passu  with Triarc's  obligations under  the Partnership  Loan or  be secured by
assets of Triarc that do not secure the Partnership Loan. The failure of  Triarc
to  make payments  of principal  and interest on  the Partnership  Loan when due
would have  an  adverse  effect  on  the ability  of  the  Partnership  to  make
distributions  to Unitholders.  In addition, Triarc  is permitted  to prepay the
Partnership Loan under certain circumstances. The prepayment by Triarc of all or
a portion of the Partnership Loan and the failure by the Partnership to reinvest
such funds in a manner  that generates an equivalent  amount of cash flow  could
have  an adverse  effect on the  Partnership's ability to  make distributions to
Unitholders. The Partnership  Loan is  recourse to Triarc  and is  secured by  a
pledge  by Triarc of all of the shares  of capital stock of the Managing General
Partner owned by Triarc (approximately  75.7% of the Managing General  Partner's
outstanding  capital  stock  as  of  the date  of  this  Prospectus).  See 'Cash
Distribution Policy  -- Partnership  Loan'  and 'Certain  Information  Regarding
Triarc.'
 
                                       39
 


<PAGE>

<PAGE>
THE PARTNERSHIP'S INDEBTEDNESS MAY LIMIT THE PARTNERSHIP'S ABILITY TO MAKE
DISTRIBUTIONS AND MAY AFFECT ITS OPERATIONS
 
     On  a pro forma  basis as of  March 31, 1996,  assuming consummation of the
transactions contemplated by  this Prospectus,  the Partnership  would have  had
approximately  $126.5 million in total  consolidated indebtedness and the amount
of such indebtedness  as a percentage  of total capitalization  would have  been
approximately  79.4%.  As  a  result,  the  Partnership  will  be  significantly
leveraged and will  have indebtedness  that is  substantial in  relation to  its
partners'  capital. Although the Partnership does not intend to draw on the Bank
Credit Facility at the time of  the closing of this Offering, future  borrowings
could   result  in  a  significant   increase  in  the  Partnership's  leverage.
Furthermore, the Managing  General Partner  may cause the  Partnership to  incur
additional indebtedness, including borrowings that have the purpose or effect of
enabling  the Managing General Partner to receive distributions or hastening the
conversion  of  Subordinated  Units  into  Common  Units.  The  ability  of  the
Partnership  to  make  principal and  interest  payments will  depend  on future
performance, which is subject to many factors, some of which will be outside the
Partnership's  control.  Certain  of  the  Partnership's  indebtedness   contain
provisions relating to change of control. If such provisions are triggered, such
outstanding  indebtedness may become immediately due. In such event, there is no
assurance that  the Partnership  would  be able  to  pay such  indebtedness.  In
addition,  the First Mortgage Notes and the Bank Credit Facility will be secured
by substantially all of the assets of the Operating Partnership and will contain
restrictive covenants that  limit the  ability of the  Operating Partnership  to
distribute  cash  and  to  incur  additional  indebtedness.  In  the  case  of a
continuing default by  the Operating  Partnership under  such indebtedness,  the
lenders would have the right to foreclose on the Operating Partnership's assets,
which would have a material adverse effect on the Partnership. See 'Management's
Discussion  and Analysis  of Financial  Condition and  Results of  Operations --
Description  of  Indebtedness.'  Payment  of  principal  and  interest  on  such
indebtedness,  as well as compliance with the requirements and covenants of such
indebtedness, may  limit  the Partnership's  ability  to make  distributions  to
Unitholders. The Partnership's leverage may also adversely affect the ability of
the  Partnership to finance  its future operations and  capital needs, may limit
its ability to pursue other business  opportunities and may make its results  of
operations  more susceptible  to adverse economic  conditions. See 'Management's
Discussion   and   Analysis   of    Financial   Conditions   and   Results    of
Operations -- Description of Indebtedness.'
 
PARTNERSHIP ASSUMPTIONS CONCERNING FUTURE OPERATIONS AND WEATHER MAY NOT BE
REALIZED
 
     In establishing the terms of the Offering, including the number and initial
offering  price of Common Units, the number of Subordinated Units and the amount
of the  Minimum  Quarterly  Distribution,  the  Partnership  relied  on  certain
assumptions  concerning its operations  through the quarter  ending December 31,
1997, including the assumptions that  normal weather conditions will prevail  in
the Partnership's operating areas, that the Partnership's operating margins will
remain  constant, that  all required interest  payments on  the Partnership Loan
will be made by Triarc, and that market and overall economic conditions will not
change substantially.  Although the  Partnership  believes its  assumptions  are
reasonable,  whether the assumptions are realized is  not, in a number of cases,
within the control of the Partnership and cannot be predicted with any degree of
certainty. See 'Cash Distribution Policy -- Cash Available for Distribution.'
 
     Because a substantial portion of the  Partnership's propane is used in  the
heating-sensitive  residential and commercial markets, weather conditions have a
particularly significant effect on the financial performance of the Partnership.
See ' --  Risks Inherent  in the  Partnership's Business  -- Weather  Conditions
Affect the Demand for Propane.' In preparing its forecasts of future operations,
management of the Partnership requested each regional and service center manager
to  provide a forecast of  propane sales volumes based  upon the assumption that
normal weather conditions will prevail in such region or locality.  Accordingly,
the  Partnership's  assumptions concerning  its future  operations are  based in
significant part on an aggregate  of forecasted regional propane volumes  which,
in turn, are based on the assumption that normal weather conditions will prevail
in the Partnership's operating areas.
 
                                       40
 


<PAGE>

<PAGE>
     There  is a substantial risk  that the Partnership's assumptions concerning
the weather will not prove to be correct in any year or series of years.  Actual
weather  conditions can vary  substantially from historical  averages, and there
can be no assurance  that weather conditions  in the future  will not be  warmer
than  weather conditions in the past. For example, the Partnership believes that
during the 10 years and the five  years ended June 30, 1995, nationwide  weather
averaged  3.0% and 3.3% warmer than normal, respectively, compared to the number
of average Degree Days (as defined in the Glossary) on a nationwide basis during
the 30-year period ended June 30, 1991, as determined by the U.S. Department  of
Commerce's  National Climatic Data Center. During  such 10-year period, eight of
such years were warmer than normal (by as much as 10.3% for the year ended  June
30,  1991), while two were colder  than normal (by as much  as 3.6% for the year
ended June 30, 1994).
 
     The Partnership believes  that the information  from the National  Climatic
Data Center shown above regarding nationwide weather is useful in evaluating the
general  extent of weather variations in  the Partnership's areas of operations.
However, weather conditions  in the  Partnership's areas of  operation may  vary
from  normal on a year-to-year basis to a greater extent than weather conditions
on a nationwide basis. Should weather conditions in the Partnership's  operating
areas  be warmer than normal, particularly during the October through March peak
heating season,  the  Partnership's results  of  operations would  be  adversely
affected.
 
THE MANAGING GENERAL PARTNER WILL MANAGE AND OPERATE THE PARTNERSHIP; HOLDERS OF
COMMON UNITS HAVE LIMITED VOTING RIGHTS
 
     The  Managing  General Partner  will  manage and  operate  the Partnership.
Unlike the holders  of common  stock in  a corporation,  holders of  outstanding
Common  Units  will have  only limited  voting rights  on matters  affecting the
Partnership's business. Holders of Common Units will have no right to elect  the
Managing  General  Partner  on an  annual  or  other continuing  basis,  and the
Managing General Partner  generally may not  be removed except  pursuant to  the
vote of the holders of not less than 66 2/3% of the outstanding Units (including
Units  owned by the General Partners and their Affiliates). The Managing General
Partner's current ownership interest  in the Partnership  precludes any vote  to
remove  the Managing General Partner without its consent. In addition, if at any
time any person or  group other than the  General Partners and their  Affiliates
beneficially owns more than 20% of the Units of any class then outstanding, such
person  or group will lose voting rights with  respect to all of its Units. As a
result, holders of Common Units will have limited influence on matters affecting
the operation of  the Partnership, and  third parties may  find it difficult  to
attempt to gain control or influence the activities of the Partnership. See 'The
Partnership Agreement.'
 
PURCHASERS OF COMMON UNITS WILL EXPERIENCE DILUTION
 
     Purchasers  of Common Units in the Offering will experience substantial and
immediate dilution in net tangible book value of $19.83 per Common Unit from the
initial public offering price, the  Managing General Partner will experience  an
increase in net tangible book value of $22.27 per Unit and each Common Unit will
have  a  pro  forma  net tangible  book  value  of $1.17  per  Common  Unit. See
'Dilution.'
 
COST REIMBURSEMENTS AND FEES DUE TO THE MANAGING GENERAL PARTNER MAY BE
SUBSTANTIAL AND COULD ADVERSELY AFFECT THE PARTNERSHIP'S ABILITY TO MAKE
DISTRIBUTIONS.
 
     Prior to making any distribution on the Common Units, the Partnership  will
reimburse  the Managing General Partner and its Affiliates (including Triarc) at
cost for all  expenses incurred on  behalf of  the Partnership. On  a pro  forma
basis, approximately $56.8 million of expenses would have been reimbursed by the
Partnership  to the Managing  General Partner in  1995 (comprising approximately
$33.0 million in salary, payroll tax and other compensation paid to employees of
the Managing  General Partner  and  approximately $23.8  million for  all  other
operating  expenses).  Affiliates  of the  Managing  General  Partner (including
Triarc) may perform  certain administrative  services for  the Managing  General
Partner  on behalf of  the Partnership and  will be reimbursed  for all expenses
incurred in connection therewith. In addition, the Managing General Partner  and
its Affiliates may provide
 
                                       41
 


<PAGE>

<PAGE>
additional  services  to  the Partnership,  for  which the  Partnership  will be
charged reasonable fees as determined by the Managing General Partner. Such cost
reimbursements and  fees  may be  substantial  and could  adversely  affect  the
ability of the Partnership to make distributions to Unitholders.
 
THE PARTNERSHIP MAY ISSUE ADDITIONAL UNITS THEREBY DILUTING EXISTING
UNITHOLDERS' INTERESTS
 
     After  the  end  of  the  Subordination  Period,  the  Partnership  has the
authority to  issue an  unlimited number  of additional  Common Units  or  other
equity securities of the Partnership for such consideration and on such terms as
shall  be established  by the  Managing General  Partner in  its sole discretion
without the  approval  of  the Unitholders.  During  the  Subordination  Period,
however,  the Partnership may not issue  equity securities ranking senior to the
Common Units or an aggregate of  more than 3,095,238 additional Common Units  or
an  equivalent number of  securities ranking on  a parity with  the Common Units
(excluding Common  Units or  in  some instances,  equity securities  ranking  on
parity   with   Common  Units   issued  upon   exercise  of   the  Underwriters'
over-allotment option, upon conversion of Subordinated Units, upon conversion of
the Special General Partner's  combined unsubordinated general partner  interest
or  in  connection with  Acquisitions (as  defined in  the Glossary)  or Capital
Improvements  (as  defined  in  the  Glossary)  or  the  repayment  of   certain
indebtedness  or pursuant to  employee benefit plans) without  the approval of a
Unit Majority. The  Partnership Agreement does  not give the  holders of  Common
Units  the right to approve the issuance by the Partnership of equity securities
ranking  junior  to  the  Common  Units  at  any  time.  See  'The   Partnership
Agreement -- Issuance of Additional Securities.' The effect of any such issuance
may  be to  dilute the interests  of the then  existing holders of  Units in the
Partnership. In addition, the conversion of Subordinated Units into Common Units
during  the  Subordination  Period  will  increase  the  Partnership's   Minimum
Quarterly  Distribution  obligation  with  respect  to  the  Common  Units while
simultaneously reducing the Minimum Quarterly  Distribution with respect to  the
Subordinated  Units. Further,  the exercise of  the Underwriters' over-allotment
option will increase the Partnership's Minimum Quarterly Distribution obligation
with respect to the Common Units.
 
THE MANAGING GENERAL PARTNER WILL HAVE A LIMITED CALL RIGHT WITH RESPECT TO THE
PARTNER INTERESTS
 
     If at any  time not more  than 20%  of the issued  and outstanding  partner
interests  of any class are held by  persons other than the General Partners and
their Affiliates, the Managing General Partner will have the right, which it may
assign to any of its Affiliates or the Partnership, to acquire all, but not less
than all,  of  the  remaining partner  interests  of  such class  held  by  such
unaffiliated Persons at a price generally equal to the then current market price
of  such partner interests.  As a consequence of  the Managing General Partner's
right to purchase outstanding partner  interests, a holder of partner  interests
may have its partner interests purchased from it even though such holder may not
desire  to sell them, and the price paid may be less than the amount such holder
would desire  to receive  upon the  sale  of such  partner interests.  See  'The
Partnership Agreement -- Limited Call Right.'
 
CHANGE OF MANAGEMENT PROVISIONS
 
     Following the Offering, the Managing General Partner will own approximately
42%   of  the  outstanding   Units  (approximately  39%   if  the  Underwriters'
over-allotment option is  exercised in full),  and as a  result the  Unitholders
will not have the required 66 2/3% of the Units necessary to remove the Managing
General  Partner.  Even  if the  percentage  of  outstanding Units  held  by the
Managing General  Partner and  its Affiliates  were significantly  reduced,  the
Partnership  Agreement contains certain  provisions that may  have the effect of
discouraging a person or  group from attempting to  remove the Managing  General
Partner.  If the Managing General Partner is removed as a general partner of the
Partnership other than for Cause and the Units held by the General Partners  and
their  Affiliates are not voted  in favor of such  removal (i) the Subordination
Period will end and all outstanding Subordinated Units will immediately  convert
into  Common  Units  on  a  one-for-one basis,  (ii)  any  existing  Common Unit
Arrearages will be extinguished,  and (iii) the General  Partners will have  the
right  to  convert their  General Partner  Interests (and  the right  to receive
Incentive Distributions) into Common  Units or to receive  in exchange for  such
interests  a cash  payment equal  to the  fair market  value of  such interests.
 
                                       42
 


<PAGE>

<PAGE>
Also, the Special  General Partner  will withdraw as  a general  partner of  the
Partnership  and  the Operating  Partnership upon  the  removal of  the Managing
General Partner. Further, if any person or group other than the General Partners
and their Affiliates acquires beneficial ownership  of 20% or more of the  Units
of any class then outstanding, such person or group will lose voting rights with
respect  to  all of  its  Units. In  addition,  the Partnership  has substantial
latitude  in  issuing  equity   securities  without  Unitholder  approval.   The
Partnership   Agreement  also  contains  provisions   limiting  the  ability  of
Unitholders to call meetings of Unitholders or to acquire information about  the
Partnership, the disclosure of which the Partnership believes is not in the best
interests  of the Partnership or which the  Partnership is required by law or by
agreements with third  parties to  keep confidential. Further,  the Bank  Credit
Facility  and the First  Mortgage Notes contain provisions  that could result in
acceleration of the repayment of such  indebtedness upon a change in control  of
the  Partnership. The effect of these provisions may be to diminish the price at
which the  Common  Units  will  trade  under  certain  circumstances.  See  'The
Partnership  Agreement  --  Withdrawal  or  Removal  of  the  General Partners,'
' -- Meetings; Voting,' ' -- Right to Inspect Partnership Books and Records' and
' -- Change of Management Provisions.'
 
NO PRIOR PUBLIC MARKET FOR COMMON UNITS
 
     Prior to  the Offering,  there has  been no  public market  for the  Common
Units.  The initial  public offering  price of  the Common  Units was determined
through negotiations among Triarc, the Partnership, the Managing General Partner
and the representatives of  the several Underwriters. For  a description of  the
factors  considered  in  determining  the  initial  public  offering  price, see
'Underwriting.' No assurance can be given as  to the market prices at which  the
Common  Units will trade. The Common Units have been approved for listing on the
NYSE upon notice of issuance.
 
UNITHOLDERS MAY NOT HAVE LIMITED LIABILITY IN CERTAIN CIRCUMSTANCES; LIABILITY
FOR THE RETURN OF CERTAIN DISTRIBUTIONS
 
     The limitations  on  the liability  of  holders  of Common  Units  for  the
obligations  of a limited partnership have  not been clearly established in some
states. If it were determined that the Partnership had been conducting  business
in any state without compliance with the applicable limited partnership statute,
or that the right or the exercise of the right by the holders of Common Units as
a  group to  remove or  replace the  Managing General  Partner, to  make certain
amendments to the Partnership Agreement or to take other action pursuant to  the
Partnership   Agreement  constituted  participation  in  the  'control'  of  the
Partnership's business, then a holder of Common Units could be held liable under
certain circumstances for the Partnership's obligations to the same extent as  a
general  partner. In addition,  under certain circumstances  a Unitholder may be
liable to the Partnership for the amount of a distribution for a period of three
years   from   the   date   of   the   distribution.   See   'The    Partnership
Agreement -- Limited Liability' for a discussion of the limitations on liability
and the implications thereof to a holder of Common Units.
 
POSSIBLE INABILITY TO OBTAIN CONSENTS TO ASSET TRANSFERS
 
     Concurrent  with the closing of the  Offering, National Propane will convey
substantially all  of its  assets (which  assets will  not include  an  existing
intercompany  note from Triarc, approximately $59.3  million of the net proceeds
from the issuance of the  First Mortgage Notes and  certain other assets of  the
Managing  General  Partner) to  the  Operating Partnership,  including leasehold
interests in real  and personal  property, permits, licenses  and other  similar
rights.  Many of such leases and many of such permits, licenses and other rights
are transferable  to the  Operating Partnership  only with  the consent  of  the
lessor  or other third party. The failure by the Operating Partnership to obtain
any such  consents and  its resulting  inability to  obtain any  such  leasehold
rights,  permits, licenses or other rights  could have a material adverse effect
on the  Partnership. However,  the Managing  General Partner  believes that  the
Operating  Partnership will  have the  licenses, permits  and rights  which will
enable the Operating  Partnership to conduct  its propane business  in a  manner
which  is similar in  all material respects  to that which  was conducted by the
General Partner prior to  the closing of  the Offering and  that any failure  to
obtain  such licenses, permits or rights will not have a material adverse impact
on the business of the
 
                                       43
 


<PAGE>

<PAGE>
Operating Partnership or the  Partnership as described  in this Prospectus.  See
'Business and Properties -- Transfer of the Partnership Assets.'
 
COMMON UNITHOLDERS HAVE NOT BEEN REPRESENTED BY COUNSEL
 
     The  holders of the  Common Units have  not been represented  by counsel in
connection with  the  Offering, including  the  preparation of  the  Partnership
Agreement or the other agreements referred to herein.
 
THE PARTNERSHIP MAY ENGAGE IN ACQUISITIONS, DISPOSITIONS AND COMBINATIONS WITH
OTHER RETAIL MARKETERS
 
     The  propane  industry  consists  of  a  small  number  of  national retail
marketers and a larger  number of regional companies.  From time to time,  these
national  and regional retail marketers, including  the Partnership, have in the
past  engaged,  and  may  in  the  future  engage,  in  discussions   concerning
acquisitions, dispositions and combinations of operations. While the Partnership
is  not currently engaged in negotiations with any national or regional marketer
concerning any such  acquisition, disposition  or combination, there  can be  no
assurance  that  in the  future  the Partnership  will  not engage  in  any such
negotiations or  pursue opportunities  to  engage in  any such  transaction.  In
addition,  although  any  merger,  consolidation  or  combination  involving the
Partnership, and any sale, exchange or  disposition of all or substantially  all
of  its assets, would require the approval of a Unit Majority under the terms of
the Partnership  Agreement, the  Partnership and  the General  Partners are  not
restricted  under the Partnership Agreement  from engaging in other transactions
that may not require the prior consent or vote of the Unitholders and that could
result in a change of  control of the Partnership.  If any of such  transactions
were deemed to be a change of control under the First Mortgage Notes or the Bank
Credit Facility, the Partnership would be required to offer to redeem all of the
outstanding  First Mortgage  Notes at  a premium  and to  repay all indebtedness
under the Bank  Credit Facility.  As a  result, the  occurrence of  a change  of
control  could have a material adverse effect on the Partnership and its ability
to pay the Minimum Quarterly Distribution to the Unitholders.
 
DEPENDENCE ON KEY PERSONNEL
 
     The Partnership believes that its success has been and will continue to  be
dependent  to a significant extent upon the  efforts and abilities of its senior
management team. The failure by the  Managing General Partner to retain  members
of  its senior management team could  adversely affect the Partnership's ability
to build on  the efforts undertaken  by its current  management to increase  the
efficiency and profitability of the Partnership. Mr. Paliughi, the President and
Chief Executive Officer of the Managing General Partner, is employed pursuant to
an    employment   contract   that    expires   on   January    2,   1998.   See
'Management -- Employment Arrangements with Executive Officers.' The loss of Mr.
Paliughi or  other  members of  senior  management could  adversely  affect  the
Partnership.
 
CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITY
 
     Conflicts  of interest could arise as a result of the relationships between
the Partnership,  on the  one hand,  and the  Managing General  Partner and  its
Affiliates,  on the  other. The directors  and officers of  the Managing General
Partner have fiduciary duties to manage the Managing General Partner in a manner
beneficial to its stockholders. At the same time, the Managing General  Partner,
as  general partner, has fiduciary duties to  manage the Partnership in a manner
beneficial to the Partnership  and the Unitholders. The  duties of the  Managing
General  Partner, as  general partner, to  the Partnership  and the Unitholders,
therefore, may come into conflict with the duties of the directors and  officers
of the Managing General Partner to its stockholders.
 
     Such  conflicts of interest might arise  in the following situations, among
others:
 
          (i) Decisions  of the  Managing General  Partner with  respect to  the
     amount and timing of cash expenditures, borrowings, issuances of additional
     Units  and reserves  in any  quarter will affect  whether or  the extent to
     which there is  sufficient Available  Cash from Operating  Surplus to  meet
 
                                       44
 


<PAGE>

<PAGE>
     the  Minimum Quarterly Distribution  and Target Distribution  Levels on all
     Units in a  given quarter.  In addition,  actions by  the Managing  General
     Partner  may have  the effect of  enabling the Managing  General Partner to
     receive Incentive  Distributions  or  accelerating the  expiration  of  the
     Subordination  Period or the  conversion of Subordinated  Units into Common
     Units.
 
          (ii) The Partnership will not have any employees and will rely  solely
     on  employees of its  subsidiaries, the Managing  General Partner and other
     Affiliates.
 
          (iii) Under the  terms of the  Partnership Agreement, the  Partnership
     will  reimburse the Managing General  Partner and its Affiliates (including
     Triarc) at cost  for all expenses  incurred on behalf  of the  Partnership,
     including  costs incurred in rendering corporate staff and support services
     to the Partnership. On  a pro forma basis,  approximately $56.8 million  of
     expenses  would have  been reimbursed  by the  Partnership to  the Managing
     General Partner in 1995 (comprising approximately $33.0 million in  salary,
     payroll  tax  and  other compensation  paid  to employees  of  the Managing
     General Partner and  approximately $23.8  million for  all other  operating
     expenses).   In  addition,  Affiliates  of  the  Managing  General  Partner
     (including Triarc)  may provide  certain  administrative services  for  the
     Managing  General  Partner  on  behalf  of  the  Partnership  and  will  be
     reimbursed for all expenses incurred in connection therewith.  Furthermore,
     the  Managing  General Partner  and its  Affiliates may  provide additional
     services to  the Partnership  for  which the  Partnership will  be  charged
     reasonable fees as determined by the Managing General Partner.
 
          (iv)  Whenever possible, the Managing General Partner intends to limit
     the Partnership's  liability  under  contractual  arrangements  to  all  or
     particular  assets of the Partnership, with the other party thereto to have
     no recourse  against  the Managing  General  Partner, the  Special  General
     Partner, or their respective assets.
 
          (v)  Any agreements between  the Partnership and  the Managing General
     Partner and its Affiliates will not  grant to the holders of Common  Units,
     separate  and  apart  from  the  Partnership,  the  right  to  enforce  the
     obligations of the Managing General Partner and such Affiliates in favor of
     the Partnership. Therefore, the Managing  General Partner, in its  capacity
     as  a general partner of the Partnership, will be primarily responsible for
     enforcing such obligations.
 
          (vi) Under  the  terms  of the  Partnership  Agreement,  the  Managing
     General  Partner  is not  restricted from  causing  the Partnership  to pay
     itself or its Affiliates for any  services rendered on terms that are  fair
     and  reasonable to the Partnership  or entering into additional contractual
     arrangements with  any  of such  entities  on behalf  of  the  Partnership.
     Neither  the  Partnership  Agreement  nor  any  of  the  other  agreements,
     contracts and arrangements between  the Partnership, on  the one hand,  and
     the  Managing General Partner and its Affiliates, on the other, are or will
     be the result of arms'-length negotiations.
 
          (vii) The Managing General Partner may exercise its right to call  for
     and  purchase Units as provided in the Partnership Agreement or assign such
     right to one of its Affiliates or to the Partnership.
 
          (viii) The  Partnership Agreement  does not  prohibit the  Partnership
     from  engaging  in  roll-up  transactions.  Although  the  Managing General
     Partner has no present  intention of causing the  Partnership to engage  in
     any such transaction, it is possible it will do so in the future. There can
     be  no  assurance that  a  roll-up transaction  would  not have  a material
     adverse effect on a Unitholder's investment in the Partnership.
 
          (ix) The Managing  General Partner (unless  the Triarc Merger  occurs)
     and the Special General Partner are prohibited from conducting any business
     or  having any operations other than those incidental to serving as general
     partners of the Partnership and the  Operating Partnership so long as  they
     are general partners of the Partnership. The Partnership Agreement provides
     that  it will  not constitute  a breach  of the  Managing General Partner's
     fiduciary duties to the  Partnership or the  Unitholders for Affiliates  of
     the  General Partners (other than the Special General Partner) to engage in
     certain activities of  the type  conducted by the  Partnership, other  than
     retail propane sales to end users in the continental United States, even if
     in  direct competition with  the Partnership. However, in  the event of the
     Triarc Merger, the  ability of the  Managing General Partner  to engage  in
     activities  other than those incidental to  serving as a general partner of
     the Operating Partnership
 
                                       45
 


<PAGE>

<PAGE>
     and the Partnership and to compete with the Partnership in certain  propane
     related  activities, such as trading, transportation, storage and wholesale
     distribution, will not be restricted. Furthermore, the General Partners and
     their Affiliates have  no obligation to  present business opportunities  to
     the Partnership.
 
     Unless  provided for otherwise  in the partnership  agreement, Delaware law
generally requires a general partner of a Delaware limited partnership to adhere
to fiduciary duty standards under which  it owes its limited partners duties  of
good  faith,  fairness and  loyalty and  which  generally prohibit  such general
partner from taking any action or engaging in any transaction as to which it has
a conflict of interest. The Partnership Agreement expressly permits the Managing
General  Partner  to  resolve  conflicts  of  interest  between  itself  or  its
Affiliates,  on the  one hand,  and the Partnership  or the  Unitholders, on the
other, and to consider, in resolving  such conflicts of interest, the  interests
of  other parties in addition to the  interests of the Unitholders. In addition,
the Partnership Agreement provides that a purchaser of Common Units is deemed to
have consented  to certain  conflicts of  interest and  actions of  the  General
Partners  and  their Affiliates  that might  otherwise be  prohibited, including
those described  in paragraphs  (i)-(ix) above,  and to  have agreed  that  such
conflicts  of interest  and actions  do not constitute  a breach  by the General
Partners of any duty stated  or implied by law  or equity. The General  Partners
will  not be in breach  of their obligations under  the Partnership Agreement or
their duties to  the Partnership or  the Unitholders if  the resolution of  such
conflict  is fair and reasonable  to the Partnership. The  latitude given in the
Partnership Agreement to the Managing General Partner in resolving conflicts  of
interest  may significantly limit the ability  of a Unitholder to challenge what
might otherwise be  a breach  of fiduciary  duty. The  Managing General  Partner
believes  however, that such latitude is  necessary and appropriate to enable it
and the Special General Partner to serve as general partners of the  Partnership
without undue risk of liability.
 
     The  Partnership Agreement  expressly limits  the liability  of the General
Partners by  providing that  the General  Partners, their  Affiliates and  their
respective officers and directors will not be liable for monetary damages to the
Partnership, the limited partners or assignees for errors of judgment or for any
actual  omissions if such General Partner and other persons acted in good faith.
In addition,  the Partnership  is required  to indemnify  the General  Partners,
their  Affiliates and their respective officers, directors, employees and agents
to the fullest extent permitted by law, against liabilities, costs and  expenses
incurred  by such General Partner or such other persons, if the General Partners
or such persons acted in good faith and in a manner they reasonably believed  to
be  in,  or not  opposed to,  the best  interests of  the Partnership  and, with
respect to any  criminal proceedings,  had no  reasonable cause  to believe  the
conduct was unlawful.
 
     The  provisions of Delaware law that  allow the common law fiduciary duties
of a general partner to  be waived or modified  by a partnership agreement  have
not  been resolved in a  court of law, and the  Managing General Partner has not
obtained an  opinion  of  counsel  covering the  provisions  set  forth  in  the
Partnership  Agreement that purport to waive or restrict the fiduciary duties of
the General Partners that would  be in effect under common  law were it not  for
the   Partnership   Agreement.  See   'Conflicts   of  Interest   and  Fiduciary
Responsibility -- Fiduciary Duties of the General Partners.'
 
TAX RISKS
 
     For a general discussion of the expected federal income tax consequences of
owning and disposing of Common Units, see 'Tax Considerations.'
 
TAX TREATMENT IS DEPENDENT ON PARTNERSHIP STATUS
 
     The availability to  a holder  of Common Units  of the  federal income  tax
benefits  of an  investment in  the Partnership depends,  in large  part, on the
classification of  the  Partnership as  a  partnership for  federal  income  tax
purposes. Moreover, in order for the Partnership to continue to be classified as
a partnership for federal income tax purposes, at least 90% of the Partnership's
gross income for each taxable year must consist of 'qualifying income.' Based on
certain  representations  made  by  the General  Partners  and  the Partnership,
Counsel is  of the  opinion that,  under current  law, the  Partnership will  be
classified  as a partnership for federal income tax purposes. However, no ruling
from the IRS as to such
 
                                       46
 


<PAGE>

<PAGE>
issues has been or will be requested, and the opinion of Counsel is not  binding
on the IRS. See 'Tax Considerations -- Partnership Status.'
 
     If  the  Partnership  were  classified  as  an  association  taxable  as  a
corporation for federal or state income tax purposes, the Partnership would  pay
tax  on  its  income at  corporate  rates  (currently at  a  35%  federal rate),
distributions would generally  be taxed  again to the  Unitholders as  corporate
distributions,  and no income, gains, losses or deductions would flow through to
the Unitholders.  Because a  tax would  be imposed  upon the  Partnership as  an
entity, the cash available for distribution to the holders of Common Units would
be substantially reduced. Treatment of the Partnership as an association taxable
as  a corporation or  otherwise as a  taxable entity would  result in a material
reduction in the anticipated  cash flow and after-tax  return to the holders  of
Common  Units and, thus, would  likely result in a  substantial reduction in the
value of the Common Units. See 'Tax Considerations -- Partnership Status.'
 
     There can be no assurance that the law  will not be changed so as to  cause
the  Partnership to be  treated as an  association taxable as  a corporation for
federal income tax purposes or otherwise to be subject to entity-level taxation.
The Partnership Agreement provides that, if a law is enacted or existing law  is
modified or interpreted in a manner that subjects the Partnership to taxation as
a corporation or otherwise subjects the Partnership to entity level taxation for
federal,  state  or  local  income  tax  purposes,  certain  provisions  of  the
Partnership  Agreement  relating  to  the  subordination  of  distributions   on
Subordinated  Units  will be  subject  to change,  including  a decrease  in the
Minimum Quarterly Distribution and the Target Distribution Levels to reflect the
impact   of   such   law   on   the   Partnership.   See   'Cash    Distribution
Policy  -- Adjustment of Minimum  Quarterly Distribution and Target Distribution
Levels.'
 
NO IRS RULING WITH RESPECT TO TAX CONSEQUENCES
 
     No ruling has been requested from the IRS with respect to classification of
the Partnership as a  partnership for federal income  tax purposes, whether  the
Partnership's  propane operations  generate 'qualifying income'  under SS7704 of
the Code or any other matter affecting the Partnership. Accordingly, the IRS may
adopt positions that differ from Counsel's conclusions expressed herein. It  may
be  necessary to resort to  administrative or court proceedings  in an effort to
sustain some  or  all  of  Counsel's  conclusions,  and  some  or  all  of  such
conclusions  ultimately may not be sustained. Any  such contest with the IRS may
materially and adversely impact the market  for the Common Units and the  prices
at  which Common Units trade. In addition, the costs of any contest with the IRS
will be borne directly or indirectly by  some or all of the Unitholders and  the
General Partners.
 
TAX LIABILITY EXCEEDING CASH DISTRIBUTIONS
 
     A  holder of Common Units will be required to pay federal income taxes and,
in certain cases, state  and local income  taxes on his  allocable share of  the
Partnership's  income, even if  he does not receive  cash distributions from the
Partnership.  There  is  no  assurance  that  a  Unitholder  will  receive  cash
distributions   equal  to  his  allocable  share  of  taxable  income  from  the
Partnership or  even  the tax  liability  to  him resulting  from  that  income.
Further,  a holder of Common  Units may incur a tax  liability, in excess of the
amount  of  cash  received,  upon  the  sale  of  his  Common  Units.  See  'Tax
Considerations -- State, Local and Other Tax Considerations' for a discussion of
certain  state and local tax considerations  that may be relevant to prospective
Unitholders.
 
OWNERSHIP OF COMMON UNITS BY TAX-EXEMPT ORGANIZATIONS AND CERTAIN OTHER
  INVESTORS
 
     Investment in  Common  Units  by  certain  tax-exempt  entities,  regulated
investment  companies and foreign persons raises  issues unique to such persons.
For example, virtually all of the  taxable income derived by most  organizations
exempt  from federal  income tax  (including individual  retirement accounts and
other retirement plans) from the ownership of a Unit will be unrelated  business
taxable  income  and  thus  will  be taxable  to  such  a  Unitholder.  See 'Tax
Considerations -- Uniformity  of Units --  Tax-Exempt Organizations and  Certain
Other Investors.'
 
                                       47
 


<PAGE>

<PAGE>
DEDUCTIBILITY OF LOSSES
 
     In  the  case of  taxpayers subject  to the  passive loss  rules (generally
individuals  and  closely  held  corporations),  any  losses  generated  by  the
Partnership  will only  be available  to offset  future income  generated by the
Partnership and cannot be used to offset income from other activities, including
passive activities or investments.  Unused passive losses  may be deducted  when
the  Unitholder disposes of all of his Units in a fully taxable transaction with
an unrelated party.  Net passive income  from the Partnership  may be offset  by
unused  Partnership losses carried over from prior years, but not by losses from
other  passive  activities,   including  losses  from   other  publicly   traded
partnerships.   See   'Tax   Considerations   --   Tax   Consequences   of  Unit
Ownership -- Limitations on Deductibility of Partnership Losses.'
 
TAX SHELTER REGISTRATION; POTENTIAL IRS AUDIT
 
     The Partnership has registered with the IRS as a 'tax shelter.' There is no
assurance that  the Partnership  will not  be audited  by the  IRS or  that  tax
adjustments  will not be made. The rights of  a Unitholder owning less than a 1%
profits interest  in the  Partnership to  participate in  the income  tax  audit
process  are very limited. Further, any adjustments in the Partnership's returns
will lead to adjustments in the Unitholders'  returns and may lead to audits  of
Unitholders' returns and adjustments of items unrelated to the Partnership. Each
Unitholder  would bear the cost  of any expenses incurred  in connection with an
examination of such Unitholder's personal tax return.
 
PROPOSED CHANGES IN FEDERAL INCOME TAX LAWS
 
     Legislation passed  by  Congress  in  November  1995  (the  '1995  Proposed
Legislation')  would  alter  the  tax reporting  procedures  and  the deficiency
collection procedures applicable to large  partnerships such as the  Partnership
(generally  defined as  electing partnerships with  more than  100 partners) and
would make certain additional  changes to the  treatment of large  partnerships.
That  legislation was generally  intended to simplify  the administration of the
tax reporting and deficiency collection rules governing large partnerships.
 
     On March 19, 1996, President  Clinton introduced tax legislation, known  as
the  Revenue  Reconciliation Act  of  1996, that  would  impact the  taxation of
certain financial products, including partnership interests. One proposal  would
treat  a taxpayer as  having sold an 'appreciated'  partnership interest (one in
which gain would be recognized  if such interest were  sold) if the taxpayer  or
related  persons enters into one  or more positions with  respect to the same or
substantially  identical  property   which,  for   some  period,   substantially
eliminates  both the risk  of loss and  opportunity for gain  on the appreciated
financial position  (including selling  'short against  the box'  transactions).
Certain of these proposed changes are also discussed later in this section under
'Disposition of Common Units.'
 
     The  1995 Proposed Legislation was vetoed  by President Clinton on December
6, 1995.  As of  the date  of this  Prospectus, it  is not  possible to  predict
whether  any  of  the  changes  which  were  set  forth  in  the  1995  Proposed
Legislation, the Revenue Reconciliation Act of 1996 or any other changes in  the
federal  income tax laws  that would impact  the Partnership and  the holders of
Common Units will  ultimately be  enacted or, if  enacted, what  form they  will
take,  what the effective dates will be  and what, if any, transition rules will
be provided.
 
UNIFORMITY OF COMMON UNITS AND NONCONFORMING DEPRECIATION CONVENTIONS
 
     Because the Partnership cannot match transferors and transferees of  Common
Units, uniformity of the economic and tax characteristics of the Common Units to
a  purchaser of Common Units must be  maintained. To maintain uniformity and for
other reasons, the Partnership will adopt certain depreciation and  amortization
conventions  that do not conform with all  aspects of certain proposed and final
Treasury Regulations which may, or may not, be applicable. The IRS may challenge
those conventions and,  if such a  challenge were sustained,  the uniformity  of
Common Units could be affected. Non-uniformity could adversely affect the amount
of  tax depreciation available to  a purchaser of Common  Units and could have a
negative   impact   on   the   value    of   the   Common   Units.   See    'Tax
Considerations -- Uniformity of Units.'
 
                                       48
 


<PAGE>

<PAGE>
STATE, LOCAL AND OTHER TAX CONSIDERATIONS
 
     In  addition to federal income taxes,  Unitholders will be subject to other
taxes, such as state and local taxes, unincorporated business taxes, and estate,
inheritance or intangible taxes that may be imposed by the various jurisdictions
in which the Partnership  does business or owns  property. A Unitholder will  be
required  to file state income tax returns and to pay state income taxes in some
or perhaps all of  such states and  may be subject to  penalties for failure  to
comply  with those requirements. It is  the responsibility of each Unitholder to
file all state and local, as well  as federal, tax returns that may be  required
of  such Unitholder. Counsel has  not rendered an opinion  on the state or local
tax   consequences   of   an   investment   in   the   Partnership.   See   'Tax
Considerations -- State, Local and Other Tax Considerations.'
 
PARTNERSHIP TAX INFORMATION AND AUDITS
 
     The  Partnership will furnish  each holder of Common  Units with a Schedule
K-1 that sets forth such holder's  allocable share of income, gains, losses  and
deductions.  In  preparing these  schedules,  the Partnership  will  use various
accounting  and  reporting  conventions  and  adopt  various  depreciation   and
amortization  methods. There is  no assurance that these  schedules will yield a
result  that   conforms  to   statutory  or   regulatory  requirements   or   to
administrative  pronouncements of the IRS. Further, the Partnership's tax return
may be audited,  and any  such audit  could result in  an audit  of a  partner's
individual  tax return  as well  as increased  liabilities for  taxes because of
adjustments resulting from the audit.
 
                                       49
 


<PAGE>

<PAGE>
                                THE TRANSACTIONS
 
     Concurrently with the closing of the Offering, the Managing General Partner
and the  Special General  Partner  will contribute  substantially all  of  their
assets (which assets will not include an existing intercompany note from Triarc,
approximately  $59.3 million of the net proceeds  from the issuance of the First
Mortgage Notes and certain other assets of the Managing General Partner) to  the
Operating  Partnership as a  capital contribution and  the Operating Partnership
will assume substantially all of the liabilities of the Managing General Partner
and the Special  General Partner  (other than certain  income tax  liabilities),
including  the First Mortgage Notes and all indebtedness of the Managing General
Partner outstanding under the  Existing Credit Facility  and the Other  Existing
Indebtedness.  Immediately  thereafter,  the Managing  General  Partner  and the
Special General  Partner will  convey  their limited  partner interests  in  the
Operating  Partnership to  the Partnership. As  a result  of such contributions,
each of the Managing General Partner and the Special General Partner will have a
1.0% general partner interest in the  Partnership and a 1.0101% general  partner
interest in the Operating Partnership. In addition, the Managing General Partner
will  receive  in exchange  for its  contribution  to the  Partnership 4,533,638
Subordinated Units and the right to receive the Incentive Distributions.
 
     Also concurrently with the  closing of the  Offering, the Managing  General
Partner  will issue  $125 million aggregate  principal amount  of First Mortgage
Notes to certain institutional investors  in a private placement.  Approximately
$59.3 million of the net proceeds from the sale of the First Mortgage Notes (the
entire net proceeds of which are estimated to be $121.5 million) will be used by
the  Managing General Partner to pay a  dividend to Triarc. The remainder of the
net proceeds from  the sale  of the  First Mortgage  Notes (approximately  $62.2
million)  will be contributed  by the Managing General  Partner to the Operating
Partnership in connection with the Conveyance and will be used by the  Operating
Partnership  to repay (in the manner described  below) a portion of the Managing
General Partner's indebtedness  outstanding under the  Existing Credit  Facility
and  the Other Existing Indebtedness, all  of which indebtedness will be assumed
by  the  Operating  Partnership  in  connection  with  the  Conveyance.   First,
approximately  $30 million of  such net proceeds  will be used  by the Operating
Partnership to repay indebtedness evidenced by the Refunding Notes, and then the
remainder of such  net proceeds (approximately  $32.2 million) will  be used  to
repay  other indebtedness outstanding under the  Existing Credit Facility and to
repay $4.9 million of Other Existing Indebtedness. The effective interest  rates
on  the  Refunding Notes,  the  $27.3 million  outstanding  under the  term loan
facility and the $4.9 million of  Other Existing Indebtedness were 7.69%,  8.28%
and 8.34%, respectively, as of May 31, 1996.
 
     After  the repayment of the Refunding  Notes and such other indebtedness as
described above, the net proceeds of the sale of the Common Units issued in  the
Offering  (estimated to be approximately $118.2  million) will be contributed to
the Operating Partnership which  will use such proceeds  to repay all  remaining
indebtedness under the Existing Credit Facility, to make the Partnership Loan to
Triarc  and to pay certain accrued management  fees and tax sharing payments due
to Triarc from the Managing General Partner. The effective interest rate on  the
remaining  $9.2 million outstanding under the  revolving credit facility and the
remaining $56.8 million outstanding under the  term loan facility was 7.85%  and
8.28%, respectively, as of May 31, 1996.
 
     Concurrently  with the closing  of the Offering,  the Operating Partnership
will also enter into  the Bank Credit  Facility, which will  consist of the  $15
million Working Capital Facility and the $40 million Acquisition Facility. It is
expected  that these facilities will be undrawn  at the time of the consummation
of the Transactions.
 
     The  Partnership  believes  that,   if  its  assumptions  about   operating
conditions  are correct,  the Partnership  will not  borrow any  funds under the
Working Capital Facility until  the fourth quarter of  1996. To the extent  that
Available  Cash  from  Operating Surplus  is  insufficient to  make  the Minimum
Quarterly Distribution on the Common Units  and the related distribution on  the
General  Partner  Interests,  the Partnership  expects  that it  would  have the
ability to borrow under the Working Capital Facility to make such distributions,
although any decision to do  so would be based on  circumstances at the time  of
such distribution, and cannot be determined at the present time.
 
     In addition, the Managing General Partner will dividend to Triarc a portion
(approximately   $51.4  million  aggregate  principal  amount)  of  an  existing
intercompany note of Triarc.
 
                                       50
 


<PAGE>

<PAGE>
     For additional information regarding the terms of the First Mortgage  Notes
and  the  Bank Credit  Facility, see  'Management's  Discussion and  Analysis of
Financial Condition and Results of  Operations -- Description of  Indebtedness.'
For  additional information  regarding the  terms of  the Partnership  Loan, see
'Cash Distribution Policy -- Partnership Loan.'
 
                                USE OF PROCEEDS
 
     The net  proceeds to  the Partnership  from the  sale of  the Common  Units
offered  in the Offering are estimated to be approximately $118.2 million, after
deducting the  underwriting  discounts  and commissions,  the  expenses  of  the
Offering  and an investment banking advisory fee payable by the Partnership. See
'Underwriting'. As  of May  31, 1996,  approximately $66.0  million of  the  net
proceeds  of the Offering would  have been used by  the Operating Partnership to
repay indebtedness  outstanding under  the Existing  Credit Facility.  See  'The
Transactions.' As of May 31, 1996, approximately $123.3 million of principal was
outstanding  under the  Existing Credit  Facility, of  which approximately $84.1
million was outstanding under  a term loan facility  (the 'Existing Term  Loan')
and  approximately  $39.2  million  was  outstanding  under  a  revolving credit
facility (the 'Existing Revolving Loan'),  including $30.0 million evidenced  by
the Refunding Notes. The effective interest rates on the Existing Term Loan, the
Refunding  Notes and the  remaining $9.2 million  outstanding under the Existing
Revolving Loan were 8.28%,  7.69% and 7.85%, respectively,  as of May 31,  1996.
Indebtedness  under Tranche A, Tranche B and Tranche C of the Existing Term Loan
is scheduled to  amortize in  semi-annual installments through  March 31,  2000,
March 31, 2002 and March 31, 2003, respectively. Indebtedness under the Existing
Revolving Loan matures in March 31, 2000. The balance of the net proceeds of the
Offering, approximately $52.2 million, will be used by the Operating Partnership
to   make  the  approximately   $40.7  million  Partnership   Loan  and  to  pay
approximately $11.5 million of accrued management fees and tax sharing  payments
due to Triarc.
 
     If  the  Underwriters'  over-allotment  option is  exercised  in  full, the
estimated additional net proceeds to the Partnership will be approximately $18.1
million. All of the net proceeds from the exercise, if any, of the Underwriters'
over-allotment option, will be retained by the Partnership and used for  general
partnership purposes.
 
                                       51
 


<PAGE>

<PAGE>
                                 CAPITALIZATION
 
     The  following table sets  forth (i) the  actual capitalization of National
Propane as of March 31,  1996, (ii) the pro  forma adjustments required to  give
effect  to the Transactions,  including the sale of  Common Units offered hereby
and the  application of  the net  proceeds  therefrom as  described in  'Use  of
Proceeds', and (iii) the pro forma capitalization of the Partnership as of March
31,  1996 after giving effect to such  adjustments. This table should be read in
conjunction with the  historical consolidated financial  statements and  related
notes  and the unaudited  pro forma condensed  consolidated financial statements
and related notes appearing elsewhere herein.
 
<TABLE>
<CAPTION>
                                                                                      MARCH 31, 1996
                                                                       --------------------------------------------
                                                                                       PRO FORMA       PARTNERSHIP
                                                                       HISTORICAL    ADJUSTMENTS(A)     PRO FORMA
                                                                       ----------    --------------    ------------
                                                                                      (IN THOUSANDS)
 
<S>                                                                    <C>           <C>               <C>
Current maturities of long-term debt:
     Existing Credit Facility.......................................    $   8,125      $   (8,125)       $ --    (b)
     Other Existing Indebtedness....................................        2,904          (2,597)            307
                                                                       ----------    --------------    ------------
          Total current maturities of long-term debt................       11,029         (10,722)            307
                                                                       ----------    --------------    ------------
Long-term debt:
     Existing Credit Facility.......................................      119,187        (119,187)         --    (b)
     Other Existing Indebtedness....................................        4,383          (3,190)          1,193
     First Mortgage Notes(b)........................................       --             125,000         125,000
                                                                       ----------    --------------    ------------
          Total long-term debt......................................      123,570           2,623         126,193
                                                                       ----------    --------------    ------------
Stockholders' equity (deficit)......................................      (43,083)         43,083          --
                                                                       ----------    --------------    ------------
Partners' capital:
     Limited partners...............................................       --              18,184          18,184
     General partners...............................................       --              14,639          14,639
                                                                       ----------    --------------    ------------
          Total partners' capital...................................       --              32,823          32,823
                                                                       ----------    --------------    ------------
Total capitalization................................................    $  91,516      $   67,807        $159,323
                                                                       ----------    --------------    ------------
                                                                       ----------    --------------    ------------
</TABLE>
 
- ------------
 
 (a) For a description of the adjustments and assumptions used in preparing  the
     Unaudited  Pro Forma  Condensed Consolidated Financial  and Operating Data,
     see Notes to the Unaudited  Pro Forma Condensed Consolidated Balance  Sheet
     and Statements of Operations included elsewhere herein.
 
 (b) The  Partnership expects to enter into  the Bank Credit Facility concurrent
     with the closing  of the  Offering and anticipates  that there  will be  no
     outstanding  borrowings thereunder at closing. See 'Management's Discussion
     and  Analysis  of  Financial  Condition   and  Results  of  Operations   --
     Description  of Indebtedness' for a description of the Bank Credit Facility
     and the First Mortgage Notes.
 
                                       52
 


<PAGE>

<PAGE>
                                    DILUTION
 
     On a pro  forma basis  as of  March 31, 1996,  after giving  effect to  the
Transactions  contemplated by this  Prospectus, the net  tangible book value per
Common Unit  was  $1.17.  Purchasers  of  Common  Units  in  the  Offering  will
experience  substantial and  immediate dilution in  net tangible  book value per
Common Unit for financial accounting  purposes, as illustrated in the  following
table:
 
<TABLE>
<S>                                                                                   <C>        <C>
Initial public offering price per Common Unit......................................              $21.00
                                                                                                 ------
Net negative tangible book value per Unit before the Offering(1)(2)................   ($21.10)
Increase in book value per Unit attributable to new investors......................    22.27
                                                                                      ------
Less: Pro forma net tangible book value per Unit after the Offering(2)(3)..........                1.17
                                                                                                 ------
Immediate dilution in net tangible book value per Common Unit to new investors.....              $19.83
                                                                                                 ------
                                                                                                 ------
</TABLE>
 
- ------------
 
(1) Determined by dividing the number of Units (4,533,638 Subordinated Units and
    the General Partner Interests having a dilutive effect equivalent to 446,838
    Units)  to be issued to the General  Partners for the contribution of assets
    and liabilities of  the General  Partners to  the Partnership  into the  net
    tangible  book  value  of  the  contributed  assets  and  liabilities (which
    reflects the issuance and  assumption of the First  Mortgage Notes) and  the
    $59.3 million distribution to Triarc.
 
(2) The  net negative  tangible book  value does  not include  intangible assets
    contributed to the Partnership having a book value of $19.7 million.
 
(3) Determined by dividing the  total number of  Units (6,190,476 Common  Units,
    4,533,638  Subordinated  Units and  the General  Partner Interests  having a
    dilutive effect equivalent to  446,838 Units) to  be outstanding after  this
    Offering,  into the  pro forma net  tangible book value  of the Partnership,
    after giving effect to the application of the net proceeds of the Offering.
                            ------------------------
     The following table sets forth the number  of Units that will be issued  by
the  Partnership and the total consideration provided by the General Partners in
respect of their  Units and  the cash  consideration contributed  by the  Common
Unitholders   in  the  Offering  upon   the  consummation  of  the  Transactions
contemplated by this Prospectus:
 
<TABLE>
<CAPTION>
                                                               UNITS ACQUIRED
                                                           -----------------------         TOTAL
                                                             NUMBER        PERCENT     CONSIDERATION
                                                           ----------      -------    -----------------
                                                                                       (IN THOUSANDS)
 
<S>                                                        <C>             <C>        <C>
General Partners........................................    4,980,476(a)     44.6%        $(85,377)(b)
New Investors...........................................    6,190,476        55.4          118,200
                                                           ----------      -------    ----------------
     Total..............................................   11,170,952       100.0%        $ 32,823
                                                           ----------      -------    ----------------
                                                           ----------      -------    ----------------
</TABLE>
 
- ------------
 
 (a) Upon the consummation of the Transactions contemplated by this  Prospectus,
     the  General  Partners will  own 4,533,638  Subordinated  Units and  the 4%
     General Partner Interests  having a dilutive  effect equivalent to  446,838
     Units.
 
 (b) Total  consideration for the General  Partners represents the negative book
     value of the net assets and liabilities contributed by the General Partners
     to the Partnership at March 31, 1996. The total negative book value of  the
     consideration  provided by the  General Partners is  as follows (dollars in
     thousands):
 
<TABLE>
<S>                                                                                  <C>
    Negative book value of assets and liabilities transferred by
    the General Partners to the Operating Partnership at
    March 31, 1996................................................................   $(26,077)
    Add: Distribution to Triarc of a portion of the net proceeds from the issuance
     of the First Mortgage Notes..................................................    (59,300)
                                                                                     --------
                                                                                     $(85,377)
                                                                                     --------
                                                                                     --------
</TABLE>
 
                                       53
 


<PAGE>

<PAGE>
                            CASH DISTRIBUTION POLICY
 
GENERAL
 
     The Partnership will distribute to its partners, on a quarterly basis,  all
of  its Available Cash in the manner described herein. Available Cash is defined
in the Glossary and generally means, with  respect to any fiscal quarter of  the
Partnership, all cash on hand at the end of such quarter less the amount of cash
reserves  that is  necessary or  appropriate in  the discretion  of the Managing
General Partner  to (i)  provide for  the proper  conduct of  the  Partnership's
business,  (ii) comply with applicable law or any Partnership debt instrument or
other agreement, or (iii) provide funds for distributions to Unitholders and the
General Partners in respect of any one or more of the next four quarters.
 
     Cash distributions  will  be  characterized as  distributions  from  either
Operating  Surplus  or Capital  Surplus.  This distinction  affects  the amounts
distributed to Unitholders relative to  the General Partners, and under  certain
circumstances  it determines whether  holders of Subordinated  Units receive any
distributions. See ' -- Quarterly Distributions of Available Cash.'
 
     Operating Surplus is defined  in the Glossary and  refers generally to  (i)
the  cash  balance of  the  Partnership on  the  date the  Partnership commences
operations, plus $15.4 million, plus all  cash receipts of the Partnership  from
its  operations,  less (ii)  all  Partnership operating  expenses,  debt service
payments (including reserves  therefor but  not including  payments required  in
connection  with the sale of assets or  any refinancing with the proceeds of new
indebtedness or  any  equity  offering), maintenance  capital  expenditures  and
reserves established for future Partnership operations.
 
     Capital  Surplus  is also  defined in  the Glossary  and generally  will be
generated only by borrowings (other than for working capital purposes), sales of
debt and equity securities  and sales or other  dispositions of assets for  cash
(other  than inventory, accounts receivable and  other current assets and assets
disposed of in the ordinary course of business).
 
     To avoid  the difficulty  of  trying to  determine whether  Available  Cash
distributed  by  the  Partnership  is from  Operating  Surplus  or  from Capital
Surplus, all Available Cash distributed by the Partnership from any source  will
be  treated as distributed from Operating Surplus until the sum of all Available
Cash distributed since the commencement of the Partnership equals the  Operating
Surplus  as of the end of the  quarter prior to such distribution. Any Available
Cash in excess of such amount (irrespective of its source) will be deemed to  be
from Capital Surplus and distributed accordingly.
 
     If  Available Cash from  Capital Surplus is distributed  in respect of each
Common Unit in an aggregate amount per  Common Unit equal to the initial  public
offering  price of the Common Units (the  'Initial Unit Price'), plus any Common
Unit Arrearages, the distinction between  Operating Surplus and Capital  Surplus
will  cease, and all distributions of Available  Cash will be treated as if they
were from Operating Surplus. The Partnership does not anticipate that there will
be significant distributions from Capital Surplus.
 
     The  Subordinated  Units  are  a   separate  class  of  interests  in   the
Partnership,  and  the rights  of holders  of such  interests to  participate in
distributions to partners differ from the rights of the holders of Common Units.
For any given  quarter, any Available  Cash will be  distributed to the  General
Partners  (as holders of  the General Partner  Interests) and to  the holders of
Common Units, and may also be  distributed to the holders of Subordinated  Units
depending  upon the  amount of  Available Cash  for the  quarter, the  amount of
Common Unit Arrearages, if any, whether  the Subordination Period has ended  and
other factors discussed below.
 
     The  Incentive  Distributions  are a  separate  class of  interests  in the
Partnership that  represent the  right to  receive an  increasing percentage  of
quarterly  distributions  of  Available  Cash  from  Operating  Surplus  and  of
liquidating  distributions  after  the  Target  Distribution  Levels  have  been
achieved.  The Target Distribution Levels are  based on the amounts of Available
Cash from Operating Surplus or  liquidating distributions distributed in  excess
of  payments made with respect to the Minimum Quarterly Distributions and Common
Unit Arrearages.
 
     Subject   to   the   limitations    described   under   'The    Partnership
Agreement  --  Issuance  of  Additional  Securities,'  the  Partnership  has the
authority to issue  additional Common Units  or other equity  securities of  the
Partnership  for  such consideration  and on  such terms  and conditions  as are
established by  the Managing  General  Partner, in  its discretion  without  the
approval of the Unitholders. It is possible
 
                                       54
 


<PAGE>

<PAGE>
that  the Partnership will fund acquisitions of other propane businesses through
the issuance  of additional  Common  Units or  other  equity securities  of  the
Partnership.  Holders of any  additional Common Units  issued by the Partnership
will be entitled to share equally with the then-existing holders of Common Units
in distributions of Available Cash by the Partnership. In addition, the issuance
of additional partnership interests may dilute the value of the interests of the
then-existing holders of Common Units in the net assets of the Partnership.
 
     Neither the Managing General Partner  nor the Special General Partner  will
be required to make an additional capital contribution to the Partnership or the
Operating  Partnership  in connection  with the  exercise of  the over-allotment
option, but each will nonetheless be entitled to receive 2% of distributions  of
Available Cash (except upon liquidation).
 
     The  discussion  below  indicates  the  percentages  of  cash distributions
required to be made to the General Partners and the holders of Common Units  and
the circumstances under which holders of Subordinated Units are entitled to cash
distributions  and the amounts thereof. For  a discussion of Available Cash from
Operating Surplus available for distributions  with respect to the Common  Units
on a pro forma basis, see ' -- Cash Available for Distribution.'
 
QUARTERLY DISTRIBUTIONS OF AVAILABLE CASH
 
     The  Partnership will  make distributions to  its partners  with respect to
each quarter of the Partnership prior to  its liquidation in an amount equal  to
100%  of its Available  Cash for such  quarter. The Partnership  expects to make
distributions of all Available Cash within  approximately 45 days after the  end
of  each fiscal quarter, commencing with  the quarter ending September 30, 1996,
to holders  of record  on  the applicable  record  date. The  Minimum  Quarterly
Distribution  and the Target Distribution Levels for the period from the closing
of the Offering through September 30, 1996 will be adjusted based on the  actual
length  of  such  period.  The Minimum  Quarterly  Distribution  and  the Target
Distribution Levels are also subject  to certain other adjustments as  described
below  under '  -- Distributions  from Capital Surplus'  and '  -- Adjustment of
Minimum Quarterly Distribution and Target Distribution Levels.'
 
     With respect to each quarter during the Subordination Period, to the extent
there is sufficient Available  Cash, the holders of  Common Units will have  the
right  to  receive  the Minimum  Quarterly  Distribution, plus  any  Common Unit
Arrearages, prior  to any  distribution  of Available  Cash  to the  holders  of
Subordinated  Units. This  subordination feature will  enhance the Partnership's
ability to distribute  the Minimum  Quarterly Distribution on  the Common  Units
during  the  Subordination  Period. There  is  no guarantee,  however,  that the
Minimum Quarterly Distribution will be made on the Common Units. Upon expiration
of  the  Subordination  Period,  all  Subordinated  Units  will  convert  on   a
one-for-one basis into Common Units and will participate pro rata with all other
Common   Units  in  future  distributions   of  Available  Cash.  Under  certain
circumstances, up to 2,266,820 of the Subordinated Units issued to the  Managing
General  Partner may convert  into Common Units  prior to the  expiration of the
Subordination Period.  Such  number of  Subordinated  Units eligible  for  early
conversion  may be  increased by  up to  223,419 Subordinated  Units (or 242,765
Subordinated Units if  the Underwriters' over-allotment  option is exercised  in
full)  issued  upon  conversion of  all  or  a portion  of  the  Special General
Partner's 2% General Partner Interest. Further, additional capital contributions
by the Special General  Partner upon other  issuances of additional  Partnership
securities  will increase the number of  Units into which such combined interest
may be  exchanged. Common  Units  will not  accrue  arrearages with  respect  to
distributions  for any quarter  after the Subordination  Period and Subordinated
Units will  not accrue  any arrearages  with respect  to distributions  for  any
quarter.
 
DISTRIBUTIONS FROM OPERATING SURPLUS DURING SUBORDINATION PERIOD
 
     The  Subordination Period  will generally  extend from  the closing  of the
Offering until the first  day of any  quarter beginning after  June 30, 2001  in
respect  of which (i) distributions of  Available Cash from Operating Surplus on
the Common Units and the  Subordinated Units with respect  to each of the  three
consecutive  four-quarter  periods immediately  preceding  such date  equaled or
exceeded the sum of the Minimum Quarterly Distribution on all of the outstanding
Common Units  and Subordinated  Units  during such  periods, (ii)  the  Adjusted
Operating  Surplus generated during  each of the  three consecutive four-quarter
periods immediately  preceding such  date equaled  or exceeded  the sum  of  the
Minimum
 
                                       55
 


<PAGE>

<PAGE>
Quarterly  Distribution on all of the  outstanding Common Units and Subordinated
Units and the related distribution on the General Partner Interests during  such
periods and (iii) there are no outstanding Common Unit Arrearages.
 
     Prior to the end of the Subordination Period, a portion of the Subordinated
Units  will convert into  Common Units on  a one-for-one basis  on the first day
after the record date established for the distribution in respect of any quarter
ending on or  after (a) June  30, 1999 (with  respect to 1,133,410  Subordinated
Units,  subject to adjustment  as discussed below)  and (b) June  30, 2000 (with
respect to  1,133,410 Subordinated  Units, subject  to adjustment  as  discussed
below)  in respect of  which (i) distributions of  Available Cash from Operating
Surplus on the Common Units and the  Subordinated Units with respect to each  of
the  three  consecutive  four-quarter periods  immediately  preceding  such date
equaled or exceeded the sum of the Minimum Quarterly Distribution on all of  the
outstanding  Common Units and  Subordinated Units during  such periods, (ii) the
Adjusted  Operating  Surplus  generated  during  each  of  the  two  consecutive
four-quarter periods immediately preceding such date equaled or exceeded the sum
of the Minimum Quarterly Distribution on all of the outstanding Common Units and
Subordinated Units and the related distribution on the General Partner Interests
during  such periods, and (iii) there are no outstanding Common Unit Arrearages;
provided,  however,  that  the  early  conversion  of  the  second  tranche   of
Subordinated  Units may not  occur until at  least one year  following the early
conversion of the  first tranche  of Subordinated  Units. Such  number of  units
eligible  for  early conversion  on June  30, 1999  and June  30, 2000  shall be
subject to increase in each case by a number of Subordinated Units equal to  25%
of  the total Units issued  upon conversion of the  Special General Partner's 2%
General Partner Interest.
 
     Upon expiration  of the  Subordination Period,  all remaining  Subordinated
Units  will convert into Common Units on a one-for-one basis and will thereafter
participate, pro rata, with the other Common Units in distributions of Available
Cash. In  addition, if  the Managing  General Partner  is removed  as a  general
partner  of the  Partnership other than  for Cause (i)  the Subordination Period
will end and all  outstanding Subordinated Units  will immediately convert  into
Common  Units on a  one-for-one basis, (ii) any  existing Common Unit Arrearages
will be  extinguished and  (iii) the  General Partners  will have  the right  to
convert  their remaining  General Partner  Interests (and  the right  to receive
Incentive Distributions) into Common  Units or to receive  cash in exchange  for
such interests.
 
     'Adjusted  Operating  Surplus'  is defined  in  the Glossary  and,  for any
period, generally means Operating Surplus generated during such period, less (a)
any net increase in  working capital borrowings during  such period and (b)  any
net  reduction  in  cash  reserves  for  Operating  Expenditures  that otherwise
increased the Operating Surplus generated during  such period, plus (x) any  net
decrease  in  working capital  borrowings  during such  period  and (y)  any net
increase in cash reserves for Operating Expenditures during such period required
by any debt instrument for the repayment of principal, interest or premium.
 
     Distributions by the Partnership of  Available Cash from Operating  Surplus
with  respect to any quarter during the Subordination Period will be made in the
following manner:
 
          first, 96% to the Common Unitholders, pro rata, and 4% to the  General
     Partners,  pro rata,  until there has  been distributed in  respect of each
     outstanding  Common  Unit  an  amount   equal  to  the  Minimum   Quarterly
     Distribution for such quarter;
 
          second, 96% to the Common Unitholders, pro rata, and 4% to the General
     Partners,  pro rata,  until there has  been distributed in  respect of each
     outstanding Common  Unit an  amount  equal to  any Common  Unit  Arrearages
     accrued   and  unpaid  with  respect  to  any  prior  quarters  during  the
     Subordination Period;
 
          third, 96% to the  Subordinated Unitholders, pro rata,  and 4% to  the
     General  Partners, pro rata, until there has been distributed in respect of
     each outstanding Subordinated Unit an amount equal to the Minimum Quarterly
     Distribution for such quarter;
 
          thereafter,   in   the   manner   described   in   '   --    Incentive
     Distributions -- Hypothetical Annualized Yield' below.
 
     The  above references  to the 4%  of Available Cash  from Operating Surplus
distributed to the General Partners constitute  references to the amount of  the
Managing  General Partner's  and Special General  Partner's aggregate percentage
interest   in   distributions   from   the   Partnership   and   the   Operating
 
                                       56
 


<PAGE>

<PAGE>
Partnership  on  a  combined  basis,  exclusive of  their  rights  as  holder of
Subordinated Units, Common Units or  rights to receive Incentive  Distributions.
Each  of the Managing General Partner and the Special General Partner will own a
1.0% unsubordinated general partner  interest in the  Partnership and a  1.0101%
unsubordinated  general  partner interest  in  the Operating  Partnership. Other
references  in  this  Prospectus  to   the  General  Partner  Interests  or   to
distributions  of 4% of Available Cash  also constitute references to the amount
of the General Partners'  aggregate percentage interest  in the Partnership  and
the  Operating  Partnership on  a combined  basis exclusive  of their  rights as
holder of the Subordinated  Units, Common Units or  rights to receive  Incentive
Distributions. In the event all or a portion of the Special General Partner's 2%
General  Partner Interest is converted into  Units, the Managing General Partner
will  be  required  to  amend  the  Partnership  Agreement  and  the   Operating
Partnership  Agreement  to  decrease  the  percentage  of  profits,  losses  and
distributions previously allocated to the Special General Partner in respect  of
its  General  Partner  Interest  to reflect  such  conversion  and  increase the
percentage of  profits,  losses and  distributions  that are  allocated  to  the
Unitholders  by  the same  amount. With  respect  to any  Common Unit,  the term
'Common Unit Arrearages'  refers to the  amount by which  the Minimum  Quarterly
Distribution  in  any  quarter  during  the  Subordination  Period  exceeds  the
distribution of Available  Cash from  Operating Surplus actually  made for  such
quarter on a Common Unit issued in the Offering, cumulative for such quarter and
all  prior quarters during the Subordination Period. Common Unit Arrearages will
not accrue interest.
 
DISTRIBUTIONS FROM OPERATING SURPLUS AFTER SUBORDINATION PERIOD
 
     Distributions by the Partnership of  Available Cash from Operating  Surplus
with  respect to any quarter after the  Subordination Period will be made in the
following manner:
 
          first, 96%  to  all Unitholders,  pro  rata,  and 4%  to  the  General
     Partners, pro rata until there has been distributed in respect of each Unit
     an amount equal to the Minimum Quarterly Distribution for such quarter;
 
          thereafter,    in   the   manner   described   in   '   --   Incentive
     Distributions -- Hypothetical Annualized Yield' below.
 
INCENTIVE DISTRIBUTIONS -- HYPOTHETICAL ANNUALIZED YIELD
 
     For any  quarter  for  which  Available  Cash  from  Operating  Surplus  is
distributed to the Common and Subordinated Unitholders in an amount equal to the
Minimum  Quarterly Distribution on all Units and to the Common Unitholders in an
amount equal to any unpaid Common Unit Arrearages, then any additional Available
Cash from Operating Surplus in respect of such quarter will be distributed among
the Unitholders and the General Partners in the following manner:
 
          first, 96%  to  all Unitholders,  pro  rata,  and 4%  to  the  General
     Partners, pro rata, until the Unitholders have received (in addition to any
     distributions  to Common Unitholders to eliminate Common Unit Arrearages) a
     total of $0.577 for such quarter  in respect of each outstanding Unit  (the
     'First Target Distribution');
 
          second,  85%  to all  Unitholders, pro  rata, and  15% to  the General
     Partners,  until  the  Unitholders  have  received  (in  addition  to   any
     distributions  to Common Unitholders to eliminate Common Unit Arrearages) a
     total of $0.665 for such quarter  in respect of each outstanding Unit  (the
     'Second Target Distribution');
 
          third,  75%  to all  Unitholders,  pro rata,  and  25% to  the General
     Partners,  until  the  Unitholders  have  received  (in  addition  to   any
     distributions  to Common Unitholders to eliminate Common Unit Arrearages) a
     total of $0.863 for such quarter  in respect of each outstanding Unit  (the
     'Third Target Distribution'); and
 
          thereafter,  50% to all Unitholders, pro  rata, and 50% to the General
     Partners.
 
     The distributions to the  General Partners set forth  above (other than  in
the  Managing General Partner's capacity as a holder of Subordinated Units) that
are  in  excess  of  the  General  Partner  Interests  represent  the  Incentive
Distributions  which  are paid  to the  Managing  General Partner.  The Managing
General Partner may transfer its right to receive Incentive Distributions to one
or more Persons.
 
     The following table illustrates the percentage allocation of the additional
Available Cash from Operating  Surplus between the  Unitholders and the  General
Partners  up  to  the  various Target  Distribution  Levels  and  a hypothetical
annualized   percentage   yield   to   be   realized   by   a   Unitholder    at
 
                                       57
 


<PAGE>

<PAGE>
each  different  level  of  allocation among  the  Unitholders  and  the General
Partners. For purposes of the  following table, the annualized percentage  yield
is  calculated on a pretax basis assuming that (i) the Common Unit was purchased
at  an  amount  equal  to   the  initial  public   offering price of $21.00  per
Common  Unit and (ii) the Partnership  distributed each quarter during the first
year following the investment the amount  set forth under the column  'Quarterly
Distribution  Target Amount.' The calculations are  also based on the assumption
that the quarterly  distribution amounts shown  do not include  any Common  Unit
Arrearages.  The  amounts  set  forth  under  'Marginal  Percentage  Interest in
Distributions' are  the percentage  interests of  the General  Partners and  the
Unitholders  in any Available Cash from  Operating Surplus distributed up to and
including the corresponding amount in the column 'Quarterly Distribution  Target
Amount,'  until Available Cash distributed  reaches the next Target Distribution
Level, if  any. The  percentage  interests shown  for  the Unitholders  and  the
General  Partners for the Minimum Quarterly  Distribution are also applicable to
quarterly  distribution  amounts  that  are  less  than  the  Minimum  Quarterly
Distribution.  The table is presented for  illustrative purposes only; there can
be no assurance  that the Partnership  will have Available  Cash from  Operating
Surplus in order to make such distributions.
 
<TABLE>
<CAPTION>
                                                                                                   MARGINAL PERCENTAGE
                                                                                                       INTEREST IN
                                                           QUARTERLY                                  DISTRIBUTIONS
                                                          DISTRIBUTION           HYPOTHETICAL    -----------------------
                                                             TARGET               ANNUALIZED                    GENERAL
                                                             AMOUNT                 YIELD        UNITHOLDERS    PARTNERS
                                                          ------------           ------------    -----------    --------
 
<S>                                                <C>    <C>             <C>    <C>             <C>            <C>
Minimum Quarterly Distribution..................             $0.525                 10.000%           96%           4%
First Target Distribution.......................             $0.577                 10.990%           96%           4%
Second Target Distribution......................             $0.665                 12.667%           85%          15%
Third Target Distribution.......................             $0.863                 16.438%           75%          25%
Thereafter......................................    above    $0.863        above    16.438%           50%          50%
</TABLE>
 
DISTRIBUTIONS FROM CAPITAL SURPLUS
 
     Distributions  by the  Partnership of  Available Cash  from Capital Surplus
will be made in the following manner:
 
          first, 96%  to  all Unitholders,  pro  rata,  and 4%  to  the  General
     Partners,  pro rata, until  the Partnership has  distributed, in respect of
     each outstanding Unit issued in  the Offering, Available Cash from  Capital
     Surplus in an aggregate amount per Unit equal to the Initial Unit Price;
 
          second, 96% to the Common Unitholders, pro rata, and 4% to the General
     Partners,  pro rata, until  the Partnership has  distributed, in respect of
     each outstanding Common  Unit, Available  Cash from Capital  Surplus in  an
     aggregate amount equal to any unpaid Common Unit Arrearages with respect to
     such Common Unit; and
 
          thereafter,  all distributions of Available  Cash from Capital Surplus
     will be distributed as if they were from Operating Surplus.
 
     As a distribution  of Available Cash  from Capital Surplus  is made, it  is
treated  as if it  were a repayment of  the Initial Unit  Price. To reflect such
repayment, the Minimum Quarterly Distribution and the Target Distribution Levels
will be adjusted  downward by multiplying  each such amount  by a fraction,  the
numerator of which is the Unrecovered Capital of the Common Units (as defined in
the  Glossary)  immediately  after  giving  effect  to  such  repayment  and the
denominator of which is the Unrecovered Capital of the Common Units  immediately
prior  to such repayment. This adjustment  to the Minimum Quarterly Distribution
may accelerate the termination of  the Subordination Period, thereby  increasing
the likelihood of the conversion of Subordinated Units into Common Units.
 
     When  'payback'  of the  Initial Unit  Price has  occurred, i.e.,  when the
Unrecovered Capital of  the Common Units  is zero (and  any accrued Common  Unit
Arrearages  have been paid),  then in effect  the Minimum Quarterly Distribution
and each of the Target  Distribution Levels will have  been reduced to zero  for
subsequent  quarters. Thereafter, all  distributions of Available  Cash from all
sources will be  treated as  if they were  from Operating  Surplus. Because  the
Minimum Quarterly Distribution and the Target Distribution Levels will have been
reduced to zero, the General Partners will be entitled thereafter to receive 50%
of all distributions of Available Cash.
 
     Distributions  of Available Cash  from Capital Surplus  will not reduce the
Minimum Quarterly Distribution  or Target  Distribution Levels  for the  quarter
with respect to which they are distributed.
 
                                       58
 


<PAGE>

<PAGE>
ADJUSTMENT OF MINIMUM QUARTERLY DISTRIBUTION AND TARGET DISTRIBUTION LEVELS
 
     In  addition to reductions of the Minimum Quarterly Distribution and Target
Distribution Levels  made upon  a distribution  of Available  Cash from  Capital
Surplus, the Minimum Quarterly Distribution, the Target Distribution Levels, the
Unrecovered  Capital, the number of additional  Common Units issuable during the
Subordination Period  without a  Unitholder  vote, the  number of  Common  Units
issuable  upon conversion of the Subordinated Units and other amounts calculated
on a per  Unit basis  will be proportionately  adjusted upward  or downward,  as
appropriate,  in the  event of  any combination  or subdivision  of Common Units
(whether effected by a distribution payable  in Common Units or otherwise),  but
not  by reason of the issuance of  additional Common Units for cash or property.
For example, in the event of a  two-for-one split of the Common Units  (assuming
no  prior adjustments), the  Minimum Quarterly Distribution,  each of the Target
Distribution Levels and the Unrecovered Capital  of the Common Units would  each
be reduced to 50% of its initial level.
 
     The  Minimum Quarterly Distribution and  the Target Distribution Levels may
also be adjusted if  legislation is enacted  or if existing  law is modified  or
interpreted  by the relevant governmental authority  in a manner that causes the
Partnership to  become  taxable  as  a corporation  or  otherwise  subjects  the
Partnership  to taxation  as an  entity for federal,  state or  local income tax
purposes. In  such event,  the  Minimum Quarterly  Distribution and  the  Target
Distribution  Levels would be reduced  to an amount equal  to the product of (i)
the Minimum Quarterly Distribution and  each of the Target Distribution  Levels,
respectively,  multiplied by (ii) one minus the sum of (x) the maximum effective
federal income tax rate to  which the Partnership is  then subject as an  entity
plus  (y)  any increase  that  results from  such  legislation in  the effective
overall state and local income tax rate  to which the Partnership is subject  as
an  entity for the  taxable year in  which such event  occurs (after taking into
account the benefit of any deduction  allowable for federal income tax  purposes
with  respect to  the payment  of state  and local  income taxes).  For example,
assuming the Partnership was  not previously subject to  state and local  income
tax,  if the Partnership were to become  taxable as an entity for federal income
tax purposes and the Partnership became  subject to a maximum marginal  federal,
and  effective  state  and local,  income  tax  rate of  38%,  then  the Minimum
Quarterly Distribution and the Target Distribution Levels would each be  reduced
to 62% of the amount thereof immediately prior to such adjustment.
 
DISTRIBUTIONS OF CASH UPON LIQUIDATION
 
     Following  the  commencement  of  the dissolution  and  liquidation  of the
Partnership, assets will be sold or otherwise disposed of from time to time  and
the partners' capital account balances will be adjusted to reflect any resulting
gain  or loss. The proceeds  of such liquidation will,  first, be applied to the
payment of creditors of the Partnership in the order of priority provided in the
Partnership Agreement  and  by  law  and,  thereafter,  be  distributed  to  the
Unitholders and the General Partners in accordance with their respective capital
account   balances  as  so  adjusted.   Partners  are  entitled  to  liquidating
distributions in accordance  with capital account  balances. Although  operating
losses  are allocated  to all Unitholders,  the allocations of  gains and losses
upon liquidation are intended, to the extent possible, to entitle the holders of
outstanding Common  Units  to  a  preference over  the  holders  of  outstanding
Subordinated  Units  upon  the liquidation  of  the Partnership,  to  the extent
required to permit Common Unitholders to receive their Unrecovered Capital  plus
any  unpaid Common Unit Arrearages. Thus  net losses recognized upon liquidation
of the Partnership will be allocated to the Subordinated Units to the extent  of
their capital account balances before any loss is allocated to the Common Units,
and  net gains  recognized upon liquidation  will be allocated  first to restore
negative balances in  the capital  accounts of  the General  Partners and  other
Unitholders  and  then to  the Common  Unitholders  until their  capital account
balances equal their  Unrecovered Capital  plus unpaid  Common Unit  Arrearages.
However,  no assurance  can be  given that  there will  be sufficient  gain upon
liquidation of the Partnership to enable the Common Unitholders to fully recover
all of such amounts, even though there may be cash available for distribution to
the Subordinated Unitholders.
 
     The manner of such adjustment is as provided in the Partnership  Agreement,
the  form  of  which  is included  as  Appendix  A to  this  Prospectus.  If the
liquidation of the Partnership occurs before the end
 
                                       59
 


<PAGE>

<PAGE>
of the Subordination Period,  any net gain (or  unrealized gain attributable  to
assets distributed in kind) will be allocated to the partners as follows:
 
          first,  to the  General Partners  and the  Unitholders having negative
     balances in their capital  accounts to the extent  of and in proportion  to
     such negative balances;
 
          second, 96% to the Common Unitholders, pro rata, and 4% to the General
     Partners, pro rata, until the capital account for each Common Unit is equal
     to  the sum of (i) the Unrecovered  Capital in respect of such Common Unit,
     (ii) the  amount  of the  Minimum  Quarterly Distribution  for  the  fiscal
     quarter  during which liquidation  of the Partnership  occurs and (iii) any
     unpaid Common Unit Arrearages in respect of such Common Unit;
 
          third, 96% to the  Subordinated Unitholders, pro rata,  and 4% to  the
     General Partners, pro rata, until the capital account for each Subordinated
     Unit  is equal to the sum of (i) the Unrecovered Capital in respect of such
     Subordinated Unit and (ii) the amount of the Minimum Quarterly Distribution
     for the  fiscal quarter  during which  the liquidation  of the  Partnership
     occurs;
 
          fourth,  96%  to all  Unitholders,  pro rata,  and  4% to  the General
     Partners, pro rata, until there has been allocated under this clause fourth
     an amount per Common Unit equal to (a)  the sum of the excess of the  First
     Target  Distribution per Unit  over the Minimum  Quarterly Distribution per
     Unit for  each  quarter  of  the  Partnership's  existence,  less  (b)  the
     cumulative  amount per  Unit of  any distributions  of Available  Cash from
     Operating Surplus in excess of the Minimum Quarterly Distribution per  Unit
     that  were distributed  96% to  the Unitholders,  pro rata,  and 4%  to the
     General Partners, pro rata for each quarter of the Partnership's existence;
 
          fifth, 85%  to all  Unitholders,  pro rata,  and  15% to  the  General
     Partners,  until there has been allocated under this clause fifth an amount
     per Unit  equal  to  (a)  the  sum of  the  excess  of  the  Second  Target
     Distribution  per Unit over the First Target Distribution per Unit for each
     quarter of the Partnership's existence, less (b) the cumulative amount  per
     Unit  of  any distributions  of Available  Cash  from Operating  Surplus in
     excess of the First Target Distribution per Unit that were distributed  85%
     to  the Unitholders,  pro rata,  and 15% to  the General  Partners for each
     quarter of the Partnership's existence;
 
          sixth, 75%  to all  Unitholders,  pro rata,  and  25% to  the  General
     Partners,  until there has been allocated under this clause sixth an amount
     per Common Unit  equal to (a)  the sum of  the excess of  the Third  Target
     Distribution per Unit over the Second Target Distribution per Unit for each
     quarter  of the Partnership's existence, less (b) the cumulative amount per
     Unit of  any distributions  of  Available Cash  from Operating  Surplus  in
     excess of the Second Target Distribution per Unit that were distributed 75%
     to  the Unitholders,  pro rata,  and 25% to  the General  Partners for each
     quarter of the Partnership's existence; and
 
          thereafter, 50% to all Unitholders, pro  rata, and 50% to the  General
     Partners.
 
     If  the liquidation occurs after  the Subordination Period, the distinction
between Common Units and Subordinated Units will disappear, so that clauses (ii)
and (iii) of paragraph  second above and  all of paragraph  third above will  no
longer be applicable.
 
     Upon  liquidation of the Partnership, any  loss will generally be allocated
to the General Partners and the Unitholders as follows:
 
          first, 96%  to  the  Subordinated Unitholders  in  proportion  to  the
     positive  balances  in  their respective  capital  accounts and  4%  to the
     General Partners, pro rata,  until the capital accounts  of the holders  of
     the Subordinated Units have been reduced to zero;
 
          second,  96% to the Common Unitholders,  in proportion to the positive
     balances in  their  respective  capital  accounts and  4%  to  the  General
     Partners,  pro rata, until  the capital accounts  of the Common Unitholders
     have been reduced to zero; and
 
          thereafter, to the General Partners, pro rata.
 
     If the liquidation occurs after  the Subordination Period, the  distinction
between  Common  Units and  Subordinated Units  will disappear,  so that  all of
paragraph first above will no longer be applicable.
 
     Interim adjustments  to capital  accounts  will be  made  at the  time  the
Partnership   issues   additional  interests   in   the  Partnership   or  makes
distributions of property.  Such adjustments will  be based on  the fair  market
value  of  the  interests or  the  property  distributed and  any  gain  or loss
resulting therefrom
 
                                       60
 


<PAGE>

<PAGE>
will be allocated to the Unitholders and the General Partners in the same manner
as gain  or loss  is allocated  upon  liquidation. In  the event  that  positive
interim  adjustments are made  to the capital  accounts, any subsequent negative
adjustments to the capital  accounts resulting from  the issuance of  additional
interests  in the Partnership, distributions of  property by the Partnership, or
upon liquidation  of  the Partnership,  will  be  allocated in  a  manner  which
results,  to the extent possible, in the capital account balances of the General
Partners equaling the amount which would have been the General Partners' capital
accounts if no prior positive adjustments to the capital accounts had been made.
 
CASH AVAILABLE FOR DISTRIBUTION
 
     Based on the amount of working capital that the Partnership is expected  to
have  at the time  it commences operations  in 1996 and  the availability of the
Working Capital  Facility, the  Partnership believes  that, if  its  assumptions
about  operating and other conditions prove correct, the Partnership should have
sufficient Available Cash from  Operating Surplus to  enable the Partnership  to
distribute  the Minimum Quarterly  Distribution on the  outstanding Common Units
and Subordinated  Units and  the  related distribution  on the  General  Partner
Interests  with respect  to each  of its quarters  at least  through the quarter
ending December 31,  1997, although no  assurance can be  given respecting  such
distributions  or any distribution after such  date. The Partnership's belief is
based on a number of assumptions, including the assumptions that normal  weather
conditions   will  prevail  in  the  Partnership's  operating  areas,  that  the
Partnership's operating margins will remain constant, that all required interest
payments on the  Partnership Loan will  be made  by Triarc and  that market  and
overall   economic  conditions  will  not  change  substantially.  Although  the
Partnership believes its assumptions are reasonable, whether the assumptions are
realized is not, in a number of cases, within the control of the Partnership and
cannot be predicted with any degree of certainty. For example, in any particular
year or even  series of years,  weather may deviate  substantially from  normal.
Therefore,  certain of the Partnership's assumptions may prove to be inaccurate.
As a result, the actual Available  Cash from Operating Surplus generated by  the
Partnership  could deviate substantially from that currently expected. See 'Risk
Factors.' In addition, the terms of the Partnership's indebtedness under certain
circumstances will restrict the ability of the Partnership to distribute cash to
Unitholders. See  '  --  Partnership  Loan'  and  'Management's  Discussion  and
Analysis  of Financial  Condition and  Results of  Operations --  Description of
Indebtedness.' Accordingly, no assurance can be given that distributions of  the
Minimum   Quarterly  Distribution  or  any  other  amounts  will  be  made.  The
Partnership does not intend to update the expression of belief set forth above.
 
     The amount of Available  Cash from Operating  Surplus needed to  distribute
the  Minimum Quarterly  Distribution for four  quarters on the  Common Units and
Subordinated Units to be outstanding immediately  after the Offering and on  the
General  Partner Interests  is approximately $23.5  million (approximately $13.0
million for the Common Units, $9.5  million for the Subordinated Units and  $1.0
million  for the General Partner Interests). If the Underwriters' over-allotment
option is exercised in full, such  amounts would be approximately $15.0  million
for  the Common Units, $9.5 million for  the Subordinated Units and $1.0 million
for the  General  Partner Interests,  or  an aggregate  of  approximately  $25.5
million.
 
     Pro  forma Available Cash from Operating  Surplus generated during 1994 and
1995 (approximately $22.7  million and $17.6  million, respectively) would  have
been  sufficient to cover the Minimum Quarterly Distribution on the Common Units
and the related distribution  on the General Partner  Interests, but would  have
been  insufficient by approximately  $0.8 million and $5.9  million to cover the
Minimum Quarterly  Distribution  on  the  Subordinated  Units  and  the  related
distribution  on the General  Partner Interests in  1994 and 1995, respectively.
The decline in pro forma Available Cash from Operating Surplus generated  during
1995  was  primarily due  to the  fact  that temperatures  during the  winter of
1994-95 across the markets served  by the Partnership were substantially  warmer
than  the prior year. Pro forma  Available Cash from Operating Surplus generated
during the twelve  months ended  March 31, 1996  (approximately $20.0  million),
would  have been sufficient  to cover the Minimum  Quarterly Distribution on the
Common Units and the related distribution on the General Partner Interests,  but
would  have been insufficient by approximately $3.5 million to cover the Minimum
Quarterly Distribution on the Subordinated Units and the related distribution on
the General Partner Interests.
 
                                       61
 


<PAGE>

<PAGE>
     Pro forma Available Cash from Operating Surplus generated during the  three
months  ended  March  31,  1996 would  have  been  approximately  $13.4 million;
however, because of the  highly seasonal nature  of the Partnership's  business,
such  amount is  not indicative  of the  actual amounts  of Available  Cash from
Operating  Surplus  that   will  be  generated   in  subsequent  quarters.   The
Partnership's  revenues and  cash flows  have historically  been highest  in the
first quarter. Although  such $13.4  million generated during  the three  months
ended March 31, 1996 would have been in excess of the approximately $5.9 million
required  to cover the  Minimum Quarterly Distribution on  the Common Units, the
Subordinated  Units  and  the  related  distributions  on  the  General  Partner
Interests   during  such   quarter,  the  Partnership   would  have  established
significant reserves for, among other  things, payment of the Minimum  Quarterly
Distribution  on  the  Common  Units  in  subsequent  quarters  and  future debt
payments, thereby decreasing the amount of Available Cash from Operating Surplus
that would have been  distributed for such quarter.  For the calculation of  Pro
Forma Operating Surplus, see the table below.
 
                          PRO FORMA OPERATING SURPLUS
                                  (UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                   YEAR ENDED        TWELVE MONTHS    THREE MONTHS
                                                                  DECEMBER 31,           ENDED           ENDED
                                                               ------------------      MARCH 31,       MARCH 31,
                                                                1994       1995          1996             1996
                                                               -------    -------    -------------    ------------
                                                                                 (IN THOUSANDS)
 
<S>                                                            <C>        <C>        <C>              <C>
Operating profit as reported................................   $18,750    $14,501       $16,212         $ 12,224
Add management fees.........................................     4,561      3,000         3,000              750
Less standalone costs.......................................    (1,500)    (1,500)       (1,500)            (375)
                                                               -------    -------    -------------    ------------
Pro forma operating profit..................................    21,811     16,001        17,712           12,599
Add pro forma depreciation and amortization.................    10,024     10,645        10,825            2,601
                                                               -------    -------    -------------    ------------
Pro forma EBITDA(a).........................................    31,835     26,646        28,537           15,200
Add: Interest on $40.7 million Partnership Loan.............     5,500      5,500         5,500            1,375
      Other income(b).......................................       697        652           717              234
Less: Pro forma interest expense(c).........................   (10,905)   (10,990)      (10,960)          (2,722)
      Pro forma capital expenditures -- maintenance(d)......    (4,228)    (4,030)       (3,616)            (649)
      Pro forma provision for income taxes..................      (200)      (200)         (200)             (50)
                                                               -------    -------    -------------    ------------
Pro forma operating surplus.................................   $22,699    $17,578       $19,978         $ 13,388
                                                               -------    -------    -------------    ------------
                                                               -------    -------    -------------    ------------
</TABLE>
 
- ------------
 
 (a) EBITDA  is defined as  operating income plus  depreciation and amortization
     (excluding amortization of deferred financing costs). EBITDA should not  be
     considered  as an alternative  to net income (as  an indicator of operating
     performance) or as an alternative to  cash flow (as a measure of  liquidity
     or ability to service debt obligations) and is not a measure of performance
     or  financial condition under generally accepted accounting principles, but
     provides additional information for evaluating the Partnership's ability to
     distribute the  Minimum Quarterly  Distribution. Cash  flows in  accordance
     with  generally accepted accounting  principles consist of  cash flows from
     (i) operating, (ii)  investing and (iii)  financing activities. Cash  flows
     from  operating activities reflect net income (loss) (including charges for
     interest and income taxes  not reflected in EBITDA),  adjusted for (i)  all
     non-cash charges or income (including, but not limited to, depreciation and
     amortization)  and (ii)  changes in  operating assets  and liabilities (not
     reflected in  EBITDA). Further,  cash flows  from investing  and  financing
     activities   are  not  included   in  EBITDA.  For   a  discussion  of  the
     Partnership's operating performance  and cash flows  provided by (used  in)
     operating, investing and financing activities, see 'Management's Discussion
     and Analysis of Financial Condition and Results of Operations.'
 
 (b) Other income consists of finance fees and rental income.
 
 (c) Excludes  non-cash  amortization of  deferred financing  costs of  $350 per
     annum and $88 for the three months ended March 31, 1996.
 
 (d) Includes expenditures not expected to occur on an annual basis as  follows:
     1994  --  $1,790 (primarily  computer  hardware and  systems installation);
     1995 -- $590 (primarily the purchase of an airplane).
 
                                       62
 


<PAGE>

<PAGE>
     Based on the Partnership's actual results of operations for the four months
ended April  30,  1996,  limited data  about  operations  in May  1996  and  the
Partnership's  estimated results  of operations for  the remainder  of 1996, the
Partnership believes that it will generate Available Cash from Operating Surplus
of approximately $23.5 million during 1996,  although there can be no  assurance
it  will  generate  such  amount.  The  Partnership's  belief  is  based  on the
assumptions about weather, margins and market and economic conditions  described
above  as they apply  to the remainder of  fiscal 1996. As  a result, the actual
Available Cash  from Operating  Surplus generated  by the  Partnership for  1996
could deviate substantially from that currently expected.
 
     The amounts of pro forma Available Cash from Operating Surplus for 1994 and
1995  and for the three months and twelve  months ended March 31, 1996 set forth
above were  derived in  part from  the  pro forma  financial statements  of  the
Partnership.  The  pro  forma  adjustments are  based  upon  currently available
information and  certain  estimates and  assumptions.  The pro  forma  financial
statements  do  not  purport  to  present  the  results  of  operations  of  the
Partnership had the  Partnership actually  commenced operations as  of the  date
indicated.  Furthermore, the pro forma financial statements are based on accrual
accounting concepts while Available  Cash and Operating  Surplus are defined  in
the  Partnership Agreement  on a  cash accounting  basis. As  a consequence, the
amounts of pro forma  Available Cash from Operating  Surplus shown above  should
only  be viewed as  a general indication  of the amounts  of Available Cash from
Operating Surplus that may in fact have been generated by the Partnership had it
been formed in earlier  periods. Available Cash is  defined in the Glossary  and
generally means, with respect to any fiscal quarter of the Partnership, all cash
on  hand at the  end of such  quarter less the  amount of cash  reserves that is
necessary or appropriate in  the discretion of the  Managing General Partner  to
(i)  provide for the  proper conduct of the  Partnership's business, (ii) comply
with applicable law or  any Partnership debt instrument  or other agreement,  or
(iii) provide funds for distributions to Unitholders and the General Partners in
respect  of any  one or  more of  the next  four quarters.  Operating Surplus is
defined in the  Glossary and refers  generally to  (i) the cash  balance of  the
Partnership  on  the  date  the  Partnership  commences  operations,  plus $15.4
million, plus all  cash receipts of  the Partnership from  its operations,  less
(ii)  all  Partnership  operating  expenses,  debt  service  payments (including
reserves therefor but  not including  payments required in  connection with  the
sale  of assets or any refinancing with  the proceeds of new indebtedness or any
equity offering), maintenance capital expenditures and reserves established  for
future  Partnership operations. For a more complete definition of Available Cash
and Operating Surplus, see the Glossary.
 
     In addition, there are provisions in the First Mortgage Notes and the  Bank
Credit   Facility  which   will,  under  certain   circumstances,  restrict  the
Partnership's ability to make distributions  to its partners. See  'Management's
Discussion  and Analysis  of Financial  Condition and  Results of  Operations --
Description of Indebtedness.'
 
PARTNERSHIP LOAN
 
     A portion  of  the Partnership's  annual  cash receipts  will  be  interest
payments  from Triarc  under the  Partnership Loan. On  a pro  forma basis, $5.5
million of the Partnership's  Available Cash from Operating  Surplus in 1995  of
approximately  $17.6 million would  have been derived  from interest payments on
the  Partnership  Loan.   Consequently,  the  Partnership's   ability  to   make
distributions  to Unitholders  will depend in  part on Triarc's  ability to make
interest payments under the Partnership Loan.
 
     The Partnership Loan will be a  senior obligation of Triarc evidenced by  a
note  issued by Triarc to the Operating Partnership (the 'Partnership Note') and
secured by  a pledge  by Triarc  of  all of  the shares  of capital  stock  (the
'Pledged  Stock')  of the  Managing  General Partner  that  are owned  by Triarc
(approximately 75.7% of the Managing General Partner's outstanding capital stock
as of the date of this Prospectus).  The following is a summary of the  material
terms of the Partnership Note, the form of which has been filed as an exhibit to
the  Registration Statement  of which this  Prospectus is part.  This summary is
qualified in its entirety by reference to the Partnership Note.
 
     The Partnership  Note will  bear interest  at a  rate of  13.5% per  annum,
payable  semi-annually  in  arrears  on  each  June  30  and  December  30.  The
Partnership Note  will  have  a  14-year  maturity,  with  required  semi-annual
prepayments,  without  premium, of  one-eighth  the principal  thereof beginning
seven years from the date of issuance. The Partnership Note generally may not be
prepaid in whole or
 
                                       63
 


<PAGE>

<PAGE>
in part prior to the  fifth anniversary of the  date of issuance; provided  that
Triarc  shall have the right, but not  the obligation, to prepay the Partnership
Note without penalty or premium  (i) by an amount equal  to all or a portion  of
the  sum  of (x)  the total  amount of  any indebtedness  (including refinancing
indebtedness) incurred  by  the  Operating Partnership  or  the  Partnership  in
connection  with an acquisition  consummated by either that  is repaid using the
proceeds of  such  prepayment  and (y)  the  total  amount of  other  cash  (not
resulting  from proceeds of the indebtedness referred  to in clause (x)) paid by
the  Operating  Partnership   or  the  Partnership   in  connection  with   such
acquisition; or (ii) in whole, but not in part, in connection with a transaction
(x)  that results in either (A) the  Managing General Partner no longer being an
Affiliate of  Triarc or  (B) the  Managing General  Partner no  longer being  an
Affiliate  of the  Operating Partnership and  (y) where  the total consideration
received in connection therewith  indicates a value  for each Subordinated  Unit
(or  Common Unit issued  upon conversion thereof)  of not less  than the Initial
Unit Price, as adjusted for splits, reclassifications, distributions of  Capital
Surplus  and the  like. During  the sixth  and seventh  years after  the date of
issuance, the Partnership Note may be prepaid in whole or in part at  redemption
prices  equal  to  103.0%  and 101.5%,  respectively,  of  the  principal amount
prepaid, together with accrued interest on  the portion prepaid. At any time  on
and  after the seventh anniversary of the date of issuance, the Partnership Note
may be prepaid in whole or in  part without premium or penalty. The  Partnership
Note  will be pari passu to Triarc's  obligations to its other senior creditors,
if any (whose debt may be secured with other assets of Triarc) and  structurally
subordinated to all creditors of Triarc's subsidiaries.
 
     The  Partnership Note will contain various affirmative covenants applicable
to Triarc,  including a  requirement that  Triarc (i)  use its  best efforts  to
prevent  the  Managing General  Partner from  issuing  any additional  shares of
capital stock  to any  Person other  than Triarc,  a permitted  assignee of  the
Partnership  Note from Triarc  or any other  Person that pledges  such shares to
secure the Partnership  Note; (ii) use  its best efforts  to prevent SEPSCO,  an
indirect  wholly owned subsidiary of Triarc and, at the closing of the Offering,
the sole other shareholder  of the Managing  General Partner, from  transferring
any  of its shares in  the Managing General Partner to  any Person other than to
Triarc, any  of its  wholly  owned subsidiaries,  a  permitted assignee  of  the
Partnership  Note  from Triarc,  any other  Person that  pledges such  shares to
secure the Partnership Note or in  connection with a Permitted Third Party  Sale
(as defined in the Partnership Note) that results in the Pledged Stock no longer
constituting  security for the  Partnership Note; (iii) use  its best efforts to
prevent any shares of  the capital stock  of SEPSCO from  being acquired by  any
Person  other than Triarc, any of its  wholly owned subsidiaries, or a permitted
assignee of the Partnership Note from Triarc,  at any time when SEPSCO owns  any
shares  of capital  stock of  the General Partner;  (iv) comply  in all material
respects with all applicable  laws; (v) pay its  material obligations when  due;
(vi)  provide  the  Operating  Partnership with  certain  audited  and unaudited
financial statements, proxy statements  and other reports  and (vii) notify  the
Operating  Partnership of  any Event of  Default (as defined  in the Partnership
Note) or event  which with  notice or  lapse of time  would become  an Event  of
Default.
 
     In  addition, Triarc will  covenant in the Partnership  Note to prevent the
Managing General Partner from (a) incurring any indebtedness for borrowed  money
at  any time that the Operating Partnership does not have a security interest in
Retained Assets  and/or  cash  or  Cash Equivalents  (each  as  defined  in  the
Partnership  Note) having an  aggregate 'Value' (as defined  below) equal to the
then outstanding  principal  amount on  the  Partnership Note  or  (b)  selling,
assigning,  transferring, hypothecating or  pledging any of  its Retained Assets
unless immediately after giving effect thereto the Managing General Partner will
hold Units and/or cash or Cash Equivalents or Qualified Marketable Securities or
Qualified Public Company Securities  (each as defined  in the Partnership  Note)
received  on the sale thereof plus any other cash or Cash Equivalents designated
as Retained Assets (collectively, the 'Retained  Assets') with a Value equal  to
or  greater than the then outstanding  principal amount of the Partnership Note;
provided that,  the Managing  General Partner  will be  permitted to  (i)  sell,
assign,  transfer,  hypothecate  or  pledge  Retained  Assets  in  one  or  more
transactions in exchange for aggregate net  after tax proceeds of not more  than
$5  million and  (ii) consummate  the Triarc  Merger (as  defined below) without
complying with the  foregoing restriction.  For purposes of  the foregoing,  the
'Value' of the Common Units and the Qualified Public Company Securities shall be
deemed  to be equal to one-half of the  Current Trading Price (as defined in the
Partnership Note)  therefor, the  'Value'  of any  Subordinated Units  shall  be
deemed to be equal to one-half of the value of the consideration received by the
Managing  General Partner in connection with the most recent sale, assignment or
transfer of a Subordinated Unit, or if  the Managing General Partner has not  so
sold, assigned or transferred any
 
                                       64
 


<PAGE>

<PAGE>
Subordinated  Units, one-half of the Current  Trading Price of the Common Units,
the 'Value' of  any cash or  Cash Equivalents shall  be 100% of  the face  value
therefor  and the 'Value' of  any Qualified Marketable Security  shall be 50% of
the Current  Trading  Price  therefor,  as  determined  immediately  after  each
transaction  or each repayment of the  principal amount of the Partnership Note.
If at any time of determination the Value of such Retained Assets pledged or  so
subject   to  restriction  exceeds  the  outstanding  principal  amount  of  the
Partnership Note,  such  excess  Retained  Assets shall  be  released  from  the
foregoing  restriction. The  Managing General Partner  may select  which of such
assets will be released. Assets other than Retained Assets may be distributed or
sold by the Managing General Partner at any time. The Pledged Stock may be  sold
by  Triarc at any time in an arms-length transaction to an unrelated independent
third party provided that  (i) the consideration received  therefor is at  least
equal to the fair market value of the interest so transferred, is in the form of
Permitted  Consideration (as defined in the  Partnership Note) and is pledged to
secure the Partnership Note (to the extent the Value of such consideration  does
not exceed the then principal amount of the Partnership Note), (ii) if such sale
is  of  less  than  all  of  the  Pledged  Stock,  the  remaining  Pledged Stock
constitutes at  least a  majority of  the voting  common stock  of the  Managing
General  Partner  then  outstanding  or the  Operating  Partnership  then  has a
security interest in any  combination of cash or  Cash Equivalents with a  Value
equal  to  or  greater  than  the  then  outstanding  principal  amount  of  the
Partnership Note and (iii)  if an Event  of Default shall  have occurred and  be
continuing,  the Value of the net after  tax proceeds received upon such sale is
at least equal to the outstanding principal amount of the Partnership Note.  The
Partnership  Note will contain  a covenant of  Triarc that, in  the event of the
merger or consolidation  of the Managing  General Partner with  and into  Triarc
(the 'Triarc Merger'), Triarc will concurrently therewith pledge as security for
the Partnership Loan a similar amount of Retained Assets.
 
     If  an Event of  Default exists with  respect to the  Partnership Note, the
Partnership may accelerate  the maturity  of the Partnership  Note and  exercise
other rights and remedies. In the case of an Event of Default referred to in (k)
below,  the  acceleration of  the maturity  of the  Partnership Note  will occur
automatically. Events of  Default include (a)  failure to pay  any principal  or
premium  when due,  or interest within  five business  days of when  due, on the
Partnership Note;  (b)  payment  default  under  (after  giving  effect  to  any
applicable  grace  periods  or  any  extension of  any  maturity  date),  or the
acceleration of the maturity of, any indebtedness of Triarc or any guarantee  by
Triarc  of any indebtedness of  any subsidiary, if the  principal amount of such
indebtedness or guarantee, together with the principal amount of all other  such
indebtedness  and guarantees with respect to  which a payment default (after the
expiration of any applicable grace period or any extension of the maturity date)
has occurred, or  the maturity  of which has  been so  accelerated, exceeds  $20
million  in  the aggregate;  (c) failure  by  Triarc to  comply in  any material
respect with any  of its covenants  or agreements  contained in the  Note for  a
period  of 30 days after notice thereof; (d) certain unsatisfied final judgments
in excess of $5 million; (e) the failure  of the pledge by Triarc of its  shares
in the Managing General Partner to be in full force and effect; (f) the issuance
by  the Managing General  Partner of any  shares of its  capital stock except as
permitted above; (g) the transfer by SEPSCO of any of its shares in the Managing
General Partner except as  permitted above; (h) the  incurrence by the  Managing
General  Partner of  any indebtedness  for borrowed money  at any  time that the
Partnership does not have a security interest in the requisite Retained  Assets;
(i)  the sale by the  Managing General Partner of  any of its Subordinated Units
(or Common Units issued upon conversion thereof) unless immediately after giving
effect thereto the Managing  General Partner will hold  the requisite amount  of
Retained  Assets;  (j) the  failure of  Triarc to  pledge concurrently  with the
Triarc Merger as security for the  Partnership Note the requisite amount of  the
Retained  Assets,  except  as permitted  above;  and (k)  various  bankruptcy or
insolvency events involving Triarc. If an  Event of Default were to occur  under
the  Partnership  Note  and  the Partnership  accelerated  the  maturity  of the
Partnership Note (or such acceleration occurred automatically in the case of  an
Event  of  Default referred  to in  clause (k)  above), all  amounts outstanding
thereunder would become  due. In such  event, there could  be no assurance  that
Triarc  would be able to  satisfy its obligations under  the Partnership Note or
that the Operating  Partnership would  be able to  recover any  amounts owed  by
Triarc  by foreclosing on, or otherwise exercising its remedies with respect to,
the capital stock of the Managing General Partner or any other assets of  Triarc
securing  the  Partnership Loan.  The Operating  Partnership is  prohibited from
foreclosing on and owning the capital  stock of the Managing General Partner  at
any  time that the Managing General Partner continues to own its General Partner
Interest but its permitted assignee may do so. Triarc shall, if requested by the
Operating Partnership,  use  its best  efforts  to cause  the  Managing  General
Partner to
 
                                       65
 


<PAGE>

<PAGE>
transfer  its General Partner Interest to a third party immediately prior to any
foreclosure by the  Operating Partnership. The  failure by Triarc  to repay  the
Partnership Loan would have a material adverse effect on the financial condition
of  the Partnership and on the ability the Partnership to make any distributions
to Unitholders.
 
     Triarc's  obligations  under  the  Partnership  Note  may,  under   certain
circumstances,  be  assigned  to and  assumed  by any  Qualified  Transferee (as
defined in the  Partnership Note)  that has a  consolidated net  worth at  least
equal  to the greater  of (i) Triarc's  consolidated net worth  at such time and
(ii) $43 million and that acquires the Managing General Partner, the Partnership
or the Operating Partnership (whether  by merger, consolidation, acquisition  of
stock  or assets or otherwise). The Partnership  Note may not be assigned by the
Operating Partnership without Triarc's consent, except that the Partnership Note
will be assigned by  the Operating Partnership as  security for its  obligations
under  the First Mortgage Notes and  the Bank Credit Facility. See 'Management's
Discussion   and   Analysis    of   Financial   Condition    and   Results    of
Operations -- Description of Indebtedness.'
 
                      CERTAIN INFORMATION REGARDING TRIARC
 
     Triarc  is a holding company which, through its subsidiaries, is engaged in
four businesses:  beverages,  restaurants,  specialty  chemicals  and  dyes  and
propane  distribution. The beverage operations are conducted through Royal Crown
Company, Inc. ('Royal Crown') and Mistic Brands, Inc. ('Mistic'); the restaurant
operations  are  conducted  through  Arby's,  Inc.  ('Arby's');  the   specialty
chemicals and dyes business is conducted through C.H. Patrick & Co., Inc. ('C.H.
Patrick');  and  the  propane  distribution  operations  are  conducted  through
National Propane. On April 29, 1996,  Triarc sold (the 'Graniteville Sale')  the
textile  business  (the  'Textile  Business')  of  its  subsidiary, Graniteville
Company ('Graniteville')  (other than,  among other  things, the  stock of  C.H.
Patrick),  to  Avondale  Mills, Inc.  for  approximately $255  million  in cash,
subject to certain  post-closing adjustments.  Through May 31,  1996 Triarc  has
advanced  $5 million in respect  of such post-closing adjustments. Approximately
$189 million of such proceeds were used by Graniteville to repay its outstanding
principal amount of  revolving loans and  term loans under  its credit  facility
(which  are not reflected on the parent company only pro forma condensed balance
sheet) with financial institutions at the closing of the Graniteville Sale.
 
     The following  is the  unaudited parent  company only  pro forma  condensed
balance sheet of Triarc as of March 31, 1996, which reflects only the assets and
liabilities of Triarc and does not reflect the individual assets and liabilities
of  its subsidiaries which are  shown on the net  equity method, and which gives
effect to (i) the Graniteville Sale including the related payment of all of  the
debt  of the  Textile Business, the  cancellation of  intercompany balances with
Graniteville and a $35 million distribution to Triarc from the proceeds of a new
bank financing of C.H. Patrick (collectively, the 'Completed Transactions')  and
(ii)  the Transactions as  if they had all  occurred on March  31, 1996. The pro
forma adjustments to the pro forma condensed balance sheet are described in  the
accompanying notes to the pro forma condensed balance sheet which should be read
in  conjunction with such statement. The  pro forma condensed balance sheet does
not purport to be indicative of the actual financial position of Triarc had such
transactions actually  been consummated  on  March 31,  1996  or of  the  future
financial  position  of Triarc.  Also presented  below are  historical condensed
statements of operations  and cash  flows of Triarc  for the  three years  ended
April  30, 1991, 1992  and 1993, the  eight months ended  December 31, 1993, the
years ended December  31, 1994 and  1995 and  the three months  ended March  31,
1996.
 
                                       66
 


<PAGE>

<PAGE>
                  TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
                       PRO FORMA CONDENSED BALANCE SHEET
 
<TABLE>
<CAPTION>
                                                                               MARCH 31, 1996
                                                 ---------------------------------------------------------------------------
                                                                                      PRO
                                                                COMPLETED          FORMA FOR
                                                               TRANSACTIONS        COMPLETED     TRANSACTIONS         PRO
                                                 HISTORICAL    ADJUSTMENTS        TRANSACTIONS   ADJUSTMENTS         FORMA
                                                 ----------    -----------        -----------    -----------        --------
                                                                               (IN THOUSANDS)
<S>                                              <C>           <C>                <C>            <C>                <C>
                    ASSETS
Cash and cash equivalents.....................    $  16,724     $  38,646(c)       $  90,370      $  40,700(i)      $203,467
                                                                   35,000(h)                         59,300(j)
                                                                                                     13,097(k)
Due from subsidiaries.........................       29,135        (2,503)(g)         26,632         (5,944)(k)       20,688
Other current assets..........................        7,779        --                  7,779         --                7,779
                                                 ----------    -----------        -----------    -----------        --------
    Total current assets......................       53,638        71,143            124,781        107,153          231,934
Investment in consolidated subsidiaries, at
  equity(a)...................................      209,624       (17,748)(c)         25,331        (59,300)(j)        --
                                                                   (7,790)(d)                        67,145(l)
                                                                   (7,326)(e)                         2,500(m)
                                                                 (116,429)(g)                        (2,646)(n)
                                                                  (35,000)(h)                       (33,030)(o)
Notes receivable from subsidiaries............       26,300        --                 26,300         --               26,300
Deferred income tax benefit...................       15,964       (15,964)(f)         --             --                --
Investments and other assets..................        9,010        --                  9,010         --                9,010
                                                 ----------    -----------        -----------    -----------        --------
                                                  $ 314,536     $(129,114)         $ 185,422      $  81,822         $267,244
                                                 ----------    -----------        -----------    -----------        --------
                                                 ----------    -----------        -----------    -----------        --------
 
     LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of 9 1/2% promissory note
  payable(b)..................................    $   5,274     $  --              $   5,274      $  --             $  5,274
Due to subsidiaries...........................       13,868        (6,531)(g)          7,337         --                7,337
Accounts payable and accrued expenses.........       20,589        20,898(c)          23,215          7,153(k)        30,368
                                                                  (18,272)(f)
                                                 ----------    -----------        -----------    -----------        --------
    Total current liabilities.................       39,731        (3,905)            35,826          7,153           42,979
                                                 ----------    -----------        -----------    -----------        --------
Triarc note...................................       --            --                 --             30,000(o)        30,000
Intercompany Note payable to Managing General
  Partner.....................................       81,392        --                 81,392        (81,392)(o)        --
Other Notes and loans payable to subsidiaries,
  net of discount.............................      138,458      (112,401)(g)         26,057         40,700(i)        66,757
9 1/2% promissory note payable(b).............       32,423        --                 32,423         --               32,423
Deferred income taxes.........................       --             2,308(f)           2,308         26,858(l)        31,666
                                                                                                      2,500(m)
Accumulated reductions in stockholders' equity
  of consolidated subsidiaries in excess of
  investment(a)...............................       --            --                 --             18,362(o)        18,362
Other non-current liabilities.................        1,734        --                  1,734         --                1,734
Stockholders' equity..........................       20,798        (7,790)(d)          5,682         40,287(l)        43,323
                                                                   (7,326)(e)                        (2,646)(n)
                                                 ----------    -----------        -----------    -----------        --------
                                                  $ 314,536     $(129,114)         $ 185,422      $  81,822         $267,244
                                                 ----------    -----------        -----------    -----------        --------
                                                 ----------    -----------        -----------    -----------        --------
</TABLE>
 
                                                        (footnotes on next page)
 
                                       67
 


<PAGE>

<PAGE>
(footnotes from previous page)
 
 (a) The  'Investment in consolidated  subsidiaries, at equity'  includes all of
     Triarc's direct  and  indirect owned  subsidiaries.  As such,  it  includes
     investments  in numerous holding companies,  inactive companies and smaller
     operating companies, as well as its principal operating subsidiaries, Royal
     Crown, Mistic, Arby's,  National Propane and  Graniteville (including  C.H.
     Patrick) as detailed above. The investment in consolidated subsidiaries, as
     adjusted  on  a pro  forma  basis for  the  Completed Transactions  and the
     Transactions, has a negative balance as a result of aggregate distributions
     from  consolidated  subsidiaries   and  forgiveness  of   Triarc  debt   to
     consolidated  subsidiaries in excess of  the investment in the consolidated
     subsidiaries. Such excess has been  reported in the accompanying pro  forma
     consolidated  balance  sheet  as 'Accumulated  Reductions  in Stockholders'
     Equity of Consolidated Subsidiaries in Excess of Investment.'
 (b) Matures in 1996 ($5,274), 1997 ($3,880), 1998 ($2,546), 1999 ($1,712), 2000
     ($702) and thereafter ($23,583).
 (c) To reflect the  receipt by  Triarc of  the proceeds  from the  sale of  the
     Textile  Business  which, as  of  March 31,  1996,  would have  amounted to
     $38,646 representing net proceeds from the sale of the Textile Business  of
     $251,379  ($257,629 cash  proceeds less  the payment  of estimated expenses
     related to the  transaction of $6,250)  less debt of  the Textile  Business
     repaid  ($207,110 as  of March 31,  1996) and  related prepayment penalties
     ($5,623). Such cash was transferred to Triarc as a tax sharing payment  for
     the  income  tax liability  related  to the  sale  of the  Textile Business
     ($20,898) and an intercompany advance  ($17,748) which was then  cancelled,
     thereby reducing the 'Investment in consolidated subsidiaries, at equity.'
 (d) To reflect the equity in the loss on the sale of the Textile Business which
     as  of March 31, 1996 would have amounted  to $7,790. Due to changes in the
     balances of assets and  liabilities sold or assumed  through the April  29,
     1996  closing date,  the actual  impact of  the sale  will differ  from the
     $38,646 net proceeds and the $7,790 loss above. Based on current  estimates
     and  subject to post-closing adjustments, the impact  of the sale as of the
     April 29, 1996 closing date is expected  to range from breakeven to a  loss
     of less than the $7,790.
 (e) To   reflect  the  equity   in  an  extraordinary   charge  for  the  early
     extinguishment of the debt  of the Textile Business  which as of March  31,
     1996 would have amounted to $7,326.
 (f) To  reclassify  the  deferred  income  tax  benefit  as  a  result  of  the
     utilization of a portion of the net operating loss carryforwards of  Triarc
     ($18,272),  the benefit of which had  been previously recorded in 'Deferred
     income tax benefit.'
 (g) To reflect the cancellation of the intercompany notes payable by Triarc  to
     Graniteville  ($112,401 as of March 31,  1996) and intercompany amounts due
     to and from Graniteville ($6,531 and $2,503, respectively, as of March  31,
     1996) in connection with the sale of the Textile Business.
 (h) To  reflect  the  receipt  of a  $35,000  advance  from  Graniteville which
     occurred on May 16, 1996 from a portion of the proceeds of borrowings under
     a new $50,000 C.H. Patrick bank  credit facility entered into on such  date
     which  were in turn  dividended to Graniteville. The  advance to Triarc was
     then  cancelled,   thereby  reducing   the  'Investment   in   consolidated
     subsidiaries, at equity.'
 (i) To reflect a loan of $40,700 from the Partnership to Triarc.
 (j) To reflect a cash dividend of $59,300 from National Propane to Triarc.
 (k) To  reflect the  receipt of  receivables from  the Partnership representing
     management fees of $5,944  and a tax  sharing payment of  $7,153 due as  of
     March 31, 1996.
 (l) To  reflect the estimated gain of $40,287 to be realized on the sale of the
     Units consisting of the  excess of the  net proceeds from  the sale of  the
     Units  in excess of  the interest sold  ($67,145) less income  taxes on the
     gain ($26,858).
(m) To reflect as a contribution the transfer from National Propane to Triarc of
    certain income tax liabilities.
 (n) To  reflect  the  equity   in  an  extraordinary   charge  for  the   early
     extinguishment  of the majority of the debt of National Propane which as of
     March 31, 1996 would have amounted to $2,646.
 (o) To reflect a $51,392 dividend from National Propane to Triarc resulting  in
     'Accumulated   reductions   in   stockholders'   equity   of   consolidated
     subsidiaries in excess of investment.'  Such dividend represents a  portion
     of  Triarc's $81,392 payable to National Propane with the remaining portion
     of $30,000 becoming the 'Triarc note.'
 
                                       68
 


<PAGE>





<PAGE>
                  TRIARC COMPANES, INC. (PARENT COMPANY ONLY)
                       CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                                   YEAR ENDED APRIL 30,           EIGHT MONTHS
                                                             --------------------------------    ENDED DECEMBER
                                                               1991        1992        1993         31, 1993
                                                             --------    --------    --------    ---------------
                                                                               (IN THOUSANDS)
 
<S>                                                          <C>         <C>         <C>         <C>
Income and (expenses):
    Equity in (losses) income from continuing operations
      of subsidiaries.....................................   $   (129)   $ 12,196    $(15,634)      $     465
    Interest expense......................................    (22,973)    (22,751)    (24,858)        (18,992)
    Unallocated general and administrative expenses.......     (2,540)     (2,961)     (4,050)         (8,622)
    Facilities relocation and corporate restructuring.....      --          --         (7,200)         --
    Recovery of (provision for) doubtful accounts from
      affiliates and former affiliates....................     (9,554)     (9,221)     (3,311)         --
    Cost of a proposed acquisition not consummated........      --          --          --             --
    Shareholder litigation and other expenses.............      2,165      (2,004)     (7,025)         (6,424)
    Settlements with former affiliates....................      2,871       --          8,900          --
    Other income (expense)................................      1,248         813         517            (650)
                                                             --------    --------    --------    ---------------
        Income (loss) from continuing operations before
          income taxes....................................    (28,912)    (23,928)    (52,661)        (34,223)
Benefit from income taxes.................................     11,411      13,721       8,112           3,784
                                                             --------    --------    --------    ---------------
        Income (loss) from continuing operations..........    (17,501)    (10,207)    (44,549)        (30,439)
Equity in losses of discontinued operations of
  subsidiaries............................................        (55)      2,705      (2,430)         (8,591)
Equity in extraordinary charges of subsidiaries...........        703       --         (6,611)           (448)
Cumulative effect of changes in accounting principles
  from:
    Triarc Companies, Inc.................................      --          --         (3,488)         --
    Equity in subsidiaries................................      --          --         (2,900)         --
                                                             --------    --------    --------    ---------------
                                                                --          --         (6,338)         --
                                                             --------    --------    --------    ---------------
        Net income (loss).................................    (16,853)     (7,502)    (59,978)        (39,478)
Preferred stock dividend requirements.....................        (11)        (11)       (121)         (3,889)
                                                             --------    --------    --------    ---------------
        Net income (loss) applicable to common
          stockholders....................................   $(16,864)   $ (7,513)   $(60,099)      $ (43,367)
                                                             --------    --------    --------    ---------------
                                                             --------    --------    --------    ---------------
Income (loss) per share:
    Continuing operations.................................   $   (.68)   $   (.39)   $  (1.73)      $   (1.62)
    Discontinued operations...............................      --            .10        (.09)           (.40)
    Extraordinary charges.................................        .03       --           (.26)           (.02)
    Cumulative effect of changes in accounting
      principles..........................................      --          --           (.25)         --
                                                             --------    --------    --------    ---------------
        Net income (loss).................................   $   (.65)   $   (.29)   $  (2.33)      $   (2.04)
                                                             --------    --------    --------    ---------------
                                                             --------    --------    --------    ---------------
 
<CAPTION>
 
                                                           YEAR ENDED DECEMBER
                                                                   31,             THREE MONTHS
                                                           --------------------    ENDED MARCH
                                                             1994        1995        31, 1996
                                                           ---------   --------    ------------
                                                                     (IN THOUSANDS)
 
<S>                                                          <C>       <C>         <C>
Income and (expenses):
    Equity in (losses) income from continuing operations
      of subsidiaries..................................... $  29,610   $(26,078)     $  2,997
    Interest expense......................................   (28,807)   (15,794)       (2,131)
    Unallocated general and administrative expenses.......    (6,660)    (2,072)        --
    Facilities relocation and corporate restructuring.....    (8,800)    (2,700)        --
    Recovery of (provision for) doubtful accounts from
      affiliates and former affiliates....................    --          3,049         --
    Cost of a proposed acquisition not consummated........    (5,480)     --            --
    Shareholder litigation and other expenses.............      (500)       (24)        --
    Settlements with former affiliates....................    --          --            --
    Other income (expense)................................       508      3,102           362
                                                           ---------   --------    ------------
        Income (loss) from continuing operations before
          income taxes....................................   (20,129)   (40,517)        1,228
Benefit from income taxes.................................    18,036      3,523           557
                                                           ---------   --------    ------------
        Income (loss) from continuing operations..........    (2,093)   (36,994)        1,785
Equity in losses of discontinued operations of
  subsidiaries............................................    (3,900)     --            --
Equity in extraordinary charges of subsidiaries...........    (2,116)     --           (1,387)
Cumulative effect of changes in accounting principles
  from:
    Triarc Companies, Inc.................................    --          --            --
    Equity in subsidiaries................................    --          --            --
                                                           ---------   --------    ------------
                                                              --          --            --
                                                           ---------   --------    ------------
        Net income (loss).................................    (8,109)   (36,994)          398
Preferred stock dividend requirements.....................    (5,833)     --            --
                                                           ---------   --------    ------------
        Net income (loss) applicable to common
          stockholders.................................... $ (13,942)  $(36,994)     $    398
                                                           ---------   --------    ------------
                                                           ---------   --------    ------------
Income (loss) per share:
    Continuing operations................................. $    (.34)  $  (1.24)     $    .06
    Discontinued operations...............................      (.17)     --            --
    Extraordinary charges.................................      (.09)     --             (.05)
    Cumulative effect of changes in accounting
      principles..........................................    --          --            --
                                                           ---------   --------    ------------
        Net income (loss)................................. $    (.60)  $  (1.24)     $    .01
                                                           ---------   --------    ------------
                                                           ---------   --------    ------------
</TABLE>
 
                                       69




<PAGE>
<PAGE>



<PAGE>
                  TRIARC COMPANIES, INC. (PARENT COMPANY ONLY)
                       CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
                                                                   YEAR ENDED APRIL 30,           EIGHT MONTHS
                                                             --------------------------------    ENDED DECEMBER
                                                               1991        1992        1993         31, 1993
                                                             --------    --------    --------    ---------------
                                                                               (IN THOUSANDS)
 
<S>                                                          <C>         <C>         <C>         <C>
Cash flows from operating activities:
    Net income (loss).....................................   $(16,853)   $ (7,502)   $(59,978)      $ (39,478)
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
        Equity in net losses (income) of subsidiaries.....       (519)    (14,901)     27,575           8,574
        Dividends from subsidiaries.......................      4,763       1,080       3,127          --
        Depreciation and amortization.....................      1,246       1,248       1,248           1,371
        Provision for facilities relocation and corporate
          restructuring...................................      --          --          7,200          --
        Payments of facilities relocation and corporate
          restructuring...................................      --          --           (258)         (2,970)
        Provision for cost of a proposed acquisition not
          consummated in excess of payments...............      --          --          --             --
        Interest capitalized and not paid.................      --          --          --             --
        Reduction in commuted insurance liabilities
          credited against notes payable..................      --          --          --             --
        Change in due from/to subsidiaries and other
          affiliates including capitalized interest
          ($21,017 in 1994 and $9,569 in 1995)............      4,157       3,674     (15,214)         18,121
        Deferred income tax provision (benefit)...........        603      (5,130)     (2,199)          5,591
        Provision for doubtful accounts from former
          affiliates......................................      9,554       9,221       3,311          --
        Cumulative effect of change in accounting
          principle.......................................      --          --          3,488          --
        Other, net........................................        737         424       6,848             449
        Increase in receivables...........................      --          --          --             --
        Increase in restricted cash.......................      --          --          --             (2,422)
        Decrease (increase) in prepaid expenses and other
          current assets..................................     (1,288)      9,197      (1,156)            598
        Increase (decrease) in accounts payable and
          accrued expenses................................     (1,909)      2,182       5,824            (376)
                                                             --------    --------    --------    ---------------
            Net cash provided by (used in) operating
              activities..................................        491        (507)    (20,184)        (10,542)
                                                             --------    --------    --------    ---------------
Cash flows from investing activities:
    Business acquisitions.................................      --          --          --             --
    Loans to subsidiaries.................................      --          --          --             --
    Investment in an affiliate............................      --          --          --             --
    Capital contributed to a subsidiary...................      --          --          --             --
    Purchase of minority interests........................      --          --        (21,100)         --
    Other.................................................        (18)         (4)      2,079          (3,047)
                                                             --------    --------    --------    ---------------
            Net cash used in investing activities.........        (18)         (4)    (19,021)         (3,047)
                                                             --------    --------    --------    ---------------
Cash flows from financing activities:
    Issuance (repurchase) of Class A common stock.........      --          --          9,650          --
    Payment of preferred dividends........................        (11)        (11)         (9)         (2,557)
    Repayment of long-term debt...........................      --            (52)    (20,907)         --
    Borrowings from subsidiaries..........................      --          --        141,600          --
    Repayment of notes and loans payable to
      subsidiaries........................................      --          --        (57,115)         --
    Other.................................................      --          --         (4,620)         (1,056)
                                                             --------    --------    --------    ---------------
            Net cash provided by (used in) financing
              activities..................................        (11)        (63)     68,599          (3,613)
                                                             --------    --------    --------    ---------------
Net increase (decrease) in cash and cash equivalents......        462        (574)     29,394         (17,202)
Cash and cash equivalents at beginning of period..........        238         700         126          29,520
                                                             --------    --------    --------    ---------------
Cash and cash equivalents at end of period................   $    700    $    126    $ 29,520       $  12,318
                                                             --------    --------    --------    ---------------
                                                             --------    --------    --------    ---------------
 
<CAPTION>
 
                                                           YEAR ENDED DECEMBER
                                                                   31,             THREE MONTHS
                                                           --------------------    ENDED MARCH
                                                             1994        1995        31, 1996
                                                           ---------   --------    ------------
                                                                      (IN THOUSANDS)

<S>                                                          <C>       <C>         <C>
Cash flows from operating activities:
    Net income (loss)..................................... $  (8,109)  $(36,994)     $    398
    Adjustments to reconcile net income (loss) to net cash
      provided by (used in) operating activities:
        Equity in net losses (income) of subsidiaries.....   (23,594)    26,078        (1,610)
        Dividends from subsidiaries.......................    40,000     22,721         --
        Depreciation and amortization.....................     2,573      3,626         --
        Provision for facilities relocation and corporate
          restructuring...................................     8,800      2,700         --
        Payments of facilities relocation and corporate
          restructuring...................................    (5,136)    (3,278)         (673)
        Provision for cost of a proposed acquisition not
          consummated in excess of payments...............     1,475      --            --
        Interest capitalized and not paid.................     3,247      3,271         --
        Reduction in commuted insurance liabilities
          credited against notes payable..................    --         (3,000)        --
        Change in due from/to subsidiaries and other
          affiliates including capitalized interest
          ($21,017 in 1994 and $9,569 in 1995)............    33,034      1,332          (130)
        Deferred income tax provision (benefit)...........    (2,899)      (382)        --
        Provision for doubtful accounts from former
          affiliates......................................    --          --            --
        Cumulative effect of change in accounting
          principle.......................................    --          --            --
        Other, net........................................    (1,968)       489         1,222
        Increase in receivables...........................      (649)    (4,715)        1,928
        Increase in restricted cash.......................      (498)   (22,887)       22,760
        Decrease (increase) in prepaid expenses and other
          current assets..................................     2,399       (214)           65
        Increase (decrease) in accounts payable and
          accrued expenses................................   (18,249)     4,522        (2,399)
                                                           ---------   --------    ------------
            Net cash provided by (used in) operating
              activities..................................    30,426     (6,731)       21,561
                                                           ---------   --------    ------------
Cash flows from investing activities:
    Business acquisitions.................................    --        (29,240)        --
    Loans to subsidiaries.................................    --        (18,375)       (7,925)
    Investment in an affiliate............................    --         (5,340)        --
    Capital contributed to a subsidiary...................    --         (8,865)        --
    Purchase of minority interests........................    --          --            --
    Other.................................................       (83)       (57)          (12)
                                                           ---------   --------    ------------
            Net cash used in investing activities.........       (83)   (61,877)       (7,937)
                                                           ---------   --------    ------------
Cash flows from financing activities:
    Issuance (repurchase) of Class A common stock.........      (344)    (1,170)        --
    Payment of preferred dividends........................    (5,833)     --            --
    Repayment of long-term debt...........................    --          --            --
    Borrowings from subsidiaries..........................    --         45,900         --
    Repayment of notes and loans payable to
      subsidiaries........................................    --          --           (9,450)
    Other.................................................    --            (56)        --
                                                           ---------   --------    ------------
            Net cash provided by (used in) financing
              activities..................................    (6,177)    44,674        (9,450)
                                                           ---------   --------    ------------
Net increase (decrease) in cash and cash equivalents......    24,166    (23,934)        4,174
Cash and cash equivalents at beginning of period..........    12,318     36,484        12,550
                                                           ---------   --------    ------------
Cash and cash equivalents at end of period................ $  36,484   $ 12,550      $ 16,724
                                                           ---------   --------    ------------
                                                           ---------   --------    ------------
</TABLE>
 
                                       70





<PAGE>

<PAGE>
     Because Triarc  is  a  holding  company,  its  ability  to  meet  its  cash
requirements   (including  required  interest  and  principal  payments  on  the
Partnership Loan) is primarily dependent  upon cash flows from its  subsidiaries
including  loans and cash dividends and  reimbursement by subsidiaries to Triarc
in connection with  its providing  certain management services  and payments  by
subsidiaries under certain tax sharing agreements.
     Under  the terms  of various  indentures and  credit arrangements, Triarc's
principal subsidiaries are  currently unable to  pay any dividends  or make  any
loans  or advances to  Triarc. The stock of  Triarc's principal subsidiaries and
substantially all of the assets of such subsidiaries are pledged as security for
indebtedness under the various debt  agreements of Triarc's subsidiaries. As  of
March  31, 1996,  Triarc had outstanding  external indebtedness  consisting of a
$37.7 million  9  1/2% note  (the  '9 1/2%  Note')  and guarantees  of  external
indebtedness  of its  subsidiaries in the  aggregate principal  amount of $412.7
million ($125.5 million after  giving effect to  the Completed Transactions  and
the  Transactions.  In addition,  at March  31,  1996, Triarc  owed intercompany
indebtedness of  $219.9  million  ($96.8  million after  giving  effect  to  the
Completed  Transactions and the Transactions). Such intercompany indebtedness at
March 31, 1996  consisted of a  9 1/2% note  in the principal  amount of  $112.4
million  to  Graniteville  (which  note  was  canceled  in  connection  with the
Graniteville Sale), notes  in the principal  amounts of $23.8  million and  $2.3
million   to  SEPSCO  and  a   subsidiary  of  RC/Arby's  Corporation  ('RCAC'),
respectively (which bear interest at rates ranging  from 9 1/2% to 13%), and  an
$81.4  million non-interest bearing  advance owed to  National Propane (which is
being reduced  to  $30.0  million  in  connection  with  the  Transactions).  In
connection with all of such debt, the only scheduled principal payments required
during the remainder of 1996 are $5.3 million on the 9 1/2% Note.
     As  of  March  31, 1996  Triarc  had  notes receivable  from  RCAC  and its
subsidiaries in the aggregate amount of $26.3 million of which $19.6 million  is
due  on demand and $6.7 million is due in 1998 and which bear interest at a rate
of 11 7/8%.
     Triarc's significant  cash  requirements  for the  remainder  of  1996,  in
addition  to  interest payments  on  the Partnership  Note,  are expected  to be
limited to (i)  general corporate  expenses including cash  used in  operations,
(ii)  $5.3  million  and  $3.6  million  of  principal  and  interest  payments,
respectively, on the  9 1/2% Note,  (iii) cash requirements  for its  facilities
relocation  and corporate restructuring accruals of $2.2 million, and (iv) up to
$3.9 million of advances to affiliates  under loan agreements and loans to  RCAC
as  necessary. There can  be no assurances,  however, that Triarc  will not have
significant additional  cash  requirements  in  the future  that  could  have  a
material  adverse effect on  its ability to make  required payments of principal
and interest on the Partnership Loan.
     Triarc anticipates meeting  its significant cash  requirements through  its
cash  on hand (approximately $16.7  million as of March  31, 1996), dividends or
advances from  the Managing  General Partner  and the  Special General  Partner,
reimbursement of general corporate expenses from subsidiaries in connection with
management  services agreements to the extent  such subsidiaries are able to pay
and net payments received under tax sharing agreements with certain subsidiaries
(which Triarc  may not  have to  remit to  the IRS  due to  the availability  of
operating  loss  depletion  and tax  carryforwards).  However, there  can  be no
assurances that Triarc's sources of cash will be sufficient to enable Triarc  to
meet  its  cash  requirements, including  its  obligations to  make  payments of
principal and interest on the Partnership Loan.
     Upon consummation of the Transactions, payments received under tax  sharing
agreements  and  the reimbursement  of  general corporate  expenses  by National
Propane will be  limited. See  'The Partnership Agreement  -- Reimbursement  for
Services.'  As a result of  the Graniteville Sale, the  textile division will no
longer make  any  payments  under  the tax  sharing  agreement  with  Triarc  or
reimburse  Triarc for general  corporate expenses. Triarc  expects to compensate
for such lower cash availability  from its subsidiaries through additional  cash
on  hand of approximately $186 million from the cash received from the Completed
Transactions and the Transactions.
     The Federal income  tax returns of  Triarc and its  subsidiaries have  been
examined  by the Internal Revenue Service ('IRS') for the tax years 1985 through
1988. Triarc  and its  subsidiaries have  resolved all  issues related  to  such
audit.  The amount which Triarc and its  subsidiaries expect to pay in 1996 with
respect to  such  audit will  not  exceed $5.0  million.  The IRS  is  currently
finalizing  its examination of the Federal income  tax returns of Triarc and its
subsidiaries for the tax years from 1989 through 1992 and has issued notices  of
proposed  adjustments increasing taxable income by approximately $145.0 million,
the tax effect of which  has not yet been  determined. Triarc is contesting  the
majority of the proposed
 
                                       71
 


<PAGE>

<PAGE>
adjustments  and, accordingly, the amount and timing of any payments required as
a result thereof  cannot presently be  determined. However, it  is not  expected
that  the resolution of the  1989 through 1992 examination  will be finalized in
1996 and, accordingly, no tax payments  with respect to such years are  expected
to be required in 1996.
     On  a pro forma basis for  the Transactions and the Completed Transactions,
Triarc's liquidity has improved significantly since November 1994, when National
Propane reclassified an existing intercompany note from Triarc as a component of
stockholders' equity because  it determined,  based upon  circumstances at  such
time,  that Triarc's  liquidity position  was insufficient  to enable  Triarc to
repay the note. The factors present that resulted in that determination included
(i) the reduction of Triarc's  consolidated cash to approximately $47.0  million
at September 30, 1994 from approximately $119.0 million at December 31, 1993 and
(ii)  a pending acquisition transaction which, if completed, would have required
the utilization of a significant amount of Triarc's available cash.
     There can be no assurance that Triarc will continue to have cash on hand or
will in the  future receive  sufficient distributions from  its subsidiaries  in
order  to enable it to  satisfy its obligations under  the Partnership Loan. The
failure of Triarc to make payments of principal and interest on the  Partnership
Loan  when due would have an adverse effect on the ability of the Partnership to
make any distributions to Unitholders. Furthermore,  as a result of the  holding
company  structure of Triarc, creditors of  Triarc, including the Partnership as
the holder  of  the  Partnership  Note, will  effectively  rank  junior  to  all
creditors of Triarc's subsidiaries. In the event of the dissolution, bankruptcy,
liquidation  or  reorganization of  such  subsidiaries, the  Partnership  as the
holder of the Partnership Note would not receive any amounts in respect  thereof
until  after the payment  in full of  the creditors of  such subsidiaries. As of
March 31, 1996 on a pro forma basis after giving effect to the Transactions  and
the  Completed Transactions  and the  use of  proceeds therefrom,  the aggregate
amount of indebtedness of Triarc and  its subsidiaries to which the  Partnership
as  the holder of  the Partnership Note would  be effectively subordinated would
have been  approximately $591.0  million. The  failure by  Triarc to  repay  the
Partnership Loan would have a material adverse effect on the financial condition
of the Partnership.
     Triarc  is a public company  and its Class A Common  Stock is listed on the
New York Stock  Exchange under  the symbol 'TRY.'  Triarc's principal  executive
offices  are  located at  900 Third  Avenue, New  York, New  York 10022  and its
telephone number is (212) 230-3000. Certain reports, proxy statements and  other
information filed by Triarc with the Commission can be obtained from Triarc upon
request  at no  cost and  can be  inspected and  copied at  the public reference
facilities maintained by the  Commission at Judiciary  Plaza, 450 Fifth  Street,
N.W.,  Washington, D.C.  20549; and  at the  Commission's regional  offices at 7
World Trade  Center, Suite  1300, New  York, New  York 10048;  and  Northwestern
Atrium   Center,  500  West  Madison   Street,  Suite  1400,  Chicago,  Illinois
60661-2511. Copies of such  material can be obtained  from the Public  Reference
Section   of  the  Commission  at  Judiciary  Plaza,  450  Fifth  Street,  N.W.,
Washington, D.C.  20549,  at  prescribed  rates.  Such  documents  can  also  be
inspected at the office of the NYSE, 20 Broad Street, New York, New York 10005.
 
                                       72



<PAGE>

<PAGE>
                       SELECTED HISTORICAL AND PRO FORMA
                   CONSOLIDATED FINANCIAL AND OPERATING DATA
 
     The  following  table  presents  selected  consolidated  financial  data of
National Propane for each of  the years in the  two-year period ended April  30,
1993, the ten-month transition period ended December 31, 1993, each of the years
in  the two-year  period ended  December 31,  1995 and  each of  the three-month
periods ended March 31,  1995 and 1996. The  selected consolidated statement  of
operations  data for the ten-month transition period ended December 31, 1993 and
for the two years ended December 31, 1994 and 1995 and the selected consolidated
balance sheet data as of December 31,  1994 and 1995 have been derived from  the
financial  statements included elsewhere herein, which financial statements have
been audited by Deloitte & Touche LLP, independent auditors (whose report  makes
reference  to the  report of  other auditors),  contained elsewhere  herein. The
selected consolidated statement of operations data for each of the years in  the
two-year  period ended April 30, 1993 and  each of the three-month periods ended
March 31, 1995 and 1996 and the  selected consolidated balance sheet data as  of
April  30, 1992 and 1993, December 31, 1993 and March 31, 1996 have been derived
from  National  Propane's  unaudited  consolidated  financial  statements  which
reflect,  in  the  opinion  of National  Propane's  management,  all adjustments
necessary to  present fairly  the data  for such  periods. Due  to the  seasonal
nature of the National Propane's business, the interim results of operations are
not  indicative of results  to be expected  for full years.  The following table
also presents unaudited selected  pro forma consolidated  financial data of  the
Partnership  for the year  ended December 31, 1995  and as of  and for the three
months ended March 31, 1996 reflecting the Offering and related Transactions  as
if  they had been consummated as of January 1, 1995 with respect to statement of
operations data and as of March 31, 1996 with respect to balance sheet data. The
unaudited selected  pro forma  consolidated financial  data is  not  necessarily
indicative  of  the  financial position  or  the  results of  operations  of the
Partnership had the Offering  and related Transactions  been consummated on  the
dates  indicated or of the future results  of operations of the Partnership. The
data for all of the  periods presented below have  been restated to reflect  the
effects  of the June  1995 merger of  Public Gas with  and into National Propane
which is further described in Note 3 to the accompanying consolidated  financial
statements.  National Propane's  selected historical and  pro forma consolidated
financial and operating data should be read in conjunction with the consolidated
financial statements and  notes thereto,  the pro  forma consolidated  financial
statements  and  notes  thereto  and 'Management's  Discussion  and  Analysis of
Financial Condition and Results of Operations' included elsewhere herein.
<TABLE>
<CAPTION>
                                                                         HISTORICAL                             PARTNERSHIP
                                                -------------------------------------------------------------   PRO FORMA(b)
                                                  FISCAL YEAR ENDED      TEN MONTHS                             ------------
                                                      APRIL 30,            ENDED              YEAR ENDED DECEMBER 31,
                                                ---------------------   DECEMBER 31,   -------------------------------------
                                                  1992         1993       1993(a)        1994                 1995
                                                --------     --------   ------------   --------      -----------------------
                                                                    (IN THOUSANDS, EXCEPT PER UNIT DATA)
<S>                                             <C>          <C>        <C>            <C>           <C>        <C>
STATEMENT OF OPERATIONS DATA:
   Operating revenues.........................  $144,667     $151,931     $119,249     $151,651      $148,983     $148,983
   Cost of sales..............................   109,329      117,366       92,301      109,683       109,059      109,059
                                                --------     --------   ------------   --------      --------   ------------
   Gross profit...............................    35,338       34,565       26,948       41,968        39,924       39,924
   Selling, general and administrative
     expenses (other than management fees
     charged by parents)......................    16,776       19,578       16,501       18,657        22,423       23,923
   Management fees charged by parents(c)......     3,271        2,328        3,485        4,561         3,000       --
   Facilities relocation and corporate
     restructuring............................     --           7,647(d)      8,429(d)    --            --          --
                                                --------     --------   ------------   --------      --------   ------------
                                                 129,376      146,919      120,716      132,901       134,482      132,982
                                                --------     --------   ------------   --------      --------   ------------
   Operating profit (loss)....................    15,291        5,012(d)     (1,467)(d)   18,750       14,501       16,001
                                                --------     --------   ------------   --------      --------   ------------
   Interest expense...........................   (17,696)     (16,770)      (9,949)      (9,726)      (11,719)     (11,340)
   Interest income from Triarc(e).............    16,334       17,127       10,360        9,751         --           5,500
   Other income, net..........................     1,699          131        1,727        1,169           904          904
                                                --------     --------   ------------   --------      --------   ------------
                                                     337          488        2,138        1,194       (10,815)      (4,936)
                                                --------     --------   ------------   --------      --------   ------------
   Income before income taxes, extraordinary
     charge and cumulative effect of change in
     accounting principles....................    15,628        5,500          671       19,944         3,686       11,065
   Provision for income taxes.................     5,833        2,624        1,018        7,923         4,291          200
                                                --------     --------   ------------   --------      --------   ------------
   Income (loss) before extraordinary charge
     and cumulative effect of change in
     accounting principles....................     9,795        2,876         (347)      12,021          (605)      10,865
   Extraordinary charge.......................     --           --          --           (2,116)(f)     --          --
   Cumulative effect of change in accounting
     principles...............................     --           6,259(g)     --           --            --          --
                                                --------     --------   ------------   --------      --------   ------------
   Net income (loss)..........................  $  9,795     $  9,135     $   (347)    $  9,905      $   (605)    $ 10,865
                                                --------     --------   ------------   --------      --------   ------------
                                                --------     --------   ------------   --------      --------   ------------
   Net income per Unit(h).....................                                                                     $0.97
                                                                                                                ------------
                                                                                                                ------------
BALANCE SHEET DATA (AT PERIOD END):
   Working capital (deficit)..................  $(24,469)(i) $ 13,163     $  5,479     $   (631)     $ (4,357)
   Due from Triarc(e).........................    92,804       65,999       71,172        --            --
   Total assets...............................   234,699      218,095      191,955      137,581       139,112
   Long-term debt.............................    78,556       67,511       51,851       98,711       124,266
   Stockholders' equity (deficit)(e)..........    81,666       88,063       88,971      (19,502)      (48,600)
   Partners' capital..........................     --           --          --            --            --
OPERATING DATA:
   EBITDA(j)..................................  $ 23,670     $ 13,087     $  5,483     $ 28,774      $ 25,146     $ 26,646
   Capital expenditures(k)....................     7,039        8,290       11,260       12,593        11,013       11,013
   Retail propane gallons sold(l).............   145,708      154,839      117,415      152,335       150,141      150,141
 
<CAPTION>
                                                                        PARTNERSHIP
                                                                        PRO FORMA(b)
                                                                        ------------
 
                                                            THREE MONTHS
                                                          ENDED MARCH 31,
                                                ------------------------------------
                                                  1995                1996
                                                ---------   ------------------------
 
<S>                                             <C>         <C>         <C>
STATEMENT OF OPERATIONS DATA:
   Operating revenues.........................  $ 50,299    $ 59,981      $ 59,981
   Cost of sales..............................    33,862      41,154        41,154
                                                ---------   ---------   ------------
   Gross profit...............................    16,437      18,827        18,827
   Selling, general and administrative
     expenses (other than management fees
     charged by parents)......................     5,174       5,853         6,228
   Management fees charged by parents(c)......       750         750        --
   Facilities relocation and corporate
     restructuring............................     --          --           --
                                                ---------   ---------   ------------
                                                  39,786      47,757        47,382
                                                ---------   ---------   ------------
   Operating profit (loss)....................    10,513      12,224        12,599
                                                ---------   ---------   ------------
   Interest expense...........................    (2,858 )    (3,138 )      (2,810)
   Interest income from Triarc(e).............     --          --            1,375
   Other income, net..........................       300         278           278
                                                ---------   ---------   ------------
                                                  (2,558 )    (2,860 )      (1,157)
                                                ---------   ---------   ------------
   Income before income taxes, extraordinary
     charge and cumulative effect of change in
     accounting principles....................     7,955       9,364        11,442
   Provision for income taxes.................     3,156       3,847            50
                                                ---------   ---------   ------------
   Income (loss) before extraordinary charge
     and cumulative effect of change in
     accounting principles....................     4,799       5,517        11,392
   Extraordinary charge.......................     --          --           --
   Cumulative effect of change in accounting
     principles...............................     --          --           --
                                                ---------   ---------   ------------
   Net income (loss)..........................  $  4,799    $  5,517      $ 11,392
                                                ---------   ---------   ------------
                                                ---------   ---------   ------------
   Net income per Unit(h).....................                             $1.02
                                                                        ------------
                                                                        ------------
BALANCE SHEET DATA (AT PERIOD END):
   Working capital (deficit)..................              $  1,649      $ 17,436
   Due from Triarc(e).........................                 --           40,700
   Total assets...............................               147,379       178,362
   Long-term debt.............................               123,570       126,193
   Stockholders' equity (deficit)(e)..........               (43,083 )      --
   Partners' capital..........................                 --           32,823
OPERATING DATA:
   EBITDA(j)..................................  $ 12,934      14,825      $ 15,200
   Capital expenditures(k)....................     1,820       1,457         1,457
   Retail propane gallons sold(l).............    51,360      58,425        58,425
</TABLE>
 
                                                    (see footnotes on next page)
 
                                       73
 


<PAGE>

<PAGE>
(footnotes from preceding page)
 
 (a) In October 1993 National  Propane's fiscal year ended  April 30 and  Public
     Gas'  fiscal year ended February  28 were changed to  a calendar year ended
     December 31. In  order to  conform the  reporting periods  of the  combined
     entities  and to select a period deemed to meet the Securities and Exchange
     Commission requirement for filing financial statements for a period of  one
     year,  the ten-month period ended December 31, 1993 ('Transition 1993') has
     been  presented  above  and  in  the  accompanying  consolidated  financial
     statements.  The selected consolidated  financial and operating  data as of
     and for the  fiscal years ended  April 30, 1992  and 1993 ('Fiscal  1993'),
     however,  reflect the former year-ends of  both National Propane and Public
     Gas. Accordingly, Fiscal 1993 and Transition 1993 each include the  results
     of  National  Propane for  the  two-month period  ended  April 30,  1993 as
     follows: Operating revenues  -- $28,266;  Operating loss  -- $(5,190);  Net
     loss -- $(3,375) (see Note (d) below).
 
 (b) For  a description of the adjustments and assumptions used in preparing the
     Unaudited Pro Forma  Condensed Consolidated Financial  and Operating  Data,
     see  Notes to the Unaudited Pro  Forma Condensed Consolidated Balance Sheet
     and Statement of Operations included elsewhere herein.
 
 (c) Management fees  charged  by  parents include  costs  charged  to  National
     Propane  by Triarc  and to Public  Gas by  SEPSCO, its parent  prior to the
     Merger. (See Note 19 to the accompanying consolidated financial  statements
     for further discussion).
 
 (d) Includes   certain  significant  pretax  charges  recorded  in  April  1993
     affecting Fiscal 1993  and Transition 1993  operating profit consisting  of
     (i)  $8.4  million  of facilities  relocation  and  corporate restructuring
     charges ($7.6 million  of which  affected both Fiscal  1993 and  Transition
     1993  due to National  Propane's April 1993 being  included in both periods
     and $0.8 million  of which  affected only  Transition 1993)  and (ii)  $0.5
     million  of  allocated  costs of  a  payment  to the  Special  Committee of
     Triarc's Board of  Directors ($0.4  million of which  affected both  Fiscal
     1993  and Transition 1993).  (See Note 20  to the accompanying consolidated
     financial statements).
 
 (e) In November, 1994, National Propane reclassified its receivable from Triarc
     as a component  of stockholders'  equity and began  reserving all  interest
     accrued  subsequent thereto.  Receivables from  SEPSCO are  classified as a
     component of stockholders' equity for all  of the above periods. (See  Note
     13  to the accompanying  consolidated financial statements).  The pro forma
     due from parent is classified as an  asset because it will be evidenced  by
     an interest-bearing note with a fixed maturity.
 
 (f) The  extraordinary charge represents the  write-off of unamortized deferred
     financing  costs  and  original  issue  discount,  net  of  income   taxes,
     associated with the early extinguishment of debt.
 
 (g) The  cumulative  effect of  change in  accounting principles  resulted from
     National Propane's adoption of SFAS No. 109 effective May 1, 1992.
 
 (h) See Note  (f)  of  Notes  to Unaudited  Pro  Forma  Condensed  Consolidated
     Statement  of Operations included elsewhere  herein for details relating to
     the calculation of net income per Unit.
 
 (i) Reflects the classification of $35.0  million of long-term debt, which  was
     repaid in Fiscal 1993, as a current liability.
 
 (j) EBITDA  is  defined  as  operating  profit  (loss)  plus  depreciation  and
     amortization (excluding amortization of  deferred financing costs).  EBITDA
     should  not be considered as an alternative  to net income (as an indicator
     of operating performance) or as an  alternative to cash flow (as a  measure
     of  liquidity or ability to service debt  obligations) and is not a measure
     of performance or financial  condition under generally accepted  accounting
     principles,   but  provides  additional   information  for  evaluating  the
     Partnership's ability  to distribute  the Minimum  Quarterly  Distribution.
     Cash  flows  in accordance  with  generally accepted  accounting principles
     consist of  cash  flows  from  (i)  operating,  (ii)  investing  and  (iii)
     financing  activities.  Cash flows  from  operating activities  reflect net
     income  (loss)  (including  charges  for  interest  and  income  taxes  not
     reflected  in  EBITDA), adjusted  for (i)  all  non-cash charges  or income
     (including, but not  limited to,  depreciation and  amortization) and  (ii)
     changes  in  operating assets  and liabilities  (not reflected  in EBITDA).
     Further, cash  flows  from  investing  and  financing  activities  are  not
     included  in  EBITDA.  For  a  discussion  of  the  Partnership's operating
     performance and cash flows provided  by (used in) operating, investing  and
     financing   activities,  see  'Management's   Discussion  and  Analysis  of
     Financial Condition and Results of Operations.'
 
 (k) The Partnership's  capital  expenditures, including  capital  leases,  fall
     generally  into  three  categories: (i)  maintenance  capital expenditures,
     which  include  expenditures  for   replacement  of  property,  plant   and
     equipment,  (ii) growth capital expenditures  for the expansion of existing
     operations, and  (iii)  acquisition  capital  expenditures,  which  include
     expenditures related to the acquisition of retail propane operations.
 
     An  analysis by category for the years ended December 31, 1994 and 1995 and
     the three months ended March 31, 1995 and 1996 is as follows:
 
<TABLE>
<CAPTION>
                                                                                      YEAR ENDED          THREE MONTHS
                                                                                     DECEMBER 31,       ENDED MARCH 31,
                                                                                  ------------------    ----------------
                                                                                   1994       1995       1995      1996
                                                                                  -------    -------    ------    ------
                                                                                              (IN THOUSANDS)
<S>                                                                               <C>        <C>        <C>       <C>
Maintenance(1).................................................................   $ 4,228    $ 4,030    $1,064    $  649
Growth.........................................................................     3,672      4,936       733       808
Acquisition....................................................................     4,693      2,047(2)     23      --
                                                                                  -------    -------    ------    ------
    Total......................................................................   $12,593    $11,013    $1,820    $1,457
                                                                                  -------    -------    ------    ------
                                                                                  -------    -------    ------    ------
</TABLE>
 
        --------------------
        (1) Includes expenditures not expected  to occur on  an annual basis  as
            follows:  1994 --  $1,790 (primarily  computer hardware  and systems
            installation); 1995 -- $590 (primarily the purchase of an airplane).
        (2) Includes $1,864 of assets purchased  and contributed by Triarc  (see
            Note 19 to the accompanying consolidated financial statements).
 
 (l) Retail  propane gallons sold  includes sales to  (i) residential customers,
     (ii) commercial and industrial customers, (iii) agricultural customers, and
     (iv) dealers (located primarily  in the Northeast)  that resell propane  to
     residential and commercial customers.
 
                                       74
 


<PAGE>

<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
GENERAL
 
     National  Propane (referred to as the 'Company' in the audited consolidated
financial statements set forth elsewhere herein) is primarily engaged in (i) the
retail marketing of propane to residential customers, commercial and  industrial
customers,  agricultural  customers and  to  dealers (located  primarily  in the
Northeast) that resell propane to residential and commercial customers, and (ii)
the retail marketing of propane-related  supplies and equipment, including  home
and  commercial appliances.  National Propane believes  it is  the fifth largest
retail marketer  of propane  in terms  of retail  volume in  the United  States,
supplying  approximately  250,000 active  retail and  wholesale customers  in 24
states through  its  165  service centers.  National  Propane's  operations  are
concentrated  in the Midwest, Northeast, Southeast  and Southwest regions of the
United States.
 
     National  Propane's  residential  and  commercial  customers  use   propane
primarily  for space heating, water heating,  clothes drying and cooking. In the
industrial market propane is  used as a motor  fuel for over-the-road  vehicles,
forklifts  and stationary  engines, to  fire furnaces, as  a cutting  gas and in
other process  applications.  Agricultural  customers use  propane  for  tobacco
curing,  crop  drying,  poultry  brooding and  weed  control.  Dealers re-market
propane in  small  quantities,  primarily  in  cylinders,  for  residential  and
commercial uses.
 
     The  retail propane sales volumes are very dependent on weather conditions.
National Propane sells approximately 66% of  its retail volume during the  first
and fourth quarters, which are the winter heating season. As a result, cash flow
is  greatest during  the first  and fourth quarters  as customers  pay for their
purchases. Propane sales  are also  dependent on climatic  conditions which  may
affect  agricultural  regions. National  Propane believes  that its  exposure to
regional weather patterns is lessened because of the geographic diversity of its
areas of  operations and  through sales  to commercial  and industrial  markets,
which are not as sensitive to variations in weather conditions.
 
     Gross  profit margins are not only affected by weather patterns but also by
changes in customer mix. In addition, gross profit margins vary by  geographical
region.  Accordingly, profit margins could vary  significantly from year to year
in a period of identical sales volumes.
 
     It should be noted that since  National Propane reports on a calendar  year
basis  its results are affected by two different winter heating seasons: the end
of the first year's heating season, National Propane's first fiscal quarter, and
the beginning of  the second  heating season, National  Propane's fourth  fiscal
quarter.
 
     Profitability  is also affected  by the price  and availability of propane.
Worldwide availability of both gas liquids and oil affects the supply of propane
in domestic markets. National Propane does not believe it is overly dependent on
any one  supplier. National  Propane primarily  buys propane  on both  one  year
contracts  and the spot market and generally does not enter into any fixed price
take-or-pay contracts. Furthermore,  National Propane purchases  propane from  a
wide  variety of  sources. In  1995, no provider  supplied over  15% of National
Propane's propane needs.
 
     Based on demand  and weather  conditions the  price of  propane can  change
quickly over a short period of time; in most cases the increased cost of propane
is passed on to the customer. However, in cases where increases cannot be passed
on or when the price of propane escalates faster than National Propane's ability
to raise customer prices, margins will be negatively affected.
 
     The propane industry is very competitive. National Propane competes against
other major propane companies as well as local marketers in most of its markets,
with  the most competition  in the Midwest United  States. Propane also competes
against other energy sources, primarily natural gas, oil and electricity.
 
     The following discussion  compares the  three months ended  March 31,  1996
with  the three months  ended March 31,  1995, the year  ended December 31, 1995
with the year ended December 31, 1994 and the year ended December 31, 1994  with
the  twelve months  ended December  31, 1993.  All of  such periods  reflect the
effects of the June 1995  merger (the 'Merger') of  Public Gas Company with  and
into  National  Propane.  Because  the  Merger  was  a  transfer  of  assets and
liabilities in exchange for shares
 
                                       75
 


<PAGE>

<PAGE>
among a controlled group  of companies, it  has been accounted  for in a  manner
similar  to a pooling of interests and, accordingly, all prior periods have been
restated to reflect the Merger.
 
RESULTS OF OPERATIONS
 
     In connection  with National  Propane's change  in fiscal  year end  during
1993,  as  described  in Note  4  to National  Propane's  consolidated financial
statements appearing  elsewhere  herein, National  Propane's  audited  financial
statements  include  the ten-month  transition period  ended December  31, 1993.
Solely for purposes of comparing the  results of operations of National  Propane
for  1994 with  those of  the comparable  twelve-month period,  the statement of
operations for the ten-month transition period ended December 31, 1993 has  been
combined  with the results of operations for the two-month period ended February
28, 1993 to form  the combined unaudited twelve  months ended December 31,  1993
which  is presented below along with the  comparable amounts for the years ended
December 31, 1994 and 1995 and the three months ended March 31, 1995 and 1996:
 
<TABLE>
<CAPTION>
                                                   TWELVE MONTHS         YEAR ENDED             THREE MONTHS
                                                       ENDED            DECEMBER 31,          ENDED MARCH 31,
                                                   DECEMBER 31,     --------------------    --------------------
                                                       1993           1994        1995        1995        1996
                                                   -------------    --------    --------    --------    --------
                                                                          (IN THOUSANDS)
 
<S>                                                <C>              <C>         <C>         <C>         <C>
Revenues........................................     $ 154,841      $151,651    $148,983    $ 50,299    $ 59,981
Costs and expenses:
     Cost of sales..............................       117,950       109,683     109,059      33,862      41,154
     Selling, general and administrative
       expenses.................................        18,881        18,657      22,423       5,174       5,853
     Management fees charged by parents.........         4,242         4,561       3,000         750         750
     Facilities relocation and corporate
       restructuring............................         8,429         --          --          --          --
                                                   -------------    --------    --------    --------    --------
                                                       149,502       132,901     134,482      39,786      47,757
                                                   -------------    --------    --------    --------    --------
          Operating profit......................         5,339        18,750      14,501      10,513      12,224
Other income (expense):
     Interest expense...........................       (12,737)       (9,726)    (11,719)     (2,858)     (3,138)
     Interest income from Triarc................        13,342         9,751       --          --          --
     Other income, net..........................         1,408         1,169         904         300         278
                                                   -------------    --------    --------    --------    --------
                                                         2,013         1,194     (10,815)     (2,558)     (2,860)
                                                   -------------    --------    --------    --------    --------
     Income before income taxes.................         7,352        19,944       3,686       7,955       9,364
     Provision for income taxes.................         3,671         7,923       4,291       3,156       3,847
                                                   -------------    --------    --------    --------    --------
     Income (loss) before extraordinary
       charge...................................         3,681        12,021        (605)      4,799       5,517
     Extraordinary charge.......................       --             (2,116)      --          --          --
                                                   -------------    --------    --------    --------    --------
          Net income (loss).....................     $   3,681      $  9,905    $   (605)   $  4,799    $  5,517
                                                   -------------    --------    --------    --------    --------
                                                   -------------    --------    --------    --------    --------
</TABLE>
 
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995
 
     Revenues. Revenues increased $9.7  million, or 19.2%,  to $60.0 million  in
the  first quarter 1996  compared with $50.3  million in the  first quarter 1995
with propane revenues  increasing $10.1 million,  or 21.4% to  $57.2 million  in
1996  (compared with $47.1 million in 1995). This increase is principally due to
increased propane sales  volume as retail  gallons sold for  1996 increased  7.1
million,  or 13.8%, to  58.4 million in  1996 compared to  51.3 million in 1995.
Based on Degree Days  data (the 'Degree Days  Data'), published by the  National
Climatic  Data  Center,  as  applied to  the  geographical  regions  of National
Propane's operations, the  first quarter 1996  was 12.3% colder  than the  first
quarter  of 1995. The $10.1 million increase in propane revenue is due to volume
increases as a result of colder  weather during the first quarter 1996  compared
to  the  first  quarter 1995  ($5.6  million),  increased selling  price  due to
increased costs ($3.5 million) and the impact of acquisitions which were made in
the second half  of 1995  ($1.0 million). The  increase in  propane revenue  was
partially  offset by  a decrease in  National Propane's other  lines of revenue,
primarily tank and equipment rental income.
 
                                       76
 


<PAGE>

<PAGE>
     Gross Profit.  Gross profit  increased  $2.4 million,  or 14.5%,  to  $18.8
million  in 1996 compared with  $16.4 million in 1995  due principally to higher
propane volumes in  1996 compared  with 1995  slightly offset  by (i)  increased
product  costs which could not be fully  passed on to certain customers and (ii)
decreased revenue in tank and equipment rental income.
 
     Selling,  General  and  Administrative   Expenses.  Selling,  general   and
administrative  expenses increased  $0.7 million, or  13.1%, to  $5.9 million in
1996 compared to $5.2 million in  1995. This increase reflects higher costs  for
(i)  medical  benefits, (ii)  business  taxes due  to  higher volumes  and (iii)
increased amortization of costs  in excess of net  assets of acquired  companies
('Goodwill')  and other intangibles. The  increased amortization of Goodwill and
other intangibles reflects the effect of acquisitions in 1995.
 
     Operating Profit.  Operating profit  increased $1.7  million, or  16.3%  to
$12.2  million in 1996  compared with $10.5  million in 1995  due to the factors
noted above.
 
     Interest Expense. Interest expense increased $0.3 million, or 9.8%, to $3.1
million in 1996  compared to  $2.8 million  in 1995.  This increase  was due  to
higher  borrowings  under  National  Propane's revolving  credit  and  term loan
agreement.
 
     Other Income, Net. Other income remained constant in 1996 and 1995.
 
     Provision for Income Taxes. The provision for income taxes in 1996 and 1995
has been provided at the estimated effective rates of 41% and 40%, respectively.
The slight increase in the proposed effective rate resulted from a change in the
mix of state income tax rates.
 
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
 
     Revenues. Revenues declined  $2.7 million,  or 1.8%, to  $149.0 million  in
1995  compared with $151.7 million in 1994 with propane revenues decreasing $2.3
million, or 1.6%,  to $136.3 million  in 1995 (compared  with $138.6 million  in
1994).  This  decrease is  principally due  to reduced  propane sales  volume as
retail gallons sold for 1995 decreased 2.2 million, or 1.4%, to 150.1 million in
1995 compared with 152.3 million in 1994. This decrease in propane sales  volume
is  primarily the  net effect of  an unusually  warm winter season  in the first
quarter of 1995 partially  offset by (i) the  impact of acquisitions which  were
made in the second half of 1994 and the second half of 1995, and (ii) a slightly
colder  fourth quarter  in 1995. Based  on Degree  Days Data, as  applied to the
geographical regions of National Propane's operations, the first quarter of 1995
was 14.4% warmer than  the first quarter  of 1994. During  the first quarter  of
1995,  excluding the positive  impact of increased  volumes due to acquisitions,
National Propane sold 8.6 million fewer gallons than during the same quarter  in
1994.  Partially offsetting  the impact  of the  warmer temperatures  was (i) an
increase of 5.9 million gallons from businesses acquired during the second  half
of  1994 and the  first quarter of  1995, and (ii)  higher volume resulting from
slightly colder temperatures in the fourth quarter of 1995. A slight decrease in
National Propane's other lines of revenue, primarily appliance sales,  accounted
for the remainder of the decrease in revenues.
 
     Gross Profit. Gross profit declined $2.0 million, or 4.8%, to $39.9 million
in  1995 compared with  $41.9 million in  1994 due principally  to (i) the lower
propane sales volume in 1995 compared  with 1994, and (ii) lower profit  margins
(26.8%  in 1995  compared with 27.7%  in 1994) reflecting  higher product costs.
These higher product costs could  be passed along only  in part to customers  in
the  form of higher selling  prices and were partially  offset by lower overhead
costs.
 
     Selling,  General  and  Administrative   Expenses.  Selling,  general   and
administrative  expenses increased $3.8  million, or 20.2%,  to $22.4 million in
1995 compared with $18.6  million in 1994. This  increase reflects higher  costs
for  (i)  medical  benefits,  (ii)  costs  relating  to  new  marketing programs
initiated in  1995  and  (iii)  increased amortization  of  Goodwill  and  other
intangibles.  The  increased  amortization  of  Goodwill  and  other intangibles
reflects (i) the full year effects of  acquisitions in 1994 as well as  Goodwill
'pushed  down' to Public Gas in April  1994 in connection with the SEPSCO Merger
discussed in Note 14 to the consolidated financial statements included elsewhere
herein and (ii) the effect of acquisitions in 1995.
 
     Management Fees Charged by Parents. Management fees decreased $1.6  million
to  $3.0  million in  1995 compared  with  $4.6 million  in 1994.  This decrease
resulted from $1.6  million of  management fees charged  in 1994  by SEPSCO  for
services   provided  to  Public  Gas  Company   ('Public  Gas').  No  such  fees
 
                                       77
 


<PAGE>

<PAGE>
were charged in 1995 since the  management services to Public Gas were  provided
by the management of National Propane.
 
     Operating  Profit. Operating profit declined by  $4.2 million, or 22.7%, to
$14.5 million in 1995  compared with $18.7  million in 1994  due to the  factors
noted above.
 
     Interest  Expense. Interest  expense increased  $2.0 million,  or 20.5%, to
$11.7 million in 1995 compared with $9.7 million in 1994. This increase was  due
to  higher borrowings  under National Propane's  revolving credit  and term loan
agreement, including the full year 1995 effect of borrowings in October 1994  to
finance  a $40.0 million  dividend to Triarc,  and was only  partially offset by
lower interest rates.
 
     Interest Income  from  Triarc. The  interest  income from  Triarc  of  $9.8
million in 1994 did not recur in 1995 due to National Propane's reclassification
of its receivable from Triarc as a component of stockholders' equity in November
1994.  This reclassification occurred because Triarc's liquidity position was no
longer sufficient  to enable  it to  repay the  receivable and,  therefore,  the
receivable  was  no  longer  expected  to be  repaid  except  through  an equity
transaction. Concurrent  with  the  reclassification,  National  Propane  ceased
accruing interest on the receivable.
 
     Other Income, Net. Other income, net decreased $0.3 million to $0.9 million
in  1995 compared with  $1.2 million in  1994 principally due  to lower interest
income from finance charges on appliance sales.
 
     Provision for Income Taxes. The provision for income taxes in 1995 and 1994
reflect effective rates  of 116%  and 40%,  respectively. The  higher 1995  rate
reflects  a $2.5 million provision for income tax contingencies in 1995 relating
to proposed adjustments raised by the Internal Revenue Service for the tax years
1989 through 1992 (see Note 11 of notes to consolidated financial statements).
 
     Extraordinary Charge. In 1994 National Propane recognized an  extraordinary
charge  of $2.1 million  in connection with  the early extinguishment  of its 13
1/8%  senior  subordinated  debentures  due  1999  (the  '13  1/8%  Debentures')
consisting  of the write-off of  previously unamortized deferred financing costs
of $0.9  million and  previously  unamortized original  issue discount  of  $2.6
million, net of income tax benefit of $1.4 million.
 
YEAR ENDED DECEMBER 31, 1994 COMPARED TO TWELVE MONTHS ENDED DECEMBER 31, 1993
(UNAUDITED)
 
     Revenues.  Revenues decreased $3.1  million, or 2.1%,  to $151.7 million in
1994 compared with $154.8 million in 1993 with propane revenues decreasing  $1.2
million,  or 0.8%,  to $138.5  million in 1994  compared with  $139.7 million in
1993. The decrease is principally due to reduced propane sales volume as gallons
sold for 1994 decreased 1.3 million, or 0.8%, to 152.3 million in 1994  compared
with  153.6  million  in 1993.  Based  on  Degree Days  Data  applicable  to the
geographic regions in which National Propane operates, 1994 was 6.2% warmer than
1993. During the fourth quarter of  1994, reflecting the warm winter season  and
excluding  the positive impact of  increased volumes from acquisitions, National
Propane sold 8.3 million fewer gallons than  in the same quarter in 1993.  Also,
reflecting  the warmer  1994 weather,  National Propane  sold 2.5  million fewer
gallons during the second and  third quarters of 1994  compared to the year  ago
period,  exclusive of  the effect of  acquisitions. During the  first quarter of
1994, which was colder than in the  same quarter in 1993, National Propane  sold
3.4  million more gallons  than during the  same quarter in  1993, excluding the
positive impact of  acquisitions. Partially  offsetting the impact  of the  warm
temperatures  was an  increase in  1994 over  1993 of  6.1 million  gallons from
businesses acquired in 1994. Revenues from leasing vehicles and other  equipment
to  affiliates  and  former affiliates  of  National Propane  decreased  to $0.1
million  in  1994  from  $2.4  million  in  1993.  Such  leasing  business   was
significantly  curtailed after SEPSCO disposed  of certain operations which were
the principal customers of the leasing operations.
 
     Gross Profit.  Gross profit  increased  $5.1 million,  or 13.8%,  to  $42.0
million  in  1994 despite  the  decrease in  sales  volume and  leasing activity
revenues noted above. This improvement resulted from (i) lower costs of  propane
reflecting  economies  gained  through  centralized  purchasing  (only  a  small
percentage of which  was passed on  to customers  in the form  of lower  selling
prices),  (ii)  lower  delivery  costs  associated  with  efficiency initiatives
commenced in August  1993 and (iii)  increased tank and  cylinder rental  income
with no significant related costs.
 
                                       78
 


<PAGE>

<PAGE>
     Selling,   General  and  Administrative   Expenses.  Selling,  general  and
administrative expenses were relatively unchanged amounting to $18.7 million for
1994 compared with $18.9 million in 1993.
 
     Management Fees Charged by Parents. Management fees increased $0.3  million
to  $4.6  million in  1994 compared  with  $4.3 million  in 1993.  This increase
reflects a slightly higher relative allocation of costs to National Propane  for
management services compared with Triarc's other affiliates.
 
     Facilities  Relocation  and Corporate  Restructuring.  The $8.4  million of
facilities relocation and corporate  restructuring costs in  1993 relate to  the
change  in control of National  Propane and Triarc that  occurred in April 1993.
Included in  this charge  are  (a) National  Propane's  allocated share  of  the
estimated costs of (i) terminating the lease on Triarc's then existing corporate
facility  and (ii)  entering into  a consulting  agreement with  the former Vice
Chairman of Triarc for which no substantial services are required and for  which
Triarc  has not received and  does not expect to  receive any services that will
have substantial value  to Triarc  and its  subsidiaries and  (b) the  estimated
costs  of (i)  conforming subsidiary  identifications to  National Propane, (ii)
training employees to use the new management information system necessitated  by
National   Propane's  new  centralized  operating  strategy,  (iii)  terminating
employees and related  severance payments and  (iv) relocating and  reorganizing
National  Propane's corporate headquarters. Such  costs are further described in
Note 20 to National Propane's  financial statements appearing elsewhere  herein.
No similar charges were incurred in 1994.
 
     Operating  Profit.  Operating profit  increased by  $13.4 million  to $18.7
million in 1994  compared with $5.3  million in  1993 due to  the factors  noted
above.
 
     Interest  Expense.  Interest  expense  decreased by  $3.0  million  to $9.7
million in 1994  compared with  $12.7 million  in 1993.  This decrease  reflects
lower average borrowing levels and, to a lesser extent, the lower interest rates
of  a new  revolving credit  and term  loan agreement  entered into  by National
Propane in 1994.
 
     Interest Income from  Triarc. Interest  income from  Triarc decreased  $3.5
million  to $9.8 million in 1994 compared with $13.3 million in 1993 principally
reflecting the $40.0 million collection on  the receivable from Triarc in  April
1993  and,  to  a  lesser extent,  lower  interest  income in  1994  due  to the
aforementioned November 1994 reclassification of the receivable from Triarc as a
component of stockholders' equity  compared with a full  year of such income  in
1993.
 
     Provision for Income Taxes. The provision for income taxes in 1994 and 1993
reflects  effective  rates  of  40%  and  50%,  respectively.  The  decrease  is
principally due to the effects in 1993 of (i) the nondeductible costs  allocated
to National Propane of a consulting agreement between Triarc and its former Vice
Chairman  referred  to above  and (ii)  the  effect on  net deferred  income tax
liabilities of the 1% increase in the  Federal income statutory tax rate to  35%
effective in 1993.
 
     Extraordinary  Charge. In  1994 National Propane  recognized the previously
discussed extraordinary charge  in connection with  the early extinguishment  of
the 13 1/8% Debentures.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     National   Propane's  cash  balances  increased  $5.3  million  during  the
three-month period  ended March  31, 1996  to $8.1  million and  decreased  $1.2
million  during the full year 1995 to $2.8  million as of December 31, 1995 from
$4.0 million  as of  December 31,  1994. The  increase during  the 1996  quarter
reflected cash provided by operating activities of $3.6 million and by investing
activities  of $2.8  million, both  partially offset  by cash  used in financing
activities of $1.2 million. The decrease in 1995 resulted from cash provided  by
operating activities of $15.9 million more than offset by cash used in investing
and financing activities of $9.5 million and $7.6 million, respectively.
 
     The cash flows from operating activities of $3.6 million in the 1996 period
consisted  of $5.5 million of  net income plus noncash  charges of $2.6 million,
principally depreciation  and  amortization, both  partially  offset by  a  $4.5
million increase in working capital (excluding cash and current portion of long-
term  debt)  principally  due to  an  increase  in accounts  receivable  of $6.2
million. The  increase in  accounts receivable  principally reflects  seasonally
higher propane sales in the 1996 first quarter compared with the last quarter of
1995.  The cash provided  by operating activities  during the full  year 1995 of
$15.9
 
                                       79
 


<PAGE>

<PAGE>
million resulted from a  net loss of  $0.6 million more  than offset by  noncash
charges of $14.8 million and a $1.7 million reduction in working capital.
 
     Cash used in investing activities during the three-month period ended March
31,  1996 and  the year ended  December 31, 1995  included capital expenditures,
excluding capital leases and, in  1995, acquisitions, amounting to $1.2  million
and  $8.1 million, respectively. Of the  amount for the three-month period ended
March 31, 1996, $0.4 million was for recurring maintenance and $0.8 million  was
to  support  growth of  operations. Of  the  1995 amount,  $2.6 million  was for
recurring maintenance needed to sustain National Propane's operations at current
levels, $0.6 million was for projects of a non-recurring nature and $4.9 million
was  to  support  growth  of  operations.  Recurring  maintenance   expenditures
consisted  primarily  of expenditures  for maintenance  of equipment  to support
current business  levels.  National  Propane has  budgeted  maintenance  capital
expenditures for the remainder of 1996 of approximately $3.1 million, subject to
the  availability  of  cash and  other  financing sources,  and  has outstanding
commitments amounting to $0.5 million for such capital expenditures as of  March
31, 1996.
 
     Cash  paid for business  acquisitions in 1995 amounted  to $0.4 million for
three acquisitions. In addition, Triarc acquired a propane distribution business
for approximately $4.2 million in 1995 which it contributed to National Propane.
During the first  quarter of  1996, National Propane  entered into  a letter  of
intent  to acquire an additional propane  distribution business for cash of $0.8
million; such acquisition  is expected to  close in the  third quarter of  1996.
National  Propane will consider additional  selective acquisitions to the extent
it has availability under its credit facilities.
 
     In December  1995,  National  Propane  borrowed  $30.0  million  under  the
Existing  Credit Facility, and dividended such  amount to subsidiaries of Triarc
($22.7 million)  and SEPSCO  ($7.3 million)  in proportion  to their  respective
percentage  ownership in  National Propane.  On February  22, 1996,  the 11 7/8%
senior subordinated  debentures  of SEPSCO  were  redeemed. The  cash  for  such
redemption came from the proceeds of the $30.0 million of borrowings (which were
restricted, under the Existing Credit Facility, to the redemption of the 11 7/8%
Debentures),  liquidation of  marketable securities and  existing cash balances.
The indebtedness incurred in part to finance such redemption is being assumed by
the Operating Partnership and repaid in connection with the Transactions.
 
     Cash used in financing activities during the three-month period ended March
31, 1996 of $1.2  million reflected repayments of  long-term debt. Cash used  in
financing  activities during 1995 of $7.6  million reflected the aggregate $30.0
million dividend paid to subsidiaries of  Triarc and SEPSCO and $0.8 million  of
deferred financing costs partially offset by net borrowings of long-term debt of
$23.2  million. Such  net borrowings principally  result from  the $30.0 million
borrowing under the Existing Credit  Facility in December 1995 discussed  above,
less $9.5 million of repayments of Existing Credit Facility term loans.
 
     Total  stockholders' deficit decreased $5.5  million during the three-month
period ended March 31, 1996 to a deficit of $43.1 million at March 31, 1996 from
a deficit of $48.6 million  at December 31, 1995  reflecting the net income  for
such  quarter. Total stockholders'  deficit increased $29.1  million during 1995
from a deficit of $19.5 million at December 31, 1994, principally reflecting the
$30.0 million dividend to subsidiaries of Triarc and SEPSCO discussed above.  In
addition,  the increase of $2.6 million in  the receivable from SEPSCO, which is
classified as a  component of  stockholders' equity, and  the net  loss of  $0.6
million  incurred during 1995 contributed to  the deficit increase but were more
than offset  by  the  capital  contribution  from  Triarc  of  two  propane  gas
businesses it had acquired in 1995 amounting to $4.2 million.
 
     National  Propane's  Existing Credit  Facility, as  amended, consists  of a
revolving credit facility with  a maximum availability as  of March 31, 1996  of
$57.2  million  and three  tranches  of term  loans  with an  aggregate original
availability of $90.0 million and outstanding amounts aggregating $84.1  million
(net of repayments through March 31, 1996 of $5.9 million) as of March 31, 1996.
The aggregate availability of revolving credit loans (assuming full availability
under  the Acquisition Sublimit) reduces $3.0 million during the remaining three
quarters of 1996, $15.9  million in 1997  and $4.0 million in  each of 1998  and
1999 with the remaining availability of $30.3 million maturing in March 2000. As
of March 31, 1996 National Propane's only availability under the Existing Credit
Facility  was approximately  $14.0 million  under the  acquisition sublimit (the
'Acquisition   Sublimit')   component   of   the   Existing   Credit    Facility
 
                                       80
 


<PAGE>

<PAGE>
which is restricted to acquisitions. The $84.1 million of term loans outstanding
at  March 31, 1996 amortize $6.3 million  during the remaining three quarters of
1996, $6.4 million in 1997,  $8.2 million in 1998,  $8.3 million in 1999,  $10.3
million  in  2000 and  $44.6 million  thereafter  through 2003.  Any outstanding
borrowings under the Acquisition Sublimit  (none outstanding at March 31,  1996)
convert  to term loans  in October 1997; such  term loans would  be due in equal
installments from December 1997 through December 2000.
 
     The Existing Credit Facility contains  various covenants which (a)  require
meeting  certain financial amount and ratio tests; (b) limit, among other items,
(i) the incurrence of indebtedness, (ii) the retirement of certain debt prior to
maturity, (iii) investments, (iv)  asset dispositions, (v) capital  expenditures
and (vi) affiliate transactions other than in the normal course of business; and
(c)  restrict the payment of dividends to  Triarc. As of March 31, 1996 National
Propane had  $5.0 million  available  for the  payment  of dividends  under  the
Existing  Credit Facility;  however, National  Propane is  effectively prevented
from paying dividends due to the restrictions of the financial amount and  ratio
tests noted above. National Propane's debt under the Existing Credit Facility is
guaranteed by Triarc.
 
     The  Operating Partnership will  also enter into a  $55 million Bank Credit
Facility, which will include a $15  million Working Capital Facility to be  used
for  working capital  and other general  partnership purposes and  a $40 million
Acquisition Facility.  The Partnership  expects that  these facilities  will  be
undrawn  at the  closing of  the Offering. The  Partnership expects  to meet its
requirements for its capital expenditures, acquisition programs and debt service
through a combination of cash flow from operations, the availability of the Bank
Credit Facility and the interest on the Partnership Loan. On a pro forma  basis,
assuming  that the  transactions had occurred  on March 31,  1996, the Operating
Partnership would have approximately $15.0  million and $40.0 million  available
under the Working Capital Facility and the Acquisition Facility, respectively.
 
     The  Partnership's principal cash requirements, assuming the closing of the
Offering, are  maintenance  capital  expenditures (currently  budgeted  at  $3.5
million  for the twelve-month period ending June 30, 1997), and funds for growth
and  business  acquisitions,  if  any.  Pro  forma  interest  expense  for   the
twelve-month  period ending June 30, 1997 is estimated to be approximately $11.3
million. There are  no scheduled  principal repayments  in 1996  under the  Bank
Credit Facility or the First Mortgage Notes.
 
INITIAL PUBLIC OFFERING OF COMMON UNITS AND OTHER TRANSACTIONS
 
     The  Partnership was organized on March 13, 1996 and was formed to acquire,
own and operate National Propane's propane business and substantially all of the
related assets  of  National  Propane.  The  Partnership's  activities  will  be
conducted  through the Operating Partnership (including a wholly-owned corporate
subsidiary of the  Operating Partnership).  National Propane  intends to  convey
substantially  all  of its  propane-related assets  and liabilities  (other than
amounts due from a parent, deferred financing costs and income tax  liabilities)
to the Operating Partnership.
 
     The  Partnership intends  to issue  6,190,476 Common  Units at  an offering
price of $21.00 per Common Unit,  representing limited partner interests in  the
Partnership,  pursuant to a public offering  and to concurrently issue 4,533,638
Subordinated Units, representing subordinated  general partner interests in  the
Partnership,  as  well  as  an  aggregate 4%  general  partner  interest  in the
Partnership and  the Operating  Partnership, on  a combined  basis, to  National
Propane  and the Special General Partner.  The Partnership also intends to issue
$125.0 million  of First  Mortgage Notes  and  repay all  of the  then  existing
borrowings  under  the  Existing  Credit  Facility  and  certain  Other Existing
Indebtedness.
 
     Assuming consummation of (i) the Offering,  (ii) the issuance of the  First
Mortgage  Notes, (iii) the repayment of all borrowings under the Existing Credit
Facility, (iv) the Partnership Loan of  $40.7 million and dividend to Triarc  of
$59.3  million, respectively  and (v) certain  other related  transactions as of
March 31, 1996,  the Operating  Partnership would have  had aggregate  partners'
capital  of $32.8  million representing  an increase  of $75.9  million over the
stockholders' deficit of National Propane of $43.1 million as of March 31,  1996
before  the effects of  such transactions. The  Operating Partnership would also
have a  cash  interest-bearing  receivable  from Triarc  of  $40.7  million  and
long-term  debt (including  current portion thereof)  equal to  that of National
Propane, less $7.3 million. The
 
                                       81
 


<PAGE>

<PAGE>
Partnership's operating cash flows would also reflect (i) interest income on the
receivable from Triarc ($5.5 million  annually assuming a 13.5% interest  rate),
(ii)   reduced  interest  expense   reflecting  lower  debt   levels  and  (iii)
significantly reduced Federal  income taxes  since the Partnership  will not  be
subject to future income taxes on its propane-related income (such taxes will be
borne by its partners).
 
CONTINGENCIES
 
     In  May 1994 National Propane was  informed of coal tar contamination which
was discovered at one of its properties in Wisconsin. National Propane purchased
the property from a company  which had purchased the  assets of a utility  which
had   previously  owned  the  property.   National  Propane  believes  that  the
contamination occurred during  the use of  the property as  a coal  gasification
plant  by such utility. In  order to assess the  extent of the problem, National
Propane engaged  environmental consultants  who began  work in  August 1994.  In
December  1994  the  environmental  consultants provided  a  report  to National
Propane which indicated the estimated range of potential remediation costs to be
between approximately $0.4 million  and $0.9 million  depending upon the  actual
extent  of  impacted  soils,  the  presence  and  extent,  if  any,  of impacted
groundwater and the remediation method  actually required to be implemented.  In
February  1996,  based upon  new  information, National  Propane's environmental
consultants provided  a  second  report  which presented  the  two  most  likely
remediation  methods and revised the estimates of the costs of such methods. The
range of  estimated costs  for the  first method,  which involves  treatment  of
groundwater and excavation, treatment and disposal of contaminated soil, is from
$1.6  million to $3.3 million.  The range for the  second method, which involves
only treatment of groundwater  and the building of  a soil containment wall,  is
from  $0.4 million to $0.8 million. Based on discussions with National Propane's
environmental  consultants,  both  methods  are  acceptable  remediation  plans.
National  Propane, however, will have to agree on a final plan with the State of
Wisconsin. Since receiving  notice of  the contamination,  National Propane  has
engaged in discussions of a general nature concerning remediation with the State
of Wisconsin. These discussions are ongoing and there is no indication as yet of
the  time  frame for  a decision  by the  State  of Wisconsin  on the  method of
remediation. Accordingly, it is unknown  which remediation method will be  used.
National Propane is also engaged in ongoing discussions of a general nature with
the  successor to  the utility  that operated a  coal gasification  plant on the
property. There is as yet no indication that the successor will share the  costs
of  remediation. National Propane, if found liable  for any of such costs, would
attempt to recover  such costs from  the successor owner.  National Propane  has
notified  its insurance carriers of the  contamination and the likely incurrence
of costs to undertake remediation.  As of December 31,  1995 and March 31,  1996
National  Propane had a remaining accrual  of $0.4 million for this contingency.
Pursuant to a lease relating to the Marshfield facility, the ownership of  which
will  not be  transferred to  the Operating  Partnership at  the closing  of the
Offering, the Partnership has agreed to  be liable for any costs of  remediation
in  excess of any amounts  recovered from such successor  or from insurance. See
'Business and Properties --  Transfer of the  Partnership Assets.' The  ultimate
outcome  of this matter  cannot presently be determined  and, depending upon the
cost of  remediation  required,  may  have a  material  adverse  effect  on  the
Partnership's  consolidated financial position, results of operations or ability
to make the Minimum Quarterly Distribution to all Unitholders.
 
     The Internal Revenue  Service (the 'IRS')  is currently examining  Triarc's
Federal income tax returns for the tax years 1989 through 1992 and has issued to
date  notices of proposed adjustments relating to National Propane. Such notices
propose increasing  National Propane's  taxable  income by  approximately  $19.0
million,  the  tax effect  of which  has  not yet  been determined.  During 1995
National Propane provided $2.5 million relating to the proposed adjustments. The
amount and  timing  of  any payments  required  as  a result  of  such  proposed
adjustments  cannot presently be determined.  However, National Propane does not
believe the resolution  of the proposed  adjustments will be  finalized in  1996
and,  accordingly, no tax payments will be required in 1996. (See Note 11 to the
Consolidated Financial Statements included elsewhere herein.)
 
     National  Propane   is  involved   in  ordinary   claims,  litigation   and
administrative  proceedings  and  investigations  of  various  types  in several
jurisdictions incidental  to  its business.  In  the opinion  of  management  of
National  Propane, the outcome of any such matter, or all of them combined, will
not
 
                                       82
 


<PAGE>

<PAGE>
have a  material adverse  effect on  National Propane's  consolidated  financial
condition or results of operations.
 
DESCRIPTION OF INDEBTEDNESS
 
  DESCRIPTION OF FIRST MORTGAGE NOTES
 
     Concurrently  with the  Offering, the  Managing General  Partner will issue
$125 million aggregate  principal amount of  First Mortgage Notes  in a  private
placement,  which  First  Mortgage  Notes  will  be  assumed  by  the  Operating
Partnership in connection with the Conveyance. The following is a summary of the
anticipated material terms  of the First  Mortgage Notes, all  of which will  be
issued pursuant to Note Agreements to be entered into among the Managing General
Partner,  the Operating  Partnership and  each purchaser  of the  First Mortgage
Notes (collectively, the 'Note Agreements'), a  form of which has been filed  as
an  exhibit to the  Registration Statement of  which this Prospectus  is a part.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE NOTE AGREEMENTS.
 
     The Operating Partnership's obligations under  the Note Agreements and  the
First  Mortgage Notes will  be secured, on  an equal and  ratable basis with the
Operating Partnership's  obligations  under  the  Bank  Credit  Facility,  by  a
mortgage  on substantially all  of the real property  and liens on substantially
all of  the  operating assets,  equipment  and  other assets  of  the  Operating
Partnership  (including all of its right  under the Partnership Note), including
the capital stock but not the  operating assets and equipment of National  Sales
and Service, Inc. ('NSSI'), a wholly-owned corporate subsidiary of the Operating
Partnership,  a pledge by the Partnership of its limited partner interest in the
Operating Partnership  and a  pledge  by the  Managing  General Partner  of  its
general  partner interest  in the Operating  Partnership and all  of the capital
stock of the Special General  Partner (collectively, the 'Mortgaged  Property').
The  First Mortgage Notes will mature June 30, 2010 and will require eight equal
annual prepayments of  $15,625,000, without  premium, of  the principal  thereof
beginning  June 30,  2003. Pursuant  to the Note  Agreements and  subject to the
provisions of the Bank Credit Facility, the Operating Partnership may prepay the
First Mortgage Notes  in whole  or in  part at a  premium provided  in the  Note
Agreements. Under certain circumstances following the disposition of assets, the
Operating  Partnership is  required to  prepay at  a premium  the First Mortgage
Notes with certain  of the  proceeds of  such asset  dispositions. In  addition,
pursuant  to the Note Agreements,  within 90 days after  any 'Change of Control'
(as defined in the  Note Agreements), the Operating  Partnership is required  to
make  an offer to each holder of the First Mortgage Notes to prepay all, but not
less than all, of such  holder's First Mortgage Notes  at a premium provided  in
the  Note Agreements. Interest  will accrue on  the First Mortgage  Notes at the
rate of 8.54% per annum, payable semi-annually in arrears.
 
     The Note  Agreements  are  expected  to  contain  various  restrictive  and
affirmative covenants applicable to the Operating Partnership and its Restricted
Subsidiaries  (as defined in the Note  Agreement), including (i) restrictions on
the incurrence of  additional indebtedness other  than (a) borrowings  permitted
under  the Bank Credit  Facility provided that  the principal amount outstanding
under the  Acquisition  Facility,  together with  all  outstanding  indebtedness
incurred  pursuant to  clauses (g)(z)(A) and  (h)(y) below, does  not exceed $40
million,  (b)   certain  specified   pre-existing  indebtedness,   (c)   certain
indebtedness  incurred  in  connection  with  additions  (including  by  way  of
acquisitions  of  businesses),   repairs  or  improvements   to  the   Operating
Partnership's  assets,  not  to  exceed  the  net  proceeds  of  any partnership
interests sold  by the  Operating Partnership  or capital  contributions to  the
Operating  Partnership to finance  such additions, repairs  or improvements, (d)
additional indebtedness, if after  giving effect to  the incurrence thereof  and
the  repayment of any debt being refinanced or repaid (x) the pro forma ratio of
Consolidated Cash Flow to Consolidated Pro  Forma Debt Service (each as  defined
in  the Note  Agreements) is  greater than  2.50 for  the period  of four fiscal
quarters next succeeding the date  of incurrence of such  debt, and (y) the  pro
forma  ratio of  Consolidated Cash Flow  to Maximum Consolidated  Pro Forma Debt
Service (each as defined in  the Note Agreements) is  greater than 1.25 for  the
period  of four fiscal quarters  next succeeding the date  of incurrence of such
debt, (e) unsecured debt owed to either of the General Partners or an  Affiliate
of  either  of  the  General  Partners, provided  that  such  debt  is expressly
subordinated to the  First Mortgage Notes  and does  not exceed a  total of  $20
million  in  the aggregate  at any  time  outstanding, (f)  certain intercompany
subordinated indebtedness,  (g) certain  pre-existing indebtedness  of  acquired
Persons or assets, provided that (x) such
 
                                       83
 


<PAGE>

<PAGE>
indebtedness  was  not  incurred in  anticipation  of such  acquisition,  (y) no
Default or Event of Default (each as  defined in the Note Agreement) shall  have
occurred  and be continuing and (z)  either (A) such indebtedness, together with
the principal amount outstanding under the Acquisition Facility, does not exceed
$40 million  or (B)  after  giving effect  to  such acquisition,  the  Operating
Partnership  could  incur at  least $1  of  additional indebtedness  pursuant to
clause (d) above and (h)  certain indebtedness issued to  a seller of assets  or
stock purchased by the Partnership provided that (x) the financial terms of such
indebtedness  are the  same as (or  more favorable  than) that set  forth in the
Acquisition Facility  and (y)  such indebtedness,  together with  the  principal
amount  outstanding  under the  Acquisition  Facility and  indebtedness incurred
pursuant to (g)(2)(A) does not exceed $40 million, (ii) restrictions on  certain
liens,  investments,  guarantees, loans,  advances, subsidiary  dividends, fixed
price supply contracts,  lines of  business, mergers,  consolidations, sales  of
assets,  and transactions with affiliates and  (iii) restrictions on the payment
of dividends or other  distributions in respect of  any partnership interest  if
the  pro forma ratio of Consolidated  Cash Flow to Consolidated Interest Expense
(as defined in the Note Agreements) is less than 1.75 to 1.0.
 
     The Partnership  believes that  upon  the closing  of the  Offering,  after
giving effect to the Transactions contemplated by this Prospectus, the Operating
Partnership  would be in compliance with  all of the restrictive and affirmative
covenants applicable under the First Mortgage Notes.
 
     Under the Note Agreements,  as long as no  default exists or would  result,
the  Operating Partnership will  be permitted to make  cash distributions to the
Partnership not  more frequently  than  quarterly in  an  amount not  to  exceed
Available Cash (as defined in the Note Agreements) for the immediately preceding
quarter.  The Note  Agreements will  require that  Available Cash  be reduced to
reflect  reserves  for  various  items,  including,  without  duplication,   the
following:  (i) in each calendar quarter a reserve  equal to at least 50% of the
aggregate amount of all  interest payments in respect  of all indebtedness  upon
which  interest is due  semiannually or less  frequently to be  made in the next
quarter, (ii) with respect to any indebtedness secured equally and ratably  with
the  First Mortgage Notes of which principal  is payable annually, in the third,
second and first calendar quarters  immediately preceding each calendar  quarter
in  which  any scheduled  principal payment  is  due with  respect to  the First
Mortgage Notes and other Indebtedness, a reserve equal to at least 25%, 50%  and
75%,  respectively, of the aggregate principal amount  to be repaid on the First
Mortgage Notes and such other indebtedness  on such payment date and (iii)  with
respect  to the First Mortgage Notes  and any other indebtedness secured equally
and ratably  with  the  First  Mortgage Notes  of  which  principal  is  payable
semiannually,  in each calendar quarter which  immediately precedes a quarter in
which principal is payable in respect of the First Mortgage Notes and such other
indebtedness, a reserve equal  to at least  50% of the  aggregate amount of  all
principal  to  be  paid  in  respect  of  the  Mortgage  Notes  and  such  other
indebtedness in  the next  quarter; provided  that the  amount of  such  reserve
specified in clauses (ii) and (iii) above for principal amounts to be paid shall
be reduced by the aggregate principal amount of all binding, irrevocable letters
of credit established to refinance such principal amounts.
 
     Except  as described  below, if  an Event  of Default  exists on  the First
Mortgage Notes,  the holders  of a  majority in  principal amount  of the  First
Mortgage  Notes  may accelerate  the maturity  of the  First Mortgage  Notes and
exercise other rights and remedies. In the case of an Event of Default  referred
to  in (a)  below, any  holder of  the First  Mortgage Notes  may accelerate the
maturity of the First Mortgage Notes such  holder owns. In the case of an  Event
of  Default referred to  in (g) below,  the acceleration of  the maturity of the
Notes will occur automatically. Events of Default include (a) failure to pay any
principal or premium when due, or interest within five business days of the date
due, on the First Mortgage Notes,  (b) a material misrepresentation in the  Note
Agreements,  (c) failure to perform or otherwise comply with covenants contained
in the Note Agreements  and related documents, (d)  a payment default under  the
Bank Credit Facility and any other default under the Bank Credit Facility or any
other  indebtedness the aggregate  principal amount of  which exceeds $5 million
which results in such  indebtedness becoming due before  its stated maturity  or
scheduled  due date,  (e) a  material failure of  any of  the security documents
relating to the Mortgaged Property to be  in full force and effect, (f)  certain
unsatisfied  final judgments in excess of $5  million or requiring a split-up or
divestiture of the Operating Partnership,  and (g) various events of  bankruptcy
or  insolvency involving the Operating  Partnership, Managing General Partner or
any Restricted Subsidiary.
 
                                       84
 


<PAGE>

<PAGE>
  DESCRIPTION OF THE BANK CREDIT FACILITY
 
     Concurrently with the Offering, the  Operating Partnership will enter  into
the  Bank Credit Facility with a group  of commercial banks, for which The First
National Bank of  Boston will act  as administrative agent.  The following is  a
summary  of the anticipated material terms of the Bank Credit Facility, the form
of which has been  filed as an  exhibit to the  Registration Statement of  which
this  Prospectus  is  a part.  THIS  SUMMARY  IS QUALIFIED  IN  ITS  ENTIRETY BY
REFERENCE TO THE BANK CREDIT FACILITY.
 
     The Bank Credit Facility consists of a $40 million Acquisition Facility and
a $15 million Working Capital Facility. The Operating Partnership's  obligations
under  the Bank Credit Facility  will be secured, on  an equal and ratable basis
with the Operating Partnership's  obligations under the  Note Agreement and  the
First  Mortgage  Notes,  by  a  security interest  or  pledge  of  the Mortgaged
Property. The Bank Credit Facility will bear  interest at a rate based upon,  at
the Operating Partnership's option, either (i) the London Interbank Offered Rate
plus  a margin generally ranging  from 1.00% to 1.75% or  (ii) the higher of (x)
the Prime Rate  (as defined in  the Bank  Credit Facility) and  (y) the  Federal
Funds Effective Rate (as defined in the Bank Credit Facility) plus 1/2 of 1%, in
either  case, plus a margin  generally ranging from 0.0%  to 0.25%, plus, in the
case of clauses  (i) and (ii)  above, with respect  to any period  in which  the
First  Mortgage Notes have received a Sub-investment Grade Rating (as defined in
the Bank Credit Facility), a premium generally ranging from 0.125% to 0.750%.  A
quarterly commitment fee on the unused portion of the Bank Credit Facility based
on  the Leverage Ratio (as defined in  the Bank Credit Facility) and the current
rating of the First Mortgage Notes is payable on the Bank Credit Facility.
 
     The Working Capital Facility  will mature three years  from the closing  of
the  Offering. For a period of at least 30 consecutive days in each year between
March 1 and August 31  of such year, the  Operating Partnership must reduce  the
aggregate  principal amount  outstanding under  the Working  Capital Facility to
zero. Loans under the Working Capital Facility will be used for working  capital
and other general partnership purposes.
 
     The  Acquisition Facility will revolve for  two years, after which time any
loans outstanding will amortize  in equal quarterly  installments over the  next
three  years, which installments will be adjusted to apply mandatory prepayments
or reductions in commitments under the Acquisition Facility to the  amortization
schedule.  Loans under the  Acquisition Facility will be  used solely to finance
(i) acquisitions by the Operating  Partnership and (ii) capital expenditures  by
the  Operating Partnership to  improve its existing  capital assets, to increase
its customer base or to construct new capital assets.
 
     Borrowings under the Bank Credit Facilities will be subject to satisfaction
of customary conditions and,  in addition, in the  case of each borrowing  under
the Acquisition Facility, pro forma compliance with certain financial covenants.
 
     The  Bank Credit  Facility is expected  to contain  various restrictive and
affirmative covenants applicable to the Operating Partnership and its Restricted
Subsidiaries (as defined in the Bank Credit Facility) including (i) restrictions
on indebtedness other than (a) the  First Mortgage Notes, (b) certain  permitted
indebtedness  incurred to finance the making of expenditures for the improvement
or repair of or addition to the Assets (as defined in the Bank Credit Facility),
(c) certain  indebtedness incurred  by any  Restricted Subsidiary  owing to  the
Operating  Partnership or another Restricted  Subsidiary not exceeding specified
amounts, (d)  certain  additional unsecured  indebtedness  owed to  the  General
Partners  or the  Partnership, provided that  such indebtedness  does not exceed
specified amounts  and is  subordinated  to obligations  under the  Bank  Credit
Facility  on terms satisfactory to the banks under such facility, (e) additional
indebtedness, if on  the date  such indebtedness  is incurred  and after  giving
effect  thereto,  certain  financial  tests are  met,  (f)  certain pre-existing
indebtedness of  acquired  persons  and indebtedness  incurred  to  acquire  any
person, business or assets, provided that, among other things, such indebtedness
was  not  incurred  in  anticipation  of  such  acquisition  and  that  all such
indebtedness  does  not  exceed  specified  amounts,  (g)  certain  pre-existing
indebtedness  not exceeding $1.5 million, (h) so  long as no Event of Default or
Default (each  as defined  in the  Bank  Credit Facility)  has occurred  and  is
continuing,   certain  additional  indebtedness  secured  under  the  Collateral
Documents (as defined  in the Bank  Credit Facility) which  is incurred for  any
extension,  renewal, refunding or  replacement of the  First Mortgage Notes, and
(i) so long as no  Event of Default or Default  has occurred and is  continuing,
certain   indebtedness  incurred  for  any   extension,  renewal,  refunding  or
replacement of
 
                                       85
 


<PAGE>

<PAGE>
indebtedness, and (ii) restrictions  on certain liens, investments,  guarantees,
loans, advances, lines of business, acquisitions, mergers, consolidations, sales
of  assets,  sale and  leaseback transactions,  entering into  transactions with
affiliates, sales of receivables, and sales of equity interests in subsidiaries.
In addition,  the  Bank Credit  Facility  will prohibit  Triarc  or any  of  its
subsidiaries, DWG Acquisition Group, L.P. or Messrs. Peltz or May from acquiring
any propane business while they are an Affiliate of the Partnership.
 
     The  Bank Credit Facility is expected to require Available Cash (as defined
in the Bank Credit  Facility) to reflect reserves  for various items,  including
without  duplication the following: (i) in each calendar quarter a reserve equal
to at least 50% of the aggregate  amount of all interest payments in respect  of
all  indebtedness upon which interest is  due semiannually or less frequently to
be made  in the  next quarter,  (ii) with  respect to  any indebtedness  secured
equally  and ratably with the First Mortgage Notes of which principal is payable
annually, in the third, second and first calendar quarters immediately preceding
each calendar  quarter in  which any  scheduled principal  payment is  due  with
respect  to the First Mortgage Notes and  other indebtedness, a reserve equal to
at least 25%, 50% and 75%, respectively, of the aggregate principal amount to be
repaid on the First Mortgage Notes  and such other indebtedness on such  payment
date  and  (iii)  with  respect  to  the  First  Mortgage  Notes  and  any other
indebtedness secured equally and ratably with the First Mortgage Notes of  which
principal  is payable semiannually,  in each calendar  quarter which immediately
precedes a  quarter in  which principal  is  payable in  respect of  such  First
Mortgage  Notes and such other  indebtedness a reserve equal  to at least 50% of
the aggregate  amount of  all  principal to  be paid  in  respect of  the  First
Mortgage  Notes and other  such indebtedness in the  next quarter; provided that
the amount  of  such reserve  specified  in clauses  (ii)  and (iii)  above  for
principal  amounts to be paid shall be reduced by the aggregate principal amount
of all  binding, irrevocable  letters of  credit established  to refinance  such
principal  amounts. Under  the Bank  Credit Facility, so  long as  no Default or
Event of Default exists or would result and the ratio of Consolidated Cash  Flow
to  Consolidated Interest  Expense (as defined  in the Bank  Credit Facility) is
greater than 1.75 to 1.00, the  Operating Partnership will be permitted to  make
cash  distributions to the Partnership not  more frequently than quarterly in an
amount not to exceed Available Cash for the immediately preceding quarter.
 
     In addition, the Bank  Credit Facility will require  that (i) the ratio  of
Total  Funded Debt to Consolidated Cash Flow (each as defined in the Bank Credit
Facility) be no  greater than  4.50 to 1  through June  30, 1997 and  4.25 to  1
thereafter and (ii) Net Working Capital (as defined in the Bank Credit Facility)
exceed certain minimums.
 
     Events  of  Default  include  (a)  failure  to  pay  any  principal  or any
reimbursement obligation under  any letter of  credit when due,  or interest  or
fees  or other amounts within five business days of the due date, (b) failure to
perform or  otherwise  comply  with  covenants  contained  in  the  Bank  Credit
Facility,  (c)  a  material misrepresentation  in  the Bank  Credit  Facility or
related loan documents  or certain  documents related to  the Transactions,  (d)
certain  payment cross-defaults with  respect to any  indebtedness the aggregate
principal amount of which  exceeds $3 million  and certain other  cross-defaults
with  respect to indebtedness the aggregate principal amount of which exceeds $5
million, (e) the invalidity of the Bank Credit Facility, any of the related loan
documents or  certain  documents  relating  to  the  Transactions,  (f)  certain
unsatisfied  judgments  in excess  of $2.5  million or  requiring a  split-up or
divestiture of  the Operating  Partnership, (g)  certain events  resulting in  a
Material Adverse Effect (as defined in the Bank Credit Facility) and (h) various
events of bankruptcy or insolvency involving the Managing General Partner or any
Restricted Subsidiary. In addition a 'Change in Control' (as defined in the Bank
Credit  Facility) will  result in  the Operating  Partnership being  required to
repay all indebtedness under the Bank Credit Facility.
 
EFFECTS OF INFLATION
 
     In general,  inflation  has not  had  any significant  impact  on  National
Propane  in recent years and changes in propane prices, in particular, have been
dependent on factors generally more significant than inflation, such as  weather
and availability of supply. However, to the extent inflation affects the amounts
National  Propane  pays  for propane  as  well as  operating  and administrative
expenses, National Propane attempts  to limit the  effects of inflation  through
passing on propane cost increases to customers in the
 
                                       86
 


<PAGE>

<PAGE>
form  of  higher selling  prices to  the extent  it can  do so  as well  as cost
controls and  productivity  improvements.  As  such, inflation  has  not  had  a
material adverse effect on National Propane's profitability and National Propane
does  not believe  normal inflationary  pressures will  have a  material adverse
effect on future results of operations of National Propane or the Partnership.
 
RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
 
     Effective October 1, 1995 National  Propane adopted Statement of  Financial
Accounting  Standards ('SFAS') No. 121, 'Accounting for Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed of.' This standard requires that
long-lived assets  and certain  identifiable  intangibles held  and used  by  an
entity  be reviewed for  impairment whenever events  or changes in circumstances
indicate that  the carrying  amount of  an  asset may  not be  recoverable.  The
adoption  of  this standard  had no  effect  on National  Propane's consolidated
results of operations or financial position.
 
     In October 1995 the  Financial Accounting Standards  Board issued SFAS  No.
123 'Accounting for Stock-Based Compensation' ('SFAS 123') which will be adopted
by National Propane in the year ended December 31, 1996. SFAS 123 defines a fair
value   based  method  of  accounting   for  employee  stock-based  compensation
(including Units) and  encourages adoption  of that method  of accounting.  Such
method  would initially apply generally only to  awards granted in the year SFAS
123 is  adopted.  However, SFAS  123  allows  entities to  continue  to  measure
compensation  cost  under  the  intrinsic value  method  prescribed  by existing
accounting pronouncements. Such entities, however,  must make certain pro  forma
disclosures as if the fair value method had been applied. Through March 31, 1996
National  Propane has not granted any stock options; however, Triarc has granted
stock options  to purchase  Triarc  common stock  to  certain key  employees  of
National  Propane.  Assuming  consummation  of  the  Common  Unit  Offering, the
Managing General Partner will adopt  the National Propane Corporation 1996  Unit
Option  Plan pursuant to which the Managing General Partner may grant to certain
officers, employees  and  consultants  options  to  purchase  Common  Units  and
Subordinated  Units and  UARs covering  up to  an aggregate  of 1,250,000 Common
Units and Subordinate Units (subject  to adjustment), plus an additional  number
of  Units equal to 1% of the number  of Units outstanding as of each December 31
following the Option Plan's  effective date. The adoption  of SFAS 123 will  not
have  any  effect  on  National Propane's  results  of  operations  or financial
position since (i) SFAS 123 generally does not apply to stock-based compensation
granted prior to the year of  adoption, (ii) National Propane currently  intends
to  elect  to account  for stock-based  compensation  using the  intrinsic value
method if  its employees  are  granted any  stock-based compensation  and  (iii)
National  Propane  understands  that  Triarc would  also  elect  to  account for
stock-based compensation using the intrinsic value method for any further  stock
options granted to employees of National Propane.
 
                                       87
 


<PAGE>

<PAGE>
                            BUSINESS AND PROPERTIES
 
GENERAL
 
     The Partnership, a Delaware limited partnership recently formed to acquire,
own  and  operate  the  business  and assets  of  National  Propane,  is engaged
primarily in (i) the retail marketing of propane to residential, commercial  and
industrial,  and agricultural customers and to dealers (located primarily in the
Northeast) that resell propane to residential and commercial customers and  (ii)
the  retail marketing of propane-related  supplies and equipment, including home
and commercial  appliances. The  Partnership believes  it is  the fifth  largest
retail  marketer of propane in  terms of volume in  the United States, supplying
approximately 250,000 active retail and wholesale customers in 24 states through
its 165 service centers located in  23 states. The Partnership's operations  are
concentrated  in the Midwest, Northeast, Southeast  and Southwest regions of the
United  States.  The  retail  propane  sales  volume  of  the  Partnership   was
approximately  150 million gallons in 1995.  In 1995, approximately 48.6% of the
Partnership's retail sales  volume was  to residential customers,  34.2% was  to
commercial  and industrial  customers, 6.3%  was to  agricultural customers, and
10.9% was  to dealers.  Sales to  residential customers  in 1995  accounted  for
approximately 64% of the Partnership's gross profit on propane sales, reflecting
the higher-margin nature of this segment of the market. Approximately 90% of the
tanks used by the Partnership's retail customers are owned by the Partnership.
 
     National  Propane was incorporated in 1953  under the name Conservative Gas
Corporation.  During  the   period  the  Partnership   was  controlled  by   DWG
Corporation,  Triarc's  predecessor,  the Partnership's  business  was conducted
through  nine  regionally  branded  companies  without  central  management   or
coordinated  pricing or distribution  strategies. In April  1993, a partnership,
the sole general partners of which are Nelson Peltz and Peter W. May,  completed
the   Acquisition,  in  which  it  acquired  approximately  28.6%  of  the  then
outstanding  shares  of  Triarc's  common  stock.  Since  the  Acquisition,  the
Partnership's  new management  team, headed  by Ronald  D. Paliughi,  who became
President and Chief  Executive Officer of  National Propane in  April 1993,  has
implemented  an operating plan designed to  make the Partnership more efficient,
profitable and competitive.
 
     Since the Acquisition, the  Partnership's management has: (i)  consolidated
nine  separately branded businesses  into a single company  with a new, national
brand and  logo; (ii)  consolidated  eight regional  offices into  one  national
headquarters;   (iii)  installed   the  Partnership's   first  system-wide  data
processing  system;  (iv)   implemented  system-wide   pricing,  marketing   and
purchasing  strategies, thereby reducing the cost duplication and purchasing and
pricing inefficiencies associated with the Partnership's formerly  decentralized
structure;  and (v) centralized and  standardized accounting, administrative and
other corporate services. As a result of these initiatives, the Partnership  has
become  more efficient  and competitive,  and believes  it is  now positioned to
capitalize on opportunities  for business  growth, both  internally and  through
acquisitions.
 
     Although management has focused primarily on implementing the new operating
plan,  the Partnership has acquired five  propane businesses since November 1993
resulting in an increase in volume  sales of approximately 13.4 million  gallons
annually.  Four  of these  acquired businesses  operate in  the Midwest  and one
operates in the Southwest. Generally, National Propane has financed acquisitions
either with  cash  on hand  or  through the  issuance  of debt  securities.  The
Partnership  recently entered into  a letter of intent  to acquire an additional
propane business for $0.8 million; however, consummation of this transaction  is
subject   to  customary   closing  conditions   and  completion   of  definitive
documentation, and  no assurance  can be  given that  this acquisition  will  be
completed.
 
     The  Partnership believes that its competitive strengths include: (i) gross
profit and operating margins  that it believes  to be among  the highest of  the
major   retail  propane  companies  whose   financial  statements  are  publicly
available; (ii) the concentration of its  operations in colder regions (such  as
the upper Midwest and Northeast), high margin regions (such as the Northeast and
Florida),  and regions experiencing  population growth (such  as Florida and the
Southwest); (iii)  an  experienced  management team;  (iv)  a  well-trained  and
motivated  work force; and (v) an  effective pricing management system. However,
the propane  industry is  highly  competitive and  includes  a number  of  large
national  firms  that may  have greater  financial or  other resources  or lower
operating costs than the Partnership.
 
                                       88
 


<PAGE>

<PAGE>
     Prior to June 1995, the propane  business of the Partnership was  conducted
through  two separate  subsidiaries of Triarc,  Public Gas  Company and National
Propane  Corporation  (collectively,  the   'Propane  Companies').  To   further
centralize the Partnership's businesses, on June 29, 1995, the operations of the
Propane  Companies were formally consolidated by merging Public Gas Company with
and into National Propane.
 
     Concurrently with the closing of the Offering, pursuant to the  Conveyance,
National  Propane will contribute substantially all  of its assets (which assets
will not include an existing intercompany note from Triarc, approximately  $59.3
million  of the net proceeds  from the issuance of  the First Mortgage Notes and
certain  other  assets)   and  related  liabilities   (other  than  income   tax
liabilities)  to the  Operating Partnership.  In general,  current management of
National Propane will continue to manage and operate the Partnership's  business
as  officers of the Managing General Partner and its affiliates. The Partnership
will not  directly  employ  any  of the  persons  responsible  for  managing  or
operating the Partnership. See 'The Transactions' and 'Management -- Partnership
Management.'  The  following discussion  of  and references  to  the Partnership
include the  business,  operations  and  assets  of  its  predecessor,  National
Propane.
 
OPERATING STRATEGY
 
     The  Partnership's  operating  strategy  is  to  increase  its  efficiency,
profitability and  competitiveness,  while  better  serving  its  customers,  by
building on the efforts it has already undertaken to improve pricing management,
marketing and purchasing and to consolidate its operations.
 
      Improved  Pricing  Management: The  $1.4  million pricing  system recently
      installed in  substantially  all  of  the  Partnership's  service  centers
      provides  central management with current,  system-wide supply, demand and
      competitive  pricing  information.  Based  on  that  information,  pricing
      managers located in Cedar Rapids, Iowa, determine the prices to be charged
      to  the  Partnership's  existing residential  customers.  With  respect to
      commercial  and  industrial  customers,  agricultural  customers  and  new
      residential  customers, management makes  daily pricing recommendations to
      local managers who determine prices based on such recommendations as  well
      as  local conditions.  The Partnership  believes that  this combination of
      central and local decision  making enables it  to more effectively  manage
      prices.  In  addition,  to  further enhance  its  pricing  management, the
      Partnership  intends  to  equip  its  delivery  personnel  with  hand-held
      computer  terminals that simplify  customer billing and  the collection of
      price and volume information.
 
      Improved Marketing: The Partnership  intends to differentiate itself  from
      smaller,  local competitors by strengthening its image as a reliable, full
      service, nationwide  propane  supplier.  To  that  end,  (i)  all  of  the
      Partnership's  service centers  operate under  the National  Propane brand
      (other than certain service centers obtained by the Partnership in  recent
      acquisitions) and offer 24 hour/7 day-a-week service for emergency repairs
      and  deliveries, (ii) the Partnership conducts coordinated advertising and
      marketing campaigns,  (iii) the  Partnership's employees  attend  training
      courses  at its new training  center or at service  centers where they are
      employed and  (iv)  the Partnership  is  in the  process  of  establishing
      appliance  showrooms at several  service centers in  an effort to increase
      sales and rental income.
 
      Efficient Purchasing:  The  Partnership  intends to  further  improve  its
      propane  purchasing and storage strategies,  thereby making more efficient
      use of its system-wide storage capacity. When conditions are  appropriate,
      the  Partnership intends to  purchase and store  propane during the summer
      months when  prices are  generally lower  and sell  these supplies  during
      periods  of higher propane prices. In addition, the Partnership intends to
      use its existing  storage facilities or  acquire additional facilities  to
      minimize transportation costs by storing propane near large concentrations
      of its customers.
 
      Consolidating  Operations:  The  Partnership  will  continue  to  look for
      opportunities  to  consolidate  its  operations.  Since  July  1993,   the
      Partnership  has reduced its workforce by approximately 18%, from 1,228 to
      1,007 full-time employees as of May 31, 1996.
 
                                       89
 


<PAGE>

<PAGE>
STRATEGIES FOR GROWTH
 
     The Partnership's strategies  for growth involve  expanding its  operations
and  increasing  its market  share through  strategic acquisitions  and internal
growth, including the opening of new service centers.
 
     STRATEGIC ACQUISITIONS
 
     The Partnership expects the overall demand for propane to remain relatively
constant over the next several  years, with year-to-year industry volumes  being
affected  primarily by  weather patterns.  Accordingly, while  the Partnership's
business strategy includes  opening new locations,  adding new retail  customers
and  retaining existing customers, the ability  of the Partnership's business to
grow will  depend  in  large  part  on  its  ability  to  acquire  other  retail
distributors. In recent years the Partnership's ability to acquire other propane
companies  has  been  constrained primarily  due  to (i)  management's  focus on
implementing  the  new  operating  plan,  (ii)  the  need  to  make  significant
maintenance  capital expenditures not made in  prior years and (iii) limitations
under the Existing Credit Facility. Having successfully implemented much of  the
operating  plan  and significantly  improved its  capital structure  through the
October 1994 refinancing of relatively  high cost indebtedness, the  Partnership
is  now in a  better position to pursue  acquisition opportunities, although the
Partnership's  significant  leverage  may   adversely  affect  its  ability   to
consummate  such  acquisitions.  In  addition,  following  the  closing  of  the
Offering, the  Partnership will  have the  flexibility to  fund acquisitions  by
either  drawing on  the $40 million  Acquisition Facility  or issuing additional
Common Units. The Partnership believes there are numerous potential  acquisition
candidates because the propane industry is highly fragmented, with approximately
8,000 retailers (according to the National Propane Gas Association (the 'NPGA'))
and  with the  10 largest retailers  constituting approximately  32% of industry
sales (according to LP-GAS magazine). Moreover, no retailer has more than 10% of
industry sales.
 
     The Partnership  intends  to  take  two  approaches  to  acquisitions:  (i)
primarily   to  build  on  its  broad  geographic  base  by  acquiring  smaller,
independent  competitors  that   operate  within   the  Partnership's   existing
geographic  areas  and incorporating  them  into the  Partnership's distribution
network and (ii)  to acquire propane  businesses in areas  in the United  States
outside  of  its  current geographic  base  where  it believes  there  is growth
potential and where an attractive return on its investment can be achieved.  The
Partnership  recently  entered into  a  letter of  intent  to acquire  a propane
business for $0.8 million; however, consummation of this transaction is  subject
to  customary closing conditions and completion of definitive documentation, and
no assurance can be given that this acquisition will be completed. Although  the
Partnership  expects to  continue to evaluate  a number  of propane distribution
companies, including  regional  and  national  firms, as  part  of  its  ongoing
acquisition  program,  except  as  described  in  the  preceding  sentence,  the
Partnership does not have any present agreements or commitments with respect  to
any  acquisition. There can be no  assurance, however, that the Partnership will
identify attractive acquisition candidates in  the future, that the  Partnership
will  be able to acquire such candidates on acceptable terms, or will be able to
finance such  acquisitions. If  the Partnership  is able  to make  acquisitions,
there  can be no assurance  that such acquisitions will  not dilute earnings and
distributions or that any additional debt incurred to finance such  acquisitions
will  not adversely affect the ability  of the Partnership to make distributions
to Unitholders. In addition, to the  extent that warm weather adversely  affects
the  Partnership's operating and financial  results, the Partnership's access to
capital and  its acquisition  activities may  be limited.  The Managing  General
Partner has broad discretion in making acquisitions, and it is expected that the
Managing  General  Partner  generally  will  not  seek  Unitholder  approval  of
acquisitions.
 
     INTERNAL GROWTH
 
     In addition  to pursuing  expansion through  acquisitions, the  Partnership
intends  to pursue internal growth at its existing service centers and to expand
its business by opening  new service centers. The  Partnership believes that  it
can  attract new customers and expand its  market base by (i) providing superior
service, (ii) introducing  innovative marketing programs  and (iii) focusing  on
population growth areas.
 
                                       90
 


<PAGE>

<PAGE>
     The  Partnership  intends  to leverage  its  position as  a  reliable, full
service  propane  company  to  attract  new  customers,  particularly  in  those
locations   where   the  Partnership   competes  against   smaller,  independent
distributors. For example, many  propane customers rely  on their suppliers  for
technical  services  and  advice because  of  the increasing  complexity  of the
equipment such customers use. The Partnership believes that in some areas it  is
the  only propane company  that can fully  provide such services  and advice. To
enable them to  provide such  services and advice,  the Partnership's  employees
attend  a training  course at the  Partnership's new training  facility in Cedar
Rapids, Iowa or at the service centers where they are employed. Since the  third
quarter  of 1995, over 220 employees  have attended these eight-hour courses. In
the fourth  quarter of  1996,  the Partnership  expects  to establish  a  second
training  center near Great Barrington,  Massachusetts for its employees located
in the Northeast.
 
     In addition, the Partnership's marketing programs, in particular, its Water
Heater Program,  are designed  to attract  new customers.  In the  Water  Heater
Program, the Partnership offers to users of electric or fuel oil water heaters a
free  propane  water heater  (excluding installation)  in  return for  signing a
five-year  propane  purchase  agreement.  Approximately  2,500  customers   have
participated  in the Water Heater  Program since it was  introduced in the first
quarter of 1995.
 
     Furthermore, the Partnership operates in several growth areas of the United
States. The Partnership believes that it is one of the leading propane retailers
in western Colorado, a rapidly growing market. The Partnership also operates  in
central  Arizona, an area that has  experienced a significant rate of population
growth in  recent years.  In addition,  the Partnership  is one  of the  leading
propane  retailers  in  Florida,  the  population  of  which  has  increased  by
approximately 9.5% since 1990.
 
     The Partnership also intends to expand its business by opening new  service
centers,  known as 'scratch-starts,'  in areas where  there is relatively little
competition. Scratch starts are newly  opened service centers generally  staffed
with  a single employee, which typically  involve minimal start up costs because
the infrastructure of the new service  center is developed as the customer  base
expands  and  the  Partnership  can, in  many  circumstances,  transfer existing
assets,  such  as  storage  tanks,  to   the  new  service  center.  Under   its
'scratch-start'  program, the Partnership intends to open new service centers in
specific types of  markets, such  as resorts and  new residential  developments,
which  have  been targeted  because of  the unavailability  of natural  gas, the
limited number of competitors and the potential number of relatively high margin
residential accounts. Under  this program, the  Partnership has recently  opened
three  new service centers in  California and one in  each of Idaho, Georgia and
South Carolina.
 
INDUSTRY BACKGROUND
 
     Propane, a by-product of natural gas processing and petroleum refining,  is
a  clean-burning energy source  recognized for its  transportability and ease of
use relative to  alternative stand-alone  energy sources.  Propane is  extracted
from  natural gas  or oil  wellhead gas at  processing plants  or separated from
crude oil  during the  refining  process. Propane  is normally  transported  and
stored  in a liquid  state under moderate pressure  or refrigeration for economy
and ease of handling in shipping and distribution. When the pressure is released
or the temperature is increased,  it is useable as  a flammable gas. Propane  is
colorless  and odorless; an odorant is added  to allow its detection. Propane is
clean-burning, producing negligible amounts of pollutants when consumed.
 
     The  Partnership's  retail  customers  fall  into  four  broad  categories:
residential   customers,  commercial  and   industrial  customers,  agricultural
customers and dealers (located primarily  in the Northeast) that resell  propane
to  residential  and  commercial customers.  Residential  customers  use propane
primarily  for  space  heating,  water  heating,  cooking  and  clothes  drying.
Commercial and industrial customers use propane for commercial applications such
as  cooking and clothes drying and industrial uses such as fueling over-the-road
vehicles, forklifts and stationary  engines, firing furnaces,  as a cutting  gas
and  in  other  process  applications. Agricultural  customers  use  propane for
tobacco curing, crop drying, poultry brooding and weed control.
 
     Based  upon  information  provided  by  the  NPGA,  propane  accounts   for
approximately  3.0% to 4.0% of total energy consumption in the United States, an
average level that has remained relatively  constant for the past ten years.  In
addition,  propane  is now  the world's  most widely  used alternative  fuel for
automobiles with  approximately  350,000 and  3.5  million vehicles  running  on
propane  in  the United  States and  worldwide,  respectively (according  to the
NPGA). The Partnership believes, based on
 
                                       91
 


<PAGE>

<PAGE>
industry  publications,  that  the  domestic   retail  market  for  propane   is
approximately 9.4 billion gallons annually.
 
PRODUCTS, SERVICES AND MARKETING
 
     The  Partnership distributes its propane  through a nationwide distribution
network  integrating  165  service  centers  in  23  states.  The  Partnership's
operations  are  located  primarily  in the  Midwest,  Northeast,  Southeast and
Southwest regions of the United States.  The chart below sets forth  information
regarding  the Partnership's  retail volume sales  and service  centers for each
region:
 
<TABLE>
<CAPTION>
                                             MIDWEST(1)    NORTHEAST    SOUTHEAST     SOUTHWEST(2)      TOTAL
                                             ----------    ---------    ---------    --------------    -------
 
<S>                                          <C>           <C>          <C>          <C>               <C>
Volume (in thousands of gallons)(3).......     71,234        33,192       26,561         19,154        150,141
% of Total Volume.........................       47.4%         22.1%        17.7%          12.8%         100.0%
Number of Service Centers(4)..............         73            35           31             26            165
</TABLE>
 
- ------------
 
(1) Includes one service center in Texas.
 
(2) Includes California and Idaho.
 
(3) For the year ended December 31, 1995.
 
(4) As of May 31, 1996.
 
                            ------------------------
     Typically, service  centers are  found in  suburban and  rural areas  where
natural  gas is not  readily available. Generally, such  locations consist of an
office and a warehouse and service facility,  with one or more 18,000 to  30,000
gallon  storage  tanks on  the premises.  Each  service center  is managed  by a
district manager and also typically employs a customer service representative, a
service technician  and one  or two  bulk truck  drivers. However,  new  service
centers established under the Partnership's 'scratch start' program generally do
not  have offices, warehouses or service facilities and are typically staffed by
a single employee.
 
     In 1995 the Partnership served  approximately 250,000 active customers.  No
single customer accounted for 10% or more of the Partnership's revenues in 1995.
Generally,  the number  of customers  increases during  the fall  and winter and
decreases during the spring and  summer. Historically, approximately 66% of  the
Partnership's  retail propane volume  has been sold  during the six-month season
from October through March, as many customers use propane for heating  purposes.
Consequently,   sales,  gross  profits  and   cash  flows  from  operations  are
concentrated in  the Partnership's  first  and fourth  fiscal quarters.  To  the
extent  necessary, the  Partnership may reserve  cash from the  first and fourth
fiscal quarters for distribution to Unitholders  in the second and third  fiscal
quarters.
 
     As noted above, year-to-year demand for propane is affected by the relative
severity  of the  winter and other  climatic conditions. For  example, while the
frigid temperatures that were  experienced by the United  States in January  and
February  of 1994  significantly increased the  overall demand  for propane, the
warm weather during the winter  of 1994-1995 significantly reduced such  demand.
The Partnership believes, however, that the geographic diversity of its areas of
operations  helps  to  reduce  its exposure  to  regional  weather  patterns. In
addition, retail sales to the commercial and industrial markets, while  affected
by  economic patterns, are not as  sensitive to variations in weather conditions
as sales to residential and agricultural markets. For information on the  impact
of  annual  variations in  weather  on the  operations  of the  Partnership, see
'Management's Discussion  and Analysis  of Financial  Condition and  Results  of
Operations -- General.'
 
     Retail  deliveries of  propane are  usually made  to customers  by means of
bobtail and  rack  trucks. Propane  is  pumped  from the  bobtail  truck,  which
generally  holds 2,800 gallons of propane, into a stationary storage tank on the
customer's  premises.  The   capacity  of  these   tanks  usually  ranges   from
approximately  50 to approximately  1,000 gallons, with a  typical tank having a
capacity of 250 to  500 gallons. Typically, service  centers deliver propane  to
most  of their residential customers at regular intervals, based on estimates of
such  customers'  usage,  thereby  eliminating  the  customers'  need  to   make
affirmative  purchase decisions. The Partnership also delivers propane to retail
customers in  portable  cylinders,  which  typically have  a  capacity  of  23.5
gallons. When these cylinders are delivered to
 
                                       92
 


<PAGE>

<PAGE>
customers,  empty cylinders are picked up for replenishment at the Partnership's
distribution locations or are refilled  in place. The Partnership also  delivers
propane   to  certain  other  retail  customers,  primarily  dealers  and  large
commercial accounts, in larger trucks known as transports, which have an average
capacity of approximately 9,000 gallons.  Propane is generally transported  from
refineries,   pipeline   terminals   and  storage   facilities   (including  the
Partnership's underground  storage facilities  in  Hutchinson, Kansas  and  Loco
Hills,  New Mexico) to the Partnership's bulk  plants by a combination of common
carriers, owner-operators, railroad tank cars and, in certain circumstances, the
Partnership's own highway transport fleet. See ' -- Properties.'
 
     Although overall demand  for propane is  affected by climate,  availability
and  cost of alternative energy sources, changes in price and other factors, the
Partnership believes  that  residential demand  for  its propane  is  relatively
stable for the following reasons. First, residential demand for propane has been
relatively  unaffected  by  general  economic  conditions  due  to  the  largely
non-discretionary  nature  of  most  propane  purchases  by  the   Partnership's
customers. Second, when the Partnership's customers have switched to natural gas
and  other competing energy sources, the  Partnership has generally been able to
redeploy its  tanks and  attract  new customers  in  other areas.  Third,  while
significant  price increases  can result  in a  loss of  customers, many  of the
Partnership's  residential  customers,   particularly  in   the  Northeast   and
Southeast,  are relatively  less price sensitive  because they  tend to purchase
significantly less propane on an individual basis than customers in the Midwest.
Finally, the  Partnership's  residential  customers  tend  to  remain  with  the
Partnership  because of the  inconvenience of switching  tanks and suppliers. In
many states certain fire safety regulations  restrict the refilling of a  leased
tank solely to the propane supplier that owns the tank and, therefore, customers
who   do  not  own  their  own  tanks  are  less  likely  to  switch  suppliers.
Approximately 90% of the  tanks used by the  Partnership's retail customers  are
leased  to them by the  Partnership. Despite these factors,  no assurance can be
given that  demand for  the  Partnership's propane  will  not decline,  and  any
significant decline could have a material adverse affect on the Partnership.
 
     The  Partnership also sells,  leases and services  equipment related to its
propane distribution business. In the residential market, the Partnership  sells
household  appliances  such as  cooking  ranges, water  heaters,  space heaters,
central furnaces and clothes dryers, as  well as less traditional products  such
as  barbecue equipment and  gas logs. In the  industrial market, the Partnership
sells or leases specialized equipment for the use of propane as fork lift  truck
fuel,  in metal  cutting and atmospheric  furnaces and for  portable heating for
construction. In the  agricultural market,  specialized equipment  is leased  or
sold  for the use  of propane as engine  fuel and for  chicken brooding and crop
drying. The  sale of  specialized equipment,  service income  and rental  income
represented  less than 10% of the Partnership's operating revenues during fiscal
1995. In an  effort to  increase sales and  rental income,  the Partnership  has
recently  established model appliance showrooms at  its service centers in Cedar
Rapids, Iowa, New Smyrna  Beach, Florida and West  Palm Beach, Florida, where  a
broad  range  of propane-related  equipment  and appliances  are  displayed. The
Partnership is in the process of establishing additional appliance showrooms  at
a  number  of other  service  centers, and  expects  that between  five  and ten
showrooms will be  fully operational  by the end  of 1996.  Parts and  appliance
sales,   installation  and  service  activities  will  be  conducted  through  a
wholly-owned corporate subsidiary of the Operating Partnership.
 
PROPANE SUPPLY AND STORAGE
 
     The profitability  of  the Partnership  is  dependent upon  the  price  and
availability  of propane as well as seasonal and climatic factors. Contracts for
propane are typically made on a year-to-year basis, but the price of the propane
to be  delivered  depends  upon  market conditions  at  the  time  of  delivery.
Worldwide availability of both gas liquids and oil affects the supply of propane
in  domestic markets,  and from time  to time  the ability to  obtain propane at
attractive prices  may  be  limited  as a  result  of  market  conditions,  thus
affecting price levels to all distributors of propane. Should the wholesale cost
of  propane decline in the future, the  Partnership believes that its margins on
its retail  propane  distribution  business would  increase  in  the  short-term
because  retail prices tend to change less rapidly than wholesale prices. Should
the wholesale cost of  propane increase, for  similar reasons, retail  marketing
profitability  would likely be reduced at  least for the short-term until retail
prices can  be  increased.  Since  1993,  the  Partnership  has  generally  been
successful  in  maintaining  retail gross  margins  on an  annual  basis despite
changes in the wholesale cost of propane. There may be times, however, when  the
 
                                       93
 


<PAGE>

<PAGE>
Partnership  will be unable to  pass on fully price  increases to its customers.
Consequently, the Partnership's  profitability will be  sensitive to changes  in
wholesale  propane prices, and  a substantial increase in  the wholesale cost of
propane could  adversely affect  the  Partnership's margins  and  profitability.
Except   for  occasional  opportunistic  buying  and  storage  of  propane,  the
Partnership has not engaged in  any significant hedging activities with  respect
to  its propane supply requirements, although it may  do so from time to time in
the future. See 'Management's Discussion and Analysis of Financial Condition and
Results of Operations -- General.'
 
     The Partnership  purchased  propane  from over  35  domestic  and  Canadian
suppliers  during 1995, primarily major  oil companies and independent producers
of both gas liquids and oil, and  it also purchased propane on the spot  market.
In  1995, the  Partnership purchased  approximately 81%  and 19%  of its propane
supplies from domestic and  Canadian suppliers, respectively. Approximately  87%
of  propane purchases  by the  Partnership in 1995  were on  a contractual basis
(generally, under  one  year agreements  subject  to annual  renewal),  but  the
percentage of contract purchases may vary from year to year as determined by the
Managing  General Partner. Supply contracts generally  do not lock in prices but
rather provide  for pricing  in accordance  with posted  prices at  the time  of
delivery or the current prices established at major storage points, such as Mont
Belvieu, Texas and Conway, Kansas. Some contracts include a pricing formula that
typically  is based  on such  market prices.The  Partnership is  not currently a
party to any supply contracts containing 'take or pay' provisions.
 
     Warren Petroleum  Company ('Warren'),  a division  of Chevron  U.S.A.,  and
Conoco  Gas Products ('Conoco')  supplied 13.9% and  10.2%, respectively, of the
Partnership's propane in 1995.  The Partnership believes  that if supplies  from
either  Warren or Conoco were  interrupted, it would be  able to secure adequate
propane supplies  from  other  sources  without a  material  disruption  of  its
operations;  however,  the  Partnership  believes  that  the  cost  of procuring
replacement supplies might be materially higher, at least on a short-term basis,
which could adversely affect the Partnership's margins. No other single supplier
provided more than 10%  of the Partnership's total  propane supply during  1995.
Although  the  Partnership  has long-standing  relations  with a  number  of its
important suppliers and has generally been able to secure sufficient propane  to
meet  its customers' needs, no  assurance can be given  that supplies of propane
will be readily available  in the future. The  Partnership expects a  sufficient
supply  to continue to  be available during 1996.  However, increased demand for
propane in periods  of severe  cold weather,  or otherwise,  could cause  future
propane supply interruptions or significant volatility in the price of propane.
 
     The following table shows the average monthly prices of propane in the spot
market during the last five years at Mont Belvieu, Texas and Conway, Kansas, two
major storage areas:



[GRAPHICAL  REPRESENTATION  of   the  average  monthly  propane  prices  in  the
Spot-Market at Mont  Belvieu,  TX  and  Conway, KS  from  January  1991  to  May
1996. Prices range from a low of approximately $0.25 per gallon to approximately
$0.45 per gallon.]





                                       94
 


<PAGE>

<PAGE>
     The  Partnership owns underground storage  facilities in Hutchinson, Kansas
and Loco Hills, New Mexico, leases  above ground storage facilities in  Crandon,
Wisconsin and Orlando, Florida, and owns or leases smaller storage facilities in
other  locations  throughout  the  United  States.  As  of  May  31,  1996,  the
Partnership's total  storage  capacity  was  approximately  33  million  gallons
(including  approximately  one  million gallons  of  storage  capacity currently
leased to third  parties). For a  further description of  these facilities,  see
'  -- Properties.'  By utilizing its  ability to store  propane, the Partnership
believes that  it should  be able  to lower  its annual  cost of  goods sold  by
maximizing  supplies  purchased  during  periods of  seasonably  low  prices and
minimizing purchases during periods of seasonally high prices. However,  because
of the potential volatility of propane prices, the market price of propane could
fall  below  the  price  at  which the  Partnership  purchased  propane  held in
inventory, thereby adversely affecting gross margins or sales or rendering sales
from such inventory unprofitable.
 
PRICING POLICY
 
     The Partnership believes that its pricing policy is an essential element in
the marketing of propane. The $1.4 million pricing system recently installed  in
substantially   all  of  the  Partnership's  service  centers  provides  central
management with  current, system-wide  supply,  demand and  competitive  pricing
information.  Based  on  that  information, pricing  managers  located  in Cedar
Rapids, Iowa, determine the prices to  be charged to the Partnership's  existing
residential  customers.  With respect  to  commercial and  industrial customers,
agricultural customers  and new  residential customers,  management makes  daily
pricing  recommendations to  local managers who  determine prices  based on such
recommendations as well as local conditions. The Partnership believes that  this
flexible,  joint pricing management system enables the Partnership to react more
effectively to  cost increases,  and  will permit  it,  in most  situations,  to
respond  to changes in supply costs in a manner that protects its gross margins,
to the extent possible.
 
     To further enhance its price  management, the Partnership intends to  equip
its  delivery personnel with hand-held computer terminals ('HHTs') that simplify
customer billing and the collection of customer data, including price and volume
information. The  HHTs  are  also  able  to  print  accurate  customer  delivery
statements  that can be  provided to the customer  by the Partnership's delivery
personnel. The Partnership began testing the HHTs in a limited number of service
centers in the  Midwest in  March 1996.  The results  of these  tests have  been
successful  to date, and the Partnership expects  to begin deploying the HHTs at
approximately 20 additional locations during 1996.
 
COMPETITION
 
     Propane competes primarily with natural gas, electricity and fuel oil as an
energy source, principally on the basis of price, availability and  portability.
Propane  serves as  an alternative  to natural gas  in rural  and suburban areas
where natural gas is unavailable or portability of product is required.  Propane
is  generally more  expensive than  natural gas  on an  equivalent BTU  basis in
locations served by natural  gas, although propane  is sold in  such areas as  a
standby  fuel for  use during  peak demand  periods and  during interruptions in
natural gas  service. The  expansion  of natural  gas into  traditional  propane
markets  has historically been inhibited by the capital costs required to expand
distribution and  pipeline  systems.  Although  the  extension  of  natural  gas
pipelines  tends to  displace propane  distribution in  the areas  affected, the
Partnership believes  that new  opportunities for  propane sales  arise as  more
geographically remote neighborhoods are developed.
 
     Propane  is  generally less  expensive to  use  than electricity  for space
heating, water heating, clothes drying and cooking. Although propane is  similar
to  fuel oil  in certain applications,  as well  as in market  demand and price,
propane and  fuel oil  have generally  developed their  own distinct  geographic
markets,   reducing  competition  between  such   fuels.  Because  furnaces  and
appliances that burn  propane will not  operate on  fuel oil and  vice versa,  a
conversion  from  one  fuel  to  the  other  requires  the  installation  of new
equipment.
 
     In addition to competing with  alternative energy sources, the  Partnership
competes  with  other  companies  engaged  in  the  retail  propane distribution
business. Competition in the propane industry is highly fragmented and generally
occurs on  a  local basis  with  other large  full-service  multi-state  propane
marketers,   thousands  of   smaller  local   independent  marketers   and  farm
cooperatives. Based on industry
 
                                       95
 


<PAGE>

<PAGE>
publications, the  Partnership  believes that  the  domestic retail  market  for
propane  is  approximately 9.4  billion gallons  annually,  that the  10 largest
retailers, including the Partnership, account for approximately 32% of the total
retail sales of propane in the United States, and that no single marketer has  a
greater  than 10% share of the total retail market in the United States. Most of
the Partnership's service centers compete with several marketers or distributors
and certain  service  centers  compete  with a  large  number  of  marketers  or
distributors.  Each service center  operates in its  own competitive environment
because retail marketers tend to locate in close proximity to customers in order
to lower the cost of providing service. The Partnership's typical service center
has an effective marketing radius of approximately 50 miles.
 
     The ability to compete  effectively further depends  on the reliability  of
service,  responsiveness to  customers and  the ability  to maintain competitive
prices. The Partnership believes that  its reliability and service  capabilities
differentiate it from many of its competitors. The Partnership's service centers
offer  24-hour/7-day-a-week service  for emergency  repairs and  deliveries. The
Partnership also believes  that its  safety procedures are  more stringent  than
many  of its small,  independent competitors and that  the perceived benefits of
such  safety  procedures  give  the  Partnership  a  competitive  advantage.  In
addition, if legislation is enacted that mandates compliance with similar safety
procedures, the Partnership would not be required to invest as heavily to comply
as would many of its smaller, independent competitors.
 
PROPERTIES
 
     The  Partnership maintains a large  number of diverse properties, including
appliance showrooms,  maintenance facilities,  bulk plants,  warehousing  space,
garages,  storage depots or  large gas tanks  and related distribution equipment
and underground  space for  gas  storage. The  Partnership believes  that  these
properties,  taken as  a whole, are  generally well-maintained  and adequate for
current and foreseeable  business needs.  The majority of  these properties  are
owned by the Partnership.
 
     Certain information about the major properties of the Partnership as of May
31, 1996, is set forth in the following table.
 
 
 

<TABLE>
<CAPTION>
  DESCRIPTION OF FACILITIES                  NUMBER OF FACILITIES                STORAGE CAPACITY
- ------------------------------   --------------------------------------------    ----------------
                                                                                 (IN THOUSANDS OF
                                                                                     GALLONS)
 
<S>                              <C>                     <C>                     <C>
Service Centers located                   127                    owned
  throughout the United                    38                   leased
  States(1)
                                          ---
                                          165                                          7,678
 
Remote Storage Facilities                  57                    owned
                                           23                   leased
                                          ---
                                           80                                          2,201
Above Ground Storage
  Facilities:
     Crandon, Wisconsin(2)....              1                   leased                   241
     Orlando, Florida(3)......              1                   leased                 1,020
                                          ---                                        -------
                                            2                                          1,261
Underground Storage
  Facilities:
     Hutchinson, Kansas(4)....              1                    owned                12,000
     Loco Hills, New Mexico...              1                    owned                10,000
                                          ---                                        -------
                                            2                                         22,000
                                                                                     -------
          Total...............                                                        33,140
                                                                                     -------
                                                                                     -------
</TABLE>
 
 
 
 
- ------------
 
(1) Includes  six service  centers recently established  under the Partnership's
    'scratch start' program.
 
(2) The facility is leased on a year-to-year basis, and the lease is  terminable
    by either party upon 30 days' notice.
 
                                              (footnotes continued on next page)
 
                                       96
 


<PAGE>

<PAGE>
(footnotes continued from previous page)
 
(3) The  Partnership leases the real  property from a third  party pursuant to a
    ground lease that terminates on October  31, 1996. The Partnership owns  the
    storage  facility located at such property and leases it to Warren Petroleum
    pursuant to  an  agreement that  terminates  October  31, 1999  and  may  be
    cancelled   by  National  Propane   upon  60  days'   notice  under  certain
    circumstances.
 
(4) The Partnership owns the underground storage facility, which, pursuant to an
    operating agreement, is operated  by a third party  that owns the  equipment
    necessary  to use the facility for propane storage. Such operating agreement
    may be terminated  by either  party at  the end  of any  calendar year  upon
    thirty days' notice.
 
     The  transportation of  propane requires specialized  equipment. The trucks
utilized for  this  purpose carry  specialized  steel tanks  that  maintain  the
propane in a liquefied state. As of May 31, 1996, the Partnership had a fleet of
7  transport  truck tractors,  all of  which  are owned  by the  Partnership and
approximately 400 bulk  delivery trucks  and 400  service and  light trucks,  of
which  approximately 61% are owned  by the Partnership and  the balance of which
are leased. In addition, as of  May 31, 1996, the Partnership had  approximately
150  cylinder delivery  vehicles (of which  approximately 49% are  owned and the
balance of which are leased) and 55 automobiles (of which approximately 84%  are
owned  and the balance of which are leased). As of May 31, 1996, the Partnership
owned approximately 210,000  customer storage tanks  with typical capacities  of
250 to 500 gallons.
 
     The  Partnership believes that it has satisfactory title to or valid rights
to use all of  its material properties. Substantially  all of the  Partnership's
assets  (other than  the assets  of NSSI)  will be  pledged to  secure the First
Mortgage  Notes  and   indebtedness  under   the  Bank   Credit  Facility.   See
'Management's  Discussion  and Analysis  of Financial  Condition and  Results of
Operations  --  Description   of  Indebtedness.'  In   addition,  some  of   the
Partnership's  properties are subject  to liabilities and  leases and immaterial
encumbrances, easements  and restrictions,  although  the Partnership  does  not
believe  that any such burdens will  materially interfere with the continued use
by the Partnership of its properties, taken as a whole. The Partnership believes
that it has, or  in the ordinary  course of business  will obtain, all  required
material  approvals, authorizations,  orders, licenses,  permits, franchises and
consents of,  and has  obtained  or made  all required  material  registrations,
qualifications  and filings with,  the various state  and local governmental and
regulatory authorities which relate to ownership of the Partnership's properties
or the operations of its business.
 
TRADEMARKS AND TRADENAMES
 
     The Partnership utilizes  a number  of trademarks and  tradenames which  it
owns (including 'National  Propane'tm'), some of which have a significant  value
in the marketing of its products.
 
GOVERNMENT REGULATION
 
     The   Partnership  is   subject  to   various  federal,   state  and  local
environmental, health and  safety laws  and regulations.  Generally, these  laws
impose  limitations on the  discharge of pollutants  and establish standards for
the handling of  solid and  hazardous wastes.  These laws  include the  Resource
Conservation   and  Recovery  Act,  the  Comprehensive  Environmental  Response,
Compensation and Liability Act ('CERCLA'),  the Clean Air Act, the  Occupational
Safety  and Health Act, the Emergency Planning  and Community Right to Know Act,
the Clean Water  Act and comparable  state statutes. CERCLA,  also known as  the
'Superfund'  law, imposes joint and several liability without regard to fault or
the legality of  the original  conduct on certain  classes of  persons that  are
considered  to  have  contributed to  the  release  or threatened  release  of a
'hazardous substance' into the environment. Propane is not a hazardous substance
within the meaning of CERCLA. However, automotive waste products, such as  waste
oil,  generated  by  the  Partnership's  truck  fleet,  as  well  as  'hazardous
substances'  disposed  of  during  past  operations  by  third  parties  on  the
Partnership's properties, could subject the Partnership to CERCLA. Such laws and
regulations   could  result  in   civil  or  criminal   penalties  in  cases  of
non-compliance or impose  liability for remediation  costs. Also, third  parties
may make claims against
 
                                       97
 


<PAGE>

<PAGE>
owners  or operators  of properties  for personal  injuries and  property damage
associated with releases of hazardous or toxic substances.
 
     National Fire Protection  Association Pamphlets  No. 54 and  No. 58,  which
establish  rules  and  procedures governing  the  safe handling  of  propane, or
comparable regulations, have been adopted as the industry standard in all of the
states in  which  the  Partnership  operates. In  some  states  these  laws  are
administered  by  state  agencies, and  in  others  they are  administered  on a
municipal level. With  respect to the  transportation of propane  by truck,  the
Partnership  is  subject  to  regulations promulgated  under  the  Federal Motor
Carrier Safety  Act. These  regulations cover  the transportation  of  hazardous
materials   and   are  administered   by   the  United   States   Department  of
Transportation. The  Partnership  conducts  ongoing training  programs  to  help
ensure  that its operations  are in compliance  with applicable regulations. The
Partnership maintains various permits that are necessary to operate some of  its
facilities,  some of  which may be  material to its  operations. The Partnership
believes that the procedures  currently in effect at  all of its facilities  for
the  handling, storage and distribution of  propane are consistent with industry
standards and are in  compliance in all material  respects with applicable  laws
and regulations.
 
     In  May 1994, National Propane was informed of coal tar contamination which
was discovered  at one  of  its properties  in Marshfield,  Wisconsin.  National
Propane  purchased the property from a company which had purchased the assets of
a utility that had previously owned the property. National Propane believes that
the contamination occurred during the use of the property as a coal gasification
plant by such utility. In  order to assess the  extent of the problem,  National
Propane  engaged environmental  consultants who  began work  in August  1994. In
December 1994, the environmental consultants issued a report to National Propane
which  estimated  the  range  of  potential  remediation  costs  to  be  between
approximately  $0.4 million and $0.9 million depending upon the actual extent of
impacted soils, the presence  and extent, if any,  of impacted ground water  and
the  remediation method actually  required to be  implemented. In February 1996,
based upon new information National Propane's environmental consultants issued a
second report  which  presented the  two  most likely  remediation  methods  and
revised estimates of the costs of such methods. The range of estimated costs for
the  first  method,  which  involves treatment  of  groundwater  and excavation,
treatment and  disposal of  contaminated  soil, is  from  $1.6 million  to  $3.3
million.  The range  for the second  method, which involves  treatment of ground
water and building  a containment wall,  is from $0.4  million to $0.8  million.
Based  on  discussions  with National  Propane  environmental  consultants, both
methods are acceptable  remediation plans.  The Partnership will  have to  agree
upon  the final plan with the State  of Wisconsin. Since receiving notice of the
contamination, National Propane has engaged  in discussions of a general  nature
concerning  remediation  with  the  State of  Wisconsin.  These  discussions are
ongoing and there is no  indication as yet of the  time frame for a decision  by
the  State of Wisconsin on the method of remediation. Accordingly, it is unknown
which remediation  method will  be used.  National Propane  is also  engaged  in
ongoing  discussions of a general nature with  the successor to the utility that
operated a  coal  gasification  plant  on  the property.  There  is  as  yet  no
indication  that the successor will share  the costs of remediation. If National
Propane is found liable for any of  such costs, it will attempt to recover  them
from  the successor owner. National Propane  has notified its insurance carriers
of  the  contamination  and  the   likely  incurrence  of  costs  to   undertake
remediation.  As of December 31, 1995 and March 31, 1996, National Propane had a
remaining accrual of  $0.4 million  for this  contingency. Pursuant  to a  lease
relating  to  the  Marshfield  facility,  the ownership  of  which  will  not be
transferred to the  Operating Partnership at  the closing of  the Offering,  the
Partnership  has agreed to be  liable for any costs  of remediation in excess of
amounts recovered  from  such successor  or  from insurance.  See  'Management's
Discussion  and Analysis  of Financial  Condition and  Results of  Operations --
Contingencies.'  The  ultimate  outcome  of  this  matter  cannot  presently  be
determined  and, depending  upon the  cost of  remediation required,  may have a
material adverse  effect on  the Partnership's  financial position,  results  of
operations  or  ability  to  make  the  Minimum  Quarterly  Distribution  to all
Unitholders.
 
     In connection  with  all acquisitions  of  retail propane  businesses  that
involve  the purchase of real estate,  the Partnership conducts an environmental
review in an attempt to determine  whether any substance other than propane  has
been  sold from, or stored on, any such  real estate prior to its purchase. Such
review  may  include  questioning  the  seller,  obtaining  representations  and
warranties
 
                                       98
 


<PAGE>

<PAGE>
concerning   the  seller's   compliance  with  environmental   laws  and  visual
inspections of the properties, whereby  the General Partner's employees, and  in
certain   cases,  independent  environmental  consulting   firms  hired  by  the
Partnership, look  for evidence  of  hazardous substances  or the  existence  of
underground storage tanks.
 
     Future  developments, such as stricter environmental, health or safety laws
and regulations  thereunder,  could affect  Partnership  operations. It  is  not
anticipated   that  the  Partnership's  compliance  with  or  liabilities  under
environmental, health and  safety laws and  regulations, including CERCLA,  will
have  a material adverse effect on the Partnership. To the extent that there are
any environmental  liabilities  unknown  to the  Partnership  or  environmental,
health  or safety laws or  regulations are made more  stringent, there can be no
assurance that the Partnership's  results of operations  will not be  materially
and adversely affected.
 
EMPLOYEES
 
     As  of  May 31,  1996, the  Managing  General Partner  had 1,007  full time
employees,  of  whom  79  were  general  and  administrative  (including   fleet
maintenance  personnel),  15 were  sales,  428 were  transportation  and product
supply and  494 were  district employees.  In  addition, at  May 31,  1996,  the
Managing General Partner had 25 temporary and part-time employees. Approximately
171  of such full-time employees are covered by collective bargaining agreements
that expire  on various  dates in  1996,  1997 and  1998. The  Managing  General
Partner  believes that its relations with both its union and non-union employees
are satisfactory.
 
     The Partnership has no  employees; however, for  certain purposes, such  as
workers'  compensation claims, employees of the Managing General Partner who are
providing services for the benefit of the Partnership may also be considered  to
be employees of the Partnership under applicable state law.
 
LITIGATION AND CONTINGENT LIABILITIES
 
     There   are  a  number  of  lawsuits  pending  or  threatened  against  the
Partnership. In general, these  lawsuits have arisen in  the ordinary course  of
the  Partnership's business and  involve claims for actual  damages, and in some
cases punitive damages, arising from  the alleged negligence of the  Partnership
or  as  a  result of  product  defects or  similar  matters. Of  the  pending or
threatened matters,  a  number  involve property  damage,  and  several  involve
serious personal injuries or deaths and the claims made are for relatively large
amounts.  Although  any  litigation  is  inherently  uncertain,  based  on  past
experience, the information currently  available to it  and the availability  of
insurance coverage in certain matters, the Partnership does not believe that the
pending  or threatened litigation of which the  Partnership is aware will have a
material adverse effect on its results of operations or its financial condition.
However, any one or all of these matters taken together may adversely affect the
Partnership's quarterly  or  annual results  of  operations and  may  limit  the
Partnership's ability to make distributions to Unitholders.
 
     In  addition, certain contingent liabilities  related to National Propane's
operations  are  being  assumed  by  the  Partnership  in  connection  with  the
Transactions.  These  contingent  liabilities  include  potential  environmental
remediation costs  (primarily  costs related  to  the remediation  of  coal  tar
contamination at the Managing General Partner's Marshfield, Wisconsin facility).
As  of March 31, 1996  the Partnership has accrued  a liability of approximately
$0.4 million for contingent liabilities associated with the Marshfield facility.
There can be no  assurance that the ultimate  liability relating to this  matter
will  not exceed the $0.4  million reserved or that such  matter will not have a
material adverse effect  on the Partnership's  results of operations,  financial
condition  or  its ability  to make  the Minimum  Quarterly Distribution  to all
Unitholders.
 
TRANSFER OF THE PARTNERSHIP ASSETS
 
     Immediately prior to the closing of the Offering, the General Partners will
convey substantially  all of  their assets  (which assets  will not  include  an
existing  intercompany note from Triarc, approximately  $59.3 million of the net
proceeds from the issuance of the First Mortgage Notes and certain other  assets
of  the Managing  General Partner) and  related liabilities  (other than certain
income tax liabilities) to the
 
                                       99
 


<PAGE>

<PAGE>
Operating Partnership. These assets include real estate and fixtures located  in
25  states, motor  vehicles, tanks,  cylinders, machinery  and office furniture,
intangible property such as contracts,  and various licenses, permits and  other
similar  rights required in  connection with the ownership  and operation of the
General Partners'  business,  and  leasehold  interests  in  real  and  personal
property,   including  automobiles,  light  trucks   and  service  centers.  See
' -- Properties.' Parts and appliance sales, installation and service activities
will be  conducted through  NSSI,  a wholly-owned  corporate subsidiary  of  the
Operating Partnership.
 
     Pending  the  completion  of  any  remediation  required  by  the  State of
Wisconsin and the prosecution of  insurance claims and third-party  contribution
claims  related to the coal tar  contamination at the Managing General Partner's
Marshfield, Wisconsin facility, ownership of  such facility will be retained  by
the  Managing General Partner and such property  will be leased to the Operating
Partnership. The lease will  provide for a nominal  annual rental and will  also
grant to the Operating Partnership an option to purchase the Marshfield property
at  a nominal purchase price upon  completion of any required remediation. Under
the lease, the Operating  Partnership will be responsible  for all expenses  and
liabilities  relating to the property from and  after the date of the closing of
the Offering and will be liable for costs related to such remediation in  excess
of any insurance recovery and third-party contributions obtained by the Managing
General   Partner.  See  'Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations -- Contingencies.'
 
     Many of the leases for the General Partners' real and personal property are
transferable to the Operating Partnership only  with the consent of the  lessor.
The  General Partners expect  to obtain, prior  to the closing  of the Offering,
third party consents  which are  sufficient to enable  them to  transfer to  the
Operating  Partnership the assets necessary to enable the Partnership to conduct
the General Partners' propane business in all material respects as described  in
this Prospectus. In addition, certain of the General Partners' licenses, permits
and  other similar rights relating to the assets to be assigned to the Operating
Partnership are not transferable  or are transferable only  with the consent  of
third parties. Such transferable rights will not be transferred to the Operating
Partnership  at the closing of the Offering unless applicable consents have been
obtained. In the case of non-transferable rights or rights where no consent  has
been  obtained by the closing of the Offering, the General Partners will seek to
obtain such consents in the normal course of business after the closing or  seek
to  have  comparable  rights  granted  to  the  Operating  Partnership. Numerous
licenses, permits and rights will be required for the operation of the Operating
Partnership's business,  and  no  assurance  can be  given  that  the  Operating
Partnership  will obtain all licenses, permits  and rights which are required in
connection with the ownership and operation  of its business. If consent to  the
assignment  or reissuance of  any lease, license, permit  or other similar right
being transferred  is  not obtained,  the  General Partners  and  the  Operating
Partnership  will develop alternative approaches so  that, to the maximum extent
possible, the Operating  Partnership will  receive the benefits  of such  lease,
license,  permit or right and  will discharge the duties  and bear the costs and
risks thereunder.  The  Operating  Partnership  will bear  the  risk  that  such
alternative  arrangements will  not provide  the Operating  Partnership with the
full benefits of such lease, license,  permit or right. Although failure by  the
Operating  Partnership  to  obtain  licenses, permits  or  rights  could  have a
material adverse  effect  on  the  Partnership,  the  Managing  General  Partner
believes  that the  Operating Partnership  will have  the licenses,  permits and
rights which will enable it to conduct its propane business in a manner which is
similar in all  material respects  to that which  was conducted  by the  General
Partners  prior to the  closing of the  Offering and that  any failure to obtain
such licenses, permits or rights will not have a material adverse impact on  the
business  of the Partnership  or the Operating Partnership  as described in this
Prospectus. The Operating Partnership will be responsible for the payment of any
transfer taxes  and fees  owing  as a  result of  the  transfer of  the  General
Partners' assets.
 
                                      100



<PAGE>

<PAGE>
                                   MANAGEMENT
 
PARTNERSHIP MANAGEMENT
 
     The  Managing General Partner will manage and operate the activities of the
Partnership. Unitholders  will not  directly or  indirectly participate  in  the
management  or operation of the Partnership and will not have actual or apparent
authority to  enter into  contracts on  behalf  of, or  to otherwise  bind,  the
Partnership.  The  Managing General  Partner will  owe a  fiduciary duty  to the
Unitholders.  See  'Conflicts   of  Interest   and  Fiduciary   Responsibility.'
Notwithstanding  any limitation on  obligations or duties,  the Managing General
Partner and the Special General Partner will be liable, as the general  partners
of  the Partnership, for all debts of the Partnership (to the extent not paid by
the Partnership), except to  the extent that  indebtedness or other  obligations
incurred by the Partnership are made specifically non-recourse to either or both
of the General Partners. Whenever possible, the Managing General Partner intends
to  make any such indebtedness  or other obligations non-recourse  to it and the
Special General Partner.  However, if the  Operating Partnership defaults  under
the  First  Mortgage Notes  or the  Bank Credit  Facility, the  Managing General
Partner will be  liable for any  deficiency remaining after  foreclosure on  the
Operating Partnership's assets.
 
     The  Managing  General Partner  will appoint  two  persons who  are neither
officers nor employees of the General  Partners or any Affiliate of the  General
Partners  to its Board of  Directors within three months  after the date of this
Prospectus. Such directors will serve on the Audit Committee with the  authority
to  review, at the request of the  Managing General Partner, specific matters as
to which  the Managing  General Partner  believes  there may  be a  conflict  of
interest  in order to determine  if the resolution of  such conflict proposed by
the Managing General Partner is fair  and reasonable to the Partnership.  Absent
specific delegation from the Board of Directors of the Managing General Partner,
determinations  of the Audit Committee are advisory and do not bind the Managing
General  Partner.  Any  matters  approved   by  the  Audit  Committee  will   be
conclusively  deemed to be  fair and reasonable to  the Partnership, approved by
all partners of the Partnership and not a breach by the Managing General Partner
of any duties it may  owe the Partnership or  the Unitholders. In addition,  the
Audit  Committee will  review external  financial reporting  of the Partnership,
will recommend engagement of the Partnership's independent accountants and  will
review  the Partnership's procedures  for internal auditing  and the adequacy of
the Partnership's internal accounting controls. With respect to such  additional
matters,  the Audit  Committee may  act on  its own  initiative to  question the
Managing General Partner and, absent the delegation of specific authority by the
entire Board of Directors, its recommendations will be advisory.
 
     The Special  General Partner,  a wholly  owned subsidiary  of the  Managing
General  Partner, is a  non-managing general partner of  the Partnership and the
Operating Partnership with  no operations  or business  other than  acting as  a
general  partner of the Partnership and  the Operating Partnership. In the event
that the Managing  General Partner  is merged with  and into  Triarc, the  Audit
Committee  of the Special  General Partner will  perform the functions described
above previously  performed  by the  Audit  Committee of  the  Managing  General
Partner.  The Audit Committee of the Special General Partner will be composed of
the same directors  that serve on  the Audit Committee  of the Managing  General
Partner. In addition, if following a merger of the Managing General Partner with
and into Triarc, a bankruptcy event involving Triarc occurs, the Special General
Partner  will become the  managing general partner  of the Partnership, continue
the business of the Partnership and have all the rights, authority and powers of
the Managing General Partner described in this Prospectus.
 
     As is  commonly the  case with  publicly traded  limited partnerships,  the
Partnership will not directly employ any of the persons responsible for managing
or  operating the  Partnership. In general,  the current  management of National
Propane will  continue  to manage  and  operate the  Partnership's  business  as
officers  and employees of the Managing  General Partner and its Affiliates. See
'Business and Properties -- Employees.'
 
                                      101
 


<PAGE>

<PAGE>
DIRECTORS AND EXECUTIVE OFFICERS OF THE MANAGING GENERAL PARTNER
 
     The following  table sets  forth certain  information with  respect to  the
current directors and executive officers of the Managing General Partner.
 
<TABLE>
<CAPTION>
               NAME                   AGE                 POSITION WITH THE MANAGING GENERAL PARTNER
- -----------------------------------   ---   ----------------------------------------------------------------------
 
<S>                                   <C>   <C>
Nelson Peltz.......................   53    Director
Peter W. May.......................   53    Director
Ronald D. Paliughi.................   52    President, Chief Executive Officer and Director
Ronald R. Rominiecki...............   42    Senior Vice President and Chief Financial Officer
Laurie B. Crawford.................   45    Senior Vice President, Administration, General Counsel and Assistant
                                              Secretary
</TABLE>
 
     Nelson  Peltz has  been a  director of the  Managing General  Partner and a
director and Chairman of the Board  and Chief Executive Officer of Triarc  since
April  23, 1993.  Since then, he  has also been  a director and  Chairman of the
Board and Chief  Executive Officer  of certain of  Triarc's other  subsidiaries,
including  RC/Arby's  Corporation  formerly  known  as  Royal  Crown Corporation
('RCAC'). He is  also a  general partner of  DWG Acquisition  Group, L.P.  ('DWG
Acquisition'),  whose principal business  is ownership of  securities of Triarc.
From its formation in January 1989 until April 23, 1993, Mr. Peltz was  Chairman
and Chief Executive Officer of Trian Group, Limited Partnership ('Trian'), which
provided  investment banking and management  services for entities controlled by
Mr. Peltz and Mr.  May. From 1983  to December 1988, he  was Chairman and  Chief
Executive  Officer  and a  director of  Triangle Industries,  Inc. ('Triangle'),
which, through wholly-owned subsidiaries, was,  at that time, a manufacturer  of
packaging  products,  copper electrical  wire and  cable  and steel  conduit and
currency and coin handling  products. From November 1989  through May 1992,  Mr.
Peltz  was  director of  Mountleigh Group  plc, a  British property  trading and
retailing company  ('Mountleigh'). He  served in  various executive  capacities,
including  Executive Chairman,  of Mountleigh  from November  1989 until October
1991.
 
     Peter W. May  has been a  director of  the Managing General  Partner and  a
director  and President  and Chief Operating  Officer of Triarc  since April 23,
1993. Since then, he has also been a director and President and Chief  Operating
Officer  of certain of Triarc's other subsidiaries, including RCAC. He is also a
general partner of  DWG Acquisition. From  its formation in  January 1989  until
April  23, 1993, Mr. May was President  and Chief Operating Officer of Trian. He
was President and Chief Operating Officer  and a director of Triangle from  1983
until December 1988. From November 1989 through May 1992, Mr. May was a director
of  Mountleigh and served as Joint Managing Director of Mountleigh from November
1989 until October 1991. Mr. May was also named a director on April 29, 1993  of
The  Leslie  Fay Companies,  Inc.  following its  filing  on April  5,  1993 for
protection under Chapter 11 of the United States Bankruptcy Code.
 
     Ronald D. Paliughi has  been President and Chief  Executive Officer of  the
Managing General Partner since April 29, 1993. From May 1992 through April 1993,
Mr. Paliughi was a temporary, full time officer in the U.S. Army National Guard,
serving  as an Army  Aviator. During 1991, he  served on active  duty as an Army
Aviator and commissioned officer in Operation Desert Shield/Storm. From 1987  to
1990,  Mr. Paliughi was Senior Vice  President -- Western Operations of AmeriGas
Propane, Inc.  (then  a subsidiary  of  UGI Corporation),  the  largest  propane
company  in the U.S. During 1986, Mr. Paliughi was Director of Retail Operations
of CalGas Corporation. For more than  14 years prior, he held various  positions
with  VanGas, Inc.  ('VanGas'), the western  subsidiary of  Suburban Propane Gas
(then a  division  of Quantum  Chemical  Corporation), the  third  largest  U.S.
propane  company. He last  served as Senior  Vice President/General Manager, the
top executive officer at VanGas.
 
     Ronald R. Rominiecki  joined the  Managing General Partner  on December  1,
1995  as Senior Vice President  and Chief Financial Officer.  From April 1994 to
November 1995,  he served  as  Vice President  and  Chief Financial  Officer  of
O'Brien Environmental Energy, Inc. ('O'Brien'), a publicly-owned company engaged
in  cogeneration and other energy related  businesses. In September 1994 O'Brien
filed a petition in bankruptcy under Chapter 11 of the United States Code.  From
June 1988 to March 1994, Mr. Rominiecki was Corporate Controller at Westmoreland
Coal Company, a NYSE listed company.
 
                                      102
 


<PAGE>

<PAGE>
     Laurie  B. Crawford has been Senior Vice President, Administration, General
Counsel and Assistant Secretary of  the Managing General Partner since  December
1,  1995. From  December 1,  1993 to  December 1,  1995 she  was Vice President,
Administration, responsible  for human  resources, legal  matters, real  estate,
fleet  management,  plant engineering,  safety,  risk management,  insurance and
public relations. Prior to her employment with the Managing General Partner, she
was employed  by  Rockwell International  as  Succession Planning  Manager  from
November  1991 through November 1993. From  August 1986 until November 1991, she
was Director of Human Resources for MCI Communication Corp.
 
     Each director  has  been  elected  to  serve  until  the  Managing  General
Partner's  next  annual  meeting  of  stockholders  and  until  such  director's
successor is  duly elected  and qualified  or until  his death,  resignation  or
removal.  The term of office of each  executive officer is until the next annual
meeting of the Board of Directors of the Managing General Partner and until  his
successor is elected and qualified or until his death, resignation or removal.
 
REIMBURSEMENT OF EXPENSES OF THE MANAGING GENERAL PARTNER
 
     Following  the  Offering,  in  general,  the  management  and  employees of
National Propane  who currently  manage  and operate  the propane  business  and
assets  to be owned by  the Partnership will continue  to manage and operate the
Partnership's business as officers and employees of the Managing General Partner
and its Affiliates. The Partnership will  not have any officers or employees  of
its  own. The Operating  Partnership's corporate subsidiary  will, however, have
its own  employees to  manage and  operate its  business. The  Managing  General
Partner  will not receive any management fee or other compensation in connection
with its management of the Partnership, but  will be reimbursed at cost for  all
direct  and indirect expenses  incurred on behalf  of the Partnership, including
the costs of compensation and  employee benefit plans described herein  properly
allocable to the Partnership, and all other expenses necessary or appropriate to
the  conduct  of  the  business  of,  and  allocable  to,  the  Partnership. The
Partnership Agreement provides that the Managing General Partner shall determine
the expenses that  are allocable  to the  Partnership in  any reasonable  manner
determined by the Managing General Partner in its sole discretion. Affiliates of
the   Managing   General  Partner   (including   Triarc)  may   perform  certain
administrative services  for  the Managing  General  Partner on  behalf  of  the
Partnership.  Such Affiliates will not receive a fee for such services performed
for or on behalf of the Partnership,  but will be reimbursed for all direct  and
indirect  expenses incurred  in connection  therewith. In  addition, the General
Partners  and  their   Affiliates  may  provide   additional  services  to   the
Partnership,  for  which  the Partnership  will  be charged  reasonable  fees as
determined by the Managing General Partner.
 
     In addition,  the Managing  General Partner  will receive  an aggregate  2%
unsubordinated  General Partner Interest  and a 40.6% interest  as holder of the
Subordinated Units as consideration for  its contribution to the Partnership  of
its  limited  partner  interest  in the  Operating  Partnership,  which  will be
received as consideration for its  contribution to the Operating Partnership  of
the  propane business of National Propane.  The Managing General Partner will be
entitled to distributions on such Units,  and the Managing General Partner  will
be  entitled to incentive distributions as  holder of the Incentive Distribution
rights, as described under 'Cash Distribution Policy.'
 
EXECUTIVE COMPENSATION
 
     The following table sets forth the  annual salaries, bonuses and all  other
compensation  awards and  payouts earned  by the  President and  Chief Executive
Officer and by certain named executive officers of the Managing General  Partner
(collectively,  the  'Named Officers')  for  services rendered  to  the Managing
General Partner and its subsidiaries during the fiscal years ended December  31,
1995 and December 31, 1994 and the ten months ended December 31, 1993.
 
                                      103
 


<PAGE>



<PAGE>
                           SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
                                                         ANNUAL
                                                      COMPENSATION             OTHER
                                                 ----------------------        ANNUAL
     NAME AND PRINCIPAL POSITION       YEAR(1)   SALARY($)     BONUS($)     COMPENSATION
- ------------------------------------- ---------  ---------     --------     ------------
 
<S>                                   <C>        <C>           <C>          <C>
Ronald D. Paliughi ..................    1995     250,000        --            --
  President and Chief Executive          1994     250,000      300,000         --
  Officer                                1993     137,180      100,000 (8)     --
Ronald R. Rominiecki ................    1995      13,750(11)                  --
  Senior Vice President and Chief        1994       --                         --
  Financial Officer                      1993       --                         --
Laurie B. Crawford ..................    1995      88,333        --            --
  Senior Vice President,                 1994      78,472       20,000         --
  Administration, General Counsel and    1993       5,833(14)    --            --
  Assistant Secretary
Terry D. Weikel, ....................    1995     125,000        --            --
  former Senior Vice President and       1994     112,755       50,000         --
  Chief Financial Officer                1993      50,000       15,000         24,950(16)
 
<CAPTION>
                                                    LONG-TERM COMPENSATION
                                        ----------------------------------------------
 
                                                            AWARDS
                                        ----------------------------------------------
                                                               NUMBER OF
                                                               SECURITIES       LTIP
                                        RESTRICTED STOCK       UNDERLYING      PAYOUTS      ALL OTHER
     NAME AND PRINCIPAL POSITION         AWARD(S)(#)(2)    OPTIONS/SARS(#)(3)    ($)    COMPENSATION(4)($)
- -------------------------------------   -----------------  ------------------  -------  ------------------
<S>                                     <C>               <C>                 <C>      <C>
Ronald D. Paliughi ..................        --                  30,000(5)       --            2,592
  President and Chief Executive                 5,000            51,000(6)       --           96,178(7)
  Officer                                       5,000            40,000(9)     40,000  10)      --
Ronald R. Rominiecki ................        --                  20,000(5)                    63,000(12)
  Senior Vice President and Chief            --                 --                           --
  Financial Officer                          --                 --                           --
Laurie B. Crawford ..................        --                   7,500(5)       --            1,579
  Senior Vice President,                     --                  10,000(13)      --            1,117
  Administration, General Counsel and        --                 --               --          --
  Assistant Secretary
Terry D. Weikel, ....................        --                 --               --          --
  former Senior Vice President and           --                   7,500(15)      --              696
  Chief Financial Officer                    --                   5,000(15)      --           16,972(17)
</TABLE>
 



 
- ------------
 
 (1) Information  set forth opposite 1993 relates  to Fiscal 1993 (i.e., the ten
     month period ended December 31, 1993), while information set forth opposite
     1995 and 1994 relates to Fiscal 1995 (the year ended December 31, 1995) and
     Fiscal 1994 (the year ended December 31, 1994), respectively.
 
 (2) All restricted  stock awards  were made  pursuant to  Triarc's 1993  Equity
     Participation  Plan  (described below).  Based  upon the  closing  price of
     Triarc's Class  A Common  Stock, par  value $.10  per share  (the 'Class  A
     Common  Stock'), on the NYSE  on December 31, 1995  of $11.00, the value of
     Mr. Paliughi's restricted stock  holdings as of such  date is $110,000.  On
     January 16, 1996 the restrictions on all of these shares lapsed.
 
 (3) All  stock  option  grants  were  made  pursuant  to  Triarc's  1993 Equity
     Participation Plan. The option grants are described below under 'Option/SAR
     Grants in Last Fiscal Year, Individual Grants.'
 
 (4) Except as otherwise  noted, consists  only of life  insurance premiums  and
     401(k) contributions paid by National Propane.
 
 (5) One-third of the options granted will vest on each of the first, second and
     third  anniversaries  of  the  date  of  grant  and  the  options  will  be
     exercisable at  any  time  between  the  date  of  vesting  and  the  tenth
     anniversary of the date of grant.
 
 (6) With  respect to 26,000  of the options granted,  one-third of such options
     will vest on each of the first, second and third anniversary of the date of
     grant. With  respect to  the remaining  25,000 options,  one-third of  such
     options will vest on each of the third, fourth and fifth anniversary of the
     date  of grant. All of such options will be exercisable at any time between
     the date of vesting and the tenth anniversary of the date of grant.
 
 (7) Includes $33,333 for  certain salary allowances  and $60,829 of  reimbursed
     moving  expenses  in connection  with  Mr. Paliughi's  relocation  to Cedar
     Rapids, Iowa.
 
 (8) Represents a bonus of $100,000 pursuant to an employment agreement  entered
     into  effective  April  24, 1993  (see  ' --  Employment  Arrangements with
     Executive Officers' below).
 
 (9) One third of the options granted will vest on each of the third, fourth and
     fifth  anniversaries  of  the  date  of  grant  and  the  options  will  be
     exercisable  at  any  time  between  the  date  of  vesting  and  the tenth
     anniversary of the date of grant.
 
(10) $40,000 was accrued under the Mid-Term Incentive Plan.
 
(11) Mr. Rominiecki began his  employment with the  Managing General Partner  on
     December  1, 1995.  The amount  reported is  based on  an annual  salary of
     $165,000.
 
                                              (footnotes continued on next page)
 
                                      104
 


<PAGE>

<PAGE>
(footnotes continued from previous page)
 
(12) Represents a one-time  bonus payable  in connection  with Mr.  Rominiecki's
     employment by the Managing General Partner.
 
(13) With  respect to  5,000 of the  options granted, one-third  of such options
     will vest on each of the first, second and third anniversary of the date of
     grant. With  respect to  the  remaining 5,000  options, one-third  of  such
     options will vest on each of the third, fourth and fifth anniversary of the
     date  of grant. All of such options will be exercisable at any time between
     the date of vesting and the tenth anniversary of the date of grant.
 
(14) Ms. Crawford  began her  employment with  the Managing  General Partner  on
     December  1, 1993.  The amount  reported is  based on  an annual  salary of
     $70,000.
 
(15) Pursuant to  Mr. Weikel's  consulting agreement,  on January  1, 1996  such
     options were converted into the right, exercisable until December 31, 1996,
     to  receive cash equal to the positive difference, if any, between the fair
     market value of Triarc's Class A Common Stock at the time of such  exercise
     and,  with respect to options granted in  1994, $10.75, and with respect to
     options granted in 1993, $20.00.
 
(16) Represents payments for consulting services provided by Mr. Weikel in  1993
     prior to his being employed by the Managing General Partner.
 
(17) Includes  $16,666  for certain  salary  allowances in  connection  with Mr.
     Weikel's relocation to Cedar Rapids, Iowa.
 
CASH INCENTIVE PLANS
 
     Triarc has implemented an annual cash incentive plan (the 'Annual Incentive
Plan') for  executive officers  and key  employees of  National Propane  and  is
presently  developing a  mid-term cash  incentive plan  (the 'Mid-Term Incentive
Plan') for executive officers and key employees of National Propane.
 
     The Annual Incentive Plan is designed to provide annual incentive awards to
participants, 50% of which are based on whether National Propane has met certain
pre-determined goals  and  50% of  which  is based  on  the performance  of  the
participant  during  the  preceding  year.  Under  the  Annual  Incentive  Plan,
participants may receive awards of a specified percentage of their then  current
base salaries, which percentage varies depending upon the level of seniority and
responsibility  of the participant. Such percentage is set by National Propane's
management in consultation with management of Triarc. The Board of Directors  of
National Propane, in consultation with management of Triarc and the Compensation
Committee  of the Triarc Board of  Directors (the 'Compensation Committee'), may
elect to  adjust  awards  on  a discretionary  basis  to  reflect  the  relative
individual  contribution  of  the executive  or  key employee,  to  evaluate the
'quality' of  National  Propane's earnings  or  to take  into  account  external
factors  that affect  performance results.  The Board  of Directors  of National
Propane also may decide that multiple performance objectives related to National
Propane's and/or the individual's  performance may be  appropriate and, in  such
event,  such factors would be  weighted in order to  determine the amount of the
annual incentive awards. The Annual  Incentive Plan is administered by  National
Propane's  Board  of Directors  and Triarc's  management and  may be  amended or
terminated by such Board of Directors and Triarc's management at any time.
 
     Under the  Mid-Term Incentive  Plan, incentive  awards will  be granted  to
participants  if National  Propane achieves an  agreed upon profit  over a three
year performance cycle.  During each plan  year, an amount  will be accrued  for
each  participant based upon  the amount by which  National Propane's profit for
such  year  exceeds  a  minimum  return  to  be  determined.  A  new  three-year
performance  cycle will  begin each  year, such  that after  the third  year the
annual cash amount paid to participants pursuant to the Mid-Term Incentive  Plan
should  equal  the target  award if  National Propane's  profit goals  have been
achieved for  the full  three-year cycle.  The Board  of Directors  of  National
Propane,  together with  Triarc's management  and the  Compensation Committee of
Triarc's Board of  Directors, may  adjust, upward or  downward, an  individual's
award  based upon  an assessment  of the  individual's relative  contribution to
National Propane's longer-term  profit performance.  The Board  of Directors  of
Triarc  and Triarc's  management may amend  or terminate  the Mid-Term Incentive
Plan at any time. Pursuant
 
                                      105
 


<PAGE>

<PAGE>
to the terms of his employment agreement, under the Mid-Term Incentive Plan  Mr.
Paliughi was entitled to have accrued for 1993 a minimum of $40,000.
 
     From  time to time, the Compensation Committee  of the Triarc Board may, at
the request of  Triarc's or National  Propane's management, award  discretionary
bonuses  based on performance to certain executive officers. The amounts of such
bonuses will be based  on the Compensation Committee's  evaluation of each  such
individual's contribution.
 
TRIARC'S 1993 EQUITY PARTICIPATION PLAN
 
     Certain   executive  officers   of  the   Managing  General   Partner  have
participated in the Triarc Companies, Inc. 1993 Equity Participation Plan  which
was  adopted on April 24, 1993, and expires  by its terms on April 24, 1998. The
plan provides for, among other things, the grant of options to purchase Triarc's
Class A Common Stock, Stock  Appreciation Rights ('SARs') and restricted  shares
of  Class A Common Stock. Directors, selected officers and key employees of, and
key consultants to, Triarc and its subsidiaries, including the Managing  General
Partner, are eligible to participate in the plan. The plan is being administered
by  the  Compensation Committee  of  the Triarc  Board  of Directors,  which may
determine from time to time to grant options, SARs and restricted stock.
 
            OPTIONS/SAR GRANTS IN LAST FISCAL YEAR INDIVIDUAL GRANTS
 
     The following table sets forth certain information with respect to  options
to  purchase shares of Triarc Class A Common Stock and SARs granted to the Named
Officers in respect of 1995.
 
<TABLE>
<CAPTION>
                                                                                                             GRANT DATE
                                                 NUMBER OF     PERCENT OF TOTAL                                 VALUE
                                                 SECURITIES      OPTIONS/SARS                                -----------
                                                 UNDERLYING       GRANTED TO      EXERCISE OR                GRANT DATE
                                                OPTIONS/SARS     EMPLOYEES IN     BASE PRICE    EXPIRATION     PRESENT
                     NAME                       GRANTED(1)(2)   FISCAL YEAR(3)      ($/SH)         DATE      VALUE($)(4)
- ----------------------------------------------  ------------   ----------------   -----------   ----------   -----------
 
<S>                                             <C>            <C>                <C>           <C>          <C>
Ronald D. Paliughi............................     30,000            26.8%          $10.125     12/07/2005     194,100
Ronald R. Rominiecki..........................     20,000            17.9%          $10.125     12/07/2005     129,400
Laurie B. Crawford............................      7,500             6.7%          $10.125     12/07/2005      48,525
Terry D. Weikel...............................     --              --                --             --          --
</TABLE>
 
- ------------
 
(1) These options were granted  on December 7, 1995  and have an exercise  price
    equal to the closing price of Triarc Class A Common Stock on the NYSE on the
    date of such grant.
 
(2) One-third  of the options granted will vest on each of the first, second and
    third anniversaries of the date of grant and the options will be exercisable
    at any time between  the date of  vesting and the  tenth anniversary of  the
    date of grant.
 
(3) These percentages are based on the total number of Options granted under the
    Triarc  1993 Equity Participation  Plan to employees  of the General Partner
    only.
 
(4) These values were calculated using  the Black-Scholes option pricing  model.
    The  actual value, if any, that an  executive may realize will depend on the
    excess, if any, of the stock price  over the exercise price on the date  the
    options are exercised, and no assurance exists that the value realized by an
    executive will be at or near the value estimated by the Black-Scholes model.
    The following assumptions were used in the calculations:
 
         (a) assumed option term of 7.5 years;
        (b) stock price volatility factor of 0.4844;
        (c) 7.6% annual discount rate;
        (d) no dividend payment; and
        (e) 3% discount to Black-Scholes values for each year an option remains
    unvested.
 
                                      106
 


<PAGE>

<PAGE>
          OPTION/SAR EXERCISES IN 1995 AND YEAR-END OPTION/SAR VALUES
 
     The  following table sets  forth certain information  concerning options to
purchase shares of Triarc  Class A Common  Stock, and the values  at the end  of
1995  of unexercised in-the-money  options to purchase shares  of Triarc Class A
Common Stock granted to the Named Officers outstanding as of the end of 1995. No
Named Officer exercised any options to  purchase Triarc Class A Common Stock  in
1995.
 
<TABLE>
<CAPTION>
                                                                NUMBER OF SECURITIES            VALUE OF UNEXERCISED
                                                               UNDERLYING UNEXERCISED        IN-THE-MONEY OPTIONS/SARS
                                                                  OPTIONS/SARS AT
                                                                    FISCAL 1995                    AT FISCAL 1995
                                                                      YEAR-END                      YEAR-END(1)
                                                            ----------------------------    ----------------------------
                          NAME                              EXERCISABLE    UNEXERCISABLE    EXERCISABLE    UNEXERCISABLE
- ---------------------------------------------------------   -----------    -------------    -----------    -------------
 
<S>                                                         <C>            <C>              <C>            <C>
Ronald D. Paliughi.......................................       8,667          112,333        $ 2,167         $30,583
Ronald R. Rominiecki.....................................      --               20,000         --              17,500
Laurie B. Crawford.......................................       1,667           15,833            417           7,396
Terry D. Weikel..........................................       2,500           10,000            625           1,250
</TABLE>
 
- ------------
 
(1) On  December 31, 1995, the last day of Fiscal 1995, the closing price of the
    Triarc Class A Common Stock was $11.00.
 
UNIT OPTION PLAN
 
     Effective upon the closing  of the Offering,  the Managing General  Partner
will  adopt the National Propane Corporation  1996 Unit Option Plan (the 'Option
Plan'),  which  permits  the  issuance  of  options  (the  'Options')  and  Unit
appreciation  rights  ('UARs') to  eligible persons.  An aggregate  of 1,250,000
Common Units and Subordinated  Units are initially reserved  for issuance as  of
the  Option Plan's effective date. Pursuant to  the terms of the Option Plan, an
additional number of Units equal to 1% of the number of Units outstanding as  of
each December 31 following the Option Plan's effective date will be added to the
total  number  of Units  that  may be  issued  thereafter. The  number  of Units
available for issuance will also be increased by the number of Units received by
the Managing General Partner as payment of the exercise price of Options and  by
the  number of Units  purchased by the  Managing General Partner  from an amount
equal to  the cash  proceeds received  by the  Managing General  Partner on  the
exercise  of Options. The number of Units available for issuance pursuant to the
Option Plan is subject to adjustment in certain circumstances. The following  is
a  summary of  the material  terms of the  Option Plan  and is  qualified in its
entirety by reference to the Option Plan, which has been filed as an exhibit  to
the Registration Statement of which this Prospectus is a part.
 
     The   Option  Plan  has  been  designed  to  furnish  additional  incentive
compensation to selected directors, officers,  employees and consultants of  the
Managing  General Partner and its Affiliates  and to increase their personal and
proprietary interest in the future performance of the Partnership. Approximately
1,000 directors,  officers,  employees,  and consultants  will  be  eligible  to
participate  in the Option  Plan. In addition,  in the event  that the provision
relating to disinterested administration in Rule 16b-3 under the 1934 Act (as in
effect on the Option Plan's effective date) becomes inapplicable to the Managing
General Partner and the Partnership, directors who are not employees or officers
of the Managing General Partner will be eligible to receive Options and UARs.
 
     The Option  Plan will  be administered  by the  Managing General  Partner's
compensation  committee (the 'Committee'). The Committee, in its sole discretion
and authority, but subject to the terms  of the Option Plan, will determine  the
directors,  officers,  employees and  consultants  who are  eligible  to receive
Options and UARs and the date of grant, number of Units, exercise price, vesting
schedule, duration (not  to exceed  ten years)  and other  terms and  conditions
applicable  to each Option and UAR granted  under the Option Plan. The Committee
may accelerate the  exercisability of Options  and UARs. No  Option or UAR  with
respect  to Subordinated  Units will  become exercisable  before the  end of the
Subordination Period.
 
                                      107
 


<PAGE>

<PAGE>
     On a change of control (as defined in the Option Plan), the Committee  will
have  discretion to accelerate the  exercisability (and duration) of outstanding
Options and UARs or cancel outstanding Options and UARs in exchange for cash.
 
     The exercise price of each  Option may be paid in  the form of cash,  check
acceptable  to the Managing  General Partner, Units held  by the participant for
such period as  may be  required to  avoid a  charge to  earnings for  financial
reporting  purposes,  or  such  other form  of  consideration  permitted  by the
Committee, including by assignment of a portion of the proceeds on sale of Units
deliverable upon exercise or any combination of the foregoing.
 
     Units delivered by the Managing General Partner on exercise of an Option or
UAR may  consist  of Units  acquired  in the  open  market or  from  any  person
(including  Units newly issued  by the Partnership), Units  already owned by the
Managing General Partner, or any combination of the foregoing. Options and  UARs
are generally nontransferable.
 
     With  respect to each Unit delivered upon the exercise of an Option (unless
newly issued by the Partnership), the Managing General Partner shall be entitled
to reimbursement by  the Partnership for  the excess,  if any, of  (i) the  fair
market  value of each such Unit (as of  the date of exercise of such Option) or,
in the case of Units  purchased in the open market,  the price actually paid  by
the Managing General Partner therefor over (ii) the exercise price of the Option
relating  to such Unit.  With respect to  the settlement of  a UAR, the Managing
General Partner shall be  entitled to reimbursement by  the Partnership for  (i)
the  amount of cash, if any, paid in connection with such settlement or (ii) the
fair market value of each such Unit delivered in connection with such settlement
(unless such Unit is  newly issued by  the Partnership). Thus,  the cost of  the
Options and UARs will be borne by the Partnership.
 
     The  Committee may grant UARs in such amounts and subject to such terms and
conditions as the  Committee may determine.  UARs may be  granted in  connection
with  all or  any part  of, or  independently of,  any Option  granted under the
Option Plan. The grantee  of a UAR  has the right to  receive from the  Managing
General  Partner an amount equal to (a) the  excess of (i) the fair market value
of a Unit on the date of exercise of the UAR over (ii) the fair market value  of
a  Unit on the date  of grant (or over  the Option exercise price  if the UAR is
granted in connection  with an Option),  multiplied by (b)  the number of  Units
with respect to which the UAR is exercised. Payment to the grantee upon exercise
of  a UAR will be in cash or in  Units (valued at their fair market value on the
date of exercise of the  UAR) or both, all as  the Committee shall determine  in
its  sole discretion. Upon the  exercise of a UAR  granted in connection with an
Option, the number of Units  subject to the related  Option shall be reduced  by
the  number  of Units  with  respect to  which the  UAR  is exercised.  Upon the
exercise of an  Option in  connection with  which a  UAR has  been granted,  the
number  of Units subject  to the related UAR  shall be reduced  by the number of
Units with respect to which the Option is exercised.
 
     The Board of Directors  of the Managing General  Partner in its  discretion
may  terminate the Option Plan at any time with respect to any Units for which a
grant has not theretofore been made. The  Board of Directors will also have  the
right  to alter or amend the Option Plan,  any award made thereunder or any part
thereof from time to  time; provided, that no  change in any previously  granted
Option  or UAR may be made which would  impair the rights of the grantee without
the consent of such grantee; and provided further, that to the extent  necessary
to  comply with Rule 16b-3  under the 1934 Act,  no such amendment or alteration
will, without  the  requisite consent  under  such Rule  16b-3:  (i)  materially
increase  the total  number of  Units available for  Options and  UARs under the
Option  Plan,  subject  to  certain  exceptions;  (ii)  materially  modify   the
requirements  as  to eligibility  for participation  in  the Option  Plan; (iii)
extend the maximum period during which Options and UARs may be granted under the
Option Plan; or (iv) materially  increase the benefits accruing to  participants
under the Option Plan.
 
     Generally,  no tax is imposed on the grantee upon the grant of an Option or
UAR under the Plan and neither the Partnership nor the Managing General  Partner
will  be entitled to a tax deduction by  reason of such a grant. Generally, upon
the exercise of an Option,  the optionee will be  taxable on ordinary income  in
the  year of exercise in an amount equal  to the excess of the fair market value
of the Units  on the date  of exercise over  the Option exercise  price and  the
employer  will be entitled to  a deduction in an  equivalent amount. In general,
upon exercising a UAR, the amount of any cash
 
                                      108
 


<PAGE>

<PAGE>
received and the fair market  value on the exercise date  of any Units or  other
property received are taxable to the recipient as ordinary income and deductible
by  the employer. Insofar as the Partnership will reimburse the Managing General
Partner for the  difference between the  cost incurred by  the Managing  General
Partner  in acquiring Units  to deliver to  the optionee or  holder of UARs upon
exercise and the  proceeds received  by the  Managing General  Partner from  the
optionee  in connection  with such exercise,  the Managing  General Partner will
generally be treated as receiving income in the amount of such reimbursement and
the Partnership  may claim  a  deduction for  such  payment. Upon  a  subsequent
disposition  of  the Units  received  upon exercise  of  an Option  or  UAR, any
appreciation after the date of exercise will generally qualify as capital  gain.
If  the Units received upon the exercise of  an Option or UAR are transferred to
the optionee subject to certain  restrictions, then the taxable income  realized
by the optionee, unless the optionee elects otherwise, and the corresponding tax
deduction   (assuming  any  federal  income  tax  withholding  requirements  are
satisfied) should be deferred and should be measured at the fair market value of
the Units  at the  time  the restrictions  lapse.  The restrictions  imposed  on
certain  individuals by  Section 16(b)  of the  1934 Act  may constitute  such a
transfer restriction  during  the  period prescribed  thereby  with  respect  to
Options or UARs exercised within six months of the grant date thereof.
 
     It  is not anticipated that any Options or UARs will be granted at or prior
to the closing of the Offering.
 
COMPENSATION OF DIRECTORS
 
     The Managing  General  Partner  pays  no  additional  remuneration  to  its
employees (or employees of any of its Affiliates) for serving as directors or to
directors  who are not employees  of the Managing General  Partner or any of its
Affiliates. The Managing General Partner may  in the future pay remuneration  to
its  directors. In addition, the Partnership  anticipates that directors who are
not employees  of  the  Managing  General Partner  or  its  Affiliates  will  be
compensated  for serving as such, will  be reimbursed for out-of-pocket expenses
and will be  eligible to participate  in the Partnership's  or Managing  General
Partner's Unit purchase or option plans, if any.
 
EMPLOYMENT ARRANGEMENTS WITH EXECUTIVE OFFICERS
 
     Mr.  Paliughi has an employment contract with the Managing General Partner,
effective as of April 24, 1993, as  amended, pursuant to which (i) the  Managing
General  Partner agrees to employ Mr.  Paliughi as President and Chief Executive
Officer through January  2, 1998, (ii)  Mr. Paliughi receives  a base salary  of
$300,000  per annum (effective June 15,  1996) during his employment (subject to
increase at the  discretion of the  Board of Directors),  (iii) Mr. Paliughi  is
eligible to participate in the Annual Incentive Plan, enabling him to receive an
annual  cash bonus of up to 75% of his base salary based upon the achievement of
certain individual and Partnership performance objectives, (iv) Mr. Paliughi  is
eligible  to participate in the Mid-Term Incentive Plan, enabling him to receive
an annual bonus award at  least equal to 75% of  his base salary based upon  the
achievement  by the Partnership of certain financial performance objectives over
a three-year  performance  cycle, (v)  Mr.  Paliughi is  entitled  to  severance
benefits  generally equal  to two years  base salary  and bonuses (approximately
$1,050,000 if such termination occurred on June 15, 1996) and certain relocation
payments in the event he is terminated other than for cause (as defined), or  if
his  existing employment agreement  is not renewed  or extended on substantially
similar terms  and  (vi)  Mr.  Paliughi is  entitled  to  participate  in  other
generally  available  compensation  plans and  receives  various  other benefits
including reimbursement of  certain expenses. The  agreement also restricts  Mr.
Paliughi  from  competing  with the  General  Partner  for 24  months  after the
termination of the  agreement if  such termination results  from Mr.  Paliughi's
voluntary  resignation  or the  Managing  General Partner's  termination  of Mr.
Paliughi's employment for cause (as defined in the agreement).
 
     Ms. Crawford has an  employment agreement (effective as  of April 9,  1996)
and  a severance agreement  (effective as of  March 27, 1995)  with the Managing
General Partner pursuant  to which (i)  the Managing General  Partner agrees  to
employ  Ms. Crawford as Senior Vice President -- Administration, General Counsel
and Assistant Secretary  through April 15,  1998, (ii) Ms.  Crawford receives  a
one-time  signing bonus of  $124,500 in cash  and a base  salary of $125,000 per
annum until
 
                                      109
 


<PAGE>

<PAGE>
January 1,  1997 and  $137,500 thereafter,  (iii) Ms.  Crawford is  eligible  to
participate in the Annual Incentive Plan, enabling her to receive an annual cash
bonus  of up  to 50% of  her base salary  based upon the  achievement of certain
individual and Partnership performance objectives, (iv) Ms. Crawford is eligible
to participate in the Mid-Term Incentive Plan, enabling her to receive an annual
bonus award equal to 40%  of her base salary based  upon the achievement by  the
Partnership  of  certain  financial  performance  objectives  over  a three-year
performance cycle, (v) Ms. Crawford is entitled to severance benefits  generally
equal  to  two years  base salary  and bonuses  (approximately $312,500  if such
termination occurred on June 15, 1996) in the event she is terminated other than
for cause (as  defined) during the  term of her  employment agreement, (vi)  if,
after  the term of her  employment agreement has expired,  Ms. Crawford is still
employed by the Managing General Partner, and is terminated other than for cause
(as defined) and  within one year  of a change  of control (as  defined) of  the
Managing  General  Partner,  Ms.  Crawford  is  entitled  to  severance benefits
generally equal to  her annual  compensation plus an  amount not  to exceed  Ms.
Crawford's  prior year's bonus and (vii) Ms. Crawford is entitled to participate
in other  generally  available  compensation plans  and  receive  various  other
benefits including reimbursement of certain expenses.
 
     Mr.  Rominiecki has a severance agreement with the Managing General Partner
which provides  that in  the event  he  is terminated  by the  Managing  General
Partner  other than for cause  (as defined in the  agreement), he is entitled to
severance benefits  generally equal  to his  annual compensation  (approximately
$165,000  if such  termination occurred  on June  15, 1996)  if such termination
occurs prior to December 1, 1996 or within  one year of a change of control  (as
defined  in  the  agreement) of  the  Managing  General Partner  or  six month's
compensation if such termination occurs thereafter.
 
                                      110
 


<PAGE>

<PAGE>
         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
OWNERSHIP OF TRIARC COMMON STOCK BY THE DIRECTORS
AND EXECUTIVE OFFICERS OF THE MANAGING GENERAL PARTNER
 
     All of the  issued and outstanding  shares of common  stock of the  General
Partner  are  indirectly  owned  by  Triarc.  The  table  below  sets  forth the
beneficial ownership as of May  31, 1996, by each  person known by the  Managing
General  Partner to be the  beneficial owner of more  than 5% of the outstanding
shares of Triarc  Class A Common  Stock (constituting the  only class of  voting
capital  stock of Triarc), each director and  each Named Officer of the Managing
General Partner and the executive officers and directors of the Managing General
Partner as a group. Triarc's Class A Common Stock is traded on the NYSE.
 
<TABLE>
<CAPTION>
                                                                            AMOUNT AND NATURE
                 NAME AND ADDRESS OF BENEFICIAL OWNER                        OF OWNERSHIP(1)       PERCENT OF CLASS
- -----------------------------------------------------------------------   ---------------------    ----------------
 
<S>                                                                       <C>                      <C>
Nelson Peltz ..........................................................   6,819,967(2)(3)(4)(5)          27.6%
  900 Third Avenue
  New York, NY 10022
Peter W. May ..........................................................   6,549,667(2)(4)(6)             26.8%
  900 Third Avenue
  New York, NY 10022
DWG Acquisition Group, L.P. ...........................................   5,982,867(4)                   25.0%
  1201 North Market Street
  Wilmington, DE 19801
Ronald D. Paliughi.....................................................      32,000(7)                  *
Ronald R. Rominiecki...................................................            --                   *
Laurie B. Crawford.....................................................       1,667(8)                  *
All executive officers and directors as a group (5 persons)............   7,420,434                      29.3%
</TABLE>
 
- ------------
 
*  Less than 1%.
 
(1) Except as otherwise indicated, each  person has sole voting and  dispositive
    power with respect to such shares.
 
(2) Includes  5,982,867 shares held  by DWG Acquisition, of  which Mr. Peltz and
    Mr. May are the sole general partners.
 
(3) Includes 200 shares owned by a family trust of which Mr. Peltz is a  general
    partner. Mr. Peltz disclaims beneficial ownership of such 200 shares.
 
(4) The  Partnership is informed that DWG Acquisition has pledged such shares to
    a financial institution on behalf of  Messrs. Peltz and May to secure  loans
    made to them.
 
(5) Includes  options to purchase  810,000 shares of Class  A Common Stock which
    have vested or will vest within 60 days of May 31, 1996.
 
(6) Includes options to purchase  540,000 shares of Class  A Common Stock  which
    have vested or will vest within 60 days of May 31, 1996.
 
(7) Includes  options to  purchase 22,000 shares  of Class A  Common Stock which
    have vested or will vest within 60 days of May 31, 1996.
 
(8) Represents options to purchase  1,667 shares of Class  A Common Stock  which
    have vested or will vest within 60 days of May 31, 1996.
                            ------------------------
     The   foregoing  table  does  not  include  5,997,622  shares  of  Triarc's
non-voting Class B Common  Stock owned by Victor  Posner or entities related  to
Victor  Posner as a result of a certain Settlement Agreement dated on January 9,
1995. The shares of  Class B Common Stock  can be converted without  restriction
into an equal number of shares of Class A Common Stock following a transfer to a
non-affiliate  of Victor Posner.  Triarc has certain rights  of first refusal if
such shares are proposed to be sold  to an unaffiliated party. If the  5,997,622
currently  outstanding shares  of the Class  B Common Stock  were converted into
shares of Class A Common Stock, such shares would constitute approximately 20.0%
of the then outstanding shares of Class A Common Stock as of May 31, 1996.
 
                                      111



<PAGE>

<PAGE>
                 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
RIGHTS OF THE GENERAL PARTNERS
 
     The  Partnership  and  the  Managing General  Partner  will  have extensive
ongoing relationships with Triarc and its Affiliates. Affiliates of the Managing
General Partner, including Triarc, will perform certain administrative  services
for  the Managing General Partner on  behalf of the Partnership. Such Affiliates
will not receive a fee for such services, but will be reimbursed for all  direct
and indirect expenses incurred in connection therewith. See
'Management  -- Reimbursement of  Expenses of the  Managing General Partner.' In
addition, after the Offering, the Managing  General Partner will own all of  the
Subordinated  Units,  representing 42%  of  the outstanding  Units.  Triarc will
indirectly own  100%  of the  General  Partners. Through  the  Managing  General
Partner's  ability to control the management of the Partnership and its right to
vote the Subordinated Units (effectively giving the Managing General Partner the
ability to  veto  certain actions  of  the Partnership),  the  Managing  General
Partner and its Affiliates will have the ability to exercise substantial control
over the Partnership. See 'Conflicts of Interest and Fiduciary Responsibility.'
 
TRANSACTIONS INVOLVING TRIARC AND ITS AFFILIATES
 
     In January 1996, the Partnership entered into a five-year lease, as lessee,
with  Graniteville, then  a wholly owned  subsidiary of Triarc,  as lessor, with
respect to certain storage facilities  located in Graniteville, South  Carolina.
As consideration for the use of the leased premises, the Partnership is required
to  provide all  of Graniteville's  annual propane  requirements (up  to 700,000
gallons annually) at cost plus  delivery expenses. Pursuant to the  Graniteville
Sale,  such lease was assigned to Avondale and amended to provide that it may be
terminated by either party thereto upon six months' notice.
 
     In August 1995 Triarc, through a  wholly owned subsidiary, acquired all  of
the  outstanding  stock  of  two related  propane  distribution  businesses. The
aggregate  purchase  price  was   approximately  $4.2  million  (including   the
assumption of certain existing indebtedness). In September 1995 the stock of the
subsidiary  which acquired  the two companies  was contributed by  Triarc to NPC
Holdings, Inc. ('NPC Holdings')  which, in turn, contributed  such stock to  the
Managing  General Partner. In consideration  for such contribution, NPC Holdings
received an additional 30 shares of the Managing General Partner's common stock,
increasing its ownership of the Managing General Partner to 75.7% from 75.2%.
 
     In December 1995, National Propane borrowed $30 million under the  Existing
Credit  Facility and  dividended such  amount to  subsidiaries of  Triarc ($22.7
millon) and SEPSCO ($7.3 million)  in proportion to their respective  percentage
ownership  in  National  Propane.  On  February 22,  1996,  the  11  7/8% senior
subordinated debentures of SEPSCO  were redeemed. The  cash for such  redemption
came  from  the proceeds  of the  $30  million of  borrowings (which,  under the
Existing Credit  Facility, were  restricted to  the redemption  of the  11  7/8%
Debentures),  liquidation of  marketable securities and  existing cash balances.
The indebtedness incurred in part to finance such redemption is being assumed by
the Operating Partnership and repaid in connection with the Transactions.
 
     In  the  fourth  quarter  of  1995,  the  Managing  General  Partner   sold
approximately  $3.9 million face amount of its accounts receivable to Triarc for
approximately $3.8  million.  As collections  on  such accounts  receivable  are
received  by  the Managing  General Partner  they  are remitted  to Triarc  on a
periodic basis. As of  May 31, 1996,  such remittances aggregated  approximately
$3.5  million. Under the agreement pursuant  to which the receivables were sold,
the Managing General Partner  is obligated to  repurchase any receivables  which
are  determined to be uncollectible,  up to a maximum of  10% of the face amount
originally sold. The  Manager General  Partner believes that  its allowance  for
doubtful accounts is adequate to allow for any repurchases that may be required.
 
     The  Managing  General  Partner  receives  from  Triarc  certain management
services including  legal,  accounting,  tax,  insurance,  financial  and  other
management  services. Effective April 23, 1993 the Managing General Partner (and
certain of  Triarc's  other subsidiaries)  entered  into a  management  services
agreement  (the 'Management Services  Agreement') with Triarc  pursuant to which
the allocation method  for those costs  that cannot be  directly allocated,  are
allocated based upon the greater of (i) the sum of earnings before income taxes,
depreciation and amortization and (ii) 10% of revenues,
 
                                      112
 


<PAGE>

<PAGE>
as  a percentage of  Triarc's corresponding consolidated  amount. Prior to April
23, 1993,  the costs  of management  services were  allocated by  Triarc to  its
subsidiaries   under  a  former  management   services  agreement  (the  'Former
Management Services Agreement') based first directly on the cost of the services
provided and then, for those costs which could not be directly allocated,  based
upon  the  relative revenues  and tangible  assets as  a percentage  of Triarc's
corresponding  consolidated  amounts.  Additionally,  in  Transition  1993   the
Managing  General Partner was allocated certain costs representing uncollectible
amounts owed to Triarc for similar management services by certain affiliates  or
former  affiliates. For additional information regarding the Management Services
Agreement and  the Former  Management Services  Agreement, see  note 19  to  the
consolidated financial statements of National Propane.
 
     Chesapeake  Insurance Company Limited ('Chesapeake Insurance'), an indirect
subsidiary of Triarc,  provided certain  insurance coverage  and reinsurance  of
certain  risks to the Managing General Partner  until October 1993 at which time
Chesapeake Insurance  ceased  writing all  insurance  and reinsurance.  The  net
premium  expense incurred  was approximately $4  million in  Transition 1993. In
addition, on April 1, 1995 the Managing General Partner issued a promissory note
to Chesapeake Insurance for $900,000. $125,000 of the principal of such note was
repaid on December 31,  1995 and the  remaining $775,000 was  repaid on June  7,
1996.
 
     The Managing General Partner's wholly owned leasing subsidiary, NPC Leasing
Corp. ('NPC Leasing'), leases vehicles and other equipment to companies that are
or  were  affiliates  of  the Managing  General  Partner  under  long-term lease
obligations. Lease billings  by NPC  Leasing to current  and former  affiliates,
other  than the Managing General Partner, which included interest and principal,
during Transition 1993,  1994 and  1995 were $8,213,000,  $168,000 and  $47,000,
respectively.  NPC  Leasing  also  had minor  billings  with  current  or former
affiliates during the three-month period ended March 31, 1996.
 
     The Managing General Partner holds an intercompany note of Triarc's in  the
aggregate  principal amount of  approximately $81.4 million as  of May 31, 1996.
Concurrent with the closing of the  Offering, the Managing General Partner  will
dividend  a portion (approximately $51.4  million aggregate principal amount) of
such intercompany  note  to  Triarc.  See  'The  Transactions.'  For  additional
information  regarding the  intercompany note, see  note 13  to the consolidated
financial statements of National Propane.
 
PARTNERSHIP NOTE
 
     Concurrent with the closing of the Offering, the Operating Partnership will
make the Partnership  Loan to  Triarc. Management  believes that,  based on  the
terms  of the  Partnership Note,  taken as a  whole, the  Partnership Note, when
issued, will have a  fair market value  of not less than  100% of its  principal
amount.  For information  regarding the Partnership  Loan and  Triarc, see 'Cash
Distribution Policy  -- Partnership  Loan'  and 'Certain  Information  Regarding
Triarc.'
 
               CONFLICTS OF INTEREST AND FIDUCIARY RESPONSIBILITY
 
CONFLICTS OF INTEREST
 
     Certain  conflicts  of interest  could  arise as  a  result of  the General
Partners' relationships  with  their stockholders,  on  the one  hand,  and  the
Partnership,  on  the other  hand. The  directors and  officers of  the Managing
General Partner and the Special General Partner have fiduciary duties to  manage
such Managing General Partner, including its investments in its subsidiaries and
Affiliates,  in  a  manner beneficial  to  their stockholders.  In  general, the
Managing General Partner  has a fiduciary  duty to manage  the Partnership in  a
manner  beneficial  to  the  Partnership and  the  Unitholders.  The Partnership
Agreement contains provisions that  allow the Managing  General Partner to  take
into  account  the  interests  of  parties in  addition  to  the  Partnership in
resolving conflicts  of interest,  thereby limiting  its fiduciary  duty to  the
Unitholders  as well as  provisions that may restrict  the remedies available to
Unitholders for actions taken that  might, without such limitations,  constitute
breaches  of  fiduciary duty.  The duty  of  the directors  and officers  of the
Managing General Partner  to the  stockholders of the  Managing General  Partner
may,  therefore,  come into  conflict with  the duties  of the  Managing General
 
                                      113
 


<PAGE>

<PAGE>
Partner to the Partnership and the Unitholders. The Audit Committee of the Board
of Directors  of  the Managing  General  Partner will,  at  the request  of  the
Managing  General Partner, review  conflicts of interest  that may arise between
the Managing  General  Partner or  its  Affiliates, on  the  one hand,  and  the
Partnership,  on  the  other.  See 'Management  --  Partnership  Management' and
' -- Fiduciary Duties of the General Partners.'
 
     Conflicts of interest could arise in the situations described below,  among
others:
 
CERTAIN  ACTIONS TAKEN BY THE MANAGING GENERAL  PARTNER MAY AFFECT THE AMOUNT OF
CASH AVAILABLE  FOR  DISTRIBUTION TO  UNITHOLDERS  OR ACCELERATE  THE  RIGHT  TO
CONVERT SUBORDINATED UNITS
 
     Decisions  of the Managing  General Partner with respect  to the amount and
timing  of   cash  expenditures,   participation  in   capital  expansions   and
acquisitions,  borrowings,  issuance of  additional  Units and  reserves  in any
quarter may  affect  whether,  or  the extent  to  which,  there  is  sufficient
Available Cash from Operating Surplus to meet the Minimum Quarterly Distribution
and  Target  Distribution Levels  on  all Units  in  such quarter  or subsequent
quarters.  The  Partnership  Agreement  provides  that  any  borrowings  by  the
Partnership  or the approval  thereof by the Managing  General Partner shall not
constitute a breach  of any duty  owed by  the Managing General  Partner to  the
Partnership  or the  Unitholders including borrowings  that have  the purpose or
effect, directly or indirectly, of enabling the the Managing General Partner  to
receive  Incentive Distributions or  hasten the expiration  of the Subordination
Period or  the conversion  of  the Subordinated  Units  into Common  Units.  The
Partnership Agreement provides that the Partnership may make loans to and borrow
funds from the General Partners and their Affiliates. Further, any actions taken
by  the Managing  General Partner  consistent with  the standards  of reasonable
discretion set forth in the definitions of Available Cash, Operating Surplus and
Capital Surplus will be deemed  not to breach any  duty of the Managing  General
Partner  to the  Partnership or  the Unitholders.  The Managing  General Partner
intends  to  submit  any  question  regarding  amendments  to  the   Partnership
Agreement,  the enforcement of  Triarc's obligations under  the Partnership Note
and other matters that could  have, in each case,  a material adverse affect  on
the  limited partners to  the Audit Committee  of the Board  of Directors of the
Managing General  Partner.  See  'Risk  Factors --  Conflicts  of  Interest  and
Fiduciary Responsibility' and 'Cash Distribution Policy.'
 
BORROWINGS  BY THE PARTNERSHIP MAY ENABLE THE MANAGING GENERAL PARTNER TO PERMIT
PAYMENTS OF DISTRIBUTIONS ON THE SUBORDINATED UNITS
 
     The Managing  General Partner  generally must  act as  a fiduciary  to  the
Partnership  and the Unitholders, and therefore must generally consider the best
interests of the Partnership when deciding whether to make capital or  operating
expenditures   or  take  other  steps  with  respect  to  the  business  of  the
Partnership. However,  the  Partnership  Agreement provides  that  it  will  not
constitute  a  breach of  the General  Partner's  fiduciary duty  if Partnership
borrowings are  effected  that,  directly or  indirectly,  enable  the  Managing
General  Partner  to permit  the payment  of  distributions on  the Subordinated
Units.
 
THE GENERAL PARTNER MAY MERGE WITH AND INTO TRIARC
 
     The Partnership Agreement  provides that the  Managing General Partner  may
merge  with and into Triarc (the 'Triarc  Merger') without the prior approval of
any Unitholder; provided, however, that immediately prior to such merger (a) the
Partnership has received an Opinion of Counsel, (b) the Special General  Partner
has not converted or transferred any portion of its General Partner Interest and
(c)  the Special General Partner  has a net worth equal  to at least $15 million
independent of  its  interest  in  the Partnership  Group  (as  defined  in  the
Glossary).  The Partnership Note will contain a  covenant of Triarc that, in the
event of the merger  or consolidation of the  Managing General Partner with  and
into  Triarc,  Triarc will  concurrently therewith  pledge  as security  for the
Partnership Loan  certain assets  of  the Managing  General Partner.  See  'Cash
Distribution  Policy  --  Partnership  Loan.'  The  Partnership  Agreement  also
provides that after  a merger  of the General  Partner into  Triarc, Triarc  may
conduct  businesses and activities of its own in which the Partnership will have
no economic interest.
 
                                      114
 


<PAGE>

<PAGE>
CERTAIN PARTNERSHIP ACTIONS REQUIRE THE APPROVAL OF THE UNITHOLDERS
 
     The Partnership and the  Unitholders may not  take certain actions  without
the  affirmative vote of the holders of 66  2/3% of the outstanding Units or, in
certain cases, a Unit Majority (which, during the Subordination Period, requires
the affirmative vote of the  holders of a majority of  the Common Units and  the
Subordinated  Units each  voting as a  separate class). The  affirmative vote of
66 2/3% of the outstanding Units  (including Units held by the General  Partners
and  their Affiliates) is required to  remove the Managing General Partner (with
or without  Cause). Certain  amendments to  the Partnership  Agreement, a  sale,
merger  or  other  disposition  of  substantially  all  of  the  assets  of  the
Partnership  and  certain  issuances   of  Partnership  Securities  during   the
Subordination  Period  require  the  approval of  a  Unit  Majority. Immediately
following the completion of the Offering, the Managing General Partner will  own
a sufficient percentage of the outstanding Units to require the Managing General
Partner's  affirmative vote to  take such actions.  The Managing General Partner
may give or withhold its  approval of any such  action or vote its  Subordinated
Units for or against any such action, as the case may be, in its sole discretion
without  considering any interest  of, or factors  affecting, the Partnership or
any Unitholder. See 'The Partnership Agreement.'
 
EMPLOYEES OF  THE  MANAGING  GENERAL  PARTNER AND  ITS  AFFILIATES  WHO  PROVIDE
SERVICES TO THE PARTNERSHIP WILL ALSO PROVIDE SERVICES TO OTHER BUSINESSES
 
     The  Partnership will not have any employees  and will rely on employees of
its subsidiaries, the  Managing General  Partner and  its Affiliates,  including
Triarc.  Prior to any  merger of the  Managing General Partner  into Triarc, the
Managing General Partner will not conduct any other business as long as it is  a
general  partner  of the  Partnership.  After any  such  merger, Triarc,  as the
Managing General Partner, may  conduct businesses and activities  of its own  in
which  the Partnership will  have no economic interest.  In addition, Triarc and
other Affiliates  of  the  Managing  General  Partner,  principally  direct  and
indirect  wholly  owned  subsidiaries  of  Triarc,  will  conduct  business  and
activities of their own in which the Partnership will have no economic interest.
Accordingly, there may be competition between the Partnership and Affiliates  of
the  Managing  General Partner,  including Triarc,  for the  time and  effort of
employees who provide services  to both. Certain officers  of Affiliates of  the
Managing  General Partner  will divide  their time  between the  business of the
Partnership and the business of the Affiliates and will not be required to spend
any specified  percentage  or  amount of  their  time  on the  business  of  the
Partnership.
 
THE  PARTNERSHIP WILL REIMBURSE THE MANAGING  GENERAL PARTNER AND ITS AFFILIATES
FOR CERTAIN EXPENSES
 
     Under the terms of the Partnership Agreement, the Managing General  Partner
and  its Affiliates will  be reimbursed by the  Partnership for certain expenses
incurred on behalf  of the  Partnership, including costs  incurred in  providing
corporate  staff and support services to the Partnership (including compensation
costs incurred under employee benefit plans). The Partnership Agreement provides
that the  Managing  General  Partner  shall  determine  the  expenses  that  are
allocable to the Partnership in any reasonable manner determined by the Managing
General  Partner in  its sole  discretion. See  'Management --  Reimbursement of
Expenses of the Managing General Partner' and 'Certain Relationships and Related
Transactions.'
 
THE MANAGING GENERAL PARTNER INTENDS TO LIMIT ITS LIABILITY WITH RESPECT TO  THE
PARTNERSHIP'S OBLIGATIONS
 
     Whenever  possible,  the  Managing  General Partner  intends  to  limit the
Partnership's liability  under contractual  arrangements  to all  or  particular
assets  of the  Partnership, with  the other party  thereto to  have no recourse
against the  Managing General  Partner,  the Special  General Partner  or  their
respective  assets. The  Partnership Agreement provides  that any  action by the
Managing General Partner in so limiting the liability of the General Partners or
that of  the Partnership  will not  be  deemed to  be a  breach of  the  General
Partners'  fiduciary duties,  even if the  Partnership could  have obtained more
favorable terms without such limitation on liability.
 
                                      115
 


<PAGE>

<PAGE>
COMMON UNITHOLDERS WILL  HAVE NO RIGHT  TO ENFORCE OBLIGATIONS  OF THE  MANAGING
GENERAL PARTNER AND ITS AFFILIATES UNDER AGREEMENTS WITH THE PARTNERSHIP
 
     The  Partnership  will acquire  or  provide many  services  from or  to the
Managing General Partner  and its  Affiliates (including Triarc)  on an  ongoing
basis,  including those described above. The  agreements relating thereto do not
grant to  the  holders  of  the  Common  Units,  separate  and  apart  from  the
Partnership,  the  right  to enforce  the  obligations of  the  Managing General
Partner and its Affiliates in favor of the Partnership. Therefore, the  Managing
General Partner will be primarily responsible for enforcing such obligations.
 
CONTRACTS  BETWEEN THE  PARTNERSHIP, ON THE  ONE HAND, AND  THE MANAGING GENERAL
PARTNER AND ITS AFFILIATES, ON THE OTHER, WILL NOT BE THE RESULT OF ARMS'-LENGTH
NEGOTIATIONS
 
     Under the terms of the Partnership Agreement, the Managing General  Partner
is not restricted from paying the Managing General Partner or its Affiliates for
any  services rendered  (provided such services  are rendered on  terms fair and
reasonable  to  the  Partnership)   or  entering  into  additional   contractual
arrangements  with  any  of  them  on behalf  of  the  Partnership.  Neither the
Partnership  Agreement  nor   any  of  the   other  agreements,  contracts   and
arrangements  between the Partnership, on the one hand, and the Managing General
Partner and  its  Affiliates,  on the  other,  are  or will  be  the  result  of
arm's-length  negotiations. All of such transactions entered into after the sale
of the Common Units offered  in the Offering are to  be on terms which are  fair
and reasonable to the Partnership, provided that any transaction shall be deemed
fair  and reasonable if (i) such transaction is approved by the Audit Committee,
(ii) its terms  are no less  favorable to the  Partnership than those  generally
being provided to or available from unrelated third parties or (iii) taking into
account   the  totality  of  the  relationships  between  the  parties  involved
(including other transactions that may be particularly favorable or advantageous
to the Partnership), the  transaction is fair to  the Partnership. The  Managing
General  Partner  and  its Affiliates  will  have  no obligation  to  permit the
Partnership to use any facilities or assets of the Managing General Partner  and
such  Affiliates, except as may be provided  in contracts entered into from time
to time specifically dealing with such use, nor shall there be any obligation of
the Managing  General  Partner  and  its  Affiliates  to  enter  into  any  such
contracts.
 
POTENTIAL ROLL-UP TRANSACTIONS
 
     The  Partnership Agreement does not  prohibit the Partnership from engaging
in roll-up transactions. Although  the Managing General  Partner has no  present
intention  of causing the Partnership  to engage in any  such transaction, it is
possible it will do so in the future.  There can be no assurance that a  roll-up
transaction  would  not  have  a  material  adverse  effect  on  a  Unitholder's
investment in the Partnership.
 
COMMON UNITHOLDERS HAVE NOT BEEN REPRESENTED BY COUNSEL
 
     The Common Unitholders have not  been represented by counsel in  connection
with  the preparation of the Partnership  Agreement or other agreements referred
to herein  or  in  establishing  the  terms  of  the  Offering.  The  attorneys,
accountants  and  others  who have  performed  services for  the  Partnership in
connection with the Offering have been employed by the Managing General  Partner
and  its Affiliates and  may continue to represent  the Managing General Partner
and its Affiliates. Attorneys, accountants and others who will perform  services
for  the Partnership  in the  future will  be selected  by the  Managing General
Partner or the Audit  Committee and may also  perform services for the  Managing
General  Partner and  its Affiliates.  The Managing  General Partner  may retain
separate counsel for the  Partnership or the Unitholders  after the sale of  the
Common  Units offered in the  Offering, depending on the  nature of the conflict
that arises, but it does not intend to do so in most cases.
 
PARTNERSHIP INTERESTS ARE SUBJECT TO THE MANAGING GENERAL PARTNER'S LIMITED CALL
RIGHT
 
     The Partnership Agreement provides that it will not constitute a breach  of
the  Managing General Partner's fiduciary duties if the Managing General Partner
exercises its right to call for  and purchase partnership interests as  provided
in  the Partnership Agreement or  assign this right to  its Affiliates or to the
Partnership. The Managing General Partner thus may use its own discretion,  free
of fiduciary duty
 
                                      116
 


<PAGE>

<PAGE>
restrictions, in determining whether to exercise such right. As a consequence, a
holder  of partnership  interests may  have his  partnership interests purchased
from him even though he may not desire  to sell them, and the price paid may  be
less  than  the amount  the  holder would  desire to  receive  upon sale  of his
partnership interests. For  a description  of such right,  see 'The  Partnership
Agreement -- Limited Call Right.'
 
THE GENERAL PARTNERS' AFFILIATES MAY COMPETE WITH THE PARTNERSHIP
 
     Following  the sale of the Common Units offered in the Offering, Affiliates
of the General  Partners will not  be restricted from  engaging in any  business
activities  other  than  the  retail  sales  of  propane  to  end  users  in the
continental United States, even if they are in competition with the Partnership.
As a result, conflicts of interest  may arise between Affiliates of the  General
Partners,  on the one hand,  and the Partnership, on  the other. The Partnership
Agreement expressly provides  that, subject  to certain  limited exceptions,  it
shall  not constitute a breach of the  General Partners' fiduciary duties to the
Partnership or the Unitholders for Affiliates of the General Partners to  engage
in  direct  competition with  the Partnership,  other than  with respect  to the
retail sale of propane to end  users within the continental United States.  Such
competition  may  include  the trading,  transportation,  storage  and wholesale
distribution of  propane.  The  Partnership Agreement  also  provides  that  the
General  Partners and  their Affiliates have  no obligation  to present business
opportunities to the Partnership.
 
FIDUCIARY DUTIES OF THE GENERAL PARTNERS
 
     The General  Partners  will  be  accountable to  the  Partnership  and  the
Unitholders  as fiduciaries.  Consequently, the  General Partners  must exercise
good faith and integrity in handling the assets and affairs of the  Partnership.
In  contrast to  the relatively  well-developed law  concerning fiduciary duties
owed by officers  and directors to  the shareholders of  a corporation, the  law
concerning  the  duties  owed  by  general partners  to  other  partners  and to
partnerships is  relatively undeveloped.  Neither the  Delaware Revised  Uniform
Limited  Partnership  Act  (the  'Delaware  Act')  nor  case  law  defines  with
particularity the fiduciary duties owed by general partners to limited  partners
or  a limited partnership,  but the Delaware Act  provides that Delaware limited
partnerships may,  in  their  partnership agreements,  restrict  or  expand  the
fiduciary  duties that might  otherwise be applied  by a court  in analyzing the
standard  of  duty  owed  by  general  partners  to  limited  partners  and  the
partnership.  The provisions of the Delaware Act that allow the fiduciary duties
of a general partner to be waived or restricted by a partnership agreement  have
not  been resolved in a court of law, and the General Partners have not obtained
an opinion  of counsel  covering the  provisions set  forth in  the  Partnership
Agreement  that purport  to waive  or restrict  fiduciary duties  of the General
Partners. Unitholders  should consult  their own  legal counsel  concerning  the
fiduciary  responsibilities  of  the  General Partners  and  their  officers and
directors and the remedies available to the Unitholders.
 
     Fiduciary duties are generally considered  to include an obligation to  act
with good faith, fairness and loyalty. Such duty of loyalty, in the absence of a
provision  in  a  partnership  agreement  providing  otherwise,  would generally
prohibit a general  partner of a  Delaware limited partnership  from taking  any
action or engaging in any transaction as to which it has a conflict of interest.
In  order to induce the  Managing General Partner to  manage the business of the
Partnership, the  Partnership  Agreement,  as permitted  by  the  Delaware  Act,
contains  various  provisions  intended  to  have  the  effect  of  limiting the
fiduciary duties that might otherwise be owed by the Managing General Partner to
the Partnership and  its partners and  waiving or consenting  to conduct by  the
Managing General Partner and its Affiliates that might otherwise raise issues as
to compliance with fiduciary duties or applicable law.
 
     The  Partnership  Agreement  provides that  in  order to  become  a limited
partner of the Partnership, a holder of Common Units is required to agree to  be
bound  by the provisions thereof, including the provisions discussed above. This
is in accordance with the policy of  the Delaware Act favoring the principle  of
freedom  of contract and enforceability  of partnership agreements. The Delaware
Act also provides that a partnership agreement is not unenforceable by reason of
its not having been signed  by a person being admitted  as a limited partner  or
becoming an assignee in accordance with the terms thereof.
 
     The  Partnership Agreement  provides that  whenever a  conflict of interest
arises between the General  Partners or their Affiliates,  on the one hand,  and
the Partnership or any other partner, on the
 
                                      117
 


<PAGE>

<PAGE>
other,  the Managing  General Partner shall  resolve such  conflict. The General
Partners shall  not be  in breach  of their  obligations under  the  Partnership
Agreement  or  their  duties  to  the  Partnership  or  the  Unitholders  if the
resolution of such conflict is fair  and reasonable to the Partnership, and  any
resolution  shall  conclusively  be deemed  to  be  fair and  reasonable  to the
Partnership if such resolution is (i) approved by the Audit Committee  (although
no party is obligated to seek such approval and the Managing General Partner may
adopt  a resolution or  course of action  that has not  received such approval),
(ii) on terms no  less favorable to the  Partnership than those generally  being
provided  to or  available from  unrelated third  parties or  (iii) fair  to the
Partnership, taking into account the  totality of the relationships between  the
parties   involved  (including  other  transactions  that  may  be  particularly
favorable or advantageous to the  Partnership). In resolving such conflict,  the
Managing General Partner may (unless the resolution is specifically provided for
in  the Partnership  Agreement) consider the  relative interests  of the parties
involved in such conflict or affected by such action, any customary or  accepted
industry  practices or  historical dealings with  a particular  person or entity
and, if applicable,  generally accepted accounting  or engineering practices  or
principles  and such other factors as it deems relevant. Thus, unlike the strict
duty of  a  fiduciary  who  must  act  solely  in  the  best  interests  of  his
beneficiary,  the Partnership Agreement permits  the Managing General Partner to
consider the interests of all parties to a conflict of interests, including  the
interests of the General Partners and their stockholders. In connection with the
resolution  of any conflict that arises, unless the Managing General Partner has
acted in bad faith, the action taken  by the Managing General Partner shall  not
constitute  a breach  of the Partnership  Agreement, any other  agreement or any
standard of care or duty  imposed by the Delaware  Act or other applicable  law.
The  Partnership  Agreement  also  provides that  in  certain  circumstances the
Managing General  Partner may  act in  its  sole discretion,  in good  faith  or
pursuant to other appropriate standards.
 
     The Delaware Act provides that a limited partner may institute legal action
on  behalf  of  the partnership  (a  partnership derivative  action)  to recover
damages from a third  party where the general  partner has refused to  institute
the  action or  where an effort  to cause  the general partner  to do  so is not
likely  to  succeed.  In  addition,  the  statutory  or  case  law  of   certain
jurisdictions  may permit a limited partner  to institute legal action on behalf
of himself or all other similarly situated limited partners (a class action)  to
recover damages from a general partner for violations of its fiduciary duties to
the limited partners.
 
     The  Partnership Agreement also provides that any standard of care and duty
imposed thereby  or  under the  Delaware  Act or  any  applicable law,  rule  or
regulation  will be modified, waived or limited, to the extent permitted by law,
as required  to  permit  the  Managing General  Partner  and  its  officers  and
directors  to  act  under  the  Partnership  Agreement  or  any  other agreement
contemplated therein  and  to  make  any  decision  pursuant  to  the  authority
prescribed  in the  Partnership Agreement so  long as such  action is reasonably
believed by the Managing General Partner to be in, or not inconsistent with, the
best interests of the Partnership.  Further, the Partnership Agreement  provides
that  the Managing General  Partner and its  officers and directors  will not be
liable for  monetary  damages  to  the  Partnership,  the  limited  partners  or
assignees  for errors of judgment  or for any acts  or omissions if the Managing
General Partner and such other persons acted in good faith.
 
     In addition, under the terms of the Partnership Agreement, the  Partnership
is  required to  indemnify the General  Partners and  their officers, directors,
employees, Affiliates,  partners, agents  and trustees,  to the  fullest  extent
permitted  by  law,  against liabilities,  costs  and expenses  incurred  by the
General Partners or other such persons, if the General Partners or such  persons
acted  in good faith and in  a manner they reasonably believed  to be in, or not
opposed to,  the best  interests of  the Partnership  and, with  respect to  any
criminal  proceedings,  had  no  reasonable cause  to  believe  the  conduct was
unlawful. See 'The Partnership Agreement -- Indemnification.' Thus, the  General
Partners  could  be  indemnified for  their  negligent  acts if  they  meet such
requirements concerning good faith and the best interests of the Partnership.
 
                                      118
 


<PAGE>

<PAGE>
                        DESCRIPTION OF THE COMMON UNITS
 
     Upon consummation  of the  Offering, the  Common Units  will be  registered
under  the Securities Exchange Act of 1934, as amended (the 'Exchange Act'), and
the rules and regulations  promulgated thereunder, and  the Partnership will  be
subject to the reporting and certain other requirements of the Exchange Act. The
Partnership  will be required to file  periodic reports containing financial and
other information  with  the  Commission.  Purchasers of  Common  Units  in  the
Offering and subsequent transferees of Common Units (or their brokers, agents or
nominees on their behalf) will be required to execute Transfer Applications, the
form  of which is included  as Appendix B to  this Prospectus. Purchasers in the
Offering may hold Common Units in nominee accounts, provided that the broker (or
other nominee)  executes  and delivers  a  Transfer Application  and  becomes  a
limited partner. The Partnership will be entitled to treat the nominee holder of
a  Common Unit as the absolute owner  thereof, and the beneficial owner's rights
will be limited  solely to those  that it has  against the nominee  holder as  a
result of or by reason of any understanding or agreement between such beneficial
owner and nominee holder.
 
THE UNITS
 
     The  Common  Units issued  in  the Offering  and  Common Units  issued upon
conversion of  Subordinated Units  represent limited  partner interests  in  the
Partnership.  The Subordinated Units held by the Managing General Partner or its
Affiliates are (unless such Persons  elect otherwise) general partner  interests
in  the  Partnership. The  holders of  Common Units  and Subordinated  Units are
entitled to participate in Partnership distributions and exercise the rights  or
privileges   available  to  Common  Unitholders  and  Subordinated  Unitholders,
respectively, under the Partnership Agreement. For a description of the relative
rights and  preferences  of  Common  Units and  Subordinated  Units  in  and  to
Partnership  distributions,  together with  a  description of  the circumstances
under which  Subordinated  Units  may  convert  into  Common  Units,  see  'Cash
Distribution  Policy.' For a description of the rights and privileges of limited
partners under the Partnership Agreement, see 'The Partnership Agreement.'
 
TRANSFER AGENT AND REGISTRAR
 
DUTIES
 
     American Stock  Transfer  & Trust  Company  will  act as  a  registrar  and
transfer  agent (the 'Transfer Agent')  for the Common Units  and will receive a
fee from the Partnership for serving in such capacities. All fees charged by the
Transfer Agent for transfers  of Common Units will  be borne by the  Partnership
and  not  by the  holders of  Common Units,  except that  fees similar  to those
customarily paid by  stockholders for surety  bond premiums to  replace lost  or
stolen  certificates, taxes and other  governmental charges, special charges for
services requested  by a  holder of  a Common  Unit and  other similar  fees  or
charges will be borne by the affected holder. There will be no charge to holders
for  disbursements of the Partnership's cash distributions. The Partnership will
indemnify  the  Transfer  Agent,  its  agents  and  each  of  their   respective
shareholders,  directors, officers and  employees against all  claims and losses
that may arise out of acts performed or omitted in respect of its activities  as
such,  except for  any liability  due to  any negligence,  gross negligence, bad
faith or intentional misconduct of the indemnified person or entity.
 
RESIGNATION OR REMOVAL
 
     The Transfer Agent may at any time resign, by notice to the Partnership, or
be removed by the Partnership, such  resignation or removal to become  effective
upon  the  appointment by  the  Partnership of  a  successor transfer  agent and
registrar and  its acceptance  of such  appointment. If  no successor  has  been
appointed  and accepted  such appointment  within 30  days after  notice of such
resignation or removal, the Managing General Partner is authorized to act as the
transfer agent and registrar until a successor is appointed.
 
TRANSFER OF COMMON UNITS
 
     Until a Common Unit has been  transferred on the books of the  Partnership,
the  Partnership  and  the Transfer  Agent,  notwithstanding any  notice  to the
contrary, may treat  the record  holder thereof as  the absolute  owner for  all
purposes, except as otherwise required by law or stock exchange regulations. The
transfer  of  the  Common  Units  to persons  that  purchase  directly  from the
Underwriters will be
 
                                      119
 


<PAGE>

<PAGE>
accomplished through  the  completion,  execution and  delivery  of  a  Transfer
Application  by  such  investor  in  connection  with  such  Common  Units.  Any
subsequent transfers of a Common Unit will not be recorded by the Transfer Agent
or recognized by the Partnership unless  the transferee executes and delivers  a
Transfer  Application. By executing  and delivering a  Transfer Application (the
form of which is set  forth as Appendix B to  this Prospectus and which is  also
set  forth  on the  reverse  side of  the  certificates representing  the Common
Units), the transferee  of Common Units  (i) becomes the  record holder of  such
Common   Units  and  shall  constitute  an  assignee  until  admitted  into  the
Partnership  as  a  substitute  limited  partner,  (ii)  automatically  requests
admission  as a substituted limited partner  in the Partnership, (iii) agrees to
be bound  by  the  terms  and  conditions  of,  and  executes,  the  Partnership
Agreement,  (iv) represents  that such  transferee has  the capacity,  power and
authority to enter into the Partnership Agreement, (v) grants powers of attorney
to the Partnership  and any liquidator  of the Partnership  as specified in  the
Partnership  Agreement, and (vi) makes the consents and waivers contained in the
Partnership Agreement. An assignee will become a substituted limited partner  of
the  Partnership in respect of the transferred  Common Units upon the consent of
the Partnership and the recordation of the name of the assignee on the books and
records of the Partnership. Such consent may be withheld in the sole  discretion
of the Managing General Partner.
 
     Common  Units are  securities and  are transferable  according to  the laws
governing transfer  of securities.  In addition  to other  rights acquired  upon
transfer,  the transferor gives the transferee the right to request admission as
a substituted limited partner in the  Partnership in respect of the  transferred
Common Units. A purchaser or transferee of Common Units who does not execute and
deliver  a Transfer Application obtains only (a)  the right to assign the Common
Units to a purchaser or other transferee and (b) the right to transfer the right
to seek  admission as  a substituted  limited partner  in the  Partnership  with
respect  to the  transferred Common  Units. Thus,  a purchaser  or transferee of
Common Units who does  not execute and deliver  a Transfer Application will  not
receive  cash distributions  unless the  Common Units are  held in  a nominee or
'street name' account  and the nominee  or broker has  executed and delivered  a
Transfer  Application with  respect to  such Common  Units, and  may not receive
certain federal income tax information or reports furnished to record holders of
Common Units. The transferor of  Common Units will have  a duty to provide  such
transferee  with all information that may be necessary to obtain registration of
the transfer of the Common Units, but a transferee agrees, by acceptance of  the
certificate  representing Common Units, that the transferor will not have a duty
to insure the execution of the  Transfer Application by the transferee and  will
have  no liability or responsibility if  such transferee neglects or chooses not
to execute and forward the Transfer Application to the Transfer Agent. See  'The
Partnership   Agreement   --   Status   as   Limited   Partner   or   Assignee.'
 
                                      120



<PAGE>

<PAGE>
                           THE PARTNERSHIP AGREEMENT
 
     The  following  paragraphs  are  a summary  of  certain  provisions  of the
Partnership Agreement. The form of the Partnership Agreement for the Partnership
is included in this Prospectus as Appendix A. The form of Partnership  Agreement
for  the Operating Partnership  (the 'Operating Partnership  Agreement') will be
included as an exhibit  to the Registration Statement  of which this  Prospectus
constitutes  a part. The  Partnership will provide  prospective investors with a
copy of  the form  of the  Operating Partnership  Agreement upon  request at  no
charge.  The  following  summary  of  material  provisions  of  the  Partnership
Agreement  is  qualified  in  its  entirety  by  reference  to  the  Partnership
Agreements   for  the  Partnership  and   for  the  Operating  Partnership.  The
Partnership will be the sole limited partner of the Operating Partnership, which
will own, manage and  operate the Partnership's  business. The Managing  General
Partner  and the Special General  Partner will serve as  the general partners of
the Partnership and of the Operating Partnership. Unless specifically  described
otherwise,   references  herein   to  the   'Partnership  Agreement'  constitute
references to the Partnership Agreement and the Operating Partnership Agreement,
collectively.
 
     Certain material  provisions of  the Partnership  Agreement are  summarized
elsewhere  in this  Prospectus under  various headings.  With regard  to various
transactions and relationships of the Partnership with the General Partners  and
their  Affiliates,  see 'Risk  Factors --  Conflicts  of Interest  and Fiduciary
Responsibility,'  'Certain   Relationships   and  Related   Transactions,'   and
'Conflicts  of  Interest  and  Fiduciary  Responsibility.'  With  regard  to the
management of the Partnership, see 'Management.' With regard to the transfer  of
Common Units, see 'Description of the Common Units -- Transfer of Common Units.'
With  regard to distributions of Available Cash, see 'Cash Distribution Policy.'
With regard  to  allocations  of  taxable income  and  taxable  loss,  see  'Tax
Considerations.'  Prospective investors  are urged  to review  these sections of
this Prospectus and the Partnership Agreement carefully.
 
ORGANIZATION
 
     The Partnership and the Operating  Partnership were organized on March  13,
1996  and March  15, 1996, respectively,  as Delaware  limited partnerships. The
Managing General  Partner  and  the  Special General  Partner  are  the  general
partners  of  the  Partnership  and  the  Operating  Partnership.  Following the
issuance of the Common Units offered in the Offering, the General Partners  will
own  an  effective  combined  4% unsubordinated  General  Partner  Interest, the
Managing General Partner will own a 40.6% subordinated general partner  interest
(as  holder of  the Subordinated  Units) and the  Common Unitholders  will own a
55.4% limited partner interest, in the Partnership and the Operating Partnership
on a combined basis.
 
SPECIAL GENERAL PARTNER
 
     The Special  General Partner,  a wholly  owned subsidiary  of the  Managing
General  Partner, is a  non-managing general partner of  the Partnership and the
Operating Partnership.  Pursuant  to  the  Partnership  Agreement,  the  Special
General  Partner  is  prohibited  from conducting  any  business  or  having any
operations other than those  incidental to serving as  a general partner of  the
Partnership  and  the  Operating  Partnership.  The  Partnership  Agreement also
provides that the Board of Directors of the Special General Partner shall be  at
all times composed of the same individuals who compose the Board of Directors of
the  Managing  General Partner.  In the  event the  Managing General  Partner is
merged with and into Triarc, the Audit Committee of the Special General  Partner
will  perform the functions  previously performed by the  Audit Committee of the
Managing General Partner. In addition,  the Partnership Agreement provides  that
if,  following a merger  of the Managing  General Partner with  and into Triarc,
Triarc involuntarily withdraws as general partner of the Partnership pursuant to
bankruptcy or certain related events,  the Special General Partner shall  become
the  managing general partner of the Partnership and shall continue the business
of the Partnership, without any Unitholder approval.
 
     Provided that  the Triarc  Merger  has not  occurred, the  Special  General
Partner  may convert  all or  a portion  of its  combined unsubordinated general
partner interest into  Units having  rights to distributions  of Available  Cash
from  Operating  Surplus  equal  to  the  distribution  rights  with  respect to
Available Cash from  Operating Surplus  of the  combined unsubordinated  general
partner interest so converted.
 
                                      121
 


<PAGE>

<PAGE>
For  example, as  of the  Closing Date,  the Special  General Partner's combined
effective 2% interest in the Partnership and the Operating Partnership would  be
exchanged  into 223,419 Units (or 242,765  Units if the over-allotment option is
exercised, notwithstanding  the fact  that the  Special General  Partner is  not
required  to make any additional capital  contributions upon the exercise of the
over-allotment option). Additional capital contributions by the Special  General
Partner  upon other issuances of additional Partnership securities will increase
the number of Units into which  such combined interest is exchanged. Such  Units
shall be issued as Subordinated Units and/or Common Units in the same proportion
as  Subordinated Units initially issued to the  General Partner are at such time
constituted. Upon conversion of  all of the  Special General Partner's  combined
unsubordinated  general partner interests,  the Special General  Partner will no
longer  be  obligated  to  make  additional  capital  contributions  upon  other
issuances of additional Partnership securities.
 
PURPOSE
 
     The  purpose of the Partnership under  the Partnership Agreement is limited
to serving as the limited partner  of the Operating Partnership and engaging  in
any  business activity that  may be engaged  in by the  Operating Partnership or
that is  approved by  the Managing  General Partner.  The Operating  Partnership
Agreement  provides that  the Operating Partnership  may engage  in any activity
engaged in by  National Propane and  its subsidiaries immediately  prior to  the
Offering,  and  any other  activity approved  by  the Managing  General Partner.
Although the  Managing General  Partner has  the ability  under the  Partnership
Agreement  to cause the  Partnership and the Operating  Partnership to engage in
activities other than  propane marketing  and related  businesses, the  Managing
General  Partner  has no  current intention  of doing  so. The  Managing General
Partner is authorized in general to  perform all acts deemed necessary to  carry
out  such  purposes  and  to  conduct  the  business  of  the  Partnership.  See
' -- Certain Required Approvals of the Managing General Partner.'
 
CAPITAL CONTRIBUTIONS
 
     For a description of  the initial capital contributions  to be made to  the
Partnership,  see 'The Transactions.' The Unitholders  are not obligated to make
additional capital contributions to the  Partnership, except as described  below
under ' -- Limited Liability.'
 
POWER OF ATTORNEY
 
     Each  Limited Partner  (as defined  in the  Glossary), and  each person who
acquires a  Unit  from  a  Unitholder  and  executes  and  delivers  a  Transfer
Application with respect thereto, grants to the Managing General Partner and, if
a  liquidator of the Partnership has been appointed, such liquidator, a power of
attorney to, among other things, execute and file certain documents required  in
connection   with  the   qualification,  continuance   or  dissolution   of  the
Partnership, or the amendment  of the Partnership  Agreement in accordance  with
the  terms thereof and to make consents and waivers contained in the Partnership
Agreement.
 
LIMITED LIABILITY
 
     Assuming that a Limited Partner does not participate in the control of  the
business of the Partnership within the meaning of the Delaware Act and that such
Limited  Partner  otherwise  acts  in  conformity  with  the  provisions  of the
Partnership Agreement, his  liability under  the Delaware Act  will be  limited,
subject  to  certain possible  exceptions, to  the amount  of capital  that such
Limited Partner is obligated to contribute to the Partnership in respect of  his
Common  Units plus such Limited Partner's share of any undistributed profits and
assets of the  Partnership. If it  were determined, however,  that the right  or
exercise  of the right by the Limited Partners  as a group, to remove or replace
the General Partners, to approve certain amendments to the Partnership Agreement
or to  take  other action  pursuant  to the  Partnership  Agreement  constituted
'participation in the control' of the Partnership's business for the purposes of
the  Delaware Act, then the Limited Partners could be held personally liable for
the Partnership's obligations  under the laws  of the State  of Delaware to  the
same extent as the
 
                                      122
 


<PAGE>

<PAGE>
General  Partners  with  respect  to  persons  who  transact  business  with the
Partnership reasonably believing, based on  the Limited Partner's conduct,  that
the Limited Partner is a general partner.
 
     Under  the Delaware Act, a limited  partnership may not make a distribution
to a partner to the  extent that at the time  of the distribution, after  giving
effect  to  the distribution,  all liabilities  of  the partnership,  other than
liabilities  to  partners  on  account   of  their  partnership  interests   and
liabilities  for which the recourse of creditors is limited to specific property
of the  Partnership,  exceed  the  fair  value of  the  assets  of  the  limited
partnership.  For the purpose of  determining the fair value  of the assets of a
limited partnership, the Delaware Act provides  that the fair value of  property
subject  to  liability  for which  recourse  of  creditors is  limited  shall be
included in the assets of  the limited partnership only  to the extent that  the
fair value of that property exceeds that nonrecourse liability. The Delaware Act
provides that a limited partner who receives such a distribution and knew at the
time  of the distribution that the distribution was in violation of the Delaware
Act  shall  be  liable  to  the  limited  partnership  for  the  amount  of  the
distribution  for  three years  from  the date  of  the distribution.  Under the
Delaware Act, an assignee who becomes a substituted limited partner of a limited
partnership is liable for the obligations of his assignor to make  contributions
to the partnership, except the assignee is not obligated for liabilities unknown
to  him  at  the  time he  became  a  limited  partner and  which  could  not be
ascertained from the partnership agreement.
 
     The Partnership  expects  that  the Operating  Partnership  will  initially
conduct  business in  at least 24  states. Maintenance of  limited liability may
require compliance with legal  requirements in such  jurisdictions in which  the
Operating  Partnership  conducts  business, including  qualifying  the Operating
Partnership to  do  business there.  Limitations  on the  liability  of  limited
partners  for the  obligations of  a limited  partnership have  not been clearly
established in many jurisdictions.  If it were  determined that the  Partnership
was,  by virtue of its limited partner  interest in the Operating Partnership or
otherwise,  conducting  business  in  any  state  without  compliance  with  the
applicable  limited partnership  statute, or that  the right or  exercise of the
right by the  Limited Partners  as a  group, to  remove or  replace the  General
Partners, to approve certain amendments to the Partnership Agreement, or to take
other action pursuant to the Partnership Agreement constituted 'participation in
the  control' of the Partnership's business for  the purposes of the statutes of
any relevant jurisdiction, then  the Limited Partners  could be held  personally
liable  for the Partnership's obligations under  the law of such jurisdiction to
the same  extent  as  the  General Partners  under  certain  circumstances.  The
Partnership  will operate in  such manner as the  Managing General Partner deems
reasonable and necessary or appropriate to preserve the limited liability of the
Limited Partners.
 
ISSUANCE OF ADDITIONAL SECURITIES
 
     The Partnership Agreement authorizes the Managing General Partner to  cause
the  Partnership  to  issue an  unlimited  number of  additional  limited and/or
general partner interests  and other  equity securities of  the Partnership  for
such  consideration and on such  terms and conditions as  are established by the
Managing General Partner  in its  sole discretion  without the  approval of  any
Limited  Partners;  provided that,  during the  Subordination Period,  except as
provided in clauses (i) and (ii) of the following sentence, the Partnership  may
not  issue equity securities of  the Partnership ranking prior  or senior to the
Common Units or an aggregate of  more than 3,095,238 additional Common Units  or
an  equivalent number  of securities ('parity  securities') ranking  on a parity
with the  Common Units  (excluding  Common Units  issued  upon exercise  of  the
Underwriters'  over-allotment option,  pursuant to employee  benefit plans, upon
conversion of  the Special  General  Partner's combined  unsubordinated  general
partner   interest,  upon  conversion  of  Subordinated  Units  and  subject  to
adjustment in the event of a combination or subdivision of Common Units) without
the  approval  of  the  holders  of  at  least  a  Unit  Majority.  During   the
Subordination  Period the Partnership may also  issue (i) an unlimited number of
additional Common  Units  or  parity  securities without  the  approval  of  the
Unitholders  if such issuance occurs (A) in  connection with an Acquisition or a
Capital Improvement or (B) within  365 days of, and  the net proceeds from  such
issuance are used to repay debt incurred in connection with, an Acquisition or a
Capital  Improvement, in each case where such Acquisition or Capital Improvement
involves assets that would have, if acquired  by the Partnership as of the  date
that is one year prior to the first day of the quarter in which such transaction
is    to    be    effected,   resulted    in    an   increase    in    (1)   the
 
                                      123
 


<PAGE>

<PAGE>
amount of Adjusted Operating Surplus generated by the Partnership on a  per-Unit
basis  for all outstanding Units with respect  to each of the four most recently
completed quarters (on a pro forma basis) over (2) the actual amount of Adjusted
Operating Surplus  generated by  the Partnership  on a  per-Unit basis  for  all
outstanding  Units  with respect  to  each of  such  four quarters  (or,  if the
issuance of Units with respect to  an Acquisition or Capital Improvement  occurs
within  the first four  full quarters from  the Closing Date,  then based on the
Partnership's pro  forma Adjusted  Operating Surplus  for any  full quarter  for
which there was no actual performance); and (ii) an unlimited number of Units or
parity  securities prior to the end of  the Subordination Period and without the
approval of  the  Unitholders if  the  use of  proceeds  from such  issuance  is
exclusively  to  repay up  to $50  million in  indebtedness of  a member  of the
Partnership Group (as  defined in  the Glossary), in  each case  only where  the
aggregate amount of distributions that would have been paid with respect to such
newly issued Units and the related additional distributions that would have been
made  to the General Partners in respect of the four-quarter period ending prior
to the first  day of  the quarter  in which the  issuance is  to be  consummated
(assuming  such additional Units had been outstanding throughout such period and
that distributions equal  to the distributions  that were actually  paid on  the
outstanding  Units during the period were paid on such additional Units) did not
exceed  the  interest  costs  actually  incurred  during  such  period  on   the
indebtedness  that is to be repaid (or, if such indebtedness was not outstanding
throughout the entire  period, would  have been incurred  had such  indebtedness
been  outstanding for the entire period). Following the closing of the Offering,
the Partnership may file  a registration statement on  Form S-1 with respect  to
Common  Units to be issued from time  to time in connection with Acquisitions or
Capital Improvements. In addition,  following the closing  of the Offering,  the
Partnership  may file a Registration Statement on Form S-8 with respect to Units
that may be issued pursuant to the Unit Option Plan. In accordance with Delaware
law and the provisions  of the Partnership Agreement,  the Partnership may  also
issue  additional partnership interests that, in  the discretion of the Managing
General Partner, may have  special voting rights to  which the Common Units  are
not entitled.
 
     The  General Partners will have the right, which they may from time to time
assign in whole or in part to any of their Affiliates, to purchase Common Units,
Subordinated Units  or  other equity  securities  of the  Partnership  from  the
Partnership  whenever, and on  the same terms that,  the Partnership issues such
securities or  rights to  Persons  other than  the  General Partners  and  their
Affiliates,  to the extent necessary to  maintain the percentage interest of the
General  Partners  and  their  Affiliates   in  the  Partnership  that   existed
immediately  prior  to  each  such  issuance.  Moreover,  upon  the  issuance of
additional Partnership  Securities (other  than  pursuant to  the  Underwriters'
over-allotment  option, which will  not require the General  Partners to make an
additional capital contribution) each of  the General Partners will be  required
to  make contributions  to the Partnership  which, when added  to the additional
amount contributed in exchange for such Partnership Securities, will equal 2% of
such  additional  capital  contributions.  The   holders  of  Common  Units   or
Subordinated  Units (other than the General  Partners and their Affiliates) will
not have  preemptive rights  to acquire  additional Common  Units,  Subordinated
Units  or other  partnership interests  that may  be issued  by the Partnership.
Furthermore, the General Partners and any of their Affiliates may acquire  Units
or  other Partnership Securities  in addition to those  acquired in the Offering
and, except  as  otherwise  provided  in the  Partnership  Agreement,  shall  be
entitled  to  exercise all  rights  of a  holder or  assignee  of such  Units or
Partnership Securities,  as the  case  may be.  Additional issuances  of  Units,
including  Subordinated  Units or  other  equity securities  of  the Partnership
ranking junior to the Common Units, may reduce the likelihood of, and the amount
of, any distributions above the Minimum Quarterly Distribution.
 
AMENDMENT OF PARTNERSHIP AGREEMENT
 
     Amendments to the Partnership Agreement may be proposed only by or with the
consent of the Managing General Partner. In order to adopt a proposed amendment,
the Partnership  is required  to seek  written approval  of the  holders of  the
number  of Units  required to approve  such amendment  or call a  meeting of the
Unitholders to  consider  and  vote  upon  the  proposed  amendment,  except  as
described  below.  Proposed  amendments  (unless  otherwise  specified)  must be
approved by holders of a majority of the outstanding Units (including Units held
by the General Partners and their  Affiliates), except that no amendment may  be
made    which   would   (i)    enlarge   the   obligations    of   any   Limited
 
                                      124
 


<PAGE>

<PAGE>
Partner, without its consent, (ii) enlarge  the obligations of, restrict in  any
way  any action by or rights of, or reduce in any way the amounts distributable,
reimbursable or otherwise payable by the Partnership to, the General Partners or
any of their Affiliates  without the Managing  General Partner's consent,  which
may  be given or withheld  in its sole discretion, (iii)  change the term of the
Partnership, (iv)  provide  that  the  Partnership is  not  dissolved  upon  the
expiration  of  its  term or  (v)  give any  Person  the right  to  dissolve the
Partnership other  than the  Managing General  Partner's right  to dissolve  the
Partnership with the approval of holders of a Unit Majority.
 
     The   Managing  General  Partner  may  generally  make  amendments  to  the
Partnership Agreement without the approval of any Limited Partner or assignee to
reflect (i)  a change  in  the name  of the  Partnership,  the location  of  the
principal  place of  business of  the Partnership,  the registered  agent or the
registered office of the  Partnership, (ii) admission, substitution,  withdrawal
or  removal of  partners in accordance  with the Partnership  Agreement, (iii) a
change that,  in  the  sole  discretion of  the  Managing  General  Partner,  is
necessary  or  advisable  to  qualify  or  continue  the  qualification  of  the
Partnership as  a limited  partnership or  a partnership  in which  the  Limited
Partners  have limited liability  or to ensure that  neither the Partnership nor
the Operating  Partnership  will be  treated  as  an association  taxable  as  a
corporation  or otherwise  taxed as  an entity  for federal  income tax purposes
(except approval  of  holders  of a  Unit  Majority  will be  required  if  such
amendment would result in a delisting or a suspension of trading of any class of
Units  on the principal national securities  exchange or over the counter market
where such class of Units is then traded), (iv) an amendment that is  necessary,
in the opinion of counsel to the Partnership, to prevent the Partnership, or the
General  Partners or their  directors, officers, agents or  trustees from in any
manner being subjected to the provisions of the Investment Company Act of  1940,
as  amended, the Investment  Advisors Act of  1940, as amended,  or 'plan asset'
regulations adopted under the Employee  Retirement Income Security Act of  1974,
as  amended,  whether or  not substantially  similar  to plan  asset regulations
currently applied or proposed, (v) subject to the limitations on the issuance of
additional Common Units or other limited or general partner interests  described
above,  an amendment that in the sole discretion of the Managing General Partner
is necessary or  advisable in  connection with the  authorization of  additional
limited  or general partner interests, (vi) any amendment expressly permitted in
the Partnership Agreement  to be  made by  the Managing  General Partner  acting
alone,  (vii) an  amendment effected, necessitated  or contemplated  by a merger
agreement that  has been  approved  pursuant to  the  terms of  the  Partnership
Agreement,  (viii) any  amendment that, in  the sole discretion  of the Managing
General Partner, is necessary or advisable  in connection with the formation  by
the  Partnership of, or its investment in, any corporation, partnership or other
entity (other  than the  Operating Partnership)  as otherwise  permitted by  the
Partnership  Agreement, (ix) a change in the  fiscal year and/or taxable year of
the Partnership and changes related thereto,  (x) a conversion of Units held  by
the  Managing General Partner or its Affiliates  at the election of the Managing
General Partner or its  Affiliates from general  partner interests into  limited
partner interests, and (xi) any other amendments substantially similar to any of
the foregoing.
 
     In   addition  to  the  Managing  General  Partner's  right  to  amend  the
Partnership Agreement as described above, the Managing General Partner may  make
amendments  to the Partnership Agreement without  the approval of any Unitholder
or assignee if such amendments (i) do not adversely affect the Limited  Partners
in any material respect, (ii) are necessary or advisable (in the sole discretion
of  the Managing  General Partner)  to satisfy  any requirements,  conditions or
guidelines contained  in any  opinion, directive,  ruling or  regulation of  any
federal  or state agency  or judicial authority  or contained in  any federal or
state statute, (iii) are necessary or  advisable (in the sole discretion of  the
Managing  General Partner) to facilitate  the trading of the  Common Units or to
comply with any  rule, regulation,  guideline or requirement  of any  securities
exchange on which the Common Units are or will be listed for trading, compliance
with any of which the Managing General Partner deems to be in the best interests
of  the  Partnership and  the Unitholders,  (iv) are  necessary or  advisable in
connection with any  action taken by  the Managing General  Partner relating  to
splits  or combinations of  Units pursuant to the  provisions of the Partnership
Agreement or (v) are required to effect the intent expressed in this  Prospectus
or  contemplated by the Partnership Agreement. The Managing General Partner will
not be required to obtain an Opinion of Counsel (as defined in the Glossary)  in
the  event  of  the  amendments  described  in  the  two  immediately  preceding
paragraphs. No other amendments to the Partnership
 
                                      125
 


<PAGE>

<PAGE>
Agreement will become effective without the approval of holders of at least  90%
of the Units (including Units held by the General Partners and their Affiliates)
unless  the Partnership has  obtained an Opinion  of Counsel to  the effect that
such amendment will not affect the limited liability under applicable law of any
limited partner  in the  Partnership or  the limited  partner of  the  Operating
Partnership.  Any amendment that materially and  adversely affects the rights or
preferences of  any type  or class  of outstanding  Units in  relation to  other
classes of Units will require the approval of at least a majority of the type or
class of Units so affected.
 
MERGER, SALE OR OTHER DISPOSITION OF ASSETS
 
     The  Managing General Partner is prohibited,  without the prior approval of
holders of a Unit Majority, from causing the Partnership to, among other things,
sell, exchange or otherwise dispose of all or substantially all of its assets in
a single transaction or  a series of related  transactions (including by way  of
merger,  consolidation  or  other combination)  or  approving on  behalf  of the
Partnership the sale, exchange or other disposition of all or substantially  all
of  the assets of  the Operating Partnership; provided  that the Partnership may
mortgage,  pledge,  hypothecate  or  grant   a  security  interest  in  all   or
substantially  all  of  the  Partnership's  assets  without  such  approval. The
Partnership may also sell all or substantially  all of its assets pursuant to  a
foreclosure  or other realization  upon the foregoing  encumbrances without such
approval. The Unitholders are  not entitled to  dissenters' rights of  appraisal
under  the Partnership Agreement  or applicable Delaware  law in the  event of a
merger or consolidation of the Partnership,  a sale of substantially all of  the
Partnership's assets or any other transaction or event.
 
TERMINATION AND DISSOLUTION
 
     The  Partnership  will  continue  until December  31,  2086,  unless sooner
terminated pursuant  to  the  Partnership Agreement.  The  Partnership  will  be
dissolved  upon (i) the election of the Managing General Partner to dissolve the
Partnership, if  approved by  the holders  of a  Unit Majority,  (ii) the  sale,
exchange  or other  disposition of  all or substantially  all of  the assets and
properties of the Partnership and the Operating Partnership, (iii) the entry  of
a  decree of judicial dissolution  of the Partnership or  (iv) the withdrawal or
removal of the  Managing General Partner  or the occurrence  of any other  event
that  results in its ceasing to be  the Managing General Partner (other than (x)
by reason  of a  transfer  of its  unsubordinated  general partner  interest  in
accordance  with the Partnership Agreement,  (y) withdrawal or removal following
approval and admission of a  successor or (z) certain bankruptcy-related  events
of  the Managing General Partner but only if at such time Triarc is the Managing
General Partner and the Special General  Partner is not bankrupt at such  time).
Upon a dissolution pursuant to (x) or (y) of clause (iv) above, the holders of a
Unit  Majority may also elect, within  certain time limitations, to reconstitute
the Partnership and continue its business  on the same terms and conditions  set
forth in the Partnership Agreement by forming a new limited partnership on terms
identical  to those set forth in the Partnership Agreement and having as general
partner an entity approved by the holders of at least a Unit Majority subject to
receipt by the Partnership of an Opinion of Counsel. Upon a dissolution pursuant
to (z) of  clause (iv) above,  the Special General  Partner shall  automatically
become  the Managing General Partner and  the Partnership shall continue without
any Unitholder action.
 
LIQUIDATION AND DISTRIBUTION OF PROCEEDS
 
     Upon  dissolution   of  the   Partnership,   unless  the   Partnership   is
reconstituted  and continued as a new limited partnership, the Person authorized
to wind up the affairs of  the Partnership (the 'Liquidator') will, acting  with
all  of the powers  of the Managing  General Partner that  such Liquidator deems
necessary or  desirable in  its  good faith  judgment in  connection  therewith,
liquidate  the Partnership's assets and apply the proceeds of the liquidation as
provided  in  'Cash   Distribution  Policy   --  Distributions   of  Cash   Upon
Liquidation.'  Under certain  circumstances and subject  to certain limitations,
the Liquidator may defer liquidation or distribution of the Partnership's assets
for a reasonable period of time or  distribute assets to partners in kind if  it
determines  that a sale  would be impractical  or would cause  undue loss to the
partners.
 
                                      126
 


<PAGE>

<PAGE>
WITHDRAWAL OR REMOVAL OF THE GENERAL PARTNERS
 
     The Managing General Partner has agreed not to withdraw voluntarily as  the
managing  general partner of the Partnership and the Operating Partnership prior
to June 30, 2006  (with limited exceptions  described below), without  obtaining
the  approval of  the holders of  a Unit  Majority and furnishing  an Opinion of
Counsel. On or after June 30, 2006, the Managing General Partner may withdraw as
the  Managing  General  Partner  (without  first  obtaining  approval  from  any
Unitholder)  by giving  90 days'  written notice,  and such  withdrawal will not
constitute  a  violation  of  the  Partnership  Agreement.  Notwithstanding  the
foregoing, the Managing General Partner may withdraw without Unitholder approval
upon 90 days' notice to the Limited Partners if more than 50% of the outstanding
Common Units are held or controlled by one Person and its Affiliates (other than
the  General  Partners  and  their  Affiliates).  In  addition,  the Partnership
Agreement permits the Managing General Partner (in certain limited instances) to
sell or otherwise  transfer all  of its  General Partner  Interest, without  the
approval  of the Unitholders.  See ' -- Transfer  of General Partners' Interests
and Right to  Receive Incentive Distributions  and Conversion of  Units Held  by
Managing General Partner into Limited Partner Interests.'
 
     Upon the withdrawal of the Managing General Partner under any circumstances
(other than as a result of (x) a transfer by the Managing General Partner of all
or  a part  of its  General Partner  Interest or  (y) certain bankruptcy-related
events of the Managing General Partner but only if the Managing General  Partner
is  Triarc and the  Special General Partner  is not bankrupt  at such time), the
holders of a Unit Majority may  select a successor to such withdrawing  Managing
General  Partner.  If such  a successor  is not  elected, or  is elected  but an
Opinion of Counsel cannot be obtained, the Partnership will be dissolved,  wound
up and liquidated, unless within 180 days after such withdrawal the holders of a
Unit  Majority agree in writing to continue  the business of the Partnership and
to the appointment of a successor Managing General Partner. See ' -- Termination
and Dissolution.'
 
     The Managing General  Partner may  not be  removed unless  such removal  is
approved  by the vote of the holders of not less than 66 2/3% of the outstanding
Units (including Units held  by the General Partners  and their Affiliates)  and
the Partnership receives an Opinion of Counsel. Any such removal is also subject
to the approval of a successor general partner by the vote of the holders of not
less  than  a  Unit Majority.  Units  held  by the  General  Partners  and their
Affiliates shall be deemed to be outstanding for purposes of any such vote.  The
Partnership  Agreement also  provides that  if the  Managing General  Partner is
removed as general  partner of the  Partnership other than  for Cause and  Units
held by the General Partners and their Affiliates are not voted in favor of such
removal (i) the Special General Partner shall withdraw as general partner of the
Partnership  and the Operating  Partnership, (ii) the  Subordination Period will
end and all outstanding Subordinated Units will immediately convert into  Common
Units  on a one-for-one basis, (iii) any existing Common Unit Arrearages will be
extinguished and (iv) the General Partners will have the right to convert  their
General  Partner Interests and the right to receive Incentive Distributions into
Common Units or to receive in exchange  for such interests a cash payment  equal
to the fair market value (as determined below) of such interests.
 
     Withdrawal  or removal of the Managing General Partner as a general partner
of the Partnership also constitutes withdrawal  or removal, as the case may  be,
of  the  Managing  General  Partner  as  a  general  partner  of  the  Operating
Partnership. The withdrawal  or removal of  the Managing General  Partner, as  a
general  partner  of  the  Partnership, will  also  constitute  a  withdrawal or
removal, as the case may be, of the Special General Partner as a general partner
of the Partnership and the Operating  Partnership unless such withdrawal of  the
Managing  General Partner is caused by  certain bankruptcy related events of the
Managing General Partner but only if the Managing General Partner is Triarc  and
the  Special General  Partner is not  bankrupt at  such time (in  which case the
Special General Partner will automatically  become the managing general  partner
and the Partnership will continue without any action by Unitholders).
 
     In  the event of  withdrawal of the General  Partners where such withdrawal
violates the Partnership Agreement,  a successor general  partner will have  the
option to purchase the unsubordinated general partner interests of the departing
General Partners (the 'Departing Partners') in the Partnership and the Operating
Partnership  and the right to receive Incentive Distributions for a cash payment
equal to the fair market value of such interests. Under all other  circumstances
where the General Partners
 
                                      127
 


<PAGE>

<PAGE>
withdraw or are removed by the Unitholders, the Departing Partners will have the
option  to require the successor general partner to purchase such unsubordinated
general partner interests  of the Departing  Partners and the  right to  receive
Incentive  Distributions for such  amount. In each case,  such fair market value
will be determined by agreement between the Departing Partners and the successor
general partner, or  if no agreement  is reached, by  an independent  investment
banking firm or other independent experts selected by the Departing Partners and
the  successor general partner (or if no expert can be agreed upon, by an expert
chosen by agreement of the experts selected  by each of them). In addition,  the
Partnership will be required to reimburse the Departing Partners for all amounts
due  the Departing Partners, including, without limitation, all employee-related
liabilities, including severance  liabilities, incurred in  connection with  the
termination  of any employees employed by the Departing Partners for the benefit
of the Partnership.
 
     If neither  of the  above-described  options are  exercised by  either  the
Departing  Partners  or  the  successor  general  partner,  as  applicable,  the
Departing General Partners will have  the right to convert their  unsubordinated
general  partner interests  and their  right to  receive Incentive Distributions
into Common Units equal to the fair market value of such interests as determined
by an investment banking firm or other independent expert selected in the manner
described in the preceding paragraph or to receive cash from the Partnership  in
exchange for such interests.

TRANSFER  OF  GENERAL  PARTNERS'  INTERESTS  AND  RIGHT  TO  RECEIVE   INCENTIVE
DISTRIBUTIONS  AND CONVERSION OF UNITS HELD BY THE MANAGING GENERAL PARTNER INTO
LIMITED PARTNER INTERESTS
 
     Except for (x) a transfer by either of the General Partners of all, but not
less  than all, of  their General Partner  Interests in the  Partnership and the
Operating Partnership  to (a)  an Affiliate  (including Triarc)  or (b)  another
Person  in connection with the merger or consolidation of either of the Managing
General Partner with or into another Person,  (y) the transfer by either of  the
General Partners of all or substantially all of its assets to another Person, or
(z)  the transfer  by operation  of law  upon the  merger or  liquidation of the
Managing General Partner with and into  Triarc but only if, (i) the  Partnership
has  received an Opinion  of Counsel, (ii)  the Special General  Partner has not
converted or transferred any portion of its 1.0% general partner interest in the
Partnership or 1.0101% general partner interest in the Operating Partnership and
(iii) the Special General Partner has a net worth equal to at least $15  million
independent  of its  interest in the  Partnership Group, neither  of the General
Partners may transfer all  or any part  of its General  Partner Interest in  the
Partnership  to another Person prior  to June 30, 2006,  without the approval of
the holders of  a Unit Majority;  provided that, in  each case, such  transferee
assumes  the rights and duties of the Managing General Partner to whose interest
such transferee  has succeeded,  agrees to  be bound  by the  provisions of  the
Partnership Agreement, furnishes an Opinion of Counsel and agrees to acquire all
(or the appropriate portion thereof, as applicable) of the transferring Managing
General  Partner's interests in the Operating Partnership and agrees to be bound
by the  provisions  of  the Operating  Partnership  Agreement.  The  Partnership
Agreement  permits  the Managing  General Partner  to transfer  its Subordinated
Units and Common Units  to one or more  Persons. The Partnership Note,  however,
contains  certain agreements by Triarc that  could restrict the Managing General
Partner's ability to transfer or sell Subordinated Units. See 'Cash Distribution
Policy -- Partnership Loan.' The Managing General Partner and its Affiliates may
each at their  election convert any  portion of the  Units from general  partner
interests  into limited partner  interests. In addition,  the Subordinated Units
held by the Managing General Partner will convert into limited partner interests
upon (i)  the conversion  into Common  Units or  (ii) immediately  prior to  the
transfer  of the Subordinated Units to transferees who are unaffiliated with the
Managing General Partner. Furthermore, the  Special General Partner can  convert
its  General Partner  Interest into  Units. See  ' --  Special General Partner.'
Furthermore, the Managing General  Partner shall have the  right at any time  to
transfer its right to receive Incentive Distributions to one or more Persons (as
an  assignment of such  rights or as  a special limited  partner interest in the
Partnership) subject  only  to  any  reasonable  restrictions  on  transfer  and
requirements for registering the transfer of such right as may be adopted by the
Managing   General  Partner  without  Unitholder  approval.  At  any  time,  the
Affiliates of the General Partners (including  Triarc) may sell or transfer  all
or  part of their respective direct or indirect interest in the General Partners
to an  Affiliate or  an unaffiliated  third party  without the  approval of  the
Unitholders.
 
                                      128
 


<PAGE>

<PAGE>
LIMITED CALL RIGHT
 
     If at any time less than 20% of the then-issued and outstanding partnership
interests  of any class are held by  Persons other than the General Partners and
their Affiliates, the Managing General Partner will have the right, which it may
assign in whole or in  part to any of its  Affiliates or to the Partnership,  to
acquire  all, but not less  than all, of the  remaining partnership interests of
such class held by such unaffiliated Persons as of a record date to be  selected
by  the Managing  General Partner,  on at least  10 but  not more  than 60 days'
notice. The purchase price in the event of such a purchase shall be the  greater
of (i) the highest price paid by the General Partners or any of their Affiliates
for  partnership interests  purchased within the  90 days preceding  the date on
which the  Managing  General Partner  first  mails  notice of  its  election  to
purchase  such  partnership interests,  and (ii)  the  Current Market  Price (as
defined in the Glossary) of such partnership interests as of the date three days
prior to  the date  such notice  is mailed.  As a  consequence of  the  Managing
General  Partner's right to purchase outstanding partnership interests, a holder
of partnership  interests may  have such  partnership interests  purchased  even
though  he may not desire to  sell them, or the price  paid may be less than the
amount the  holder would  desire to  receive upon  the sale  of his  partnership
interests.  The tax consequences  to a Unitholder  of the exercise  of this call
right are the  same as  a sale by  such Unitholder  of his Common  Units in  the
market. See 'Tax Considerations -- Disposition of Common Units.'
 
MEETINGS; VOTING
 
     Except  as described below with respect to  a Person or group owning 20% or
more of all Units, Unitholders or assignees  who are record holders of Units  on
the  record date set pursuant  to the Partnership Agreement  will be entitled to
notice of, and to vote  at, meetings of Unitholders and  to act with respect  to
matters  as to which approvals  may be solicited. With  respect to voting rights
attributable to Common  Units that  are owned  by an  assignee who  is a  record
holder  but who  has not yet  been admitted  as a Limited  Partner, the Managing
General Partner shall be deemed to  be the Limited Partner with respect  thereto
and  shall, in exercising the  voting rights in respect  of such Common Units on
any matter,  vote such  Common Units  at the  written direction  of such  record
holder. Absent such direction, such Common Units will not be voted (except that,
in  the case of Common  Units held by the Managing  General Partner on behalf of
Non-citizen Assignees (as  defined below),  the Managing  General Partner  shall
distribute  the votes in respect of such Common  Units in the same ratios as the
votes of Limited Partners in respect of other Common Units are cast).
 
     The Managing  General  Partner does  not  anticipate that  any  meeting  of
Unitholders  will  be  called in  the  foreseeable  future. Any  action  that is
required or permitted to be  taken by the Unitholders may  be taken either at  a
meeting  of the Unitholders or without a  meeting if consents in writing setting
forth the action so taken are signed by holders of such number of Units as would
be necessary  to authorize  or take  such  action at  a meeting  of all  of  the
Unitholders.  Meetings of the Unitholders may  be called by the Managing General
Partner or  by  Unitholders  owning  in  the  aggregate  at  least  20%  of  the
outstanding  Common  Units  of  the  class  for  which  a  meeting  is proposed.
Unitholders may vote either in person or by proxy at meetings. The holders of  a
majority  of the  outstanding Units of  the class  for which a  meeting has been
called represented in person or by proxy  will constitute a quorum at a  meeting
of  Unitholders  of  such  class  or classes,  unless  any  such  action  by the
Unitholders requires approval by holders of a greater percentage of such  Units,
in which case the quorum shall be such greater percentage.
 
     Each  record  holder of  a  Unit has  a  vote according  to  his percentage
interest in the Partnership, although additional limited and/or general  partner
interests  having special voting rights could  be issued by the Managing General
Partner. See ' -- Issuance of Additional Securities.' However, if any Person  or
group  (other than the  General Partners and their  Affiliates) acquires, in the
aggregate, beneficial  ownership  of  20%  or  more  of  the  total  Units  then
outstanding, such Person or group loses voting rights with respect to all of its
Units  and such Units may not be voted  on any matter and will not be considered
to be  outstanding  when sending  notices  of  a meeting  of  limited  partners,
calculating  required votes, determining  the presence of a  quorum or for other
similar Partnership  purposes. The  Partnership Agreement  provides that  Common
Units  held in nominee  or street name account  will be voted  by the broker (or
other nominee) pursuant to  the instruction of the  beneficial owner unless  the
arrangement
 
                                      129
 


<PAGE>

<PAGE>
between  the  beneficial owner  and his  nominee  provides otherwise.  Except as
otherwise provided in  the Partnership Agreement,  Subordinated Units will  vote
together with the Common Units as a single class.
 
     Any notice, demand, request, report or proxy material required or permitted
to  be given  or made  to record holders  of Common  Units (whether  or not such
record holder has been admitted as a partner) under the terms of the Partnership
Agreement will be delivered to  the record holder by  the Partnership or by  the
Transfer Agent at the request of the Partnership.
 
STATUS AS LIMITED PARTNER OR ASSIGNEE
 
     Except  as described above under '  -- Limited Liability,' the Common Units
will be fully  paid, and  Unitholders will not  be required  to make  additional
contributions to the Partnership.
 
     An  assignee of a Common Unit  or Subordinated Unit subsequent to executing
and  delivering  a  Transfer  Application,  but  pending  its  admission  as   a
substituted  Limited Partner in  the Partnership, is entitled  to an interest in
the Partnership equivalent  to that  of a Limited  Partner with  respect to  the
right  to share in allocations and distributions from the Partnership, including
liquidating distributions. The Managing General  Partner will vote and  exercise
other powers attributable to Common Units or Subordinated Units, as the case may
be,  owned by an assignee who has not become a substitute Limited Partner at the
written direction of such assignee. See ' -- Meetings; Voting.' Transferees  who
do  not execute and  deliver a Transfer  Application will be  treated neither as
assignees nor  as record  holders of  Common Units,  and will  not receive  cash
distributions,  federal income  tax allocations  or reports  furnished to record
holders of Common  Units. See 'Description  of the Common  Units -- Transfer  of
Common Units.'
 
NON-CITIZEN ASSIGNEES; REDEMPTION
 
     If the Partnership is or becomes subject to federal, state or local laws or
regulations  that, in the reasonable determination  of the Partnership, create a
substantial risk of  cancellation or  forfeiture of  any property  in which  the
Partnership  has an interest because  of the nationality, citizenship, residency
or other related status of any  Partner or assignee, the Partnership may  redeem
the Common Units held by such Partner or assignee at their Current Market Price.
In  order  to avoid  any such  cancellation or  forfeiture, the  Partnership may
require each Partner or assignee  to furnish information about his  nationality,
citizenship,  residency or  related status.  If a  Partner or  assignee fails to
furnish information  about such  nationality,  citizenship, residency  or  other
related status within 30 days after a request for such information, such Limited
Partner  or  assignee may  be treated  as  a non-citizen  assignee ('Non-citizen
Assignee'). In addition to other limitations on the rights of an assignee who is
not a substituted  Partner, a Non-citizen  Assignee does not  have the right  to
direct  the voting of his Common Units and may not receive distributions in kind
upon liquidation of the Partnership.
 
INDEMNIFICATION
 
     The Partnership Agreement provides that the Partnership will indemnify each
General Partner, any Departing Partner, any Person who is or was an Affiliate of
either of the General Partners  or any Departing Partner,  any Person who is  or
was  an  officer, director,  partner  or trustee  of  a General  Partner  or any
Departing Partner or  any affiliate  of either of  the General  Partners or  any
Departing  Partner, or  any Person  who is or  was serving  at the  request of a
General Partner  or any  Departing Partner  or any  Affiliate of  either of  the
General  Partners or  any Departing Partner  as an  officer, director, employee,
partner, agent  or trustee  of another  Person ('Indemnitees'),  to the  fullest
extent  permitted by law, from and against  any and all losses, claims, damages,
liabilities (joint or several),  expenses (including, without limitation,  legal
fees and expenses), judgments, fines, penalties, interest, settlements and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
whether   civil,  criminal,  administrative  or   investigative,  in  which  any
Indemnitee may be  involved, or  is threatened  to be  involved, as  a party  or
otherwise,  by reason of  its status as  any of the  foregoing; provided that in
each case  the  Indemnitee  acted in  good  faith  and in  a  manner  that  such
Indemnitee  reasonably believed to be in or not opposed to the best interests of
the Partnership and, with respect to any criminal proceeding, had no  reasonable
cause  to  believe its  conduct was  unlawful.  Any indemnification  under these
provisions will be only out  of the assets of  the Partnership, and the  General
Partners  shall  not  be  personally  liable  for,  or  have  any  obligation to
contribute   or    loan    funds   or    assets    to   the    Partnership    to
 
                                      130
 


<PAGE>

<PAGE>
enable  it to effectuate, such indemnification. The Partnership is authorized to
purchase (or to reimburse the General Partners or their Affiliates for the  cost
of) insurance against liabilities asserted against and expenses incurred by such
persons  in connection with the  Partnership's activities, regardless of whether
the Partnership  would have  the power  to indemnify  such person  against  such
liabilities  under the provisions described  above. National Propane Corporation
(and, after  the  Triarc  Merger, Triarc)  has  generally  indemnified  National
Propane  SGP, Inc. for all  liabilities arising as a  result of National Propane
SGP, Inc.'s status  as general partner  of the Partnership  and the  Partnership
Group.
 
BOOKS AND REPORTS
 
     The  Partnership is required  to keep appropriate books  of the business of
the Partnership at the principal offices  of the Partnership. The books will  be
maintained  for both tax  and financial reporting purposes  on an accrual basis.
For financial reporting and tax purposes, the fiscal year of the Partnership  is
the calendar year.
 
     As soon as practicable, but in no event later than 120 days after the close
of each fiscal year, the Managing General Partner will furnish or make available
to  each record holder  of Units (as of  a record date  selected by the Managing
General Partner) an annual report containing audited financial statements of the
Partnership for  the past  fiscal year,  prepared in  accordance with  generally
accepted  accounting principles. As  soon as practicable, but  in no event later
than 90 days after the  close of each quarter (except  the last quarter of  each
fiscal  year), the  Managing General Partner  will furnish or  make available to
each record  holder of  Units (as  of a  record date  selected by  the  Managing
General  Partner)  a report  containing  unaudited financial  statements  of the
Partnership with respect to  such quarter and such  other information as may  be
required by law.
 
     The  Partnership will  use all  reasonable efforts  to furnish  each record
holder of  a Unit  information reasonably  required for  tax reporting  purposes
within  90  days after  the close  of  each calendar  year. Such  information is
expected to be furnished  in summary form so  that certain complex  calculations
normally  required  of partners  can be  avoided.  The Partnership's  ability to
furnish such summary information to  Unitholders will depend on the  cooperation
of  such Unitholders in supplying certain  information to the Partnership. Every
Unitholder (without  regard  to whether  he  supplies such  information  to  the
Partnership)  will receive information to assist  him in determining his federal
and state tax liability and filing his federal and state income tax returns.
 
RIGHT TO INSPECT PARTNERSHIP BOOKS AND RECORDS
 
     The Partnership  Agreement  provides that  a  Limited Partner  can,  for  a
purpose  reasonably  related to  such Limited  Partner's  interest as  a limited
partner, upon reasonable demand  and at his own  expense, have furnished to  him
(i)  a current list of the  name and last known address  of each partner, (ii) a
copy of the  Partnership's tax returns,  (iii) information as  to the amount  of
cash,  and a description and statement of the agreed value of any other property
or services, contributed or to  be contributed by each  partner and the date  on
which  each  became a  partner, (iv)  copies of  the Partnership  Agreement, the
certificate of limited  partnership of the  Partnership, amendments thereto  and
powers  of  attorney  pursuant  to  which  the  same  have  been  executed,  (v)
information regarding the  status of  the Partnership's  business and  financial
condition  and  (vi)  such  other  information  regarding  the  affairs  of  the
Partnership as is just and reasonable. The Partnership may, and intends to, keep
confidential from the Limited  Partners trade secrets  or other information  the
disclosure  of which the Partnership  believes in good faith  is not in the best
interests of the Partnership or which the  Partnership is required by law or  by
agreements with third parties to keep confidential.
 
REIMBURSEMENT FOR SERVICES
 
     The  Partnership  Agreement  provides  that the  General  Partners  are not
entitled to receive any compensation for  their services as general partners  of
the Partnership; the General Partners are, however, entitled to be reimbursed on
a  monthly  basis (or  such  other basis  as  the Managing  General  Partner may
reasonably determine) for all direct and indirect expenses such General  Partner
incurs  or payments it makes on behalf of  or for the benefit of the Partnership
(including payments made or
 
                                      131
 


<PAGE>

<PAGE>
expenses incurred  under employee  benefit plans),  and all  other necessary  or
appropriate  expenses  allocable  to  the  Partnership  or  otherwise reasonably
incurred by  the  General Partners  in  connection  with the  operation  of  the
Partnership's  business (including expenses allocated to the General Partners by
their Affiliates). The Partnership Agreement provides that the Managing  General
Partner  shall determine the  expenses that are allocable  to the Partnership in
any reasonable manner  determined by the  Managing General Partner  in its  sole
discretion.  In addition, Affiliates of  the General Partners (including Triarc)
may perform administrative services  for the General Partners  on behalf of  the
Partnership.  Such Affiliates  will be  reimbursed for  all direct  and indirect
expenses incurred in connection therewith. Furthermore, the General Partners and
their Affiliates may provide additional  services to the Partnership, for  which
the  Partnership will be  charged reasonable fees as  determined by the Managing
General Partner.
 
CHANGE OF MANAGEMENT PROVISIONS
 
     The Partnership Agreement contains certain provisions that are intended  to
discourage  a Person  or group  from attempting  to remove  the Managing General
Partner as general partner of the Partnership or otherwise change management  of
the  Partnership. If any  Person or group  (other than the  General Partners and
their Affiliates) acquires,  in the  aggregate, beneficial ownership  of 20%  or
more  of the  Units of any  class then  outstanding, such Person  or group loses
voting rights with respect  to all of  its Units. In  addition, if the  Managing
General Partner is removed as Managing General Partner other than for Cause, (i)
the  Subordination Period will  end and all  outstanding Subordinated Units will
immediately convert into Common Units on a one-for-one basis, (ii) any  existing
Common Units Arrearages will be extinguished and (iii) the General Partners will
have  the right  to convert  their General  Partner Interests  and the  right to
receive Incentive Distributions into Common Units or to receive in exchange  for
such  interests a cash payment equal to the fair market value of such interests.
See ' -- Withdrawal or Removal of the General Partners.'
 
REGISTRATION RIGHTS
 
     Pursuant to the terms of the  Partnership Agreement and subject to  certain
limitations described therein, the Partnership has agreed to register for resale
under  the Securities Act and applicable  state securities laws any Common Units
or other  securities  of  the  Partnership  (including  Subordinated  Units  and
Incentive  Rights) proposed to be sold by the Managing General Partner or any of
its Affiliates. The Partnership is obligated  to pay all expenses incidental  to
such  registration, excluding underwriting discounts and commissions. See 'Units
Eligible for Future Sale.'
 
                         UNITS ELIGIBLE FOR FUTURE SALE
 
     After the sale of  the Common Units offered  in the Offering, the  Managing
General  Partner  will  hold 4,533,638  Subordinated  Units, all  of  which will
convert into Common Units  at the end  of the Subordination  Period and some  of
which  may convert earlier. In addition, the Special General Partner may convert
all or a portion of its General  Partner Interest into a number of  Subordinated
Units  (or Common Units after the end of the Subordination Period) having rights
to  distributions  of  Available  Cash  from  Operating  Surplus  equal  to  the
distribution rights with respect to Available Cash from Operating Surplus of the
General  Partner Interest so converted, provided  that the Triarc Merger has not
occurred. See 'Cash Distribution Policy -- Distributions from Operating  Surplus
during  Subordination Period.'  The sale  of these  Units could  have an adverse
impact on  the price  of the  Common Units  or on  any trading  market that  may
develop.  For  a  discussion of  the  transactions whereby  the  General Partner
acquired the  Subordinated Units  in  connection with  the organization  of  the
Partnership, see 'The Transactions.'
 
     The  Common  Units  sold in  the  Offering will  generally  be transferable
without restriction or  further registration  under the  Securities Act,  except
that  any Common Units owned by 'an  affiliate' of the Partnership (as that term
is defined in the  rules and regulations  under the Securities  Act) may not  be
resold  publicly except in compliance with  the registration requirements of the
Securities Act or pursuant to an  exemption therefrom under Rule 144  thereunder
('Rule 144') or otherwise. Rule 144 permits
 
                                      132
 


<PAGE>

<PAGE>
securities acquired by an affiliate of the issuer in an offering to be sold into
the market in an amount that does not exceed, during any three-month period, the
greater of (i) 1% of the total number of such securities outstanding or (ii) the
average weekly reported trading volume of the Common Units for the four calendar
weeks  prior to  such sale.  Sales under  Rule 144  are also  subject to certain
manner of sale provisions, notice  requirements and the availability of  current
public  information about the  Partnership. A person  who is not  deemed to have
been an  affiliate  of the  Partnership  at any  time  during the  three  months
preceding  a sale, and who has beneficially  owned his Common Units for at least
three years, would be entitled to sell such Common Units under Rule 144  without
regard  to the  public information  requirements, volume  limitations, manner of
sale provisions or notice requirements of Rule 144.
 
     Prior to the end of the Subordination Period, the Partnership may not issue
equity securities of the Partnership ranking prior or senior to the Common Units
or an aggregate of more than 3,095,238 additional Common Units or an  equivalent
amount of securities ranking on a parity with the Common Units (excluding Common
Units  issued  upon exercise  of the  Underwriters' over-allotment  option, upon
conversion of Subordinated Units or  in connection with Acquisitions or  Capital
Improvements  or the repayment  of certain indebtedness  or pursuant to employee
benefit plans) in either case without the approval of the holders of at least  a
Unit  Majority,  except  under certain  circumstances.  After  the Subordination
Period, the  Partnership,  without a  vote  of  the Unitholders,  may  issue  an
unlimited  number of additional  Common Units or other  equity securities of the
Partnership on a  parity with  or senior to  the Common  Units. The  Partnership
Agreement  does not impose any restriction on the Partnership's ability to issue
equity securities ranking junior to the  Common Units at any time. Any  issuance
of  additional Common Units or certain other equity securities would result in a
corresponding  decrease  in   the  proportionate  ownership   interest  in   the
Partnership represented by, and could adversely affect the cash distributions to
and  market  price  of,  Common Units  then  outstanding.  See  'The Partnership
Agreement -- Issuance of Additional Securities.'
 
     Pursuant to the Partnership Agreement, the Managing General Partner and its
Affiliates will have  the right, upon  the terms and  subject to the  conditions
therein, to cause the Partnership to register under the Securities Act and state
securities  laws the offer and sale of any Units or other Partnership Securities
that it holds. Subject to the terms and conditions of the Partnership Agreement,
such registration rights allow the  Managing General Partner and its  affiliates
or  their assigns, holding any  Units to require registration  of any such Units
and to include  any such Units  in a  registration by the  partnership of  other
Units,  including Units  offered by the  Partnership or by  any Unitholder. Such
registration rights  will  continue  in  effect  for  two  years  following  any
withdrawal  or removal of the Managing General Partner as the general partner of
the Partnership. In connection with any such registration, the Partnership  will
indemnify  each Unitholder participating in  such registration and its officers,
directors and controlling  Persons from  and against any  liabilities under  the
Securities  Act  or  any state  securities  laws arising  from  the registration
statement or prospectus. The Partnership will  bear the reasonable costs of  any
such   registration,  excluding  underwriting   discounts  and  commissions.  In
addition, the Managing General Partner and  its Affiliates may sell their  Units
in private transactions at any time, subject to compliance with applicable laws.
 
     The  Partnership, the  Operating Partnership, the  Managing General Partner
and Triarc have agreed  not to (i)  offer, sell, contract  to sell or  otherwise
dispose  of any Common Units  or Subordinated Units (other  than the issuance of
Common Units in connection  with Acquisitions or  Capital Improvements) or  (ii)
grant  any options  or warrants to  purchase Common Units  or Subordinated Units
(other than the grant of options  to purchase Common Units pursuant to  employee
benefit  plans that are not exercisable for at  least 180 days), for a period of
180 days after the date of this Prospectus without the prior written consent  of
Merrill  Lynch, Pierce, Fenner &  Smith Incorporated ('Merrill Lynch'), provided
that the  Subordinated Units  may  be transferred  without  such consent  to  an
Affiliate of the Managing General Partner who agrees to be bound by the transfer
restrictions contained in this paragraph.
 
                               TAX CONSIDERATIONS
 
     This  section  is a  summary  of material  tax  considerations that  may be
relevant to prospective  Unitholders and, to  the extent set  forth below  under
'  -- Legal  Opinions and  Advice,' represents  the opinion  of Andrews  & Kurth
L.L.P.,  special  counsel   to  the   General  Partners   and  the   Partnership
 
                                      133
 


<PAGE>

<PAGE>
('Counsel'),  insofar as it relates  to matters of law  and legal conclusions. A
copy of such opinion has been filed as an exhibit to the Registration  Statement
of  which  this  Prospectus  is  a part.  This  section  is  based  upon current
provisions of the Internal Revenue Code  of 1986, as amended ('Code'),  existing
and proposed regulations thereunder and current administrative rulings and court
decisions,  all  of which  are  subject to  change.  Subsequent changes  in such
authorities may  cause  the tax  consequences  to vary  substantially  from  the
consequences  described below. Unless the context otherwise requires, references
in this section to  Partnership are references to  both the Partnership and  the
Operating Partnership.
 
     No  attempt has  been made  in the following  discussion to  comment on all
federal income  tax  matters  affecting  the  Partnership  or  the  Unitholders.
Moreover,  the discussion focuses on Unitholders  who are individual citizens or
residents of the United States and has only limited application to corporations,
estates, trusts, non-resident aliens or other Unitholders subject to specialized
tax treatment (such as tax-exempt institutions, individual retirement  accounts,
REITs or mutual funds). Accordingly, each prospective Unitholder should consult,
and should depend on, his own tax advisor in analyzing the federal, state, local
and  foreign tax consequences to  him of the ownership  or disposition of Common
Units.
 
LEGAL OPINIONS AND ADVICE
 
     Counsel has expressed its  opinion that, based  on the representations  and
subject to the qualifications set forth in the detailed discussion that follows,
for   federal  income  tax  purposes  (i)  the  Partnership  and  the  Operating
Partnership will each  be treated  as a partnership  and (ii)  owners of  Common
Units  (with certain exceptions, as described in 'Limited Partner Status' below)
will  be  treated  as  partners  of  the  Partnership  (but  not  the  Operating
Partnership).  In  addition,  all statements  as  to  matters of  law  and legal
conclusions contained  in  this section,  unless  otherwise noted,  reflect  the
opinion of Counsel.
 
     Although no attempt has been made in the following discussion to comment on
all  federal  income  tax  matters  affecting  the  Partnership  or  prospective
Unitholders, Counsel has advised the Partnership that, based on current law, the
following  is  a  general  description  of  the  principal  federal  income  tax
consequences  that should  arise from  the ownership  and disposition  of Common
Units and,  insofar as  it relates  to  matters of  law and  legal  conclusions,
addresses  the  material  tax  consequences to  Unitholders  who  are individual
citizens or residents of the United States.
 
     No ruling has been or will  be requested from the Internal Revenue  Service
(the  'IRS') with respect to classification  of the Partnership as a partnership
for federal income  tax purposes, whether  the Partnership's propane  operations
generate  'qualifying  income' under  SS7704  of the  Code  or any  other matter
affecting the  Partnership or  prospective Unitholders.  An opinion  of  counsel
represents  only that counsel's best legal judgment and does not bind the IRS or
the courts. Thus, no assurance is given that the opinions set forth herein would
be sustained by a court if contested by  the IRS. Any such contest with the  IRS
may  materially and  adversely impact  the market for  the Common  Units and the
prices at which Common Units trade. In  addition, the costs of any contest  with
the  IRS will be borne directly or indirectly by the Unitholders and the General
Partners.  Furthermore,  no  assurance  is  given  that  the  treatment  of  the
Partnership  or  an investment  therein will  not  be significantly  modified by
future legislative  or  administrative  changes or  court  decisions.  Any  such
modification may or may not be retroactively applied.
 
     For  the reasons hereinafter described, Counsel has not rendered an opinion
with respect  to the  following  specific federal  income  tax issues:  (i)  the
treatment  of a Unitholder  whose Common Units  are loaned to  a short seller to
cover a short  sale of Common  Units (see '  -- Tax Treatment  of Operations  --
Treatment  of Short Sales'), (ii) whether a Unitholder acquiring Common Units in
separate transactions must maintain a single aggregate adjusted tax basis in his
Common Units (see '  -- Disposition of  Common Units --  Recognition of Gain  or
Loss'),  (iii)  whether  the  Partnership's  monthly  convention  for allocating
taxable income and  losses is  permitted by existing  Treasury Regulations  (see
'  --  Disposition  of  Common  Units  --  Allocations  Between  Transferors and
Transferees'), and  (iv)  whether  the  Partnership's  method  for  depreciating
Section 743 adjustments, utilized to maintain the uniformity of the economic and
tax  characteristics of the Common Units, is sustainable (see ' -- Uniformity of
Units').
 
                                      134
 


<PAGE>

<PAGE>
TAX RATES AND CHANGES IN FEDERAL INCOME TAX LAWS
 
     The top marginal income tax  rate for individuals is  36% subject to a  10%
surtax  on individuals with taxable  income in excess of  $263,750 per year. The
surtax is computed by applying a 39.6%  rate to taxable income in excess of  the
threshold. The net capital gain of an individual is subject to a maximum 28% tax
rate.
 
     The  1995 Proposed Legislation that was  passed by Congress on November 17,
1995, as part of  the Revenue Reconciliation  Act of 1995,  would alter the  tax
reporting  system  and  the  deficiency collection  system  applicable  to large
partnerships (generally  defined as  electing partnerships  with more  than  100
partners)  and would make  certain additional changes to  the treatment of large
partnerships, such  as the  Partnership.  Certain of  the proposed  changes  are
discussed  later in  this section.  The 1995  Proposed Legislation  is generally
intended to  simplify  the  administration  of the  tax  rules  governing  large
partnerships such as the Partnership. In addition, the 1995 Proposed Legislation
contained provisions which would have reduced the maximum tax rate applicable to
the net capital gains of an individual to 19.8%.
 
     On  March 19, 1996, President Clinton  introduced tax legislation, known as
the Revenue  Reconciliation Act  of  1996, that  would  impact the  taxation  of
certain  financial products, including partnership interests. One proposal would
treat a taxpayer as  having sold an 'appreciated'  partnership interest (one  in
which  gain would be recognized  if such interest were  sold) if the taxpayer or
related persons enters into one  or more positions with  respect to the same  or
substantially   identical  property   which,  for   some  period,  substantially
eliminates both the  risk of loss  and opportunity for  gain on the  appreciated
financial  position (including  selling 'short  against the  box' transactions).
Certain of these proposed changes are also discussed later in this section under
'Disposition of Common Units.'
 
     President Clinton vetoed the 1995 Proposed Legislation on December 6, 1995.
As of the date of this Prospectus, it is not possible to predict whether any  of
the   changes  set  forth   in  the  1995   Proposed  Legislation,  the  Revenue
Reconciliation Act of 1996 or any other  changes in the federal income tax  laws
that would impact the Partnership and the Unitholders will ultimately be enacted
or,  if enacted, what form they will take, what the effective dates will be, and
what, if any, transition rules will be provided.
 
PARTNERSHIP STATUS
 
     A partnership is  not a  taxable entity and  incurs no  federal income  tax
liability.  Instead, each partner is required to take into account his allocable
share of  items  of income,  gain,  loss and  deduction  of the  Partnership  in
computing   his  federal  income  tax  liability,  regardless  of  whether  cash
distributions are  made.  Distributions  by  a  partnership  to  a  partner  are
generally  not taxable unless the amount of any cash distributed is in excess of
the partner's adjusted basis in his partnership interest.
 
     No ruling has been or will be sought  from the IRS as to the status of  the
Partnership or the Operating Partnership as a partnership for federal income tax
purposes.  Instead the  Partnership has relied  on the opinion  of Counsel that,
based upon the Code, the  regulations thereunder, published revenue rulings  and
court  decisions, the  Partnership and  the Operating  Partnership will  each be
classified as a partnership for federal income tax purposes.
 
     In rendering  its  opinion, Counsel  has  relied  on the  accuracy  of  the
following  factual  representations  made  by the  Partnership  and  the General
Partners:
 
          (a) With respect to the Partnership and the Operating Partnership, the
     General Partners, at  all times  while acting  as general  partners of  the
     Partnership  and the Operating Partnership, will have a combined net worth,
     computed  on  a  fair  market  value  basis,  excluding  interests  in  the
     Partnership  and in the Operating Partnership  and any amounts due from the
     Partnership or the Operating  Partnership and deferred  taxes, of not  less
     than $15 million;
 
          (b)  The  Partnership  will be  operated  in accordance  with  (i) all
     applicable partnership statutes, (ii) the Partnership Agreement, and  (iii)
     this Prospectus;
 
                                      135
 


<PAGE>

<PAGE>
          (c)  The Operating Partnership will be operated in accordance with (i)
     all applicable partnership statutes, (ii) the limited partnership agreement
     for the Operating Partnership,  and (iii) the  description thereof in  this
     Prospectus;
 
          (d)  The General Partners will, at all times, act independently of the
     limited partners  (other than  any  limited partner  interest held  by  the
     General Partners); and
 
          (e)  For each taxable year,  more than 90% of  the gross income of the
     Partnership will be derived  from (i) marketing  of propane, (ii)  interest
     (from other than a financial business) and dividends, and (iii) other items
     of  income which, in the opinion of Counsel, constitute 'qualifying income'
     within the meaning of Section 7704(d) of the Code.
 
     Counsel's opinion as to the  partnership classification of the  Partnership
in  the event of  a change in the  general partner is  based upon the assumption
that the new general partner will satisfy the foregoing representations.
 
     Section 7704 of the Code  provides that publicly-traded partnerships  will,
as  a  general  rule,  be  taxed as  corporations.  However,  an  exception (the
'Qualifying  Income   Exception')  exists   with  respect   to   publicly-traded
partnerships  of which 90%  or more of  the gross income  for every taxable year
consists of  'qualifying income.'  Counsel  is of  the opinion  that  qualifying
income  includes interest from  the Partnership Loan to  Triarc, interest on the
Partnership's customer account balances  and other interest  (from other than  a
financial   business),  dividends   (including  dividends   from  the  corporate
subsidiary  of  the  Operating  Partnership)  and  income  and  gains  from  the
transportation  and marketing of  crude oil, natural  gas, and products thereof,
including the retail and wholesale  marketing of propane and the  transportation
of  propane  and natural  gas liquids.  The Managing  General Partner,  based on
advice of  Counsel, estimates,  that at  least 90%  of the  Partnership's  gross
income  will constitute qualifying  income. The Partnership  estimates, based on
advice of Counsel, that less  than 6% of its gross  income for its taxable  year
ending  December 31, 1996 will not constitute qualifying income. The Partnership
further estimates that  less than  6% of its  gross income  for each  subsequent
taxable year will not constitute qualifying income.
 
     If  the Partnership  fails to meet  the Qualifying  Income Exception (other
than a failure which  is determined by  the IRS to be  inadvertent and which  is
cured within a reasonable time after discovery), the Partnership will be treated
as  if it had transferred all of its  assets (subject to liabilities) to a newly
formed corporation (on the first day of the  year in which it fails to meet  the
Qualifying  Income Exception) in return for  stock in that corporation, and then
distributed that stock to the partners in liquidation of their interests in  the
Partnership. This contribution and liquidation should be tax-free to Unitholders
and  the Partnership, so  long as the  Partnership, at that  time, does not have
liabilities in excess of  the basis of its  assets. Thereafter, the  Partnership
would be treated as a corporation for federal income tax purposes.
 
     If  the  Partnership  or  the  Operating  Partnership  were  treated  as an
association taxable as a corporation in any taxable year, either as a result  of
a  failure to meet  the Qualifying Income  Exception or otherwise,  its items of
income, gain,  loss and  deduction would  be reflected  only on  its tax  return
rather than being passed through to the Unitholders, and its net income would be
taxed  to the  Partnership or the  Operating Partnership at  corporate rates. In
addition, any  distribution made  to a  Unitholder would  be treated  as  either
taxable  dividend  income  (to  the  extent  of  the  Partnership's  current  or
accumulated earnings and profits) or (in the absence of earnings and profits  or
to  the extent  any distribution  exceeds current  and accumulated  earnings and
profits) a nontaxable return of capital  (to the extent of the Unitholder's  tax
basis  in his Common Units) or taxable  capital gain (after the Unitholder's tax
basis in the Common Units is reduced to zero). Accordingly, treatment of  either
the  Partnership or  the Operating  Partnership as  an association  taxable as a
corporation would result in a material reduction in a Unitholder's cash flow and
after-tax return and thus would likely result in a substantial reduction of  the
value of the Units.
 
     The  discussion below is based on  the assumption that the Partnership will
be classified as a partnership for federal income tax purposes.
 
                                      136
 


<PAGE>

<PAGE>
LIMITED PARTNER STATUS
 
     Unitholders who have  become limited  partners of the  Partnership will  be
treated  as  partners  of  the  Partnership  for  federal  income  tax purposes.
Moreover, the IRS has ruled that assignees of partnership interests who have not
been admitted  to  a partnership  as  partners, but  who  have the  capacity  to
exercise   substantial  dominion  and  control  over  the  assigned  partnership
interests, will be treated as partners  for federal income tax purposes. On  the
basis  of this ruling, except  as otherwise described herein,  Counsel is of the
opinion  that  (a)   assignees  who   have  executed   and  delivered   Transfer
Applications,   and  are  awaiting  admission   as  limited  partners,  and  (b)
Unitholders whose Common Units are held in  street name or by a nominee and  who
have  the right to direct the nominee  in the exercise of all substantive rights
attendant to the ownership of their Common Units will be treated as partners  of
the Partnership for federal income tax purposes. As this ruling does not extend,
on  its facts,  to assignees  of Common  Units who  are entitled  to execute and
deliver Transfer Applications and thereby become entitled to direct the exercise
of attendant rights, but who fail to execute and deliver Transfer  Applications,
Counsel's  opinion does not extend to these persons. Income, gain, deductions or
losses would not appear to  be reportable by a Unitholder  who is not a  partner
for  federal income tax purposes, and any  cash distributions received by such a
Unitholder would therefore be  fully taxable as  ordinary income. These  holders
should  consult their own tax advisors with  respect to their status as partners
in the  Partnership  for federal  income  tax  purposes. A  purchaser  or  other
transferee  of  Common  Units  who  does  not  execute  and  deliver  a Transfer
Application may not receive  certain federal income  tax information or  reports
furnished  to record holders of Common Units unless the Common Units are held in
a nominee or  street name account  and the  nominee or broker  has executed  and
delivered a Transfer Application with respect to such Common Units.
 
     A beneficial owner of Common Units whose Common Units have been transferred
to  a short seller to complete a short sale would appear to lose his status as a
partner with respect to such Common  Units for federal income tax purposes.  See
' -- Tax Treatment of Operations -- Treatment of Short Sales.'
 
TAX CONSEQUENCES OF UNIT OWNERSHIP
 
FLOW-THROUGH OF TAXABLE INCOME
 
     No  federal  income tax  will  be paid  by  the Partnership.  Instead, each
Unitholder will be  required to report  on his income  tax return his  allocable
share  of the  income, gains, losses  and deductions of  the Partnership without
regard  to  whether  corresponding  cash  distributions  are  received  by  such
Unitholder.  Consequently,  a  Unitholder  may  be  allocated  income  from  the
Partnership even if  he has not  received a cash  distribution. Each  Unitholder
will be required to include in income his allocable share of Partnership income,
gain,  loss and deduction for the taxable year of the Partnership ending with or
within the taxable year of the Unitholder.
 
TREATMENT OF PARTNERSHIP DISTRIBUTIONS
 
     Distributions by  the Partnership  to a  Unitholder generally  will not  be
taxable  to the Unitholder for federal income  tax purposes to the extent of his
basis  in  his   Common  Units   immediately  before   the  distribution.   Cash
distributions  in excess of a Unitholder's basis generally will be considered to
be gain from the  sale or exchange  of the Common  Units, taxable in  accordance
with  the rules  described under  ' -- Disposition  of Common  Units' below. Any
reduction in a Unitholder's share of the Partnership's liabilities for which  no
partner,  including  the  General  Partners, bears  the  economic  risk  of loss
('nonrecourse liabilities') will be  treated as a distribution  of cash to  that
Unitholder.  To the extent  that Partnership distributions  cause a Unitholder's
'at risk' amount to be less  than zero at the end  of any taxable year, he  must
recapture  any  losses  deducted in  previous  years.  See '  --  Limitations on
Deductibility of Partnership Losses.'
 
     A decrease in a Unitholder's Percentage Interest in the Partnership because
of the issuance by the Partnership of additional Common Units will decrease such
Unitholder's share of nonrecourse liabilities of the Partnership, and thus  will
result   in  a  corresponding  deemed  distribution  of  cash.  A  non-pro  rata
distribution of money or property may result in ordinary income to a Unitholder,
regardless of his basis  in his Common Units,  if such distribution reduces  the
Unitholder's share of the Partnership's
 
                                      137
 


<PAGE>

<PAGE>
'unrealized receivables' (including depreciation recapture) and/or substantially
appreciated  'inventory  items' (both  as defined  in Section  751 of  the Code)
(collectively, 'Section 751  Assets'). To  that extent, the  Unitholder will  be
treated  as having been  distributed his proportionate share  of the Section 751
Assets and having exchanged such assets  with the Partnership in return for  the
non-pro  rata portion of the actual distribution made to him. This latter deemed
exchange will  generally  result in  the  Unitholder's realization  of  ordinary
income  under Section 751(b) of  the Code. Such income  will equal the excess of
(1) the non-pro  rata portion  of such  distribution over  (2) the  Unitholder's
basis  for  the share  of such  Section  751 Assets  deemed relinquished  in the
exchange.
 
RATIO OF TAXABLE INCOME TO DISTRIBUTIONS
 
     The Partnership estimates that a purchaser of Common Units in the  Offering
who  owns them from the date of the closing of the Offering through December 31,
2000, will be  allocated, on a  cumulative basis, an  amount of federal  taxable
income  for such period that will be less  than 30% of the cash distributed with
respect to that period. The Partnership further estimates that for taxable years
after the taxable year ending December 31, 2000, the taxable income allocable to
the Unitholders will  represent a  significantly higher percentage  (and may  in
certain  circumstances exceed  the amount)  of cash  distributed to  them. These
estimates are based upon the assumption  that gross income from operations  will
approximate  an amount required to make  the Minimum Quarterly Distribution with
respect to all Units and other assumptions with respect to capital expenditures,
cash flow and  anticipated cash distributions.  These estimates and  assumptions
are  subject to,  among other  things, numerous  business, economic, regulatory,
competitive and political uncertainties beyond  the control of the  Partnership.
Further,  the estimates are based  on current tax law  and certain tax reporting
positions that the  Partnership intends to  adopt and with  which the IRS  could
disagree. Accordingly, no assurance is given that the estimates will prove to be
correct. The actual percentage could be higher or lower and any such differences
could be material.
 
BASIS OF COMMON UNITS
 
     A Unitholder's initial tax basis for his Common Units will be the amount he
paid  for  the Common  Units  plus his  share  of the  Partnership's nonrecourse
liabilities. That basis will be increased by his share of Partnership income and
by any increases in his share of Partnership nonrecourse liabilities. That basis
will be decreased (but not below zero) by distributions from the Partnership, by
the Unitholder's share of  Partnership losses, by any  decrease in his share  of
Partnership  nonrecourse liabilities  and by  his share  of expenditures  of the
Partnership that are not deductible in computing its taxable income and are  not
required  to be capitalized. A limited partner will have no share of Partnership
debt which is recourse to a partner,  but will have a share, generally based  on
his  share of profits, of Partnership debt which is not recourse to any partner.
The Partnership does not anticipate having nonrecourse liabilities, however. See
' -- Disposition of Common Units -- Recognition of Gain or Loss.'
 
LIMITATIONS ON DEDUCTIBILITY OF PARTNERSHIP LOSSES
 
     The deduction by a  Unitholder of his share  of Partnership losses will  be
limited  to  the tax  basis  in his  Units  and, in  the  case of  an individual
Unitholder or a corporate Unitholder (if more than 50% in the value of its stock
is owned  directly  or  indirectly  by five  or  fewer  individuals  or  certain
tax-exempt  organizations), to the amount which  the Unitholder is considered to
be 'at risk' with respect to the Partnership's activities, if that is less  than
the  Unitholder's basis. A Unitholder must recapture losses deducted in previous
years to the  extent that  Partnership distributions cause  the Unitholder's  at
risk  amount  to be  less  than zero  at  the end  of  any taxable  year. Losses
disallowed to a Unitholder or recaptured  as a result of these limitations  will
carry forward and will be allowable to the extent that the Unitholder's basis or
at  risk amount  (whichever is the  limiting factor)  is subsequently increased.
Upon the taxable disposition of a Unit, any gain recognized by a Unitholder  can
be offset by losses that were previously suspended by the at risk limitation but
may  not be offset by losses suspended  by the basis limitation. Any excess loss
(above such gain) previously suspended by the at risk or basis limitations is no
longer utilizable.
 
                                      138
 


<PAGE>

<PAGE>
     In general, a Unitholder will be at risk to the extent of the tax basis  of
his  Units, excluding  any portion  of that basis  attributable to  his share of
Partnership  nonrecourse  liabilities,  reduced  by  any  amount  of  money  the
Unitholder  borrows to acquire or hold his  Units if the lender of such borrowed
funds owns an interest in  the Partnership, is related to  such a person or  can
look only to Units for repayment. A Unitholder's at risk amount will increase or
decrease  as the basis  of the Unitholder's Units  increases or decreases (other
than basic increases or decreases attributable to increases or decreases in  his
share of Partnership nonrecourse liabilities).
 
     The  passive loss limitations generally  provide that individuals, estates,
trusts and certain closely-held  corporations and personal service  corporations
can  deduct losses from  passive activities (generally,  activities in which the
taxpayer does not materially participate) only  to the extent of the  taxpayer's
income  from those passive activities. The  passive loss limitations are applied
separately with respect to  each publicly-traded partnership. Consequently,  any
passive  losses generated  by the Partnership  will only be  available to offset
future income generated by the Partnership  and will not be available to  offset
income   from  other   passive  activities   or  investments   (including  other
publicly-traded partnerships)  or  salary  or active  business  income.  Passive
losses  which  are  not deductible  because  they exceed  a  Unitholder's income
generated by the Partnership  may be deducted  in full when  he disposes of  his
entire  investment  in the  Partnership  in a  fully  taxable transaction  to an
unrelated party.  The  passive  activity  loss rules  are  applied  after  other
applicable  limitations on deductions  such as the  at risk rules  and the basis
limitation.
 
     A Unitholder's share of  net income from the  Partnership may be offset  by
any  suspended passive losses from the Partnership,  but it may not be offset by
any other current or carryover  losses from other passive activities,  including
those  attributable to other publicly-traded partnerships. The IRS has announced
that Treasury Regulations will be  issued which characterize net passive  income
from  a publicly-traded  Partnership as  investment income  for purposes  of the
limitations on the deductibility of investment interest.
 
LIMITATIONS ON INTEREST DEDUCTIONS
 
     The  deductibility  of  a  non-corporate  taxpayer's  'investment  interest
expense'  is generally limited to the  amount of such taxpayer's 'net investment
income.' As noted, a Unitholder's net  passive income from the Partnership  will
be  treated as investment income for this purpose. In addition, the Unitholder's
share of  the  Partnership's portfolio  income  will be  treated  as  investment
income.  Investment  interest  expense  includes  (i)  interest  on indebtedness
properly allocable  to  property held  for  investment, (ii)  the  Partnership's
interest  expense  attributed  to portfolio  income,  and (iii)  the  portion of
interest expense incurred to purchase or carry an interest in a passive activity
to  the  extent  attributable  to   portfolio  income.  The  computation  of   a
Unitholder's  investment interest expense will take into account interest on any
margin account borrowing or other loan incurred  to purchase or own a Unit.  Net
investment  income includes gross  income from property  held for investment and
amounts treated as  portfolio income  pursuant to  the passive  loss rules  less
deductible expenses (other than interest) directly connected with the production
of  investment income, but generally does  not include gains attributable to the
disposition of property held for investment.
 
ALLOCATION OF PARTNERSHIP INCOME, GAIN, LOSS AND DEDUCTION
 
     In general, if  the Partnership has  a net profit,  items of income,  gain,
loss  and  deduction  will  be  allocated among  the  General  Partners  and the
Unitholders in  accordance with  their respective  percentage interests  in  the
Partnership.  With respect to any taxable year,  a class of Unitholders (such as
Common Units) that receives more cash  than another class (such as  Subordinated
Units),  on a per Unit basis, will  be allocated additional income equal to that
excess. If the  Partnership has  a net  loss, items  of income,  gain, loss  and
deduction  will generally be  allocated, first, to the  General Partners and the
Unitholders in  accordance with  their respective  Percentage Interests  to  the
extent  of their positive capital accounts  (as maintained under the Partnership
Agreement), and, second, to the General Partners.
 
                                      139
 


<PAGE>

<PAGE>
     Certain items  of Partnership  income,  deduction, gain  and loss  will  be
allocated  to account for the  difference between the tax  basis and fair market
value of certain property held by the Partnership ('Contributed Property').  The
effect  of these allocations to a Unitholder  will be essentially the same as if
the tax basis of the Contributed Property were equal to its fair market value at
the time of contribution. In addition, certain items of recapture income will be
allocated to the extent possible to  the partner allocated the deduction  giving
rise  to the treatment of such gain as recapture income in order to minimize the
recognition of ordinary income  by some Unitholders,  but these allocations  may
not  be respected. If  these allocations of recapture  income are not respected,
the amount of the income or gain  allocated to a Unitholder will not change  but
instead  a change in the character of the income allocated to a Unitholder would
result. Finally, although the  Partnership does not  expect that its  operations
will  result in the  creation of negative capital  accounts, if negative capital
accounts nevertheless  result, items  of  Partnership income  and gain  will  be
allocated  in an amount and manner  sufficient to eliminate the negative balance
as quickly as possible.
 
     Regulations provide  that an  allocation of  items of  partnership  income,
gain,  loss or deduction,  other than an allocation  to eliminate the difference
between a partner's 'book' capital account (credited with the fair market  value
of  Contributed Property) and 'tax' capital account (credited with the tax basis
of Contributed Property)  (the 'Book-Tax  Disparity'), will  generally be  given
effect  for federal income tax purposes  in determining a partner's distributive
share of an item of income, gain,  loss or deduction only if the allocation  has
substantial  economic effect. In any other  case, a partner's distributive share
of an item  will be determined  on the basis  of the partner's  interest in  the
partnership,  which will be determined by taking  into account all the facts and
circumstances,  including   the   partner's  relative   contributions   to   the
partnership,  the interests of the partners  in economic profits and losses, the
interest of the partners in cash flow and other nonliquidating distributions and
rights of the partners to distributions of capital upon liquidation. Counsel  is
of  the opinion that, with  the exception of the  allocation of recapture income
discussed above,  allocations  under the  Partnership  Agreement will  be  given
effect  for federal income tax purposes  in determining a partner's distributive
share of  an  item of  income,  gain, loss  or  deduction. There  are,  however,
uncertainties in the Treasury Regulations relating to allocations of Partnership
income,  and investors should be aware  that the allocations of recapture income
in the Partnership Agreement may be successfully challenged by the IRS.
 
TAX TREATMENT OF OPERATIONS
 
ACCOUNTING METHOD AND TAXABLE YEAR
 
     The Partnership will use the fiscal year ending December 31 as its  taxable
year  and will  adopt the  accrual method of  accounting for  federal income tax
purposes. Each Unitholder will  be required to include  in income his  allocable
share of Partnership income, gain, loss and deduction for the fiscal year of the
Partnership  ending  within  or with  the  taxable  year of  the  Unitholder. In
addition, a  Unitholder who  has a  taxable year  ending on  a date  other  than
December  31 and  who disposes of  all of his  Units following the  close of the
Partnership's taxable year but before the close of his taxable year must include
his allocable share of  Partnership income, gain, loss  and deduction in  income
for  his taxable  year with  the result that  he will  be required  to report in
income for his  taxable year his  distributive share  of more than  one year  of
Partnership  income, gain,  loss and deduction.  See ' --  Disposition of Common
Units -- Allocations Between Transferors and Transferees.'
 
INITIAL TAX BASIS, DEPRECIATION AND AMORTIZATION
 
     The tax basis of the assets of the Partnership will be used for purposes of
computing depreciation and  cost recovery  deductions and,  ultimately, gain  or
loss  on the disposition  of such assets. The  Partnership assets will initially
have an aggregate tax basis equal to the tax basis of the assets in the hands of
the  Managing  General  Partner  immediately  prior  to  the  formation  of  the
Partnership  plus the amount of gain  recognized by the Managing General Partner
as a result of the formation of  the Partnership. The federal income tax  burden
associated  with  the  difference  between the  fair  market  value  of property
contributed by the Managing General Partners  and the tax basis established  for
such  property will  be borne by  the General  Partners. See '  -- Allocation of
Partnership Income, Gain, Loss and Deduction.'
 
                                      140
 


<PAGE>

<PAGE>
     The Partnership may elect to  use allowable depreciation and cost  recovery
methods  that will  result in the  largest depreciation deductions  in the early
years  of  the  Partnership.  The  Partnership  will  not  be  entitled  to  any
amortization  deductions with respect to goodwill conveyed to the Partnership on
formation, other  than with  respect to  goodwill that  was amortizable  by  the
General   Partners.  Property  subsequently  acquired   or  constructed  by  the
Partnership may be depreciated using accelerated methods permitted by the Code.
 
     If the Partnership disposes of  depreciable property by sale,  foreclosure,
or  otherwise, all  or a  portion of  any gain  (determined by  reference to the
amount of depreciation previously deducted and  the nature of the property)  may
be  subject to  the recapture  rules and  taxed as  ordinary income  rather than
capital gain. Similarly, a partner who  has taken cost recovery or  depreciation
deductions  with respect to property owned by the Partnership may be required to
recapture such deductions as ordinary income upon a sale of his interest in  the
Partnership.  See  '  --  Allocation  of  Partnership  Income,  Gain,  Loss  and
Deduction' and ' -- Disposition of Common Units -- Recognition of Gain or Loss.'
 
     Costs incurred  in organizing  the Partnership  may be  amortized over  any
period  selected  by  the Partnership  not  shorter  than 60  months.  The costs
incurred in promoting the  issuance of Units must  be capitalized and cannot  be
deducted  currently, ratably or  upon termination of  the Partnership. There are
uncertainties regarding the  classification of costs  as organization  expenses,
which may be amortized, and as syndication expenses, which may not be amortized.
For example, under recently proposed regulations, the Underwriter's spread would
be treated as a syndication cost.
 
SECTION 754 ELECTION
 
     The  Partnership will  make the  election permitted  by Section  754 of the
Code. That election is irrevocable without the consent of the IRS. The  election
will  generally permit the Partnership to adjust a Common Unit purchaser's basis
in the Partnership's assets ('inside basis')  pursuant to Section 743(b) of  the
Code to reflect his purchase price. The Section 743(b) adjustment belongs to the
purchaser  and  not  to other  partners.  (For  purposes of  this  discussion, a
partner's inside basis in  the Partnership's assets will  be considered to  have
two components: (1) his share of the Partnership's basis in such assets ('Common
Basis') and (2) his Section 743(b) adjustment to that basis.)
 
     Proposed  Treasury  Regulation  Section 1.168-2(n)  generally  requires the
Section 743(b) adjustment attributable to recovery property to be depreciated as
if the  total amount  of  such adjustment  were attributable  to  newly-acquired
recovery  property  placed  in service  when  the purchaser  acquires  the Unit.
Similarly, the legislative  history of  Section 197 indicates  that the  Section
743(b) adjustment attributable to an amortizable Section 197 intangible (such as
goodwill)  should be treated as a newly-acquired  asset placed in service in the
month when the purchaser  acquires the Unit.  Under Treasury Regulation  Section
1.167(c)-1(a)(6),  a Section 743(b) adjustment  attributable to property subject
to depreciation  under  Section  167  of the  Code  rather  than  cost  recovery
deductions  under  Section 168  is generally  required  to be  depreciated using
either the  straight-line  method or  the  150% declining  balance  method.  The
depreciation  and  amortization methods  and  useful lives  associated  with the
Section 743(b) adjustment,  therefore, may  differ from the  methods and  useful
lives generally used to depreciate the Common Basis in such properties. Pursuant
to  the  Partnership  Agreement,  the  Partnership  is  authorized  to  adopt  a
convention to preserve the  uniformity of Units even  if such convention is  not
consistent  with Treasury Regulation Section 1.167(c)-1(a)(6), Proposed Treasury
Regulation Section 1.168-2(n) or the legislative  history of Section 197 of  the
Code. See ' -- Uniformity of Units.'
 
     Although Counsel is unable to opine as to the validity of such an approach,
the Partnership intends to depreciate the portion of a Section 743(b) adjustment
attributable  to unrealized  appreciation in  the value  of Contributed Property
including goodwill (to the extent of any unamortized Book-Tax Disparity) using a
rate  of  depreciation  or  amortization   derived  from  the  depreciation   or
amortization  method  and  useful  life  applied to  the  Common  Basis  of such
property, despite its  inconsistency with Proposed  Treasury Regulation  Section
1.168-2(n),  Treasury Regulation  Section 1.167(c)-l(a)(6) (neither  of which is
expected to directly apply to a material portion of the Partnership's assets) or
the legislative history of Section 197 of  the Code. To the extent such  Section
743(b)  adjustment is attributable to appreciation  in excess of the unamortized
book-tax disparity,  the  Partnership will  apply  the rules  described  in  the
Regulations and legislative history. As a consequence, it is not expected that a
subsequent  holder will be  entitled to any  significant amortization deductions
with respect to goodwill. If
 
                                      141
 


<PAGE>

<PAGE>
the Partnership determines that  such position cannot  reasonably be taken,  the
Partnership  may adopt a depreciation or amortization convention under which all
purchasers acquiring  Units in  the  same month  would receive  depreciation  or
amortization, whether attributable to Common Basis or Section 743(b) adjustment,
based  upon the same applicable rate as  if they had purchased a direct interest
in the Partnership's  assets. Such  an aggregate  approach may  result in  lower
annual depreciation or amortization deductions than would otherwise be allowable
to certain Unitholders. See ' -- Uniformity of Units.'
 
     The  allocation of the Section 743(b) adjustment must be made in accordance
with the Code. The IRS may seek to reallocate some or all of any Section  743(b)
adjustment  not  so  allocated by  the  Partnership  to goodwill,  which,  as an
intangible asset, would  be amortizable over  a longer period  of time than  the
Partnership's tangible assets.
 
     A  Section 754  election is advantageous  if the transferee's  basis in his
Units is higher than such Units' share of the aggregate basis to the Partnership
of the Partnership's assets immediately prior  to the transfer. In such a  case,
as  a result of  the election, the transferee  would have a  higher basis in his
share of  the Partnership's  assets  for purposes  of calculating,  among  other
items,  his depreciation and depletion  deductions and his share  of any gain or
loss on a sale of the  Partnership's assets. Conversely, a Section 754  election
is  disadvantageous if the transferee's  basis in such Units  is lower than such
Unit's share  of the  aggregate basis  of the  Partnership's assets  immediately
prior  to the transfer. Thus, the fair market value of the Units may be affected
either favorably or adversely by the election.
 
     The calculations involved in the Section 754 election are complex and  will
be  made by the Partnership on the basis  of certain assumptions as to the value
of Partnership  assets  and  other  matters. There  is  no  assurance  that  the
determinations  made by the  Partnership will not  be successfully challenged by
the IRS and  that the  deductions resulting  from them  will not  be reduced  or
disallowed altogether. Should the IRS require a different basis adjustment to be
made, and should, in the Partnership's opinion, the expense of compliance exceed
the benefit of the election, the Partnership may seek permission from the IRS to
revoke  the  Section 754  election for  the Partnership.  If such  permission is
granted, a subsequent purchaser  of Units may be  allocated more income than  he
would have been allocated had the election not been revoked.
 
ALTERNATIVE MINIMUM TAX
 
     Each  Unitholder will  be required  to take  into account  his distributive
share of any items of Partnership income, gain, deduction, or loss for  purposes
of the alternative minimum tax.
 
     A   Unitholder's  alternative  minimum  taxable  income  derived  from  the
Partnership may be higher than his  share of Partnership net income because  the
Partnership  may  use  accelerated  methods  of  depreciation  for  purposes  of
computing federal taxable income or loss. The minimum tax rate for  noncorporate
taxpayers  is 26% on the first $175,000 of alternative minimum taxable income in
excess of the  exemption amount and  28% on any  additional alternative  minimum
taxable  income. Prospective Unitholders should  consult with their tax advisors
as to  the  impact  of  an  investment in  Units  on  their  liability  for  the
alternative minimum tax.
 
VALUATION OF PARTNERSHIP PROPERTY AND BASIS OF PROPERTIES
 
     The  federal income  tax consequences of  the ownership  and disposition of
Units will depend in part on estimates  by the Partnership of the relative  fair
market values, and determinations of the initial tax basis, of the assets of the
Partnership.  Although  the  Partnership  may from  time  to  time  consult with
professional appraisers with respect to valuation matters, many of the  relative
fair market value estimates will be made by the Partnership. These estimates and
determinations  of basis are subject to challenge and will not be binding on the
IRS or the courts. If  the estimates of fair  market value or determinations  of
basis  are subsequently found to be incorrect, the character and amount of items
of income, gain,  loss or  deductions previously reported  by Unitholders  might
change,  and Unitholders  might be  required to  adjust their  tax liability for
prior years.
 
                                      142
 


<PAGE>

<PAGE>
TREATMENT OF SHORT SALES
 
     A Unitholder whose Units are  loaned to a 'short  seller' to cover a  short
sale  of Units may be considered as having disposed of ownership of those Units.
If so, he would no  longer be a partner with  respect to those Units during  the
period  of the loan  and may recognize gain  or loss from  the disposition. As a
result, during this period, any Partnership income, gain, deduction or loss with
respect to  those Units  would not  be reportable  by the  Unitholder, any  cash
distributions  received by the  Unitholder with respect to  those Units would be
fully taxable  and all  of such  distributions  would appear  to be  treated  as
ordinary  income. Unitholders  desiring to assure  their status  as partners and
avoid the  risk  of gain  recognition  should modify  any  applicable  brokerage
account agreements to prohibit their brokers from borrowing their Units. The IRS
has  announced that it is actively studying issues relating to the tax treatment
of short sales  of partnership interests.  (See '  -- Tax Rates  and Changes  in
Federal Income Tax Laws').
 
DISPOSITION OF COMMON UNITS
 
RECOGNITION OF GAIN OR LOSS
 
     Gain  or loss will be recognized on a sale of Units equal to the difference
between the amount realized and the Unitholder's tax basis for the Units sold. A
Unitholder's amount realized will be measured by the sum of the cash or the fair
market  value  of  other  property  received  plus  his  share  of   Partnership
nonrecourse  liabilities. Because  the amount  realized includes  a Unitholder's
share of Partnership nonrecourse liabilities, the gain recognized on the sale of
Units could result in a tax liability  in excess of any cash received from  such
sale.
 
     Prior  Partnership distributions in excess of cumulative net taxable income
in respect of a  Common Unit which  decreased a Unitholder's  tax basis in  such
Common Unit will, in effect, become taxable income if the Common Unit is sold at
or  above original  cost (and  may partially become  taxable income  even if the
Common Unit is sold below original cost).
 
     Gain or loss recognized by a Unitholder (other than a 'dealer' in Units) on
the sale or exchange  of a Unit held  for more than one  year will generally  be
taxable as long-term capital gain or loss. A portion of this gain or loss (which
could  be  substantial),  however,  will be  separately  computed  and  taxed as
ordinary income or loss under Section 751 of the Code to the extent attributable
to  assets  giving   rise  to  depreciation   recapture  or  other   'unrealized
receivables'   or  to   'substantially  appreciated  inventory'   owned  by  the
Partnership. The  term  'unrealized receivables'  includes  potential  recapture
items,   including  depreciation  recapture.  Inventory   is  considered  to  be
'substantially appreciated' if its value exceeds  120% of its adjusted basis  to
the   Partnership.  Ordinary  income  attributable  to  unrealized  receivables,
substantially appreciated inventory  and depreciation recapture  may exceed  net
taxable  gain realized upon the  sale of the Unit and  may be recognized even if
there is a net taxable loss realized on the sale of the Unit. Thus, a Unitholder
may recognize both  ordinary income  and a capital  loss upon  a disposition  of
Units. Net capital loss may offset no more than $3,000 of ordinary income in the
case  of individuals and may only be used  to offset capital gain in the case of
corporations.
 
     The IRS has ruled that a partner who acquires interests in a Partnership in
separate transactions  must  combine  those  interests  and  maintain  a  single
adjusted  tax basis. Upon a  sale or other disposition of  less than all of such
interests, a portion of that tax basis  must be allocated to the interests  sold
using  an 'equitable apportionment' method. The ruling  is unclear as to how the
holding period of these interests is determined once they are combined. If  this
ruling is applicable to the holders of Common Units, a Common Unitholder will be
unable  to select high  or low basis Common  Units to sell as  would be the case
with corporate  stock.  It  is not  clear  whether  the ruling  applies  to  the
Partnership,  because, similar to corporate  stock, interests in the Partnership
are evidenced by separate certificates.  Accordingly Counsel is unable to  opine
as  to the effect such  ruling will have on  the Unitholders. In addition, under
the financial product provisions of the  Revenue Reconciliation Act of 1996,  in
the  case of  partnership interests  in publicly  traded partnerships  which are
substantially identical,  the basis  of such  interests and  any adjustments  to
basis,  would be determined on an average basis, and a taxpayer would be treated
as  selling  such  interests  on  a  first-in,  first-out  basis.  A  Unitholder
considering  the purchase of additional  Common Units or a  sale of Common Units
purchased in separate  transactions should  consult his  tax advisor  as to  the
possible consequences of such ruling and subsequent legislation.
 
                                      143
 


<PAGE>

<PAGE>
ALLOCATIONS BETWEEN TRANSFERORS AND TRANSFEREES
 
     In  general, the Partnership's taxable income and losses will be determined
annually, will be prorated on a monthly basis and subsequently apportioned among
the Unitholders in proportion to the number of Units owned by each of them as of
the opening of the NYSE on the first business day of the month (the  'Allocation
Date').  However,  gain or  loss  realized on  a  sale or  other  disposition of
Partnership assets  other  than in  the  ordinary  course of  business  will  be
allocated  among the Unitholders  on the Allocation  Date in the  month in which
that gain or loss is recognized.  As a result, a Unitholder transferring  Common
Units  in the  open market  may be  allocated income,  gain, loss  and deduction
accrued after the date of transfer.
 
     The use  of  this method  may  not  be permitted  under  existing  Treasury
Regulations.  Accordingly, Counsel  is unable to  opine on the  validity of this
method of  allocating income  and  deductions between  the transferors  and  the
transferees  of  Units.  If  this  method  is  not  allowed  under  the Treasury
Regulations (or only applies to transfers  of less than all of the  Unitholder's
interest),  taxable income  or losses  of the  Partnership might  be reallocated
among the Unitholders.  The Partnership is  authorized to revise  its method  of
allocation  between transferors and transferees (as well as among partners whose
interests otherwise  vary  during a  taxable  period)  to conform  to  a  method
permitted under future Treasury Regulations.
 
     A  Unitholder who owns Units at any  time during a quarter and who disposes
of such Units prior to the record date set for a cash distribution with  respect
to  such quarter will be  allocated items of Partnership  income, gain, loss and
deductions attributable to such quarter but will not be entitled to receive that
cash distribution.
 
NOTIFICATION REQUIREMENTS
 
     A Unitholder  who  sells or  exchanges  Units  is required  to  notify  the
Partnership in writing of that sale or exchange within 30 days after the sale or
exchange  and in any event by no later than January 15 of the year following the
calendar year  in  which the  sale  or  exchange occurred.  The  Partnership  is
required  to  notify  the  IRS  of  that  transaction  and  to  furnish  certain
information  to  the  transferor   and  transferee.  However,  these   reporting
requirements  do not  apply with  respect to a  sale by  an individual  who is a
citizen of the  United States and  who effects  the sale or  exchange through  a
broker.  Additionally, a transferor and a transferee  of a Unit will be required
to furnish statements to the  IRS, filed with their  income tax returns for  the
taxable  year in which the sale or  exchange occurred, that set forth the amount
of the consideration  received for  the Unit that  is allocated  to goodwill  or
going  concern  value of  the Partnership.  Failure  to satisfy  these reporting
obligations may lead to the imposition of substantial penalties.
 
CONSTRUCTIVE TERMINATION
 
     The Partnership and the  Operating Partnership will  be considered to  have
been  terminated if  there is a  sale or  exchange of 50%  or more  of the total
interests in  Partnership  capital  and  profits within  a  12-month  period.  A
termination  results  in the  closing of  a Partnership's  taxable year  for all
partners and the Partnership's assets are regarded as having been distributed to
the partners and reconveyed to the Partnership,  which is then treated as a  new
partnership.  A termination of  the Partnership will cause  a termination of the
Operating Partnership and any Subsidiary  Partnership. Such a termination  could
also  result in penalties or loss of  basis adjustments under Section 754 of the
Code if  the Partnership  were  unable to  determine  that the  termination  had
occurred.   (Under  the  1995  Proposed  Legislation,  termination  of  a  large
partnership, such as the Partnership  would not occur by  reason of the sale  or
exchange of interests in the partnership.)
 
     In the case of a Unitholder reporting on a taxable year other than a fiscal
year  ending December  31, the closing  of the  tax year of  the Partnership may
result in more than 12 months' taxable  income or loss of the Partnership  being
includable  in his taxable income for the year of termination. In addition, each
Unitholder will realize taxable gain  to the extent that  any money deemed as  a
result  of the termination to have been  distributed to him exceeds the adjusted
basis of his Units. New  tax elections required to  be made by the  Partnership,
including  a new election under Section 754 of the Code, must be made subsequent
to a constructive termination. A termination could also result in a deferral  of
Partnership  deductions for  depreciation. Finally,  a termination  might either
accelerate the application of or subject the Partnership to any tax  legislation
enacted prior to the termination.
 
                                      144
 


<PAGE>

<PAGE>
ENTITY-LEVEL COLLECTIONS
 
     If  the Partnership is required  or elects under applicable  law to pay any
federal, state or local income  tax on behalf of  any Unitholder or any  General
Partners  or any former  Unitholder, the Partnership is  authorized to pay those
taxes from  Partnership funds.  Such payment,  if  made, will  be treated  as  a
distribution of cash to the partner on whose behalf the payment was made. If the
payment  is made on behalf of a  person whose identity cannot be determined, the
Partnership is authorized  to treat  the payment  as a  distribution to  current
Unitholders. Alternatively, the Partnership may elect to treat an amount paid on
behalf  of  the  General  Partners  and Unitholders  as  an  expenditure  of the
Partnership if  the  amount  paid on  behalf  of  the General  Partners  is  not
substantially  greater  than 4%  of the  total amount  paid. The  Partnership is
authorized to  amend  the  Partnership  Agreement in  the  manner  necessary  to
maintain  uniformity of  intrinsic tax  characteristics of  Units and  to adjust
subsequent distributions, so that after giving effect to such distributions, the
priority and characterization  of distributions otherwise  applicable under  the
Partnership Agreement is maintained as nearly as is practicable. Payments by the
Partnership  as described  above could  give rise  to an  overpayment of  tax on
behalf of an individual partner  in which event the  partner could file a  claim
for credit or refund.
 
UNIFORMITY OF UNITS
 
     Because  the Partnership cannot match transferors and transferees of Units,
uniformity of the economic and tax  characteristics of the Units to a  purchaser
of  such Units must be maintained. In the absence of uniformity, compliance with
a number  of federal  income tax  requirements, both  statutory and  regulatory,
could  be  substantially diminished.  A  lack of  uniformity  can result  from a
literal application  of  Proposed  Treasury Regulation  Section  1.168-2(n)  and
Treasury  Regulation  Section  1.167(c)-1(a)(6) or  the  legislative  history of
Section 197  and  from  the  application of  the  'ceiling  limitation'  on  the
Partnership's  ability  to make  allocations  to eliminate  book-tax disparities
attributable to Contributed  Properties and Partnership  property that has  been
revalued and reflected in the partners capital accounts ('Adjusted Properties').
Any  non-uniformity could have a negative impact  on the value of the Units. See
' -- Tax Treatment of Operations -- Section 754 Election.'
 
     The Partnership  intends to  depreciate  the portion  of a  Section  743(b)
adjustment  attributable to unrealized appreciation  in the value of Contributed
Property or  Adjusted  Property  (to  the extent  of  any  unamortized  Book-Tax
Disparity)  using  a  rate  of depreciation  or  amortization  derived  from the
depreciation or amortization method and useful life applied to the Common  Basis
of  such property, despite  its inconsistency with  Proposed Treasury Regulation
Section 1.168-2(n) and Treasury Regulation Section 1.167(c)-l(a)(6) (neither  of
which  is expected to directly apply to  a material portion of the Partnership's
assets) or the legislative  history of Section  197. See '  -- Tax Treatment  of
Operations  Section 754 Election.' To the  extent such Section 743(b) adjustment
is attributable to appreciation in excess of the unamortized Book-Tax Disparity,
the  Partnership  will  apply  the  rules  described  in  the  Regulations   and
legislative  history. If the Partnership determines  that such a position cannot
reasonably be taken, the Partnership  may adopt a depreciation and  amortization
convention  under which all  purchasers acquiring Units in  the same month would
receive depreciation and amortization deductions, whether attributable to common
basis or Section 743(b) basis,  based upon the same  applicable rate as if  they
had  purchased  a direct  interest  in the  Partnership's  property. If  such an
aggregate approach is adopted,  it may result in  lower annual depreciation  and
amortization deductions than would otherwise be allowable to certain Unitholders
and  risk the loss of depreciation and  amortization deductions not taken in the
year that such deductions are otherwise  allowable. This convention will not  be
adopted  if  the  Partnership  determines  that  the  loss  of  depreciation and
amortization deductions will have a material adverse effect on the  Unitholders.
If the Partnership chooses not to utilize this aggregate method, the Partnership
may  use  any  other  reasonable  depreciation  and  amortization  convention to
preserve the uniformity of the intrinsic  tax characteristics of any Units  that
would  not  have a  material  adverse effect  on  the Unitholders.  The  IRS may
challenge any method of depreciating the Section 743(b) adjustment described  in
this  paragraph. If  such a  challenge were  sustained, the  uniformity of Units
might be affected.
 
                                      145
 


<PAGE>

<PAGE>
TAX-EXEMPT ORGANIZATIONS AND CERTAIN OTHER INVESTORS
 
     Ownership  of   Units  by   employee   benefit  plans,   other   tax-exempt
organizations,  nonresident aliens, foreign  corporations, other foreign persons
and regulated investment companies raises issues unique to such persons and,  as
described below, may have substantially adverse tax consequences.
 
     Employee  benefit plans  and most  other organizations  exempt from federal
income tax (including individual retirement accounts and other retirement plans)
are subject  to  federal  income  tax  on  unrelated  business  taxable  income.
Virtually  all of the  taxable income derived  by such an  organization from the
ownership of a Unit will be unrelated  business taxable income and thus will  be
taxable to such a Unitholder.
 
     A  regulated investment company or 'mutual  fund' is required to derive 90%
or more of its  gross income from  interest, dividends, gains  from the sale  of
stocks  or securities or foreign currency or  certain related sources. It is not
anticipated that any significant amount  of the Partnership's gross income  will
include that type of income.
 
     Non-resident  aliens and foreign corporations, trusts or estates which hold
Units will be  considered to  be engaged  in business  in the  United States  on
account  of ownership of Units.  As a consequence they  will be required to file
federal tax returns in respect of their share of Partnership income, gain,  loss
or  deduction and pay federal  income tax at regular rates  on any net income or
gain. Generally,  a Partnership  is required  to pay  a withholding  tax on  the
portion  of the  Partnership's income  which is  effectively connected  with the
conduct of a  United States  trade or  business and  which is  allocable to  the
foreign  partners, regardless of whether any actual distributions have been made
to  such   partners.  However,   under  rules   applicable  to   publicly-traded
partnerships,  the Partnership will withhold (currently at the rate of 39.6%) on
actual cash distributions  made quarterly to  foreign Unitholders. Each  foreign
Unitholder  must obtain a taxpayer identification number from the IRS and submit
that number to the Transfer Agent of the  Partnership on a Form W-8 in order  to
obtain credit for the taxes withheld. A change in applicable law may require the
Partnership to change these procedures.
 
     Because  a foreign corporation which owns  Units will be treated as engaged
in a United  States trade  or business,  such a  corporation may  be subject  to
United  States  branch profits  tax at  a rate  of 30%,  in addition  to regular
federal income tax, on its allocable share of the Partnership's income and  gain
(as  adjusted for changes in the  foreign corporation's 'U.S. net equity') which
are effectively connected with the conduct of a United States trade or business.
That tax may be reduced or eliminated by an income tax treaty between the United
States and the country with respect to which the foreign corporate Unitholder is
a 'qualified resident.'  In addition, such  a Unitholder is  subject to  special
information reporting requirements under Section 6038C of the Code.
 
     Under  a ruling  of the  IRS, a foreign  Unitholder who  sells or otherwise
disposes of a Unit will be subject to federal income tax on gain realized on the
disposition of such Unit to the  extent that such gain is effectively  connected
with a United States trade or business of the foreign Unitholder. Apart from the
ruling, a foreign Unitholder will not be taxed upon the disposition of a Unit if
that  foreign Unitholder has held less than 5%  in value of the Units during the
five-year period ending  on the date  of the  disposition and if  the Units  are
regularly  traded  on  an  established  securities market  at  the  time  of the
disposition.
 
ADMINISTRATIVE MATTERS
 
PARTNERSHIP INFORMATION RETURNS AND AUDIT PROCEDURES
 
     The Partnership intends to furnish to each Unitholder, within 90 days after
the close of each calendar year,  certain tax information, including a  Schedule
K-1,  which sets  forth each Unitholder's  allocable share  of the Partnership's
income, gain, loss and deduction for the preceding Partnership taxable year.  In
preparing this information, which will generally not be reviewed by counsel, the
Partnership will use various accounting and reporting conventions, some of which
have  been mentioned in  the previous discussion,  to determine the Unitholder's
allocable share of income, gain, loss and deduction. There is no assurance  that
any  of those conventions will yield a result which conforms to the requirements
of the  Code, regulations  or  administrative interpretations  of the  IRS.  The
Partnership  cannot  assure  prospective  Unitholders  that  the  IRS  will  not
successfully contend in court that such accounting and reporting conventions are
impermissible. Any such challenge by the IRS could
 
                                      146
 


<PAGE>

<PAGE>
negatively affect the  value of the  Units. The federal  income tax  information
returns  filed  by  the  Partnership  may be  audited  by  the  IRS. Adjustments
resulting from any  such audit  may require each  Unitholder to  adjust a  prior
year's  tax liability, and possibly  may result in an  audit of the Unitholder's
own return. Any audit  of a Unitholder's return  could result in adjustments  of
non-Partnership as well as Partnership items.
 
     Partnerships  generally are  treated as  separate entities  for purposes of
federal tax audits, judicial review of administrative adjustments by the IRS and
tax settlement proceedings. The  tax treatment of  partnership items of  income,
gain,  loss and deduction are determined in a partnership proceeding rather than
in separate proceedings with the partners. The Code provides for one partner  to
be  designated as the 'Tax Matters  Partner' for these purposes. The Partnership
Agreement appoints the Managing  General Partner as the  Tax Matters Partner  of
the Partnership.
 
     The  Tax  Matters Partner  will  make certain  elections  on behalf  of the
Partnership and  Unitholders  and can  extend  the statute  of  limitations  for
assessment  of tax deficiencies against  Unitholders with respect to Partnership
items. The Tax Matters Partner may bind a Unitholder with less than a 1% profits
interest in the Partnership to a settlement with the IRS unless that  Unitholder
elects,  by filing a statement  with the IRS, not to  give such authority to the
Tax Matters Partner. The Tax Matters Partner may seek judicial review (by  which
all  the Unitholders are bound) of a final partnership administrative adjustment
and, if the Tax Matters Partner fails  to seek judicial review, such review  may
be  sought by any Unitholder having at least a 1% interest in the profits of the
Partnership and by the Unitholders having in the aggregate at least a 5% profits
interest. However, only one action for judicial review will go forward, and each
Unitholder with an interest in the outcome may participate.
 
     A Unitholder must file a statement  with the IRS identifying the  treatment
of  any item on  his federal income tax  return that is  not consistent with the
treatment of  the item  on the  Partnership's return.  Intentional or  negligent
disregard of the consistency requirement may subject a Unitholder to substantial
penalties.  Under  the 1995  Proposed  Legislation, partners  in  electing large
partnerships would  be required  to  treat all  Partnership  items in  a  manner
consistent with the Partnership return.
 
     Under  the  reporting provisions  of  the 1995  Proposed  Legislation, each
partner of an electing large partnership would take into account separately  his
share  of the following items, determined  at the partnership level: (1) taxable
income or loss from  passive loss limitation activities;  (2) taxable income  or
loss  from other activities (such as portfolio  income or loss); (3) net capital
gains to the extent  allocable to passive loss  limitation activities and  other
activities;  (4)  tax  exempt  interest;  (5)  a  net  alternative  minimum  tax
adjustment separately computed for passive loss limitation activities and  other
activities;   (6)   general  credits;   (7)   low-income  housing   credit;  (8)
rehabilitation credit; (9) foreign income taxes; (10) credit for producing  fuel
from  a  nonconventional  source; and  (11)  any  other items  the  Secretary of
Treasury deems appropriate. The House  version of the 1995 Proposed  Legislation
would  also make a  number of changes  to the tax  compliance and administrative
rules relating to partnerships. One provision would require that each partner in
a large partnership, such as the Partnership, take into account his share of any
adjustments to partnership items  in the year such  adjustments are made.  Under
current  law, adjustments relating  to partnership items  for a previous taxable
year are taken into account by those  persons who were partners in the  previous
taxable  year. Alternatively, under the 1995 Proposed Legislation, a partnership
could elect to or, in some circumstances, could be required to, directly pay the
tax resulting from any such adjustments. In either case, therefore,  Unitholders
could bear significant economic burdens associated with tax adjustments relating
to periods predating their acquisition of Units.
 
     It  cannot  be  predicted  whether  or  in  what  form  the  1995  Proposed
Legislation, or other  tax legislation  that might affect  Unitholders, will  be
enacted.  However,  if  tax  legislation is  enacted  which  includes provisions
similar to those discussed above, a  Unitholder might experience a reduction  in
cash distributions.
 
NOMINEE REPORTING
 
     Persons  who hold an interest  in the Partnership as  a nominee for another
person are required  to furnish  to the Partnership  (a) the  name, address  and
taxpayer  identification number  of the  beneficial owner  and the  nominee; (b)
whether the beneficial owner is (i) a person that is not a United States person,
(ii) a foreign  government, an  international organization  or any  wholly-owned
agency or
 
                                      147
 


<PAGE>

<PAGE>
instrumentality  of either of  the foregoing, or (iii)  a tax-exempt entity; (c)
the amount  and description  of  Units held,  acquired  or transferred  for  the
beneficial   owner;  and  (d)   certain  information  including   the  dates  of
acquisitions and transfers, means of acquisitions and transfers, and acquisition
cost for purchases, as well  as the amount of  net proceeds from sales.  Brokers
and  financial  institutions  are required  to  furnish  additional information,
including whether  they are  United States  persons and  certain information  on
Units they acquire, hold or transfer for their own account. A penalty of $50 per
failure  (up to a maximum of $100,000 per  calendar year) is imposed by the Code
for failure  to report  such  information to  the  Partnership. The  nominee  is
required  to  supply the  beneficial  owner of  the  Units with  the information
furnished to the Partnership.
 
REGISTRATION AS A TAX SHELTER
 
     The Code requires that 'tax shelters'  be registered with the Secretary  of
the  Treasury. The temporary  Treasury Regulations interpreting  the tax shelter
registration provisions of the Code are extremely broad. It is arguable that the
Partnership will not  be subject to  the registration requirement  on the  basis
that  it  will  not constitute  a  tax  shelter. However,  the  Managing General
Partner, as  a  principal  organizer  of the  Partnership,  has  registered  the
Partnership  as a tax shelter with the IRS  in the absence of assurance that the
Partnership will not be subject to tax shelter registration and in light of  the
substantial penalties which might be imposed if registration is required and not
undertaken.  The Partnership has  applied for a  tax shelter registration number
with the IRS.  ISSUANCE OF  THE REGISTRATION NUMBER  DOES NOT  INDICATE THAT  AN
INVESTMENT  IN THE PARTNERSHIP  OR THE CLAIMED TAX  BENEFITS HAVE BEEN REVIEWED,
EXAMINED OR APPROVED BY THE IRS.  The Partnership must furnish the  registration
number  to the Unitholders, and a Unitholder  who sells or otherwise transfers a
Unit in a  subsequent transaction must  furnish the registration  number to  the
transferee.  The penalty for failure of the  transferor of a Unit to furnish the
registration number  to  the transferee  is  $100  for each  such  failure.  The
Unitholders must disclose the tax shelter registration number of the Partnership
on  Form 8271 to be attached  to the tax return on  which any deduction, loss or
other benefit  generated  by  the  Partnership  is  claimed  or  income  of  the
Partnership  is included.  A Unitholder  who fails  to disclose  the tax shelter
registration number on his  return, without reasonable  cause for that  failure,
will  be subject  to a  $250 penalty for  each failure.  Any penalties discussed
herein are not deductible for federal income tax purposes.
 
ACCURACY-RELATED PENALTIES
 
     An additional  tax  equal  to 20%  of  the  amount of  any  portion  of  an
underpayment  of tax  which is  attributable to  one or  more of  certain listed
causes, including negligence or disregard  of rules or regulations,  substantial
understatements  of  income  tax  and  substantial  valuation  misstatements, is
imposed by the Code. No  penalty will be imposed,  however, with respect to  any
portion  of an underpayment if it is shown that there was a reasonable cause for
that portion and  that the taxpayer  acted in  good faith with  respect to  that
portion.
 
     A  substantial understatement of  income tax in any  taxable year exists if
the amount of the understatement exceeds the greater of 10% of the tax  required
to  be shown  on the  return for the  taxable year  or $5,000  ($10,000 for most
corporations). The amount of any understatement subject to penalty generally  is
reduced  if any portion is attributable to  a position adopted on the return (i)
with respect to which there  is, or was, 'substantial  authority' or (ii) as  to
which  there is a reasonable basis and  the pertinent facts of such position are
disclosed on the return. Certain more stringent rules apply to 'tax shelters,' a
term that in this  context does not  appear to include  the Partnership. If  any
Partnership item of income, gain, loss or deduction included in the distributive
shares  of Unitholders  might result in  such an 'understatement'  of income for
which no 'substantial authority' exists, the Partnership intends to disclose the
pertinent facts  on  its  return.  In addition,  the  Partnership  will  make  a
reasonable  effort  to furnish  sufficient information  for Unitholders  to make
adequate disclosure on their returns to avoid liability for this penalty.
 
     A substantial valuation misstatement  exists if the  value of any  property
(or  the adjusted basis of any property) claimed on a tax return is 200% or more
of the amount determined to be the correct amount of such valuation or  adjusted
basis. No penalty is imposed unless the portion of the underpayment attributable
to  a  substantial  valuation  misstatement  exceeds  $5,000  ($10,000  for most
 
                                      148
 


<PAGE>

<PAGE>
corporations). If the  valuation claimed  on a  return is  400% or  more of  the
correct valuation, the penalty imposed increases to 40%.
 
STATE, LOCAL AND OTHER TAX CONSIDERATIONS
 
     In  addition to federal income taxes,  Unitholders will be subject to other
taxes, such as state and local income taxes, unincorporated business taxes,  and
estate,  inheritance  or intangible  taxes that  may be  imposed by  the various
jurisdictions in which the Partnership does business or owns property,  Although
an  analysis  of those  various taxes  is not  presented here,  each prospective
Unitholder should  consider their  potential  impact on  his investment  in  the
Partnership. The Partnership will initially own property and conduct business in
New  York, Florida, Michigan and 21 other  states. A Unitholder will be required
to file state income tax returns and to pay state income taxes in some or all of
these states and may be  subject to penalties for  failure to comply with  those
requirements.  Based on  1995 revenues,  the Managing  General Partner currently
anticipates that substantially all of the Partnership's income will be generated
in  Arkansas,   Arizona,  Colorado,   Connecticut,  Florida,   Iowa,   Illinois,
Massachusetts,  Michigan, Minnesota,  Missouri, New  Hampshire, New  Mexico, New
York and  Wisconsin.  Each of  the  states, other  than  Florida, in  which  the
Managing General Partner currently anticipates that a substantial portion of the
Partnership's  income will be generated currently imposes a personal income tax.
In certain states, tax losses may not produce a tax benefit in the year incurred
(if, for example, the Partnership has no income from sources within that  state)
and also may not be available to offset income in subsequent taxable years. Some
of  the states  may require  the Partnership, or  the Partnership  may elect, to
withhold a percentage of income from  amounts to be distributed to a  Unitholder
who  is not  a resident of  the state. Withholding,  the amount of  which may be
greater or  less than  a particular  Unitholder's income  tax liability  to  the
state,   generally  does  not  relieve  the  non-resident  Unitholder  from  the
obligation to file an income tax return.  Amounts withheld may be treated as  if
distributed  to Unitholders for purposes  of determining the amounts distributed
by the  Partnership.  See '  --  Disposition  of Common  Units  --  Entity-Level
Collections.'  Based  on  current law  and  its estimate  of  future Partnership
operations, the Managing General Partner  anticipates that any amounts  required
to be withheld will not be material.
 
     It  is the responsibility  of each Unitholder to  investigate the legal and
tax consequences, under  the laws  of pertinent  states and  localities, of  his
investment  in the Partnership. Accordingly,  each prospective Unitholder should
consult, and must depend upon, his own tax counsel or other advisor with  regard
to  those matters. Further, it is the  responsibility of each Unitholder to file
all state and local,  as well as  federal, tax returns that  may be required  of
such  Unitholder. Counsel has not rendered an  opinion on the state or local tax
consequences of an investment in the Partnership.
 
                                      149



<PAGE>

<PAGE>
            INVESTMENT IN THE PARTNERSHIP BY EMPLOYEE BENEFIT PLANS
 
     An  investment in the Partnership by an employee benefit plan is subject to
certain additional  considerations because  the investments  of such  plans  are
subject to the fiduciary responsibility and prohibited transaction provisions of
the  Employee Retirement Income  Security Act of 1974  as amended ('ERISA'), and
restrictions imposed  by Section  4975 of  the Code.  As used  herein, the  term
'employee  benefit plan'  includes, but  is not  limited to,  qualified pension,
profit-sharing and stock bonus plans,  Keogh plans, simplified employee  pension
plans  and tax deferred annuities  or Individual Retirement Accounts established
or maintained  by an  employer  or employee  organization: Among  other  things,
consideration  should be given  to (a) whether such  investment is prudent under
Section 404(a)(i)(B) of ERISA; (b) whether in making such investment, such  plan
will  satisfy the diversification requirement  of Section 404(a)(1)(C) of ERISA;
and (c) whether such investment will result in recognition of unrelated business
taxable income  by such  plan and,  if so,  the potential  after-tax  investment
return.   See  'Tax  Considerations   --  Uniformity  of   Units  --  Tax-Exempt
Organizations  and  Certain  Other   Investors.'  The  person  with   investment
discretion   with  respect  to  the  assets  of  an  employee  benefit  plan  (a
'fiduciary') should  determine  whether  an investment  in  the  Partnership  is
authorized  by the appropriate  governing instrument and  is a proper investment
for such plan.
 
     Section 406 of ERISA and  Section 4975 of the  Code (which also applies  to
Individual  Retirement  Accounts that  are not  considered  part of  an employee
benefit plan)  prohibit  an  employee  benefit plan  from  engaging  in  certain
transactions involving 'plan assets' with parties that are 'parties in interest'
under ERISA or 'disqualified persons' under the Code with respect to the plan.
 
     In  addition  to considering  whether  the purchase  of  Common Units  is a
prohibited transaction, a fiduciary of an employee benefit plan should  consider
whether  such plan will,  by investing in  the Partnership, be  deemed to own an
undivided interest in the  assets of the Partnership,  with the result that  the
General  Partners also would be  fiduciaries of such plan  and the operations of
the Partnership  would  be subject  to  the regulatory  restrictions  of  ERISA,
including   its  prohibited  transaction  rules,   as  well  as  the  prohibited
transaction rules of the Code.
 
     The Department  of  Labor  regulations provide  guidance  with  respect  to
whether  the assets of an entity in  which employee benefit plans acquire equity
interests would be deemed 'plan assets' under certain circumstances. Pursuant to
these regulations,  an entity's  assets  would not  be  considered to  be  'plan
assets'  if, among  other things, (a)  the equity interest  acquired by employee
benefit plans are publicly offered securities -- i.e., the equity interests  are
widely  held by 100 or more investors  independent of the issuer and each other,
freely transferable and registered pursuant to certain provisions of the federal
securities laws,  (b)  the entity  is  an 'operating  company'  -- i.e.,  it  is
primarily  engaged in the production or sale  of a product or service other than
the investment of capital either directly or through a majority owned subsidiary
or subsidiaries,  or (c)  there is  no significant  investment by  benefit  plan
investors,  which is  defined to mean  that less than  25% of the  value of each
class of equity  interest (disregarding  certain interests held  by the  General
Partner,  its affiliates,  and certain  other persons)  is held  by the employee
benefit plans  referred  to  above, Individual  Retirement  Accounts  and  other
employee  benefit plans not  subject to ERISA (such  as governmental plans). The
Partnership's  assets  should  not  be  considered  'plan  assets'  under  these
regulations  because  it  is  expected  that  the  investment  will  satisfy the
requirements in (a) and (b) above and may also satisfy the requirements in (c).
 
     Plan fiduciaries contemplating  a purchase of  Common Units should  consult
with  their own counsel regarding  the consequences under ERISA  and the Code in
light of  the serious  penalties imposed  on persons  who engage  in  prohibited
transactions or other violations.
 
                                      150
 


<PAGE>

<PAGE>
                                  UNDERWRITING
 
     Subject  to the  terms and conditions  set forth in  the Purchase Agreement
(the 'Purchase Agreement')  among the Partnership,  certain related parties  and
each  of the underwriters named below  (the 'Underwriters'), the Partnership has
agreed to sell to each  of the Underwriters, and  each of the Underwriters,  for
whom  Merrill Lynch,  Pierce, Fenner &  Smith Incorporated,  Donaldson, Lufkin &
Jenrette Securities Corporation ('DLJ'), Janney Montgomery Scott Inc.,  Rauscher
Pierce  Refsnes,  Inc. and  The Robinson-Humphrey  Company,  Inc. are  acting as
representatives (the 'Representatives'), has  severally agreed to purchase,  the
number  of Common  Units set  forth below  opposite their  respective names. The
Underwriters are  committed to  purchase all  of such  Common Units  if any  are
purchased.  Under  certain  circumstances,  the  commitments  of  non-defaulting
Underwriters may be increased as set forth in the Purchase Agreement.
 
<TABLE>
<CAPTION>
                                                                                  NUMBER OF
             UNDERWRITER                                                         COMMON UNITS
             -----------                                                         ------------

<S>                                                                              <C>
Merrill Lynch, Pierce, Fenner & Smith
              Incorporated....................................................       638,096
Donaldson, Lufkin & Jenrette Securities Corporation...........................       638,095
Janney Montgomery Scott Inc...................................................       638,095
Rauscher Pierce Refsnes, Inc..................................................       638,095
The Robinson-Humphrey Company, Inc. ..........................................       638,095
Bear, Stearns & Co. Inc. .....................................................       100,000
BT Securities Corporation.....................................................       100,000
A.G. Edwards & Sons, Inc. ....................................................       100,000
Goldman, Sachs & Co. .........................................................       100,000
Lehman Brothers Inc. .........................................................       100,000
Oppenheimer & Co., Inc. ......................................................       100,000
PaineWebber Incorporated......................................................       100,000
Prudential Securities Incorporated............................................       100,000
Wasserstein Perella Securities, Inc. .........................................       100,000
Advest, Inc. .................................................................        50,000
Robert W. Baird & Co. Incorporated............................................        50,000
George K. Baum & Company......................................................        50,000
J.C. Bradford & Co. ..........................................................        50,000
Branch, Cabell and Company....................................................        50,000
JW Charles Securities, Inc. ..................................................        50,000
The Chicago Corporation.......................................................        50,000
Crowell, Weedon & Co. ........................................................        50,000
Dain Bosworth Incorporated....................................................        50,000
Davenport & Co. of Virginia, Inc. ............................................        50,000
EVEREN Securities, Inc. ......................................................        50,000
Fahnestock & Co. Inc. ........................................................        50,000
First Albany Corporation......................................................        50,000
First of Michigan Corporation.................................................        50,000
Gabelli & Company, Inc. ......................................................        50,000
Gruntal & Co., Incorporated...................................................        50,000
Hanifen, Imhoff Inc. .........................................................        50,000
Huntleigh Securities Corporation..............................................        50,000
Interstate/Johnson Lane Corporation...........................................        50,000
Josephthal Lyon & Ross Incorporated...........................................        50,000
John G. Kinnard and Company, Incorporated.....................................        50,000
Legg Mason Wood Walker, Incorporated..........................................        50,000
McDonald & Company Securities, Inc. ..........................................        50,000
Mesirow Financial, Inc. ......................................................        50,000
Morgan Keegan & Company, Inc. ................................................        50,000
The Ohio Company..............................................................        50,000
</TABLE>
 
                                      151
 


<PAGE>

<PAGE>
 
<TABLE>
<CAPTION>
                                                                                  NUMBER OF
             UNDERWRITER                                                         COMMON UNITS
             -----------                                                         ------------
<S>                                                                              <C>
Parker/Hunter Incorporated....................................................        50,000
Piper Jaffray Inc. ...........................................................        50,000
Prime Charter LTD. ...........................................................        50,000
Principal Financial Securities, Inc. .........................................        50,000
Ragen MacKenzie Incorporated..................................................        50,000
Raymond James & Associates, Inc. .............................................        50,000
Rodman & Renshaw, Inc. .......................................................        50,000
Roney & Co., LLC..............................................................        50,000
Sands Brothers & Co., Ltd. ...................................................        50,000
Scott & Stringfellow, Inc. ...................................................        50,000
Smith, Moore & Co. ...........................................................        50,000
Stephens Inc. ................................................................        50,000
Stifel, Nicolaus & Company, Incorporated......................................        50,000
Sutro & Co. Incorporated......................................................        50,000
Tucker Anthony Incorporated...................................................        50,000
Wheat, First Securities, Inc. ................................................        50,000
                                                                                 ------------
              Total...........................................................     6,190,476
                                                                                 ------------
                                                                                 ------------
</TABLE>
 
     The Representatives of the Underwriters  have advised the Partnership  that
they  propose initially to  offer the Common  Units to the  public at the public
offering price set forth on  the cover page of  this Prospectus, and to  certain
dealers  at such price less a concession not  in excess of $.85 per Common Unit.
The Underwriters may  allow, and  such dealers may  reallow, a  discount not  in
excess  of $.10  per Common Unit  on sales  to certain other  dealers. After the
initial public offering, the public offering price, concession and discount  may
be changed.
 
     The  Partnership has granted the Underwriters  an option exercisable for 30
days after the date hereof to purchase up to 928,571 additional Common Units  to
cover  over-allotments, if any,  at the initial public  offering price, less the
underwriting discount. If  the Underwriters  exercise this option,  each of  the
Underwriters  will have  a firm  commitment, subject  to certain  conditions, to
purchase approximately the same  percentage thereof which  the number of  Common
Units  to be purchased  by it shown in  the foregoing table  is of the 6,190,476
Common Units initially offered hereby.
 
     The Partnership, the  Operating Partnership, the  Managing General  Partner
and  Triarc have agreed  not to (i)  offer, sell, contract  to sell or otherwise
dispose of any Common  Units or Subordinated Units  (other than the issuance  of
Common  Units in connection  with Acquisitions or  Capital Improvements) or (ii)
grant any options  or warrants to  purchase Common Units  or Subordinated  Units
(other  than the grant of options to  purchase Common Units pursuant to employee
benefit plans that are not exercisable for  at least 180 days), for a period  of
180  days after the date of this Prospectus without the prior written consent of
Merrill Lynch; provided that the  Subordinated Units may be transferred  without
such  consent to an Affiliate  of the Managing General  Partner who agrees to be
bound by the transfer restrictions contained in this paragraph.
 
     As the  National  Association  of  Securities  Dealers,  Inc.  ('NASD')  is
expected  to view  the Common Units  offered in  the Offering as  interests in a
direct participation  program, the  Offering is  being made  in compliance  with
Article  III,  Section  34  of  the  NASD's  Rules  of  Fair  Practice. Investor
suitability with respect to the Common  Units should be judged similarly to  the
suitability  of  other securities  that  are listed  for  trading on  a national
securities exchange. The  Underwriters do  not intend  to confirm  sales to  any
accounts  over  which they  exercise discretionary  authority without  the prior
written approval of the transaction by the customer.
 
     Prior to the Offering, there has been no public market for the Common Units
of the  Partnership.  The initial  public  offering price  has  been  determined
through negotiations among the Partnership, the Managing General Partner, Triarc
and the Representatives. Among the factors considered in determining the initial
public  offering price, in addition to  prevailing market conditions, are price-
earnings ratios of publicly traded companies that the Representatives believe to
be  comparable  to  the  Partnership,  certain  financial  information  of   the
Partnership, the proposed capital structure, assets and
 
                                      152
 


<PAGE>

<PAGE>
liabilities  of  the Partnership,  the  Partnership's management,  its  past and
present operations, the  prospects for, and  timing of, future  revenues of  the
Partnership,  the present state of the  Partnership's development, and the above
factors in relation  to market values  and various valuation  measures of  other
companies  engaged in  activities similar  to the  Partnership. There  can be no
assurance that an  active trading market  will develop for  the Common Units  or
that the Common Units will trade in the public market subsequent to the Offering
at or above the initial public offering price.
 
     The  Common Units have been approved for listing on the NYSE upon notice of
issuance. In order to meet one of the requirements for listing the Common  Units
on the NYSE, the Underwriters have undertaken to sell lots of 100 or more Common
Units to a minimum of 2,000 beneficial holders.
 
     DLJ  and Merrill Lynch are acting as co-placement agents in connection with
the private  placement of  the First  Mortgage Notes  for which  they expect  to
receive  customary compensation. In addition Merrill Lynch and DLJ have provided
investment banking and related services to Triarc and its Affiliates in the past
for which they received customary compensation. In 1995, Triarc engaged  Merrill
Lynch  to  provide  investment  banking advisory  services  relating  to general
corporate  finance  issues  for  which   services  Merrill  Lynch  received   no
compensation  other  than reimbursement  of costs  incurred.  In June  1996, the
Partnership  engaged  Merrill  Lynch  to  provide  investment  banking  advisory
services  relating to  the Transactions  for which  services Merrill  Lynch will
receive a  fee in  an amount  equal  to one-half  of one  percent of  the  gross
proceeds  from the  sale of the  Common Units  in the Offering.  An affiliate of
Merrill Lynch  and  an affiliate  of  DLJ each  own  less than  2%  of  Triarc's
outstanding Class A Common Stock.
 
     The  Partnership and certain  related parties have  agreed to indemnify the
Underwriters  against  certain  liabilities,  including  liabilities  under  the
Securities Act, or to contribute to payments the Underwriters may be required to
make in respect thereof.
 
                                 LEGAL MATTERS
 
     The validity of the Common Units offered hereby will be passed upon for the
Partnership  by Paul,  Weiss, Rifkind, Wharton  & Garrison, New  York, New York.
Certain legal matters in  connection with the Offering  will be passed upon  for
the  Underwriters by Latham & Watkins, New York, New York. Certain other matters
will be passed upon for the Partnership by Andrews & Kurth L.L.P., New York, New
York. Members of Paul,  Weiss, Rifkind, Wharton &  Garrison own an aggregate  of
1,100 shares of Triarc's Class A Common Stock.
 
                                    EXPERTS
 
     The   financial  statements   of  National  Propane   Corporation  and  its
consolidated subsidiaries  as of  December 31,  1994 and  1995 and  for the  ten
months  ended December 31,  1993 and for  the years ended  December 31, 1994 and
1995 (except Public Gas Company for the ten months ended December 31, 1993)  and
the  balance  sheet of  National Propane  Partners,  L.P. as  of March  13, 1996
included in this prospectus have been audited by Deloitte & Touche LLP as stated
in their  reports  appearing herein.  The  financial statements  of  Public  Gas
Company  for the ten months ended December  31, 1993 (consolidated with those of
National Propane and not separately included herein) have been audited by Arthur
Andersen LLP,  as  stated  in  their  report  included  herein.  Such  financial
statements  are included herein in reliance  upon the respective reports of such
firms given upon their authority as experts in accounting and auditing. Both  of
the foregoing firms are independent auditors.
 
                                      153
 


<PAGE>

<PAGE>
                             ADDITIONAL INFORMATION
 
     The  Partnership has  filed with  the Commission,  450 Fifth  Street, N.W.,
Washington, D.C. 20549, a Form  S-1 Registration Statement under the  Securities
Act,  for the registration of  the securities to be  offered by this Prospectus.
Certain of the information  contained in the  Registration Statement is  omitted
from this Prospectus, and reference is hereby made to the Registration Statement
and exhibits relating thereto for further information concerning the Partnership
and  the General  Partner and the  securities to which  this Prospectus relates.
Statements contained herein concerning  the provisions of  any document are  not
necessarily  complete and in each instance reference  is made to the copy of the
document filed as an exhibit to the Registration Statement. Each such  statement
is qualified in its entirety by this reference.
 
     The  Registration  Statement and  the  exhibits thereto  are  available for
inspection in the  principal office of  the Commission in  Washington, D.C.  and
photostatic  copies of  such material may  be obtained from  the Commission upon
payment of the fees prescribed by the Commission.
 
                                      154



<PAGE>

<PAGE>
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 
<TABLE>
<CAPTION>
                                                                                                              PAGE
                                                                                                              ----
 
<S>                                                                                                           <C>
Pro Forma Financial Statements:
     National Propane Corporation, Managing General Partner Unaudited Pro Forma Condensed Balance Sheet:
          Unaudited Pro Forma Condensed Balance Sheet -- March 31, 1996....................................    F-2
          Notes to Unaudited Pro Forma Condensed Balance Sheet.............................................    F-4
     National Propane Partners, L.P. Unaudited Pro Forma Condensed Consolidated Financial Statements:
          Unaudited Pro Forma Condensed Consolidated Balance Sheet -- March 31, 1996.......................    F-5
          Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet................................    F-7
          Unaudited Pro Forma Condensed Consolidated Statement of Operations --
            Year Ended December 31, 1995...................................................................    F-8
            Three Months Ended March 31, 1996..............................................................    F-9
          Notes to Unaudited Pro Forma Condensed Consolidated Statements of Operations.....................   F-10
Historical Financial Statements:
     National Propane Partners, L.P.
          Independent Auditors' Report.....................................................................   F-11
          Balance Sheet -- March 13, 1996..................................................................   F-12
          Note to Balance Sheet............................................................................   F-13
     National Propane Corporation:
          Independent Auditors' Reports....................................................................   F-14
          Consolidated Balance Sheets -- December 31, 1994 and 1995 and March 31, 1996.....................   F-16
          Consolidated Statements of Operations -- Ten months ended December 31, 1993, years ended December
          31, 1994 and 1995 and three months ended March 31, 1995 and 1996.................................   F-17
          Consolidated Statements of Additional Capital -- Ten months ended December 31, 1993, years ended
          December 31, 1994 and 1995 and three months ended March 31, 1996.................................   F-18
          Consolidated Statements of Cash Flows -- Ten months ended December 31, 1993, years ended December
          31, 1994 and 1995 and three months ended March 31, 1995 and 1996.................................   F-19
          Notes to Consolidated Financial Statements.......................................................   F-22
</TABLE>
 
                                      F-1



<PAGE>

<PAGE>
             NATIONAL PROPANE CORPORATION, MANAGING GENERAL PARTNER
                  UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
                                 MARCH 31, 1996
 
     The  unaudited  pro  forma  condensed  balance  sheet  of  National Propane
Corporation, Managing  General  Partner  has  been  prepared  by  adjusting  the
consolidated balance sheet of National Propane as of March 31, 1996 appearing on
page  F-16 herein, to give  effect to the issuance  of the First Mortgage Notes,
the conveyance  of  certain  assets  and liabilities  to  the  Partnership  (the
'Partnership Conveyance') and certain other related transactions as described on
page  F-4 as if  they had occurred on  March 31, 1996.  Such unaudited pro forma
balance sheet  should  also  be  read in  conjunction  with  National  Propane's
consolidated  financial statements and notes  thereto included elsewhere herein.
The following unaudited pro forma condensed consolidated balance sheet does  not
purport  to  be indicative  of  the actual  financial  position that  would have
resulted had the transactions noted above actually been consummated on March 31,
1996 or  of  the future  financial  position of  National  Propane  Corporation,
Managing  General  Partner  which  will result  from  the  consummation  of such
transactions.
 
     In addition to presenting the pro  forma effects of the transactions  noted
above,  the  unaudited pro  forma condensed  balance  sheet of  National Propane
Corporation, Managing General Partner has been  included in order to detail  the
Partnership  Conveyance, which represents the first  column of the unaudited pro
forma condensed balance sheet  of National Propane Partners,  L.P. set forth  on
page F-6 herein.
 
                                      F-2
 


<PAGE>

<PAGE>
             NATIONAL PROPANE CORPORATION, MANAGING GENERAL PARTNER
                  UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
                                 MARCH 31, 1996
 
<TABLE>
<CAPTION>
                                                          NATIONAL                                          NATIONAL
                                                          PROPANE        PRO FORMA          PARTNERSHIP      PROPANE
                                                         HISTORICAL     ADJUSTMENTS        CONVEYANCE(F)    PRO FORMA
                                                         ----------    --------------      -------------    ---------
                                                                                (IN THOUSANDS)
<S>                                                      <C>           <C>                 <C>              <C>
                        ASSETS
Current assets:
     Cash.............................................    $   8,081       $125,000(a)        $ (70,281)      $ --
                                                                           (62,800)(b)
     Receivables, net.................................       22,196        --                  (22,196)        --
     Inventories......................................        8,787        --                   (8,787)        --
     Other current assets.............................        4,423          1,764(c)           (2,887)        3,300
                                                         ----------    --------------      -------------    ---------
          Total current assets........................       43,487         63,964            (104,151)        3,300
Due from Triarc.......................................       --             30,000(d)          --             30,000
Properties, net.......................................       82,211        --                  (82,211)        --
Unamortized costs in excess of net assets of acquired
  companies...........................................       15,002        --                  (15,002)        --
Other assets..........................................        6,679         (4,410)(c)          (5,769)        --
                                                                             3,500(b)
Investment in partnership.............................       --            --                   14,639        14,639
                                                         ----------    --------------      -------------    ---------
                                                          $ 147,379       $ 93,054           $(192,494)      $47,939
                                                         ----------    --------------      -------------    ---------
                                                         ----------    --------------      -------------    ---------
            LIABILITIES AND STOCKHOLDERS'
                   EQUITY (DEFICIT)
Current liabilities:
     Current portion of long-term debt................    $  11,029       $--                $ (11,029)      $ --
     Accounts payable.................................        6,876        --                   (6,876)        --
     Due to Triarc and an affiliate...................       13,872        --                  (13,872)        --
     Accrued expenses.................................       10,061        --                  (10,061)        --
                                                         ----------    --------------      -------------    ---------
          Total current liabilities...................       41,838        --                  (41,838)        --
                                                         ----------    --------------      -------------    ---------
Long-term debt........................................      123,570        125,000(a)         (248,570)        --
                                                         ----------    --------------      -------------    ---------
Deferred income taxes.................................       22,952         (2,500)(e)         --             20,452
                                                         ----------    --------------      -------------    ---------
Other liabilities.....................................        2,102        --                   (2,102)        --
                                                         ----------    --------------      -------------    ---------
Commitments and contingencies
Stockholders' equity (deficit):
     Common stock.....................................            1        --                  --                  1
     Additional paid-in capital.......................       36,270          2,500(e)          --             38,770
     Retained earnings (accumulated deficit)..........        2,038         (2,646)(c)         100,016       (11,284)
                                                                           (51,392)(d)
                                                                           (59,300)(b)
     Due from Triarc..................................      (81,392)        81,392(d)          --              --
                                                         ----------    --------------      -------------    ---------
          Total stockholders' equity (deficit)........      (43,083)       (29,446)            100,016        27,487
                                                         ----------    --------------      -------------    ---------
                                                          $ 147,379       $ 93,054           $(192,494)      $47,939
                                                         ----------    --------------      -------------    ---------
                                                         ----------    --------------      -------------    ---------
</TABLE>
 
           See notes to unaudited pro forma condensed balance sheet.
 
                                      F-3
 


<PAGE>

<PAGE>
             NATIONAL PROPANE CORPORATION, MANAGING GENERAL PARTNER
              NOTES TO UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
                                 (IN THOUSANDS)
 
 (a) To reflect the issuance of the First Mortgage Notes of $125,000.
 
 (b) To  reflect the  use of  proceeds from the  issuance of  the First Mortgage
     Notes for the payment of estimated deferred financing costs associated with
     the issuance of the  First Mortgage Notes of  $3,500, payment of a  $59,300
     cash  dividend  to  Triarc  and  the  balance  of  $62,200  which  will  be
     contributed to the Operating Partnership in connection with the Partnership
     Conveyance.
 
 (c) To reflect the write-off  of deferred financing costs  of $4,410, net of  a
     related  tax benefit of $1,764, on the early extinguishment of the existing
     indebtedness.
 
 (d) To reflect a dividend  to Triarc of $51,392  of National Propane's  $81,392
     receivable  from Triarc  and the reclassification  of the  remainder of the
     receivable of  $30,000  as an  asset  due to  Triarc's  improved  liquidity
     position as a result of the Offering and related transactions.
 
 (e) To  reflect the transfer to  Triarc of certain income  tax liabilities as a
     contribution.
 
 (f) To reflect  the  conveyance  of  certain  assets  and  liabilities  to  the
     Partnership in exchange for general partnership interests.
 
                                      F-4
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
            UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1996
 
     The  following unaudited pro forma  condensed consolidated balance sheet of
the Partnership has been prepared by adjusting the assets and liabilities of the
Partnership resulting  from the  Partnership Conveyance  set forth  on page  F-3
herein  to give effect to the Offering,  the issuance of the Partnership Loan to
Triarc and the use of proceeds as  described on page 50 of this Prospectus  (the
'Transactions')  as  if they  had  occurred on  March  31, 1996.  The  pro forma
adjustments are described in the accompanying  notes to the pro forma  condensed
consolidated  balance  sheet  which  should be  read  in  conjunction  with such
unaudited pro forma  condensed consolidated  balance sheet.  Such unaudited  pro
forma  condensed consolidated balance  sheet should also  be read in conjunction
with National  Propane's consolidated  financial  statements and  notes  thereto
included   elsewhere  herein.  The  following   unaudited  pro  forma  condensed
consolidated balance  sheet does  not purport  to be  indicative of  the  actual
financial  position that would have resulted  had the Transactions actually been
consummated  on  March  31,  1996  or of  the  future  financial position of the
Partnership which will result from the consummation of the Transactions.
 
                                      F-5
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
            UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
                                 MARCH 31, 1996
 
<TABLE>
<CAPTION>
                                                                                       PRO FORMA
                                                                                      ADJUSTMENTS
                                                                       PARTNERSHIP   --------------      PARTNERSHIP
                                                                       CONVEYANCE                         PRO FORMA
                                                                       ----------    (IN THOUSANDS)      -----------
<S>                                                                    <C>           <C>                 <C>
                               ASSETS
Current assets:
     Cash...........................................................    $ 70,281       $  118,200(a)      $     810
                                                                                          (70,012)(b)
                                                                                          (40,700)(c)
                                                                                          (13,872)(d)
                                                                                          (63,087)(e)
     Receivables, net...............................................      22,196          --                 22,196
     Inventories....................................................       8,787          --                  8,787
     Other current assets...........................................       2,887          --                  2,887
                                                                       ----------    --------------      -----------
          Total current assets......................................     104,151          (69,471)           34,680
Due from Triarc.....................................................      --               40,700(c)         40,700
Properties, net.....................................................      82,211          --                 82,211
Unamortized costs in excess of net assets of acquired companies.....      15,002          --                 15,002
Other assets........................................................       5,769          --                  5,769
                                                                       ----------    --------------      -----------
                                                                        $207,133       $  (28,771)        $ 178,362
                                                                       ----------    --------------      -----------
                                                                       ----------    --------------      -----------
                 LIABILITIES AND PARTNERS' CAPITAL
Current liabilities:
     Current portion of long-term debt..............................    $ 11,029       $   (2,597)(e)     $     307
                                                                                           (8,125)(b)
     Accounts payable...............................................       6,876          --                  6,876
     Due to Triarc and an affiliate.................................      13,872          (13,872)(d)        --
     Accrued expenses...............................................      10,061          --                 10,061
                                                                       ----------    --------------      -----------
          Total current liabilities.................................      41,838          (24,594)           17,244
Long-term debt......................................................     248,570          (61,887)(b)       126,193
                                                                                          (60,490)(e)
Other liabilities...................................................       2,102          --                  2,102
Commitments and contingencies
Partners' capital
     Limited partners' capital......................................      --              118,200(a)         18,184
                                                                                         (100,016)(f)
     General partners' capital......................................     (85,377)         100,016(f)         14,639
                                                                       ----------    --------------      -----------
          Total partners' capital...................................     (85,377)         118,200            32,823
                                                                       ----------    --------------      -----------
                                                                        $207,133       $  (28,771)        $ 178,362
                                                                       ----------    --------------      -----------
                                                                       ----------    --------------      -----------
</TABLE>
 
     See notes to unaudited pro forma condensed consolidated balance sheet.
 
                                      F-6
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
              NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED
                                 BALANCE SHEET
                  (DOLLARS IN THOUSANDS, EXCEPT UNIT AMOUNTS)
 
 (a) To  reflect the estimated net proceeds  to the Partnership of $118,200 from
     the issuance of 6,190,476 Common Units  at an offering price of $21.00  per
     Common  Unit net  of $11,800 for  underwriting discount  and other expenses
     relating to the Offering.
 
 (b) To reflect the repayment  of $70,012 of  existing indebtedness utilizing  a
     portion  of the  proceeds from the  sale of Common  Units. National Propane
     will recognize an extraordinary loss of approximately $2.6 million, net  of
     tax, on the early extinguishment of the existing indebtedness.
 
 (c) To reflect the issuance of the $40,700 Partnership Loan to Triarc.
 
 (d) To  record the payment  of liabilities due to  Triarc and another affiliate
     primarily representing accrued management fees and tax sharing payments.
 
 (e) To reflect the repayment  of $63,087 of  existing indebtedness utilizing  a
     portion of the proceeds from the issuance of the First Mortgage Notes.
 
 (f) To record the allocation of partners' capital resulting from the completion
     of the Offering.
 
                                      F-7
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
             UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
                                 OF OPERATIONS
 
     The  following  unaudited pro  forma  condensed consolidated  statements of
operations of the Partnership have  been prepared by adjusting the  consolidated
statements  of operations  of National Propane  for the year  ended December 31,
1995 and the three months ended March 31, 1996 appearing on page F-17 herein, to
give effect to the Transactions as if they had occurred on January 1, 1995.  The
pro  forma adjustments are described in the  accompanying notes to the pro forma
condensed  consolidated  statements  of  operations  which  should  be  read  in
conjunction  with such unaudited pro  forma condensed consolidated statements of
operations. Such pro forma  statements should also be  read in conjunction  with
National  Propane's consolidated financial statements and notes thereto included
elsewhere herein.  The  following  unaudited pro  forma  condensed  consolidated
statements  of operations do not purport to  be indicative of the actual results
of the Partnership that would have  occurred had the Transactions actually  been
consummated  on January 1, 1995 or of future results of operations which will be
obtained as a result of the consummation of the Transactions.
 
<TABLE>
<CAPTION>
                                                                              YEAR ENDED DECEMBER 31, 1995
                                                                       -------------------------------------------
                                                                        NATIONAL
                                                                        PROPANE       PRO FORMA        PARTNERSHIP
                                                                       HISTORICAL    ADJUSTMENTS        PRO FORMA
                                                                       ----------    -----------       -----------
                                                                           (IN THOUSANDS, EXCEPT UNIT AMOUNTS)
 
<S>                                                                    <C>           <C>               <C>
Operating revenues..................................................    $ 148,983      $--             $   148,983
                                                                       ----------    -----------       -----------
Operating costs and expenses:
     Cost of sales..................................................      109,059       --                 109,059
     Selling, general and administrative expenses (other than
       management fees charged by parent)...........................       22,423        1,500(a)           23,923
     Management fees charged by parent..............................        3,000       (3,000)(b)         --
                                                                       ----------    -----------       -----------
                                                                          134,482       (1,500)            132,982
                                                                       ----------    -----------       -----------
     Operating profit...............................................       14,501        1,500              16,001
                                                                       ----------    -----------       -----------
Other income (expense):
     Interest expense...............................................      (11,719)         379(c)          (11,340)
     Interest income from Triarc....................................       --            5,500(d)            5,500
     Other income, net..............................................          904       --                     904
                                                                       ----------    -----------       -----------
                                                                          (10,815)       5,879              (4,936)
                                                                       ----------    -----------       -----------
Income before income taxes..........................................        3,686        7,379              11,065
Provision for income taxes..........................................        4,291       (4,091)(e)             200
                                                                       ----------    -----------       -----------
Net income (loss)...................................................    $    (605)     $11,470         $    10,865
                                                                       ----------    -----------       -----------
                                                                       ----------    -----------       -----------
General partners' interest in net income(f).........................                                   $       435
                                                                                                       -----------
                                                                                                       -----------
Unitholders' interest in net income(f)..............................                                   $    10,430
                                                                                                       -----------
                                                                                                       -----------
Net income per Unit(f)..............................................                                   $      0.97
                                                                                                       -----------
                                                                                                       -----------
Weighted average number of Units outstanding(f).....................                                    10,724,114
                                                                                                       -----------
                                                                                                       -----------
</TABLE>
 
     See notes to unaudited pro forma condensed consolidated statements of
                                  operations.
 
                                      F-8
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
             UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS
                          OF OPERATIONS -- (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                            THREE MONTHS ENDED MARCH 31, 1996
                                                                       -------------------------------------------
                                                                        NATIONAL
                                                                        PROPANE       PRO FORMA        PARTNERSHIP
                                                                       HISTORICAL    ADJUSTMENTS        PRO FORMA
                                                                       ----------    -----------       -----------
                                                                           (IN THOUSANDS, EXCEPT UNIT AMOUNTS)
 
<S>                                                                    <C>           <C>               <C>
Operating revenues..................................................    $  59,981      $--             $    59,981
                                                                       ----------    -----------       -----------
Operating costs and expenses:
     Cost of sales..................................................       41,154       --                  41,154
     Selling, general and administrative expenses (other than
       management fees charged by parent)...........................        5,853          375(a)            6,228
     Management fees charged by parent..............................          750         (750)(b)         --
                                                                       ----------    -----------       -----------
                                                                           47,757         (375)             47,382
                                                                       ----------    -----------       -----------
     Operating profit...............................................       12,224          375              12,599
                                                                       ----------    -----------       -----------
Other income (expense):
     Interest expense...............................................       (3,138)         328(c)           (2,810)
     Interest income from Triarc....................................       --            1,375(d)            1,375
     Other income, net..............................................          278       --                     278
                                                                       ----------    -----------       -----------
                                                                           (2,860)       1,703              (1,157)
                                                                       ----------    -----------       -----------
Income before income taxes..........................................        9,364        2,078              11,442
Provision for income taxes..........................................        3,847       (3,797)(e)              50
                                                                       ----------    -----------       -----------
Net income..........................................................    $   5,517      $ 5,875         $    11,392
                                                                       ----------    -----------       -----------
                                                                       ----------    -----------       -----------
General partners' interest in net income(f).........................                                   $       456
                                                                                                       -----------
                                                                                                       -----------
Unitholders' interest in net income(f)..............................                                   $    10,936
                                                                                                       -----------
                                                                                                       -----------
Net income per Unit(f)..............................................                                   $      1.02
                                                                                                       -----------
                                                                                                       -----------
Weighted average number of Units outstanding(f).....................                                    10,724,114
                                                                                                       -----------
                                                                                                       -----------
</TABLE>
 
     See notes to unaudited pro forma condensed consolidated statements of
                                  operations.
 
                                      F-9
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
         NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT
                                 OF OPERATIONS
                             (DOLLARS IN THOUSANDS)
 
(a) To reflect  the  estimated  stand-alone  general  and  administrative  costs
    associated with the Partnership. The following are primarily based on actual
    quotes  for third  party services  and salary  levels commensurate  with the
    market:
 
<TABLE>
<CAPTION>
                                                                           YEAR ENDED     THREE MONTHS ENDED
                                                                          DECEMBER 31,         MARCH 31,
                                                                              1995               1996
                                                                          ------------    -------------------
 
<S>                                                                       <C>             <C>
Cost of tax return preparation and recordkeeping.......................      $  250              $  63
Investor relations.....................................................         200                 50
Insurance..............................................................         200                 50
Audit and legal services...............................................         250                 62
Registrar and stock exchange fees......................................         125                 31
Direct charges from Triarc.............................................         175                 44
Other..................................................................         300                 75
                                                                          ------------          ------
                                                                             $1,500              $ 375
                                                                          ------------          ------
                                                                          ------------          ------
</TABLE>
 
(b) To reflect  the elimination  of  the management  services fee  allocated  by
    Triarc.
 
(c) Represents adjustments to interest expense as follows:
 
<TABLE>
<CAPTION>
                                                                           YEAR ENDED     THREE MONTHS ENDED
                                                                          DECEMBER 31,         MARCH 31,
                                                                              1995               1996
                                                                          ------------    -------------------
 
<S>                                                                       <C>             <C>
     Interest expense on the Existing Credit Facility..................     $  9,641            $ 2,650
     Interest expense on Other Existing Indebtedness...................          458                146
     Amortization of deferred financing costs associated with the
       Existing Credit Facility........................................        1,305                289
     Interest expense on the First Mortgage Notes (interest rate of
       8.54%)..........................................................      (10,675)            (2,669)
     Amortization of deferred financing costs associated with the First
       Mortgage Notes..................................................         (350)               (88)
                                                                          ------------         --------
                                                                            $    379            $   328
                                                                          ------------         --------
                                                                          ------------         --------
</TABLE>
 
(d) To reflect interest income at 13.5% on the $40,700 Partnership Loan.
 
(e) To  reflect the reduction of the provision  for income taxes as income taxes
    will be borne by the partners and not the Partnership, except for  corporate
    income  taxes relative  to the  Partnership's wholly  owned subsidiary which
    will conduct certain of the Partnership's operations.
 
(f) The General Partners' allocation  of net income is  based on their  combined
    General  Partner 4% interest in  the Partnership (excluding the Subordinated
    Units). The General Partners' 4% allocation of net income has been  deducted
    before calculating the net income per unit. The allocation of net income for
    Common Units and Subordinated Units is based on the terms of the Partnership
    Agreement and assumes that 6,190,476 Common Units and 4,533,638 Subordinated
    Units were outstanding at all times during the periods indicated.
 
                                      F-10



<PAGE>

<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors of
NATIONAL PROPANE PARTNERS, L.P.
 
     We  have  audited  the  accompanying  balance  sheet  of  National  Propane
Partners, L.P. at March  13, 1996. This balance  sheet is the responsibility  of
the  Partnership's management.  Our responsibility is  to express  an opinion on
this balance sheet based on our audit.
 
     We conducted  our  audit in  accordance  with generally  accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance  about  whether  the  balance sheet  is  free  of  material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts  and  disclosures in  the  balance  sheet. An  audit  also  includes
assessing  the  accounting principles  used  and significant  estimates  made by
management, as well  as evaluating  the overall balance  sheet presentation.  We
believe that our audit provides a reasonable basis for our opinion.
 
     In  our  opinion,  such  balance sheet  presents  fairly,  in  all material
respects, the  financial  position of  the  Partnership  at March  13,  1996  in
conformity with generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP
Cedar Rapids, Iowa
March 13, 1996
 
                                      F-11
 


<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
                                 BALANCE SHEET
                                 MARCH 13, 1996
 
<TABLE>
<S>                                                                                                         <C>
Assets
     Cash................................................................................................   $1,000
                                                                                                            ------
          Total assets...................................................................................   $1,000
                                                                                                            ------
                                                                                                            ------
Partners' Capital........................................................................................   $1,000
                                                                                                            ------
                                                                                                            ------
</TABLE>
 
        The accompanying note is an integral part of this balance sheet
 
                                      F-12



<PAGE>

<PAGE>
                        NATIONAL PROPANE PARTNERS, L.P.
                             NOTE TO BALANCE SHEET
 
NOTE 1 -- ORGANIZATION
 
     National Propane Partners, L.P. (the 'Partnership') was formed on March 13,
1996  as a Delaware limited partnership.  The Partnership was formed to acquire,
own and operate  the propane business  and substantially all  of the assets  and
liabilities (other than amounts due from a parent, deferred financing costs, and
net  deferred income tax liabilities) of National Propane Corporation ('National
Propane'),  an  indirect  wholly-owned  subsidiary  of  Triarc  Companies,  Inc.
('Triarc'). In order to simplify the Partnership's obligations under the laws of
selected  jurisdictions  in which  the  Partnership will  conduct  business, the
Partnership's activities  will  be  conducted  through  a  subsidiary  operating
partnership,  National Propane,  L.P. (the 'Operating  Partnership'). Certain of
the assets and liabilities of National  Propane will be conveyed to and  assumed
by the Operating Partnership. In addition, the Operating Partnership will form a
wholly-owned subsidiary which will conduct certain operations.
 
     The  Partnership  intends  to offer  6,190,476  Common  Units, representing
limited partner interests in the Partnership, pursuant to a public offering  and
to  concurrently issue  to the  Managing General  Partner 4,533,638 Subordinated
Units, representing subordinated general  partner interests in the  Partnership,
as  well as an aggregate 4% general  partner interest in the Partnership and the
Operating Partnership, on a combined basis.
 
     National Propane, as Managing General Partner, contributed $10 and  Triarc,
as  the organizational limited  partner, contributed $990  to the Partnership on
March 13, 1996. There have been no other transactions involving the  Partnership
as of March 13, 1996.
 
                                      F-13



<PAGE>

<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders of
NATIONAL PROPANE CORPORATION:
 
     We  have audited the  accompanying consolidated balance  sheets of National
Propane Corporation (the 'Company') (75.7% owned by NPC Holdings, Inc. and 24.3%
owned by PGC Holdings, Inc., both of which are wholly-owned by Triarc Companies,
Inc.) and  subsidiaries  as of  December  31, 1994  and  1995, and  the  related
consolidated statements of operations, additional capital and cash flows for the
ten  months ended December  31, 1993 and  the years ended  December 31, 1994 and
1995. These  financial  statements  are  the  responsibility  of  the  Company's
management.  Our  responsibility is  to express  an  opinion on  these financial
statements based  on  our audits.  The  consolidated financial  statements  give
retroactive  effect to the merger  of the Company and  Public Gas Company, which
has been accounted for as  a combination of entities  under common control in  a
manner  similar to a pooling of  interests as described in Notes  1 and 3 to the
consolidated financial statements. We did not audit the financial statements  of
Public  Gas Company for the ten months ended December 31, 1993, which statements
(not shown  separately  herein) reflect  total  revenues of  $23,394,000.  Those
statements were audited by other auditors whose report has been furnished to us,
and  our opinion, insofar as  it relates to the  amounts included for Public Gas
Company for the  ten months  ended December  31, 1993,  is based  solely on  the
report of such other auditors.
 
     We  conducted  our audits  in accordance  with generally  accepted auditing
standards. Those standards require that we plan and perform the audit to  obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also  includes
assessing  the  accounting principles  used  and significant  estimates  made by
management, as well as evaluating the overall financial statement  presentation.
We  believe  that our  audits and  the report  of the  other auditors  provide a
reasonable basis for our opinion.
 
     In our opinion, based on our audits  and the report of the other  auditors,
the  consolidated financial statements referred to  above present fairly, in all
material respects, the  financial position  of the Company  and subsidiaries  at
December  31, 1994 and 1995, and the  results of their operations and their cash
flows for the ten months  ended December 31, 1993  and the years ended  December
31, 1994 and 1995 in conformity with generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP
Cedar Rapids, Iowa
March 13, 1996
 
                                      F-14
 


<PAGE>

<PAGE>
               REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
 
To PUBLIC GAS COMPANY:
 
     We  have audited  the statements of  income and retained  earnings and cash
flows for the ten months  ended December 31, 1993  of Public Gas Company.  These
financial  statements  (not  presented  herein) are  the  responsibility  of the
Company's management.  Our responsibility  is  to express  an opinion  on  these
financial statements based on our audit.
 
     We  conducted  our audit  in  accordance with  generally  accepted auditing
standards. Those standards require that we plan and perform the audit to  obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also  includes
assessing  the  accounting principles  used  and significant  estimates  made by
management, as well as evaluating the overall financial statement  presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
     In  our opinion, the financial statements  referred to above (not presented
herein) present fairly, in all material respects, the results of operations  and
cash  flows of Public Gas Company for the  ten months ended December 31, 1993 in
conformity with generally accepted accounting principles.
 
ARTHUR ANDERSEN LLP
Miami, Florida,
April 14, 1994.
 
                                      F-15



<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                      (IN THOUSANDS EXCEPT FOR SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                                  DECEMBER 31,          MARCH 31,
                                                                              ---------------------    -----------
                                                                                1994         1995         1996
                                                                              ---------    --------    -----------
                                                                                                       (UNAUDITED)
 
<S>                                                                           <C>          <C>         <C>
                                  ASSETS
Current assets:
     Cash..................................................................   $   3,983    $  2,825     $   8,081
     Receivables, net (Notes 5 and 19).....................................      17,065      16,391        22,196
     Inventories...........................................................      10,182      10,543         8,787
     Other current assets (Note 11)........................................       3,556       4,340         4,423
                                                                              ---------    --------    -----------
          Total current assets (Note 10)...................................      34,786      34,099        43,487
Properties, net (Notes 7, 10 and 14).......................................      82,176      83,214        82,211
Unamortized costs in excess of net assets of acquired companies (Notes 8,
  12, 14, 18 and 19).......................................................      13,481      15,161        15,002
Other assets (Note 9)......................................................       7,138       6,638         6,679
                                                                              ---------    --------    -----------
                                                                              $ 137,581    $139,112     $ 147,379
                                                                              ---------    --------    -----------
                                                                              ---------    --------    -----------
              LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
     Current portion of long-term debt (Note 10)...........................   $  12,298    $ 11,278     $  11,029
     Accounts payable......................................................       6,759       7,836         6,876
     Due to a parent and another affiliate (Note 11).......................       8,736       9,972        13,872
     Accrued interest......................................................       1,657       2,233         2,077
     Accrued insurance.....................................................       1,010       2,961         3,513
     Other accrued expenses................................................       4,957       4,176         4,471
                                                                              ---------    --------    -----------
          Total current liabilities........................................      35,417      38,456        41,838
                                                                              ---------    --------    -----------
Long-term debt (Note 10)...................................................      98,711     124,266       123,570
Deferred income taxes (Notes 11 and 14)....................................      20,761      22,878        22,952
Customer deposits..........................................................       2,194       2,112         2,102
 
Commitments and contingencies (Notes 2, 11, 16 and 17)
Stockholders' equity (deficit) (Note 10):
     Preferred stock, 221,900 shares authorized, no shares issued or
       outstanding (Note 12)...............................................      --           --           --
     Common stock, $1 par value; 1,000, 3,000 and 3,000 shares authorized,
       1,000, 1,360 and 1,360 shares issued and outstanding in 1994, 1995
       and 1996, respectively (Notes 3 and 19).............................           1           1             1
     Additional paid-in capital............................................      32,164      36,270        36,270
     Retained earnings (accumulated deficit)...............................      61,663      (3,479)        2,038
     Due from parents (Note 13)............................................    (113,330)    (81,392)      (81,392)
                                                                              ---------    --------    -----------
          Total stockholders' deficit......................................     (19,502)    (48,600)      (43,083)
                                                                              ---------    --------    -----------
                                                                              $ 137,581    $139,112     $ 147,379
                                                                              ---------    --------    -----------
                                                                              ---------    --------    -----------
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                      F-16
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                        TEN MONTHS     YEAR ENDED DECEMBER     THREE MONTHS ENDED
                                                          ENDED                31,                 MARCH 31,
                                                       DECEMBER 31,    --------------------    ------------------
                                                           1993          1994        1995       1995       1996
                                                       ------------    --------    --------    -------    -------
                                                                                                  (UNAUDITED)
 
<S>                                                    <C>             <C>         <C>         <C>        <C>
Revenues............................................     $119,249      $151,651    $148,983    $50,299    $59,981
                                                       ------------    --------    --------    -------    -------
Costs and expenses:
     Cost of sales (including charges from related
       parties of $4,020 in the ten months ended
       December 31, 1993 -- Note 19)................       92,301       109,683     109,059     33,862     41,154
     Selling, general and administrative expenses
       (including charges from related parties of
       $884 in the ten months ended December 31,
       1993) (Notes 17, 18 and 20)..................       16,501        18,657      22,423      5,174      5,853
     Management fees charged by parents (Note 19)...        3,485         4,561       3,000        750        750
     Facilities relocation and corporate
       restructuring (including charges from related
       parties of $2,821) (Note 20).................        8,429         --          --         --         --
                                                       ------------    --------    --------    -------    -------
                                                          120,716       132,901     134,482     39,786     47,757
                                                       ------------    --------    --------    -------    -------
 
          Operating profit (loss)...................       (1,467)       18,750      14,501     10,513     12,224
                                                       ------------    --------    --------    -------    -------
 
Other income (expense):
     Interest expense...............................       (9,949)       (9,726)    (11,719)    (2,858)    (3,138)
     Interest income from Triarc Companies, Inc.
       (Note 13)....................................       10,360         9,751       --         --         --
     Other income, net (Notes 6 and 20).............        1,727         1,169         904        300        278
                                                       ------------    --------    --------    -------    -------
                                                            2,138         1,194     (10,815)    (2,558)    (2,860)
                                                       ------------    --------    --------    -------    -------
          Income before income taxes and
            extraordinary charge....................          671        19,944       3,686      7,955      9,364
Provision for income taxes (Note 11)................        1,018         7,923       4,291      3,156      3,847
                                                       ------------    --------    --------    -------    -------
     Income (loss) before extraordinary charge......         (347)       12,021        (605)     4,799      5,517
Extraordinary charge (Note 15)......................       --            (2,116)      --         --         --
                                                       ------------    --------    --------    -------    -------
     Net income (loss)..............................     $   (347)     $  9,905    $   (605)   $ 4,799    $ 5,517
                                                       ------------    --------    --------    -------    -------
                                                       ------------    --------    --------    -------    -------
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                      F-17



<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF ADDITIONAL CAPITAL
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                  RETAINED
                                                                  ADDITIONAL      EARNINGS
                                                                   PAID-IN      (ACCUMULATED    DUE FROM     TREASURY
                                                                   CAPITAL        DEFICIT)       PARENTS      STOCK
                                                                  ----------    ------------    ---------    --------
 
<S>                                                               <C>           <C>             <C>          <C>
Balance at February 28, 1993...................................    $ 21,505       $ 95,866      $ (27,430)    $ (638)
     Net loss..................................................      --               (347)        --          --
     Dividends paid............................................      --             (1,886)        --          --
     Capital contribution from deferred gain on sale of
       interests in Southeastern Public Service Company
       ('SEPSCO') and CFC Holdings Corp. to Triarc Companies,
       Inc. ('Triarc') (Note 6)................................       2,255         --             --          --
     Increase in due from SEPSCO classified in equity (Note
       13).....................................................      --             --             (1,605)     --
                                                                  ----------    ------------    ---------    --------
Balance at December 31, 1993...................................      23,760         93,633        (29,035)      (638)
     Net income................................................      --              9,905         --          --
     Dividends paid (including $40,030 in cash) (Note 10)......      --            (41,875)        --          --
     Repurchases of preferred stock (Note 12)..................         (62)        --             --           (234)
     Cancellation of preferred stock (Note 12).................         378         --             --            872
     Reclassification of due from Triarc to equity (Note 13)...      --             --            (81,392)     --
     Increase in SEPSCO's basis in Public Gas Company ('Public
       Gas') resulting from the repurchase of the 28.9%
       minority interest in SEPSCO (Note 14)...................       8,088         --             --          --
     Increase in due from SEPSCO classified in equity..........      --             --             (2,903)     --
                                                                  ----------    ------------    ---------    --------
Balance at December 31, 1994...................................      32,164         61,663       (113,330)     --
     Net loss..................................................      --               (605)        --          --
     Dividends paid (Note 10)..................................      --            (30,000)        --          --
     Increase in due from SEPSCO classified in equity (Note
       13).....................................................      --             --             (2,599)     --
     Dividend of due from SEPSCO (Note 13).....................      --            (34,537)        34,537      --
     Capital contribution (Note 19)............................       4,240         --             --          --
     Repurchase of the 0.3% minority interest in Public Gas
       (Note 3)................................................        (134)        --             --          --
                                                                  ----------    ------------    ---------    --------
Balance at December 31, 1995...................................    $ 36,270       $ (3,479)     $ (81,392)    $--
     Net income (unaudited)....................................      --              5,517         --          --
                                                                  ----------    ------------    ---------    --------
Balance at March 31, 1996 (unaudited)..........................    $ 36,270       $  2,038      $ (81,392)    $--
                                                                  ----------    ------------    ---------    --------
                                                                  ----------    ------------    ---------    --------
</TABLE>
 
          See accompanying notes to consolidated financial statements.
 
                                      F-18
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                     TEN MONTHS      YEAR ENDED DECEMBER        THREE MONTHS ENDED
                                                       ENDED                 31,                    MARCH 31,
                                                    DECEMBER 31,    ----------------------    ----------------------
                                                        1993          1994         1995         1995         1996
                                                    ------------    ---------    ---------    ---------    ---------
                                                                                                   (UNAUDITED)

<S>                                                 <C>             <C>          <C>          <C>          <C>
Cash flows from operating activities:
     Net income (loss)...........................     $   (347)     $  9,905      $  (605)     $ 4,799      $ 5,517
     Adjustments to reconcile net income (loss)
       to net cash and equivalents provided by
       (used in) operating activities:
          Depreciation and amortization of
            properties...........................        6,917         9,427        9,546        2,151        2,417
          Amortization of original issue discount
            and deferred financing costs.........        1,046         1,077        1,305          354          289
          Amortization of costs in excess of net
            assets of acquired companies.........           33           261          617          131          159
          Other amortization.....................       --               336          482          139           25
          Write-off of deferred financing costs
            and original issue discount..........       --             3,498        --           --           --
          Interest income from Triarc accrued and
            not collected........................      (10,360)       (9,751 )      --           --           --
          Provision for (benefit from) deferred
            income taxes.........................         (880)        1,773        1,995         (246)        (146)
          Provision for doubtful accounts........          661           685          848          284          346
          Provision for facilities relocation and
            corporate restructuring..............        8,429         --           --           --           --
          Payments on facilities relocation and
            corporate restructuring..............       (1,678)       (4,115 )      --           --           --
          Equity in net loss of affiliate........          430         --           --           --           --
          Other, net.............................         (639)        2,061          (79)        (262)        (464)
          Changes in operating assets and
            liabilities:
               Decrease (increase) in accounts
                 receivable......................        1,801        (1,305 )        (56)        (270)      (6,151)
               Decrease (increase) in
                 inventories.....................       (2,248)       (1,229 )       (286)       2,257        1,756
               Decrease (increase) in other
                 current assets..................         (237)       (1,278 )       (662)         (59)         137
               Increase (decrease) in accounts
                 payable and accrued expenses....       (6,163)         (624 )      2,823       (3,290)        (269)
                                                    ------------    ---------    ---------    ---------    ---------
                    Net cash provided by (used
                      in) operating activities...       (3,235)       10,721       15,928        5,988        3,616
                                                    ------------    ---------    ---------    ---------    ---------
Cash flows from investing activities:
     Business acquisitions.......................         (693)       (5,203 )       (373)         (23)       --
     Capital expenditures........................       (7,457)       (6,436 )     (8,082)      (1,797)      (1,216)
     Proceeds from sales of properties...........        1,452         1,375          599          242           70
     Proceeds from sale of investments, net of
       tax.......................................        2,424         --           --           --           --
     Decrease in finance-type lease receivables
       from affiliates...........................       25,670         1,458           32           15        --
</TABLE>
 
                                                  (table continued on next page)
 
                                      F-19
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
                                 (IN THOUSANDS)
 
(table continued from previous page)
 
<TABLE>
<CAPTION>
                                                     TEN MONTHS      YEAR ENDED DECEMBER        THREE MONTHS ENDED
                                                       ENDED                 31,                    MARCH 31,
                                                    DECEMBER 31,    ----------------------    ----------------------
                                                        1993          1994         1995         1995         1996
                                                    ------------    ---------    ---------    ---------    ---------
                                                                                                   (UNAUDITED)
<S>                                                 <C>             <C>          <C>          <C>          <C>
     Decrease in due from affiliates.............     $    982      $  7,754      $ --         $ --         $ --
     Decrease (increase) in due from parents.....       46,909        (6,007 )     (1,643)      (1,891)       3,974
                                                    ------------    ---------    ---------    ---------    ---------
               Net cash provided by (used in)
                 investing activities............       69,287        (7,059 )     (9,467)      (3,454)       2,828
                                                    ------------    ---------    ---------    ---------    ---------
Cash flows from financing activities:
     Proceeds from long-term debt................        6,234       100,781       32,729        3,500           --
     Repayments of long-term debt................      (76,997)      (60,678 )     (9,532)      (7,203)      (1,186)
     Dividends...................................          (41)      (40,030 )    (30,000)       --           --
     Repurchase of National Propane Corporation
       preferred stock...........................       --              (234 )      --           --           --
     Repurchase of Public Gas Company preferred
       stock.....................................       --              (704 )      --           --           --
     Payment of deferred financing costs.........       --            (5,390 )       (816)        (679)          (2)
                                                    ------------    ---------    ---------    ---------    ---------
               Net cash used in financing
                 activities......................      (70,804)       (6,255 )     (7,619)      (4,382)      (1,188)
                                                    ------------    ---------    ---------    ---------    ---------
Net increase (decrease) in cash..................       (4,752)       (2,593 )     (1,158)      (1,848)       5,256
Cash at beginning of period......................       11,328         6,576        3,983        3,983        2,825
                                                    ------------    ---------    ---------    ---------    ---------
Cash at end of period............................     $  6,576      $  3,983      $ 2,825      $ 2,135      $ 8,081
                                                    ------------    ---------    ---------    ---------    ---------
                                                    ------------    ---------    ---------    ---------    ---------
Supplemental disclosures of cash flow
  information:
     Cash paid during the period for:
          Interest...............................     $ 10,771      $ 11,110      $11,158      $ 2,713      $ 3,005
                                                    ------------    ---------    ---------    ---------    ---------
                                                    ------------    ---------    ---------    ---------    ---------
          Income taxes (net of refunds)..........     $  1,309      $  1,163      $ 1,261      $   455      $  (281)
                                                    ------------    ---------    ---------    ---------    ---------
                                                    ------------    ---------    ---------    ---------    ---------
Supplemental schedule of noncash investing and
  financing activities:
     Capital expenditures:
          Total capital expenditures.............     $ 10,588      $  7,900      $ 8,966      $ 1,797      $ 1,457
          Amounts representing capitalized
            leases...............................       (3,131)       (1,464 )       (884)       --            (241)
                                                    ------------    ---------    ---------    ---------    ---------
          Capital expenditures paid in cash......     $  7,457      $  6,436      $ 8,082      $ 1,797      $ 1,216
                                                    ------------    ---------    ---------    ---------    ---------
                                                    ------------    ---------    ---------    ---------    ---------
</TABLE>
 
     Due  to their non-cash nature, the following  are also not reflected in the
respective consolidated statements of cash flows:
 
          During the  ten months  ended December  31, 1993  and the  year  ended
     December  31, 1994,  the Company offset  'Due from  Triarc Companies, Inc.'
     ('Triarc')  with  amounts   otherwise  payable  for   (i)  $1,845,000   and
     $1,845,000,   respectively,  in  dividends  payable   to  Triarc  and  (ii)
     $1,622,000 and $790,000,  respectively, in  amounts due to  Triarc under  a
     management services agreement.
 
          In  April  1994 Triarc  acquired the  28.9%  minority interest  in its
     subsidiary, Southeastern Public Service Company ('SEPSCO'), that it did not
     already own through the  issuance of its  common stock. SEPSCO's  increased
     basis   in  Public  Gas  Company  ('Public  Gas')  (its  then  wholly-owned
     subsidiary) resulting from this transaction was 'pushed down' to Public Gas
     resulting in increases  to 'Unamortized costs  in excess of  net assets  of
     acquired companies' of $5,483,000, 'Properties' of
 
                                      F-20
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED)
                                 (IN THOUSANDS)
 
     $4,255,000,  'Deferred  income  taxes'  of  $1,650,000  with  an offsetting
     increase to 'Additional paid-in capital' of $8,088,000. See Note 14 to  the
     consolidated financial statements for further discussion.
 
          In connection with Public Gas' repurchase of its convertible preferred
     stock,   SEPSCO's  increased  basis  in  Public  Gas  resulting  from  this
     transaction was 'pushed  down' to Public  Gas resulting in  an increase  of
     $642,000  in  'Unamortized  costs  in  excess  of  net  assets  of acquired
     companies' and a charge to 'Additional paid-in capital' of $62,000 with  an
     offsetting increase in receivables from SEPSCO.
 
          In  June 1995  aggregate receivables  from SEPSCO  of $34,537,000 were
     dividended to SEPSCO prior to a merger of Public Gas with and into National
     Propane Corporation (see Notes 3 and 13).
 
          In August 1995  the stock  of a subsidiary  of Triarc  which held  the
     stock  of  two  related entities  engaged  in the  liquefied  petroleum gas
     distribution business was  contributed to National  Propane Corporation  by
     Triarc  in September, 1995 resulting in  an increase to 'Additional paid-in
     capital'  of  $4,240,000.  See  Note  19  to  the  consolidated   financial
     statements for further discussion.
 
          See accompanying notes to consolidated financial statements.
 
                                      F-21



<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION
 
     The  consolidated  financial statements  include  the accounts  of National
Propane  Corporation  (referred  to  herein  alone  or  with  its   wholly-owned
subsidiaries as the 'Company') and its wholly-owned subsidiaries. The Company is
75.7%  owned  by NPC  Holdings, Inc.  ('NPC  Holdings') and  24.3% owned  by PGC
Holdings, Inc.,  ('PGC Holdings'),  a  wholly-owned subsidiary  of  Southeastern
Public  Service  Company ('SEPSCO').  NPC Holdings  and SEPSCO  are wholly-owned
subsidiaries of Triarc Companies, Inc. ('Triarc'). All significant  intercompany
balances  and transactions have  been eliminated in  consolidation. In June 1995
Public Gas Company ('Public  Gas') was merged (the  'Merger') with and into  the
Company as more fully described in Note 3 below. Since the Merger was a transfer
of  assets and liabilities  in exchange for  shares among a  controlled group of
companies, it  has been  accounted  for in  a manner  similar  to a  pooling  of
interests  and, accordingly, all prior periods have been restated to reflect the
Merger.  'National  Propane'  is  used  herein  to  refer  to  National  Propane
Corporation, excluding the accounts of Public Gas, prior to the Merger.
 
INVENTORIES
 
     Inventories,  all of which are classified  as finished goods, are stated at
the lower of cost (first-in, first-out basis) or market.
 
PROPERTIES AND DEPRECIATION
 
     Properties are carried at cost less accumulated depreciation.  Depreciation
of  properties  is computed  on the  straight-line  method over  their estimated
useful lives of 20 to 45 years for buildings and improvements, 4 to 30 years for
equipment and customer installation  costs, 3 to 10  years for office  furniture
and  fixtures  and 3  to 8  years for  automotive and  transportation equipment.
Leased assets  capitalized are  amortized over  the shorter  of their  estimated
useful  lives or the  terms of the  respective leases. Gains  and losses arising
from disposals are included in current operations.
 
UNAMORTIZED COSTS IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES
 
     Costs in excess of  net assets of  acquired companies ('Goodwill')  arising
after   November  1,  1970  are  being  amortized  on  the  straight-line  basis
principally over 15 to  30 years; Goodwill of  $3,560,000 arising prior to  that
date  is not being amortized.  The amount of impairment,  if any, in unamortized
Goodwill is measured  based on projected  future results of  operations. To  the
extent  future results  of operations of  those acquired companies  to which the
Goodwill relates  through  the  period  such Goodwill  is  being  amortized  are
sufficient  to absorb the related amortization,  the Company has deemed there to
be no impairment of Goodwill.
 
IMPAIRMENT OF LONG-LIVED ASSETS
 
     Effective October  1,  1995  the Company  adopted  Statement  of  Financial
Accounting  Standards No. 121,  'Accounting for Impairment  of Long-Lived Assets
and for  Long-Lived Assets  to  Be Disposed  of.'  This standard  requires  that
long-lived  assets  and certain  identifiable intangibles  held  and used  by an
entity be reviewed for  impairment whenever events  or changes in  circumstances
indicate  that  the carrying  amount of  an  asset may  not be  recoverable. The
adoption of this standard had no effect on the Company's consolidated results of
operations or financial position.
 
                                      F-22
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
AMORTIZATION OF DEFERRED FINANCING COSTS AND DEBT DISCOUNT
 
     Deferred financing  costs  and  original  issue  debt  discount  are  being
amortized  as interest expense over  the lives of the  respective debt using the
interest rate method.
 
ACCRUED INSURANCE
 
     Accrued insurance includes reserves for  incurred but not reported  claims.
Such  reserves are based on actuarial  studies using historical loss experience.
Adjustments  to   estimates  recorded   resulting  from   subsequent   actuarial
evaluations  or ultimate payments are reflected in the operations of the periods
in which such adjustments become known.
 
INCOME TAXES
 
     The Company is included in the consolidated Federal income tax return filed
by Triarc except that, prior to April  14, 1994, Public Gas was included in  the
consolidated  Federal income tax return of SEPSCO. Under a tax sharing agreement
with Triarc, the Company provides for Federal income taxes on the same basis  as
if  it filed a separate consolidated return.  All Federal income tax payments or
refunds are made through Triarc. Deferred income taxes are provided to recognize
the tax  effect  of  temporary  differences between  the  bases  of  assets  and
liabilities for tax and financial statement purposes.
 
REVENUE RECOGNITION
 
     The  Company  records sales  of  liquefied petroleum  gas  ('propane') when
inventory is delivered to the customer.
 
INTERIM FINANCIAL STATEMENTS
 
     The interim financial statements and related notes are unaudited;  however,
in  the  opinion  of  management,  the  interim  data  include  all adjustments,
consisting  only  of  normal  recurring   adjustments,  necessary  for  a   fair
presentation  of the financial  position, results of  operations, and cash flows
for the  interim periods.  Interim  results are  not necessarily  indicative  of
results for a full year.
 
(2) SIGNIFICANT RISKS AND UNCERTAINTIES
 
NATURE OF OPERATIONS
 
     The  Company is  engaged primarily  in the  retail marketing  of propane to
residential  customers,  commercial   and  industrial  customers,   agricultural
customers  and resellers. The Company also  markets propane related supplies and
equipment including home and commercial appliances. The Company's operations are
concentrated in the midwest, northeast,  southeast and southwest regions of  the
United States.
 
USE OF ESTIMATES
 
     The  preparation  of  financial  statements  in  conformity  with generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that  affect the  reported amounts  of  assets and  liabilities and
disclosure of contingent  assets and liabilities  at the date  of the  financial
statements  and  the  reported  amounts  of  revenues  and  expenses  during the
reporting period. Actual results could differ from those estimates.
 
                                      F-23
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
SIGNIFICANT ESTIMATES
 
     The Company's significant estimates are for costs related to (i)  insurance
loss reserves (see Note 1), (ii) income tax examinations (see Note 11) and (iii)
an environmental contingency (see Note 17).
 
CERTAIN RISK CONCENTRATIONS
 
     The  Company's significant risk concentration arises from propane being its
principal product.  Both  sales  levels  and  costs  of  propane  are  extremely
sensitive  to weather conditions,  particularly in the  residential home heating
market. The Company's profitability depends on  the spread between its cost  for
propane  and the selling  price. The Company  generally is able  to pass on cost
increases to the customer in the  form of higher selling prices. However,  where
increases cannot be passed on, margins can be adversely affected. The Company is
also  impacted by the competitive nature of  the propane industry, as well as by
competition from  alternative  energy  sources  such as  natural  gas,  oil  and
electricity.
 
(3) PUBLIC GAS MERGER
 
     Effective  June 29, 1995, Public  Gas, previously a wholly-owned subsidiary
of SEPSCO engaged  in the LP  gas business,  was merged with  and into  National
Propane,  with  National Propane  continuing  as the  surviving  corporation. In
consideration for  their investments  in Public  Gas and  National Propane,  PGC
Holdings received 330 shares of the merged corporation representing 24.8% of its
issued  and outstanding  common stock and  NPC Holdings continued  to hold 1,000
shares representing 75.2% of  the stock of the  merged corporation (see Note  19
for  discussion  of  subsequent issuance  of  30  shares of  the  Company). Such
percentages were based upon the relative fair values of Public Gas and  National
Propane  prior  to the  Merger. In  June 1995  prior to  the Merger,  Public Gas
acquired the 0.3% of its common stock that SEPSCO did not own for  approximately
$134,000.
 
     The  following  sets  forth  summary  operating  results  of  the  combined
entities:
 
<TABLE>
<CAPTION>
                                                               TEN MONTHS
                                                                 ENDED                     YEAR ENDED DECEMBER 31,
                                                              DECEMBER 31,    --------------------------------------------------
                                                                  1993                 1994                       1995
                                                              ------------    -----------------------    -----------------------
                                                                                        (IN THOUSANDS)
<S>                                                           <C>             <C>                        <C>
Operating revenues:
     National Propane......................................     $ 95,911             $ 123,588                  $ 133,456(a)
     Public Gas............................................       23,394                28,110                     15,542(b)
     Eliminations..........................................          (56)                  (47)                       (15)
                                                              ------------         -----------                -----------
                                                                $119,249             $ 151,651                  $ 148,983
                                                              ------------         -----------                -----------
                                                              ------------         -----------                -----------
Income (loss) before extraordinary charge:
     National Propane......................................     $ (1,433)            $  10,072                  $  (2,287)(a)
     Public Gas............................................        1,086                 1,949                      1,682(b)
                                                              ------------         -----------                -----------
                                                                $   (347)            $  12,021                  $    (605)
                                                              ------------         -----------                -----------
                                                              ------------         -----------                -----------
Net income (loss):
     National Propane......................................     $ (1,433)            $   7,956                  $  (2,287)(a)
     Public Gas............................................        1,086                 1,949                      1,682(b)
                                                              ------------         -----------                -----------
                                                                $   (347)            $   9,905                  $    (605)
                                                              ------------         -----------                -----------
                                                              ------------         -----------                -----------
</TABLE>
 
- ------------
 
 (a) Reflects the  results of  National  Propane prior  to  the Merger  and  the
     combined Company after the Merger.
 
 (b) Reflects the results of Public Gas prior to the Merger.
 
                                      F-24
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
(4) CHANGE IN FISCAL YEAR
 
     In  October 1993 National  Propane's fiscal year ended  April 30 and Public
Gas' fiscal  year  ended February  28  were changed  to  a calendar  year  ended
December 31. In order to conform the reporting periods of the combining entities
and  to select a  period deemed to  meet the Securities  and Exchange Commission
requirement for  filing financial  statements  for a  period  of one  year,  the
ten-month  period ended December 31, 1993 ('Transition 1993') has been presented
in the accompanying  consolidated financial statements.  As used herein,  '1994'
and '1995' refer to the years ended December 31, 1994 and 1995, respectively.
 
(5) RECEIVABLES
 
     The following is a summary of the components of receivables:
 
<TABLE>
<CAPTION>
                                                                            DECEMBER 31,
                                                                         ------------------    MARCH 31,
                                                                          1994       1995        1996
                                                                         -------    -------    ---------
                                                                                 (IN THOUSANDS)
 
<S>                                                                      <C>        <C>        <C>
Receivables:
     Trade............................................................   $17,896    $16,939     $23,155
     Other............................................................       241        432         289
                                                                         -------    -------    ---------
                                                                          18,137     17,371      23,444
Less allowance for doubtful accounts (trade)..........................     1,072        980       1,248
                                                                         -------    -------    ---------
                                                                         $17,065    $16,391     $22,196
                                                                         -------    -------    ---------
                                                                         -------    -------    ---------
</TABLE>
 
     The following is an analysis of the allowance for doubtful accounts for the
periods  ended December 31, 1993, 1994 and 1995 and the three months ended March
31, 1996:
 
<TABLE>
<CAPTION>
                                                                                                 THREE
                                                                                              MONTHS ENDED
                                                            TRANSITION                         MARCH 31,
                                                               1993        1994      1995         1996
                                                            ----------    ------    ------    ------------
                                                                            (IN THOUSANDS)
 
<S>                                                         <C>           <C>       <C>       <C>
Balance at beginning of period...........................     $1,552      $1,343    $1,072       $  980
Provision for doubtful accounts..........................        661         685       848          346
Uncollectible accounts written off.......................       (870)       (956)     (940)         (78)
                                                            ----------    ------    ------    ------------
Balance at end of period.................................     $1,343      $1,072    $  980       $1,248
                                                            ----------    ------    ------    ------------
                                                            ----------    ------    ------    ------------
</TABLE>
 
(6) INVESTMENTS IN AFFILIATES
 
     On April 23, 1993 the  Company sold to Triarc all  of its ownership in  the
common  stock of CFC Holdings  and in SEPSCO for  an aggregate of $3,900,000, or
$3,731,000 in excess of  the net book  value of the  investments of $169,000  at
that  date. The  $3,731,000 excess less  related income taxes  of $1,476,000 was
accounted for as a deferred gain and  reported as a capital contribution in  the
accompanying  consolidated  financial statements  for  Transition 1993  since it
resulted from a transaction among a controlled group of companies. The Company's
equity in net loss of affiliates of $430,000 is included in 'Other income,  net'
in the accompanying consolidated statement of operations for Transition 1993.
 
                                      F-25
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
(7) PROPERTIES
 
     The following is a summary of the components of properties:
 
<TABLE>
<CAPTION>
                                                                          DECEMBER 31,         MARCH
                                                                      --------------------      31,
                                                                        1994        1995        1996
                                                                      --------    --------    --------
                                                                               (IN THOUSANDS)
 
<S>                                                                   <C>         <C>         <C>
Land...............................................................   $  5,357    $  5,303    $  5,303
Buildings and improvements.........................................     11,498      11,760      11,777
Equipment and customer installation costs..........................    112,576     119,614     120,382
Office furniture and fixtures......................................      4,596       4,947       4,963
Automotive and transportation equipment............................     19,199      21,937      22,501
Leased assets capitalized..........................................      1,584       1,655       1,655
                                                                      --------    --------    --------
                                                                       154,810     165,216     166,581
Less accumulated depreciation and amortization.....................     72,634      82,002      84,370
                                                                      --------    --------    --------
                                                                      $ 82,176    $ 83,214    $ 82,211
                                                                      --------    --------    --------
                                                                      --------    --------    --------
</TABLE>
 
(8) UNAMORTIZED COSTS IN EXCESS OF NET ASSETS OF ACQUIRED COMPANIES
 
     The following is a summary of the components of unamortized costs in excess
of net assets of acquired companies:
 
<TABLE>
<CAPTION>
                                                                            DECEMBER 31,
                                                                         ------------------    MARCH 31,
                                                                          1994       1995        1996
                                                                         -------    -------    ---------
                                                                                 (IN THOUSANDS)
 
<S>                                                                      <C>        <C>        <C>
Costs in excess of net assets of acquired companies...................   $14,745    $16,712     $16,712
Less accumulated amortization.........................................     1,264      1,551       1,710
                                                                         -------    -------    ---------
                                                                         $13,481    $15,161     $15,002
                                                                         -------    -------    ---------
                                                                         -------    -------    ---------
</TABLE>
 
(9) OTHER ASSETS
 
     The following is a summary of the components of other assets:
 
<TABLE>
<CAPTION>
                                                                              DECEMBER 31,
                                                                            ----------------    MARCH 31,
                                                                             1994      1995       1996
                                                                            ------    ------    ---------
                                                                                   (IN THOUSANDS)
 
<S>                                                                         <C>       <C>       <C>
Deferred financing costs.................................................   $5,390    $6,206     $ 6,208
Non-compete agreements...................................................    1,429     1,929       1,929
Long-term receivables, net of unearned interest income...................      645       300         276
Other....................................................................      355       544         994
                                                                            ------    ------    ---------
                                                                             7,819     8,979       9,407
                                                                            ------    ------    ---------
Less accumulated amortization:
     Deferred financing costs............................................      204     1,509       1,798
     Non-compete agreements..............................................      459       761         837
     Other...............................................................       18        71          93
                                                                            ------    ------    ---------
                                                                               681     2,341       2,728
                                                                            ------    ------    ---------
                                                                            $7,138    $6,638     $ 6,679
                                                                            ------    ------    ---------
                                                                            ------    ------    ---------
</TABLE>
 
     The  Company's  wholly-owned leasing  subsidiary,  NPC Leasing  Corp. ('NPC
Leasing'), leases vehicles  and other equipment  to companies that  are or  were
affiliates  of the Company under long-term lease obligations which are accounted
for as finance-type leases and are included in long-term
 
                                      F-26
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
receivables  above.  Lease  billings  by  NPC  Leasing  to  current  and  former
affiliates,  other  than the  Company,  which included  interest  and principal,
during Transition 1993,  1994 and  1995 were $8,213,000,  $168,000 and  $47,000,
respectively. Such amounts include interest of $1,676,000, $25,000 and $3,000 in
Transition  1993, 1994 and 1995, respectively,  which are included in 'Revenues'
in the accompanying consolidated statements of operations. NPC Leasing also  had
minor  lease billings with  current or former  affiliates during the three-month
period ended March 31, 1996.
 
(10) LONG-TERM DEBT
 
     Long-term debt consisted of the following:
 
<TABLE>
<CAPTION>
                                                                           DECEMBER 31,
                                                                        -------------------    MARCH 31,
                                                                         1994        1995        1996
                                                                        -------    --------    ---------
                                                                                 (IN THOUSANDS)
 
<S>                                                                     <C>        <C>         <C>
Bank Facility:
     Term notes, Tranche A, weighted average interest rate of 8.53%
       and 8.30% at December 31, 1995 and March 31, 1996,
       respectively, due through March 31, 2000......................   $60,000    $ 34,333    $  34,333
     Term notes, Tranche B, weighted average interest rate of 8.72%
       and 8.48% at December 31, 1995 and March 31, 1996,
       respectively, due through March 31, 2002......................    30,000      29,750       29,750
     Term note, Tranche C, bearing interest at 9.44% and 9.21% at
       December 31, 1995 and March 31, 1996, respectively, due
       through March 31, 2003........................................     --         20,000       20,000
     Revolving loans, weighted average interest rate of 8.09% and
       8.02% at December 31, 1995 and March 31, 1996, respectively,
       due March 31, 2000............................................    10,500      43,229       43,229
                                                                        -------    --------    ---------
          Total Bank Facility........................................   100,500     127,312      127,312
Equipment notes, bearing interest at rates of 7% to 12%, due through
  2002...............................................................     4,239       2,917        2,546
Acquisition notes, bearing interest at rates of 6% to 10%, due
  through 2004.......................................................     5,090       4,060        3,414
Capital lease obligations............................................     1,180       1,255        1,327
                                                                        -------    --------    ---------
          Total debt.................................................   111,009     135,544      134,599
Less current portion of long-term debt...............................    12,298      11,278       11,029
                                                                        -------    --------    ---------
                                                                        $98,711    $124,266    $ 123,570
                                                                        -------    --------    ---------
                                                                        -------    --------    ---------
</TABLE>
 
     The aggregate annual  maturities of  long-term debt  are as  follows as  of
December 31, 1995 and March 31, 1996:
 
<TABLE>
<CAPTION>
                                      YEAR ENDING
                                      DECEMBER 31,                                         (IN THOUSANDS)
- ----------------------------------------------------------------------------------------
 
<S>                                                                                        <C>
   1996.................................................................................      $ 11,278
   1997.................................................................................        10,591
   1998.................................................................................        13,375
   1999.................................................................................        13,494
   2000.................................................................................        37,489
   Thereafter...........................................................................        49,317
                                                                                           --------------
                                                                                              $135,544
                                                                                           --------------
                                                                                           --------------
</TABLE>
 
                                      F-27
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
<TABLE>
<CAPTION>
                                         TWELVE
                                         MONTHS
                                         ENDING
                                       MARCH 31,                                           (IN THOUSANDS)
- ----------------------------------------------------------------------------------------
 
<S>                                                                                        <C>
  1997..................................................................................      $ 10,909
  1998..................................................................................        10,790
  1999..................................................................................        13,292
  2000..................................................................................        12,802
  2001..................................................................................        41,724
  Thereafter............................................................................        45,082
                                                                                           --------------
                                                                                              $134,599
                                                                                           --------------
                                                                                           --------------
</TABLE>
 
     Bank  Facility  -- In  October 1994  the Company  entered into  a revolving
credit and term loan agreement with a group of banks (the 'Bank Facility').  The
$150,000,000  Bank Facility, as amended, consists of a revolving credit facility
with a current maximum availability as of  December 31, 1995 and March 31,  1996
of $57,167,000 and three tranches of term loans with an original availability of
$90,000,000  and outstanding amounts aggregating  $84,083,000 (net of repayments
through December 31, 1995 and March 31,  1996 of $5,917,000) as of December  31,
1995  and March 31, 1996.  As of March 31,  1996 the Company's only availability
under the  Bank Facility  was approximately  $13,900,000 under  the  acquisition
sublimit  (the 'Acquisition Sublimit')  component of the  Bank Facility which is
restricted for acquisitions by the Company. As of December 31, 1995 the  Company
was  not able  to borrow  under the  Acquisition Sublimit  due to  debt covenant
limitations and accordingly, had no availability  under the Bank Facility as  of
that  date. Any outstanding borrowings under the Acquisition Sublimit convert to
term loans in October 1997; such term  loans would be due in equal  installments
from  December 1997  through December 2000.  Borrowings under  the Bank Facility
bear interest, at the Company's option, at  rates based either on 30, 60, 90  or
180-day  LIBOR (ranging  from 5.53% to  5.72% at  December 31, 1995  and 5.5% to
5.75% at  March  31, 1996)  or  an alternate  base  rate (the  'ABR').  The  ABR
represents  the higher of the prime rate (8 1/2% at December 31, 1995 and 8 1/4%
at March 31, 1996) or 1/2% over the Federal funds rate (6% at December 31,  1995
and  5 1/4%  at March 31,  1996). Revolving loans  bear interest at  2 1/4% over
LIBOR or 1% over  ABR. The aggregate availability  of revolving loans  (assuming
full availability under the Acquisition Sublimit) reduces by $3,000,000 in 1996,
$15,896,000  in 1997, $3,958,000 in 1998,  $4,042,000 in 1999 with the remaining
availability of $30,271,000 maturing in March 2000. The term loans bear interest
at rates ranging from 2 1/2% to 3 1/2% over LIBOR or 1 1/4% to 2 1/4% over  ABR,
respectively,  and the $84,083,000 outstanding amount  of such loans at December
31, 1995 amortizes $6,250,000 in 1996,  $6,417,000 in 1997, $8,167,000 in  1998,
$8,333,000 in 1999, $10,291,000 in 2000 and $44,625,000 thereafter through 2003.
In  connection with the  closing of the  Bank Facility, the  Company paid a cash
dividend to Triarc of $40,000,000 in October 1994.
 
     The Bank  Facility contains  various covenants  which (a)  require  meeting
certain  financial amount and ratio tests; (b) limit, among other items, (i) the
incurrence of  indebtedness,  (ii)  the  retirement of  certain  debt  prior  to
maturity,  (iii) investments, (iv) asset  dispositions, (v) capital expenditures
and (vi) affiliate transactions other than in the normal course of business; and
(c) restrict the payment  of dividends to  Triarc. As of  December 31, 1995  and
March  31,  1996  the  Company  had  $5,000,000  available  for  the  payment of
dividends; however, the Company is  effectively prevented from paying  dividends
due to the restrictions of the financial amount and ratio tests noted above. The
Company's debt under the Bank Facility is guaranteed by Triarc.
 
     On  December 27, 1995 the Company  borrowed $30,000,000 under the revolving
credit facility, and dividended such  amount to Triarc ($22,721,000) and  SEPSCO
($7,279,000)  in  proportion to  their  respective percentage  ownership  of the
Company. The use of the proceeds of the $30,000,000 borrowing was restricted  to
the  redemption  of the  $45,000,000  outstanding principal  amount  of SEPSCO's
11 7/8% senior  subordinated debentures  due February 1,  1998; such  redemption
occurred on February 22, 1996.
 
                                      F-28
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
     Equipment  Notes  --  Certain of  the  equipment  notes are  issued  by the
Company's wholly-owned leasing subsidiary,  NPC Leasing, and are  collateralized
by  vehicles and other equipment which NPC  Leasing leases to current and former
affiliates. The equipment notes bear interest at rates which range from 1% to 2%
above the  prime  rate  in effect  at  the  time the  obligations  are  incurred
(combined  weighted average rate of 9.1%, 8.6% and 7.8% at December 31, 1994 and
1995 and March 31,  1996, respectively), and are  payable in both equal  monthly
and quarterly installments over varying terms of up to 60 months. Payments under
certain of the notes are guaranteed by the Company and/or Triarc.
 
     Under  the  Company's various  debt  agreements, substantially  all  of the
Company's assets  and the  Company's  outstanding common  stock are  pledged  as
collateral.
 
     The  fair values of the  revolving loans and the  term loans under the Bank
Facility at December 31, 1994 and 1995 approximated their carrying values due to
their floating interest rates. The fair values of all other long-term debt  were
assumed  to  reasonably approximate  their carrying  amounts since  the interest
rates approximate current levels.
 
(11) INCOME TAXES
 
     The provision  for income  taxes before  extraordinary charge  for the  ten
months  ended December 31, 1993  and the years ended  December 31, 1994 and 1995
consists of the following components:
 
<TABLE>
<CAPTION>
                                                           TEN MONTHS                     YEAR ENDED DECEMBER 31,
                                                       ENDED DECEMBER 31,    --------------------------------------------------
                                                              1993                    1994                       1995
                                                       ------------------    -----------------------    -----------------------
                                                                                    (IN THOUSANDS)
 
<S>                                                    <C>                   <C>                        <C>
Current:
     Federal........................................         $1,562                  $ 5,099                    $ 1,890
     State..........................................            336                    1,051                        406
                                                            -------                  -------                    -------
                                                              1,898                    6,150                      2,296
                                                            -------                  -------                    -------
Deferred:
     Federal........................................           (724)                   1,456                      2,114
     State..........................................           (156)                     317                       (119)
                                                            -------                  -------                    -------
                                                               (880)                   1,773                      1,995
                                                            -------                  -------                    -------
                                                             $1,018                  $ 7,923                    $ 4,291
                                                            -------                  -------                    -------
                                                            -------                  -------                    -------
</TABLE>
 
     The provision for income taxes for the three-month periods ended March  31,
1995 and 1996 have been provided at the estimated effective tax rates of 40% and
41%, respectively.
 
     The  difference  between  the reported  tax  provision and  a  computed tax
provision based on income  before income taxes and  extraordinary charge at  the
statutory Federal income tax rate of 35% is reconciled as follows:
 
                                      F-29
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
<TABLE>
<CAPTION>
                                                           TEN MONTHS                     YEAR ENDED DECEMBER 31,
                                                       ENDED DECEMBER 31,    --------------------------------------------------
                                                              1993                    1994                       1995
                                                       ------------------    -----------------------    -----------------------
                                                                                    (IN THOUSANDS)
 
<S>                                                    <C>                   <C>                        <C>
Income taxes computed at Federal statutory tax
  rate..............................................         $  235                  $ 6,980                    $ 1,290
Increase (decrease) in taxes resulting from:
     Provision for income tax contingencies.........        --                     --                             2,500
     State income taxes, net of Federal income tax
       benefit......................................            117                      889                        187
     Change in the statutory Federal income tax
       rate.........................................            301                --                         --
     Nondeductible consulting agreement (Note 20)...            352                --                         --
     Amortization of non-deductible goodwill........             12                       29                        126
     Other, net.....................................              1                       25                        188
                                                            -------                  -------                    -------
                                                             $1,018                  $ 7,923                    $ 4,291
                                                            -------                  -------                    -------
                                                            -------                  -------                    -------
</TABLE>
 
     The  net  current deferred  income tax  asset  (included in  'Other current
assets') and the net noncurrent deferred  income tax liability are comprised  of
the following components:
 
<TABLE>
<CAPTION>
                                                                                        DECEMBER 31,
                                                                                     ------------------
                                                                                      1994       1995
                                                                                     -------    -------
                                                                                       (IN THOUSANDS)
 
<S>                                                                                  <C>        <C>
Allowance for doubtful accounts...................................................   $   424    $   384
Accrued employee benefit costs....................................................       300        224
Accrued interest for income tax matters...........................................       198        198
Accrued environmental costs.......................................................       158        171
Casualty insurance loss reserves..................................................     --           213
Other, net........................................................................       114        126
                                                                                     -------    -------
Net current deferred income tax asset.............................................   $ 1,194    $ 1,316
                                                                                     -------    -------
                                                                                     -------    -------
 
Accelerated depreciation and other properties basis differences...................   $20,922    $20,546
Reserve for income tax contingencies..............................................     --         2,500
Other, net........................................................................      (161)      (168)
                                                                                     -------    -------
Net noncurrent deferred income tax liability......................................   $20,761    $22,878
                                                                                     -------    -------
                                                                                     -------    -------
</TABLE>
 
     As  of December 31, 1994 and 1995  and March 31, 1996, accrued income taxes
payable to Triarc are included in 'Due to a parent and another affiliate' in the
accompanying consolidated balance sheets and amounted to $2,657,000,  $3,815,000
and $7,153,000, respectively.
 
     The  Internal Revenue Service  (the 'IRS') is  currently examining Triarc's
Federal income tax returns for the tax years 1989 through 1992 and has issued to
date notices  of proposed  adjustments  relating to  the Company.  Such  notices
propose increasing the Company's taxable income by approximately $19,000,000, of
which  $6,600,000  represent  temporary  differences  and  $12,400,000 represent
permanent differences, which  will be  contested by  Triarc, the  tax effect  of
which  has not yet been determined. The temporary items, if settled as proposed,
will result in deductions from taxable income in periods subsequent to the  year
to  which the adjustment  relates, and therefore would  not result in additional
tax expense. During 1995 the Company provided $2,500,000 included in  'Provision
for  income taxes'  relating to  the Company's estimate  of the  tax effect upon
settlement of the $12,400,000 of permanent differences and interest, net of  tax
benefit,  relative  to  the  settlement  of  both  the  permanent  and temporary
differences. Such provision was based on the Company's experience with  settling
prior  audits, discussions with the IRS  regarding these adjustments, as well as
evaluating the
 
                                      F-30
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
current issues  with outside  counsel. The  amount and  timing of  any  payments
required   as  a  result  of  such  proposed  adjustments  cannot  presently  be
determined. However, the  Company believes  that adequate  provisions have  been
made  for any income tax liabilities that may result from the resolution of such
proposed adjustments. As  such the  Company does  not believe  it is  reasonably
possible  that the  tax contingency  will result  in a  settlement at  an amount
substantially in excess of the $2,500,000 provided.
 
(12) PREFERRED STOCK
 
COMPANY
 
     On June 20, 1994 the Company repurchased for treasury stock 9,206 shares of
its $21 par value  preferred stock (the 'Preferred  Stock') and 1,637 shares  of
its  $25 par value Second Preferred Stock  (the 'Second Preferred Stock') at par
value  aggregating  $234,000  representing  all  of  the  remaining  issued  and
outstanding preferred shares. Such preferred shares, were subsequently cancelled
resulting in an increase to 'Additional paid-in capital' of $378,000.
 
     A  summary of the  changes in the  aggregate number of  shares of Preferred
Stock and Second Preferred Stock held  in treasury for Transition 1993 and  1994
is as follows:
 
<TABLE>
<CAPTION>
                                                                                     TRANSITION
                                                                                        1993        1994
                                                                                     ----------    -------
                                                                                        (IN THOUSANDS)
 
<S>                                                                                  <C>           <C>
Number of shares at beginning of period...........................................     47,780       47,780
Repurchase of preferred stock.....................................................      --          10,843
Cancellation of preferred stock...................................................      --         (58,623)
                                                                                     ----------    -------
Number of shares at end of period.................................................     47,780        --
                                                                                     ----------    -------
                                                                                     ----------    -------
</TABLE>
 
     A  summary  of the  changes in  the  aggregate number  of issued  shares of
Preferred Stock and Second  Preferred Stock for Transition  1993 and 1994 is  as
follows:
 
<TABLE>
<CAPTION>
                                                                                     TRANSITION
                                                                                        1993        1994
                                                                                     ----------    -------
                                                                                        (IN THOUSANDS)
 
<S>                                                                                  <C>           <C>
Number of shares at beginning of period...........................................     58,623       58,623
Cancellation of preferred stock...................................................      --         (58,623)
                                                                                     ----------    -------
Number of shares at end of period.................................................     58,623        --
                                                                                     ----------    -------
                                                                                     ----------    -------
</TABLE>
 
PUBLIC GAS
 
     On  June 21,  1994 Public  Gas repurchased 70,369  shares of  its $1.00 par
value  convertible  preferred   stock  (the  'Public   Gas  Preferred   Stock'),
representing  all of the then issued  and outstanding preferred shares of Public
Gas for  $704,000. The  carrying value  of  the Public  Gas Preferred  Stock  of
$62,000  was charged to 'Additional paid-in  capital' and the $642,000 excess of
the purchase price over  the carrying value represented  the reacquisition of  a
minority  interest in Public  Gas at SEPSCO  and, as such,  was 'pushed down' to
Public Gas  and  recorded as  'Unamortized  costs in  excess  of net  assets  of
acquired companies' in the accompanying consolidated balance sheets.
 
(13) DUE FROM PARENTS
 
     Due  from Parents, which has been reflected as a component of stockholders'
equity (deficit) consisted of the following:
 
                                      F-31
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
<TABLE>
<CAPTION>
                                                                                     DECEMBER 31,
                                                                                  -------------------    MARCH 31,
                                                                                    1994       1995        1996
                                                                                  --------    -------    ---------
                                                                                           (IN THOUSANDS)
 
<S>                                                                               <C>         <C>        <C>
Interest-bearing advances to Triarc............................................   $ 81,392    $81,392     $81,392
Noninterest-bearing advances to SEPSCO.........................................     31,938      --          --
                                                                                  --------    -------    ---------
                                                                                  $113,330    $81,392     $81,392
                                                                                  --------    -------    ---------
                                                                                  --------    -------    ---------
</TABLE>
 
     The receivables from Triarc and SEPSCO have been classified as a  component
of  stockholders'  equity because  they were  not expected  to be  repaid except
through equity transactions and with  respect to Triarc, its liquidity  position
is not sufficient to enable it to repay the advances. The receivable from SEPSCO
(including  additional  advances during  1995 of  $2,599,000) was  dividended to
SEPSCO prior  to  the  Merger (see  Note  3).  The receivable  from  Triarc  was
reclassified  to a  component of  stockholders' equity  at November  30, 1994 at
which time it was  determined Triarc's liquidity position  may not enable it  to
repay  the advances.  Concurrent with  the reclassification,  the Company ceased
accruing interest on the receivable. Prior thereto interest income was  recorded
on the advances at 8.9% subsequent to October 6, 1994 and at 16.5% prior thereto
except that prior to April 23, 1993 the first $30,000,000 of the receivable bore
interest  at 11.75%. Such interest rates  represented the Company's cost of debt
capital. Interest income on such advances aggregated $10,360,000 and  $9,751,000
during Transition 1993 and 1994, respectively.
 
(14) SEPSCO MERGER
 
     On  April 14,  1994, SEPSCO's  shareholders other  than Triarc  approved an
agreement and plan  of merger between  Triarc and SEPSCO  (the 'SEPSCO  Merger')
pursuant  to which on  that date a  subsidiary of Triarc  was merged into SEPSCO
whereby each  holder of  shares of  SEPSCO's common  stock (the  'SEPSCO  Common
Stock')  other than  Triarc, aggregating  a 28.9%  minority interest  in SEPSCO,
received in  exchange for  each share  of  SEPSCO common  stock, 0.8  shares  of
Triarc's class A common stock or an aggregate of 2,691,824 shares. Following the
SEPSCO  Merger,  SEPSCO  became  a wholly-owned  subsidiary  of  Triarc  and its
subsidiaries.
 
     The fair value as  of April 14,  1994 of the  2,691,824 shares of  Triarc's
class  A common stock issued in the SEPSCO Merger, net of certain related costs,
aggregated $52,105,000 (the  'Merger Consideration').  Triarc had  an excess  of
$23,888,000  of Merger Consideration over  Triarc's minority interest in SEPSCO.
The SEPSCO Merger has been accounted for by Triarc and SEPSCO in accordance with
the 'pushdown' method of accounting and in accordance therewith, $17,004,000  of
such  $23,888,000 excess was  'pushed down' to  SEPSCO (the remaining $6,884,000
was 'pushed down'  to an  affiliated subsidiary)  reflecting Triarc's  increased
basis  in SEPSCO. SEPSCO, in turn, 'pushed  down' $8,088,000 to Public Gas as an
increase in SEPSCO's basis in Public Gas. Such amount increased the  'Additional
paid-in capital' of the Company reflecting Triarc's and SEPSCO's increased bases
in Public Gas and was assigned as follows:
 
<TABLE>
<CAPTION>
                                                                                           (IN THOUSANDS)
 
<S>                                                                                        <C>
Goodwill................................................................................      $  5,483
Properties..............................................................................         4,255
Deferred income taxes...................................................................        (1,650)
                                                                                           --------------
Additional paid-in capital..............................................................      $  8,088
                                                                                           --------------
                                                                                           --------------
</TABLE>
 
(15) EXTRAORDINARY CHARGE
 
     In  connection  with  the early  extinguishment  of the  Company's  13 1/8%
Debentures in October 1994,  the Company recognized  an extraordinary charge  of
$2,116,000 consisting of the write-off of previously
 
                                      F-32
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
unamortized  deferred  financing costs  of  $875,000 and  previously unamortized
original issue discount of $2,623,000, net of income tax benefit of $1,382,000.
 
(16) RETIREMENT AND INCENTIVE COMPENSATION PLANS
 
     The Company maintains a 401(k) defined contribution plan (the 'Plan') which
covers all employees meeting  certain eligibility requirements including  active
eligible  employees of Public Gas (whose  account balances were transferred into
the Plan)  subsequent to  the Merger  discussed  in Note  3. Prior  to  becoming
participants  in the  Plan, such Public  Gas employees participated  in a mirror
plan maintained  by  SEPSCO  (the  'SEPSCO  Plan').  The  Plan  allows  eligible
employees  to contribute up to  15% of their compensation  and the Company makes
matching contributions of 25% of employee contributions up to the first 5% of an
employee's contribution. The Company also makes an annual contribution equal  to
1/4  of  1%  of  employee's  compensation.  In  connection  with  these employer
contributions, the Company provided $147,000, $157,000, $142,000 and $36,000  in
Transition  1993, 1994 and 1995 and the three-month period ended March 31, 1996,
respectively.
 
     Under certain union contracts, the Company is required to make payments  to
the  unions' pension funds based upon hours worked by the eligible employees. In
connection with these  union plans, the  Company provided $1,079,000,  $726,000,
$669,000  and $169,000  in Transition  1993, 1994  and 1995  and the three-month
period ended March 31, 1996,  respectively. Information from the  administrators
of  the union  plans is  not available  to permit  the Company  to determine its
proportionate share of unfunded vested benefits, if any.
 
(17) LEGAL MATTERS
 
     In May 1994 the  Company was informed of  coal tar contamination which  was
discovered  at one  of its  properties in  Wisconsin. The  Company purchased the
property from a company which  had purchased the assets  of a utility which  had
previously  owned  the property.  The  Company believes  that  the contamination
occurred during the use  of the property  as a coal  gasification plant by  such
utility.  In  order to  assess the  extent  of the  problem the  Company engaged
environmental consultants who began  work in August 1994.  In December 1994  the
environmental  consultants provided a report to  the Company which indicated the
estimated range  of  potential remediation  costs  to be  between  approximately
$415,000  and $925,000 depending  upon the actual extent  of impacted soils, the
presence and extent, if any, of impacted groundwater and the remediation  method
actually  required  to be  implemented. Since  no amount  within this  range was
determined to be a better estimate, the Company provided a charge in the  fourth
quarter  of  1994  of  $415,000,  the minimum  gross  amount  (with  no expected
recovery) within the range, which amount  was included in 'Selling, general  and
administrative  expenses'  in the  accompanying  1994 consolidated  statement of
operations.  In  February  1996,  based  upon  new  information,  the  Company's
environmental  consultants provided a second report which presented the two most
likely remediation methods and revised estimates  of the costs of such  methods.
The  range of estimated costs for the  first method, which involves treatment of
groundwater and excavation, treatment and disposal of contaminated soil, is from
$1,600,000 to $3,300,000. The range for  the second method, which involves  only
treatment  of groundwater and the  building of a soil  containment wall, is from
$432,000 to  $750,000.  Based on  discussion  with the  Company's  environmental
consultants both methods are acceptable remediation plans. The Company, however,
will  have to agree on a final plan with the State of Wisconsin. Since receiving
notice of the contamination, the Company has engaged in discussions of a general
nature concerning remediation with the  State of Wisconsin. The discussions  are
ongoing  and there is no indication  as yet of the time  frame for a decision by
the State of Wisconsin on the method of remediation. Accordingly, it is  unknown
which  remediation method will be used. Since no amount within the ranges can be
determined to be a better estimate, the Company accrued an additional $41,000 in
December  1995   in  order   to  provide   for  the   minimum  costs   estimated
 
                                      F-33
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
for  the second remediation method and  legal fees and other professional costs.
The provisions through March  31, 1996 aggregate  $466,000 and payments  through
March  31, 1996 amounted to $34,000 resulting in a remaining accrual of $432,000
at that date. The Company  is also engaged in  ongoing discussions of a  general
nature  with a successor to the utility  that operated a coal gasification plant
on the property. There is as yet no indication that a successor owner will share
the costs of remediation. The  Company, if found liable  for any of such  costs,
would  attempt  to recover  such costs  from the  successor owner.  The ultimate
outcome of this matter  cannot presently be determined  and, depending upon  the
cost  of  remediation  required,  may  have a  material  adverse  effect  on the
Company's consolidated financial position or results of operations.
 
     The Company is involved in  ordinary claims, litigation and  administrative
proceedings  and  investigations  of  various  types  in  several  jurisdictions
incidental to its  business. In the  opinion of management  of the Company,  the
outcome  of any such matter,  or all of them combined,  will not have a material
adverse effect on the Company's  consolidated financial condition or results  of
operations.
 
(18) ACQUISITIONS
 
     During  Transition  1993,  1994  and  1995  the  Company  acquired  several
companies engaged in the  sale of propane and  related merchandise. The  Company
made  no  acquisitions  in the  three-month  period  ended March  31,  1996. The
purchase prices  (including  debt  issued and  assumed)  aggregated  $1,382,000,
$8,967,000  and $373,000,  and resulted  in increases  in Goodwill  of $475,000,
$3,096,000 and $116,000 in  Transition 1993, 1994  and 1995, respectively.  (See
Note 19 for discussion of Triarc's 1995 acquisition on behalf of the Company).
 
(19) TRANSACTIONS WITH AFFILIATES
 
     In  August 1995 Triarc, through a  wholly owned subsidiary, acquired all of
the outstanding  stock of  two  companies engaged  in the  propane  distribution
business.  The aggregate purchase price was $4,240,000 (including the assumption
of certain existing indebtedness). In September 1995 the stock of the subsidiary
which acquired  the two  companies was  contributed by  Triarc to  NPC  Holdings
which,  in  turn,  contributed  such stock  to  the  Company.  Such contribution
resulted  in  increases  in  the  Company's  'Additional  paid-in  capital'   of
$4,240,000  and Goodwill of $2,181,000.  In consideration for such contribution,
NPC Holdings received  an additional 30  shares of the  Company's common  stock,
increasing its ownership of the Company to 75.7% from 75.2%.
 
     In  the fourth  quarter of  1995 the Company  sold certain  of its accounts
receivable to Triarc  for cash of  $3,809,000. As collections  on such  accounts
receivable are received by the Company they are remitted to Triarc on a periodic
basis.   As  of  December  31,  1995,  such  remittances  aggregated  $1,412,000
($3,284,000 as of  March 31, 1996).  Under the agreement  pursuant to which  the
receivables  were sold, the  Company is obligated  to repurchase any receivables
which are determined to  be uncollectible, up  to a maximum of  10% of the  face
amount  originally sold.  The Company believes  that its  allowance for doubtful
accounts is adequate to allow for any repurchases that may be required.
 
     The Company  receives from  Triarc  certain management  services  including
legal,  accounting,  tax, insurance,  financial  and other  management services.
Effective  April  23,  1993  National  Propane  (and  Triarc's  other  principal
subsidiaries, including SEPSCO) entered into a new management services agreement
(the  'New  Management  Services  Agreement')  with  Triarc  which  revised  the
allocation method  for  those  costs  which cannot  be  directly  allocated.  As
revised,  such costs  are allocated  based upon  the greater  of (i)  the sum of
earnings before  income taxes,  depreciation and  amortization and  (ii) 10%  of
revenues,  as a percentage of  Triarc's corresponding consolidated amount. Prior
to the  Merger,  a portion  of  the costs  allocated  to SEPSCO  under  the  New
Management Services Agreement were allocated to Public Gas based on the relative
portion  of Public Gas' revenues to  SEPSCO's consolidated revenues (the 'SEPSCO
Allocation   Method').    Prior    to    the    Merger,    Public    Gas    also
 
                                      F-34
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
received  from  SEPSCO operating  management services  the  costs of  which were
charged to Public  Gas also  in accordance  with the  SEPSCO Allocation  Method.
Prior  to April  23, 1993,  the costs of  management services  were allocated by
Triarc to its  subsidiaries under  a former management  services agreement  (the
'Former  Management Services Agreement') based first directly on the cost of the
services provided  and  then,  for  those costs  which  could  not  be  directly
allocated,  based upon the relative revenues and tangible assets as a percentage
of Triarc's  corresponding  consolidated  amounts.  Management  of  the  Company
believes  that  all allocation  methods referred  to  above are  reasonable. The
Company understands Triarc is a  holding company with no independent  operations
of  its own and substantially all of the  expenses it incurs are for services on
behalf of  its affiliated  companies and,  accordingly, are  chargeable to  such
companies in accordance with management services agreements including the Former
and  New Management Services Agreements. However,  the Company believes that the
allocated costs discussed  above exceed  those which  would have  been, and  are
expected  to be, incurred by  the Company on a  standalone basis. Such costs for
services provided by  Triarc (including a  portion of the  charges allocated  by
Triarc  to  SEPSCO  and,  in  turn,  from  SEPSCO  to  the  Company)  would have
approximated amounts not  in excess  of $1,250,000,  $1,500,000, $1,500,000  and
$375,000  for Transition 1993, 1994, 1995 and the three-month period ended March
31, 1996, respectively. It  is not practicable, however,  to estimate the  costs
that  Public Gas would have incurred on a standalone basis for services provided
by SEPSCO in  Transition 1993  and 1994.  Additionally, in  Transition 1993  the
Company  was allocated certain costs  representing uncollectible amounts owed to
Triarc  for  similar  management  services  by  certain  affiliates  or   former
affiliates. The Company's portion of such allocation under the Former Management
Services  Agreement amounted  to $98,000 for  Transition 1993.  These costs were
allocated principally on the same basis as the costs of management services,  an
allocation  method management of the Company believes was reasonable. Such costs
to the  Company  would  have been  lower  if  the Company  had  operated  as  an
unaffiliated  entity of Triarc to the extent the cost of such services would not
have been incurred had services not been provided to the entities unable to pay.
A summary of  the costs charged  to the  Company for management  services is  as
follows:
 
<TABLE>
<CAPTION>
                                               TEN MONTHS                                   THREE MONTHS
                                                 ENDED         YEAR ENDED DECEMBER 31,          ENDED
                                              DECEMBER 31,    --------------------------      MARCH 31,
                                                  1993           1994           1995            1996
                                              ------------    ----------    ------------    -------------
                                                                    (IN THOUSANDS)
<S>                                           <C>             <C>           <C>             <C>
Costs allocated by Triarc to the Company
  under the New Management Services
  Agreement................................      $1,827         $3,000         $3,000           $ 750
Costs related to the New Management
  Services Agreement allocated by SEPSCO to
  Public Gas...............................         447          --            --              --
Costs of management services provided by
  SEPSCO to Public Gas.....................         783          1,561         --              --
Costs allocated to National Propane and
  Public Gas under the Former Management
  Services Agreement.......................         428          --            --              --
                                              ------------    ----------    ------------       ------
                                                 $3,485         $4,561         $3,000           $ 750
                                              ------------    ----------    ------------       ------
                                              ------------    ----------    ------------       ------
</TABLE>
 
     Until  January  31, 1994  the Company,  through  Triarc and  SEPSCO, leased
office space from a trust for the benefit of Victor Posner and his children (the
'Posner Lease'). Rent allocated by Triarc  to the Company (including Public  Gas
through  SEPSCO) amounted  to $277,000  for Transition  1993 and  is included in
'Selling, general and administrative expenses' in the accompanying  consolidated
statement  of operations.  During Transition 1993,  the Company  also recorded a
provision  of  $1,814,000  included  in  'Facilities  relocation  and  corporate
restructuring'  in the accompanying consolidated statement of operations for its
allocated share  of  the remaining  payments  on the  Posner  Lease due  to  its
cancellation
 
                                      F-35
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
effective  January 31, 1994 (see Note 20). Prior  to April 23, 1993 the rent was
allocated based on  direct square  footage utilized and  the allocation  methods
previously  described under the Former Management Services Agreement. Subsequent
to April 23, 1993 the rent allocation method was changed and was based on direct
square footage  utilized  and  the  allocation methods  of  the  New  Management
Services  Agreement.  Management  of  the  Company  believes  such  methods  are
reasonable and  the rent  charged for  direct usage  approximated the  rent  the
Company would have incurred on a stand-alone basis.
 
     Chesapeake  Insurance Company Limited ('Chesapeake Insurance'), an indirect
subsidiary of Triarc,  provided certain  insurance coverage  and reinsurance  of
certain  risks  to  the Company  until  October  1993 at  which  time Chesapeake
Insurance ceased writing all insurance and reinsurance. The net premium  expense
incurred  was $4,064,000 in Transition 1993. Such amount is included in 'Cost of
sales' ($3,971,000) and 'Selling, general and administrative expenses' ($93,000)
in the accompanying consolidated statement  of operations. Such costs have  been
allocated  based upon the  relative loss experience  after consultation with the
Company's insurance broker. Management of  the Company believes such  allocation
method  was reasonable  and resulted in  insurance charges to  the Company which
approximated those the Company would have received directly in the open market.
 
     Insurance and Risk Management, Inc. ('IRM'), which was an affiliate of  the
Company  until  April 23,  1993, acted  as  agent or  broker in  connection with
insurance coverage  obtained  by  the Company  and  provided  claims  processing
services to the Company. The commissions and payments incurred for such services
were  approximately $49,000 in Transition 1993. Such amount is included in 'Cost
of  sales'  in  the  accompanying  consolidated  statement  of  operations.  The
arrangement  with IRM  was terminated in  connection with the  change in control
discussed in Note 20.
 
     Also, see Note 9 relative to  certain transactions of NPC Leasing and  Note
20  relative to certain charges, primarily  related to facilities relocation and
corporation restructuring, allocated to the Company by Triarc.
 
(20) SIGNIFICANT TRANSITION 1993 CHARGES
 
     The results of operations for Transition 1993 included certain  significant
charges summarized below:
 
<TABLE>
<CAPTION>
                                                                                           (IN THOUSANDS)
<S>                                                                                        <C>
Estimated costs allocated to the Company by Triarc to terminate the lease on its
  existing corporate facilities (Note 19)...............................................      $  1,814
Estimated costs associated with conforming subsidiaries' identifications to 'National
  Propane'..............................................................................         2,000
Estimated costs associated with systems installation necessitated by National Propane's
  new operating strategy................................................................         1,500
Estimated costs associated with certain employee terminations and related severance
  payments..............................................................................         1,050
Estimated costs to relocate and reorganize the Company's corporate headquarters.........         1,058
Total costs allocated to the Company by Triarc related to a five-year consulting
  agreement between Triarc and the former Vice Chairman of Triarc.......................         1,007
                                                                                           --------------
     Total facilities relocation and corporate restructuring charges....................         8,429(a)
Estimated costs allocated to the Company by Triarc for compensation paid to the Special
  Committee of the Board of Directors of Triarc.........................................           514(b)
Income tax benefit relating to the above charges........................................        (3,489)
Equity in significant charges of affiliate, net of taxes................................           281(c)
                                                                                           --------------
                                                                                              $  5,735
                                                                                           --------------
                                                                                           --------------
</TABLE>
 
                                                        (footnotes on next page)
 
                                      F-36
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
(footnotes from previous page)
 
 (a) Included in 'Facilities relocation and corporate restructuring.'
 
 (b) Included in 'Selling, general and administrative expenses.'
 
 (c) Included in 'Other income, net.'
 
                            ------------------------
 
     These  charges relate to the change in control (the 'Change in Control') of
the Company and  Triarc that  resulted from  the closing  on April  23, 1993  of
transactions  contemplated by a stock purchase agreement between DWG Acquisition
Group, L.P. ('DWG Acquisition'), the sole  general partners of which are  Nelson
Peltz  and Peter W. May,  the Chairman of the  Board and Chief Executive Officer
and the  President and  Chief  Operating Officer,  respectively, of  Triarc  and
directors  of  the  Company, and  Victor  Posner,  the then  Chairman  and Chief
Executive Officer of the Company and certain entities controlled by him, whereby
DWG Acquisition acquired control of Triarc from Victor Posner.
 
     As part of  the Change in  Control, the  Board of Directors  of Triarc  was
reconstituted.  At the April 24, 1993  meeting of the reconstituted Triarc Board
of Directors, based on a report and recommendations from a management consulting
firm  that  had  conducted  an  extensive  review  of  Triarc's  operations  and
management  structure,  the  Triarc  Board  of  Directors  approved  a  plan  of
decentralization and  restructuring which  entailed,  among other  matters,  the
following features: (i) the strategic decision to manage Triarc in the future on
a  decentralized, rather than  on a centralized,  basis; (ii) the  hiring of new
executive officers for Triarc and the hiring of new chief executive officers and
new senior management teams  for certain subsidiaries  of Triarc, including  the
Company;  (iii) the termination of a significant number of employees as a result
of both the new management philosophy and  the hiring of an almost entirely  new
management team; and (iv) the relocation of the corporate headquarters of Triarc
and of all of its subsidiaries whose headquarters were located in South Florida,
including  NPC Leasing and SEPSCO. Accordingly, the Company's allocable share of
the cost to relocate its corporate  headquarters and terminate the lease on  its
existing corporate facilities, which extended through April 1997, of $1,814,000,
and  estimated corporate restructuring charges of $5,608,000 including personnel
relocation  costs  and   employee  severance   costs,  all   stemmed  from   the
decentralization  and restructuring plan formally adopted  at the April 24, 1993
meeting of Triarc's reconstituted Board of Directors.
 
     Prior to the Change in Control,  the Company's business was operated  under
various  names in different locations throughout the United States. As a part of
the strategy  of centralizing  the Company's  operations, new  management  ('New
Management')  which began with  the Change in  Control made the  decision at the
time of  the  Change  in  Control to  refocus  National  Propane's  identity  by
operating  substantially all of its entities and marketing its product under the
name 'National Propane'. Since this decision was made at the time of the  Change
in  Control, National  Propane accrued the  estimated costs  of implementing the
decision  of  $2,000,000  in  the  accompanying  Transition  1993  statement  of
operations. Such costs consist principally of repainting and replacing decals on
the  Company's vehicles  and equipment  with the  'National Propane'  colors and
logo.
 
     New Management also identified various new operating strategies in order to
refocus the Company's direction and manage  the Company on a centralized  basis.
New  Management determined that the management information systems which were in
place at  the time  of the  Change in  Control were  inadequate to  support  the
implementation  of  the  new  strategies  including  the  centralization  of the
Company's operations from six regional  centers and two corporate facilities  to
one  new corporate headquarters.  Since the decision to  change such systems was
made at the time of the Change in Control, the estimated costs of implementation
of $1,500,000, primarily related  to retraining personnel,  were accrued in  the
accompanying Transition 1993 consolidated statement of operations.
 
     In  connection with the Change in Control, Victor Posner and Steven Posner,
the then Vice  Chairman of the  Company, resigned as  officers and directors  of
Triarc  and its subsidiaries. In order to induce Steven Posner to resign, Triarc
entered   into   a   consulting    agreement   with   him   extending    through
 
                                      F-37
 


<PAGE>

<PAGE>
                 NATIONAL PROPANE CORPORATION AND SUBSIDIARIES
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
  (INSOFAR AS THESE NOTES REFER TO THE PERIOD SUBSEQUENT TO DECEMBER 31, 1995,
                              THEY ARE UNAUDITED)
 
April  1998. The Company's allocable share of costs of $1,007,000 related to the
consulting agreement was  recorded as a  charge in Transition  1993 because  the
consulting  agreement does not  require any substantial  services and Triarc has
not received  nor  did  it  expect  to  receive  any  services  that  will  have
substantial value to Triarc and its subsidiaries.
 
     The Company's equity in net loss of affiliates included similar significant
charges which were allocated by Triarc to CFC Holdings amounting to $281,000 and
is  included  in  'Other  income,  net'  in  the  accompanying  Transition  1993
consolidated statement of operations.
 
(21) INITIAL PUBLIC OFFERING OF COMMON UNITS AND OTHER TRANSACTIONS
 
     On March 13, 1996 National  Propane Partners, L.P. (the 'Partnership')  was
formed   to  acquire,  own  and  operate  the  Company's  propane  business  and
substantially all  of  the related  assets  of the  Company.  The  Partnership's
activities  will be conducted through an operating partnership, National Propane
L.P. (the 'Operating  Partnership'), the limited  partner in which  will be  the
Partnership.  The  Company  and  National  Propane  SGP,  Inc.,  a  wholly owned
subsidiary of  the Company  (the  'Special General  Partner') intend  to  convey
substantially  all of  their propane-related  assets and  liabilities other than
amounts due  from parent  ($81,392,000 as  of December  31, 1995  and March  31,
1996),  deferred financing costs  ($4,697,000 and $4,410,000  as of December 31,
1995 and March 31, 1996, respectively)  and net deferred income tax  liabilities
($21,562,000  and  $21,416,000  as of  December  31,  1995 and  March  31, 1996,
respectively) to the Operating Partnership.
 
     The Partnership  intends  to  issue 6,190,476  Common  Units,  representing
limited  partner interests in the Partnership, pursuant to a public offering and
to concurrently issue  4,533,638 Subordinated  Units, representing  subordinated
general  partner interests in the Partnership,  to the Company. In addition, the
Company and the Special General Partner  will each receive a 2% general  partner
interest  in the Partnership and the Operating Partnership, on a combined basis.
In connection  therewith  the  Partnership  will  issue  $125,000,000  of  first
mortgage  notes  to institutional  investors and  repay  all of  its outstanding
borrowings under the  Bank Facility ($127,312,000  as of December  31, 1995  and
March  31, 1996) and $5,787,000 (as of March  31, 1996) of other debt. The early
redemption of the Bank Facility will  result in an extraordinary charge for  the
writeoff  of unamortized  deferred financing costs,  net of  income tax benefit,
which as of December 31, 1995 would have approximated $2,800,000 ($2,600,000  as
of  March 31, 1996). Concurrently with the Offering, the Company will also pay a
cash dividend  to  Triarc of  $59,300,000  and the  Operating  Partnership  will
provide  a loan to  Triarc of $40,700,000.  There can be  no assurance, however,
that the Company will be able to consummate these transactions.
 



                                      F-38



<PAGE>

<PAGE>
                                                                      APPENDIX A
 
                              AMENDED AND RESTATED
                        AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                        NATIONAL PROPANE PARTNERS, L.P.
 


<PAGE>

<PAGE>
                      [THIS PAGE INTENTIONALLY LEFT BLANK]



<PAGE>

<PAGE>
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                   ARTICLE I
                                                  DEFINITIONS
<C>     <S>                                                                                                <C>
 1.1    Definitions.....................................................................................     A-1
 1.2    Construction....................................................................................    A-14
 
                                                   ARTICLE II
                                                  ORGANIZATION
 2.1    Formation.......................................................................................    A-14
 2.2    Name............................................................................................    A-14
 2.3    Registered Office; Registered Agent; Principal Office; Other Offices............................    A-15
 2.4    Purpose and Business............................................................................    A-15
 2.5    Powers..........................................................................................    A-15
 2.6    Power of Attorney...............................................................................    A-15
 2.7    Term............................................................................................    A-17
 2.8    Title to Partnership Assets.....................................................................    A-17
 
                                                  ARTICLE III
                                           RIGHTS OF LIMITED PARTNERS
 3.1    Limitation of Liability.........................................................................    A-17
 3.2    Management of Business..........................................................................    A-17
 3.3    Outside Activities of the Limited Partners......................................................    A-18
 3.4    Rights of Limited Partners......................................................................    A-18
 
                                                   ARTICLE IV
                                   CERTIFICATES; RECORD HOLDERS; TRANSFER OF
                                      PARTNERSHIP INTERESTS; REDEMPTION OF
                                             PARTNERSHIP INTERESTS
 4.1    Certificates....................................................................................    A-18
 4.2    Mutilated, Destroyed, Lost or Stolen Certificates...............................................    A-19
 4.3    Record Holders..................................................................................    A-19
 4.4    Transfer Generally..............................................................................    A-20
 4.5    Registration and Transfer of Units..............................................................    A-20
 4.6    Transfer of a General Partner's Unsubordinated General Partner Interest.........................    A-21
 4.7    Merger or Liquidation of the Managing General Partner into Triarc...............................    A-21
 4.8    Transfer of Incentive Distribution Rights.......................................................    A-22
 4.9    Restrictions on Transfers.......................................................................    A-22
 4.10   Citizenship Certificates; Non-citizen Assignees.................................................    A-22
 4.11   Redemption of Partnership Interests of Non-citizen Assignees....................................    A-23
 4.12   Exchange by Special General Partner of its Unsubordinated General Partner Interest and its
        Interest in the Operating Partnership...........................................................    A-24
 
                                                   ARTICLE V
                                     CAPITAL CONTRIBUTIONS AND ISSUANCE OF
                                             PARTNERSHIP INTERESTS
 5.1    Organizational Contributions....................................................................    A-24
 5.2    Contributions by General Partners...............................................................    A-24
 5.3    Contributions by Initial Limited Partners.......................................................    A-25
 5.4    Interest and Withdrawal.........................................................................    A-25
 5.5    Capital Accounts................................................................................    A-25
 5.6    Issuances of Additional Partnership Securities..................................................    A-28
 5.7    Limitations on Issuance of Additional Partnership Securities....................................    A-28
 5.8    Conversion of Subordinated Units................................................................    A-30
 5.9    Limited Preemptive Right........................................................................    A-31
 5.10   Splits and Combination..........................................................................    A-31
 5.11   Fully Paid and Non-Assessable Nature of Limited Partner Partnership Interests...................    A-32
</TABLE>
 
                                      A-i
 


<PAGE>

<PAGE>
<TABLE>
<C>     <S>                                                                                                <C>
                                                   ARTICLE VI
                                         ALLOCATIONS AND DISTRIBUTIONS
 6.1    Allocations for Capital Account Purpose.........................................................    A-33
 6.2    Allocations for Tax Purpose.....................................................................    A-38
 6.3    Requirement and Characterization of Distributions; Distributions to Record Holders..............    A-40
 6.4    Distributions of Available Cash from Operating Surplus..........................................    A-40
 6.5    Distributions of Available Cash from Capital Surplus............................................    A-41
 6.6    Adjustment of Minimum Quarterly Distribution and Target Distribution Levels.....................    A-42
 6.7    Special Provisions Relating to the Holders of Subordinated Units................................    A-42
 6.8    Entity-Level Taxation...........................................................................    A-42
 
                                                  ARTICLE VII
                                      MANAGEMENT AND OPERATION OF BUSINESS
 7.1    Management......................................................................................    A-43
 7.2    Certificate of Limited Partnership..............................................................    A-44
 7.3    Restrictions on Managing General Partner's Authority............................................    A-45
 7.4    Reimbursement of the General Partners...........................................................    A-45
 7.5    Outside Activities..............................................................................    A-46
 7.6    Loans from the General Partners; Loans or Contributions from the Partnership; Contracts with
        Affiliates; Certain Restrictions on the General Partners........................................    A-47
 7.7    Indemnification.................................................................................    A-48
 7.8    Liability of Indemnitees........................................................................    A-49
 7.9    Resolution of Conflicts of Interest.............................................................    A-50
 7.10   Other Matters Concerning the Managing General Partner...........................................    A-51
 7.11   Indemnification of National Propane SGP by National Propane Corporation.........................    A-51
 7.12   Purchase or Sale of Units.......................................................................    A-52
 7.13   Registration Rights of the General Partners and their Affiliates................................    A-52
 7.14   Reliance by Third Parties.......................................................................    A-53
 
                                                  ARTICLE VIII
                                     BOOKS, RECORDS, ACCOUNTING AND REPORTS
 8.1    Records and Accounting..........................................................................    A-54
 8.2    Fiscal Year.....................................................................................    A-54
 8.3    Reports.........................................................................................    A-54
 
                                                   ARTICLE IX
                                                  TAX MATTERS
 9.1    Tax Returns and Information.....................................................................    A-54
 9.2    Tax Elections...................................................................................    A-55
 9.3    Tax Controversies...............................................................................    A-55
 9.4    Withholding.....................................................................................    A-55
 
                                                   ARTICLE X
                                             ADMISSION OF PARTNERS
10.1    Admission of Initial Limited Partners...........................................................    A-55
10.2    Admission of Substituted Unitholder.............................................................    A-56
10.3    Admission of Successor or Transferee General Partners...........................................    A-56
10.4    Admission of Additional Limited Partners........................................................    A-56
10.5    Admission of Substituted Holder of Incentive Distribution Rights................................    A-57
10.6    Amendment of Agreement and Certificate of Limited Partnership...................................    A-57
 
                                                   ARTICLE XI
                                       WITHDRAWAL OR REMOVAL OF PARTNERS
11.1    Withdrawal of the General Partners..............................................................    A-57
11.2    Removal of the Managing General Partner.........................................................    A-59
11.3    Interest of Departing Partner and Successor General Partner.....................................    A-59
11.4    Termination of Subordination Period, Conversion of Subordinated Units and Extinguishment of
        Cumulative Common Unit Arrearages...............................................................    A-61
11.5    Withdrawal of Limited Partners..................................................................    A-61
</TABLE>
 
                                      A-ii
 


<PAGE>

<PAGE>
<TABLE>
<C>     <S>                                                                                                <C>
                                                  ARTICLE XII
                                          DISSOLUTION AND LIQUIDATION
12.1    Dissolution.....................................................................................    A-61
12.2    Continuation of the Business of the Partnership After Dissolution...............................    A-61
12.3    Liquidator......................................................................................    A-62
12.4    Liquidation.....................................................................................    A-62
12.5    Cancellation of Certificate of Limited Partnership..............................................    A-63
12.6    Return of Contributions.........................................................................    A-63
12.7    Waiver of Partition.............................................................................    A-63
12.8    Capital Account Restoration.....................................................................    A-63
 
                                                  ARTICLE XIII
                                      AMENDMENT OF PARTNERSHIP AGREEMENT;
                                             MEETINGS; RECORD DATE
13.1    Amendment to be Adopted Solely by the Managing General Partner..................................    A-63
13.2    Amendment Procedures............................................................................    A-65
13.3    Amendment Requirements..........................................................................    A-65
13.4    Special Meetings................................................................................    A-65
13.5    Notice of a Meeting.............................................................................    A-66
13.6    Record Date.....................................................................................    A-66
13.7    Adjournment.....................................................................................    A-66
13.8    Waiver of Notice; Approval of Meeting; Approval of Minutes......................................    A-66
13.9    Quorum..........................................................................................    A-67
13.10   Conduct of a Meeting............................................................................    A-67
13.11   Action Without a Meeting........................................................................    A-67
13.12   Voting and Other Rights.........................................................................    A-68
 
                                                  ARTICLE XIV
                                                     MERGER
14.1    Authority.......................................................................................    A-68
14.2    Procedure for Merger or Consolidation...........................................................    A-68
14.3    Approval by Unitholders of Merger or Consolidation..............................................    A-69
14.4    Certificate of Merger...........................................................................    A-69
14.5    Effect of Merger................................................................................    A-69
 
                                                   ARTICLE XV
                                             RIGHT TO ACQUIRE UNITS
15.1    Right to Acquire Units..........................................................................    A-70
 
                                                  ARTICLE XVI
                                               GENERAL PROVISIONS
16.1    Addresses and Notices...........................................................................    A-71
16.2    Further Action..................................................................................    A-72
16.3    Binding Effect..................................................................................    A-72
16.4    Integration.....................................................................................    A-72
16.5    Creditors.......................................................................................    A-72
16.6    Waiver..........................................................................................    A-72
16.7    Counterparts....................................................................................    A-72
16.8    Applicable Law..................................................................................    A-72
16.9    Invalidity of Provisions........................................................................    A-72
16.10   Consent of Partners.............................................................................    A-72
</TABLE>
 
                                     A-iii



<PAGE>

<PAGE>
                      [THIS PAGE INTENTIONALLY LEFT BLANK]



<PAGE>

<PAGE>
             AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
                                       OF
                        NATIONAL PROPANE PARTNERS, L.P.
 
     THIS  AMENDED  AND RESTATED  AGREEMENT OF  LIMITED PARTNERSHIP  OF NATIONAL
PROPANE PARTNERS, L.P., dated as of        , 1996, is entered into by and  among
National  Propane Corporation, a  Delaware corporation, as  the Managing General
Partner, National  Propane SGP,  Inc., a  Delaware corporation,  as the  Special
General  Partner, and  Triarc Companies,  Inc., a  Delaware Corporation,  as the
Organizational Limited  Partner), together  with any  other Persons  who  become
Partners   in  the  Partnership  or  parties   hereto  as  provided  herein.  In
consideration of the covenants, conditions and agreements contained herein,  the
parties hereto hereby agree as follows:
 
                                   ARTICLE I
                                  DEFINITIONS
 
1.1 DEFINITIONS
 
     The  following  definitions shall  be  for all  purposes,  unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
 
     'Acquisition' means  any transaction  in which  any Group  Member  acquires
(through  an  asset  acquisition, merger,  stock  acquisition or  other  form of
investment) control over all or a portion of the assets, properties or  business
of  another  Person for  the  purpose of  increasing  the operating  capacity or
revenues of the Partnership  Group above the operating  capacity or revenues  of
the Partnership Group existing immediately prior to such transaction.
 
     'Additional  Book Basis' means the portion  of any remaining Carrying Value
of an Adjusted  Property that is  attributable to positive  adjustments made  to
such  Carrying Value as a result of  Book-Up Events. For purposes of determining
the extent to which Carrying Value constitutes Additional Book Basis:
 
          (i) Any negative adjustment made to the Carrying Value of an  Adjusted
     Property  as a result of either a  Book-Down Event or a Book-Up Event shall
     first be deemed to offset or decrease that portion of the Carrying Value of
     such  Adjusted  Property  that  is  attributable  to  any  prior   positive
     adjustments made thereto pursuant to a Book-Up Event or Book-Down Event.
 
          (ii)  If  Carrying Value  that  constitutes Additional  Book  Basis is
     reduced as a result of  a Book-Down Event and  the Carrying Value of  other
     property  is increased  as a result  of such Book-Down  Event, an allocable
     portion of  any  such  increase  in Carrying  Value  shall  be  treated  as
     Additional  Book Basis; provided that the amount treated as Additional Book
     Basis pursuant hereto as a result of such Book-Down Event shall not  exceed
     the  amount by which the Aggregate Remaining Net Positive Adjustments after
     such  Book-Down  Event   exceeds  the  remaining   Additional  Book   Basis
     attributable  to  all of  the  Partnership's Adjusted  Property  after such
     Book-Down Event  (determined  without regard  to  the application  of  this
     clause (ii) to such Book-Down Event).
 
     'Additional  Book Basis Derivative  Items' means any  Book Basis Derivative
Items that are computed with reference  to Additional Book Basis. To the  extent
that the Additional Book Basis attributable to all of the Partnership's Adjusted
Property  as  of  the beginning  of  any  taxable period  exceeds  the Aggregate
Remaining Net  Positive Adjustments  as of  the beginning  of such  period  (the
'Excess  Additional Book Basis'), the Additional Book Basis Derivative Items for
such period shall  be reduced by  the amount that  bears the same  ratio to  the
amount  of Additional Book  Basis Derivative Items  determined without regard to
this sentence as the Excess Additional  Book Basis bears to the Additional  Book
Basis as of the beginning of such period.
 
     'Additional  Limited Partner' means a Person admitted to the Partnership as
a Limited Partner pursuant to Section 10.4 and who is shown as such on the books
and records of the Partnership.
 
     'Adjusted Capital Account'  means the Capital  Account maintained for  each
Partner  as of the end of each fiscal  year of the Partnership, (a) increased by
any amounts that such Partner is obligated to restore under the standards set by
Treasury Regulation Section 1.704-1(b)(2)(ii)(c) (or is deemed
 
                                      A-1
 


<PAGE>

<PAGE>
obligated  to  restore  under   Treasury  Regulation  Sections  1.704-2(g)   and
1.704-2(i)(5))  and (b) decreased by (i) the amount of all losses and deductions
that, as of the end of such fiscal year, are reasonably expected to be allocated
to such Partner in subsequent years  under Sections 704(e)(2) and 706(d) of  the
Code  and Treasury Regulation Section 1.751-1(b)(2)(ii),  and (ii) the amount of
all distributions  that, as  of the  end  of such  fiscal year,  are  reasonably
expected  to be made to such Partner  in subsequent years in accordance with the
terms of  this Agreement  or  otherwise to  the  extent they  exceed  offsetting
increases  to such  Partner's Capital  Account that  are reasonably  expected to
occur during (or prior to) the  year in which such distributions are  reasonably
expected  to  be  made (other  than  increases as  a  result of  a  minimum gain
chargeback  pursuant  to  Section   6.1(d)(i)  or  6.1(d)(ii)).  The   foregoing
definition of Adjusted Capital Account is intended to comply with the provisions
of  Treasury Regulation  Section 1.704-1(b)(2)(ii)(d)  and shall  be interpreted
consistently therewith. The 'Adjusted Capital  Account' of a Partner in  respect
of  an Unsubordinated  General Partner Interest,  a Common  Unit, a Subordinated
Unit or an Incentive Distribution Right  or any other specified interest in  the
Partnership  shall be the amount which such Adjusted Capital Account would be if
such Unsubordinated General  Partner Interest, Common  Unit, Subordinated  Unit,
Incentive  Distribution Right or other interest in the Partnership were the only
interest in the Partnership held by a  Partner from and after the date on  which
such  Unsubordinated General  Partner Interest, Common  Unit, Subordinated Unit,
Incentive Distribution Right or other interest was first issued.
 
     'Adjusted Operating Surplus' means, with  respect to any period,  Operating
Surplus  generated during such period  (a) less (i) any  net increase in working
capital borrowings  during  such period  and  (ii)  any net  reduction  in  cash
reserves  for  Operating  Expenditures during  such  period not  relating  to an
Operating Expenditure made during such period, and (b) plus (i) any net decrease
in working capital borrowings  during such period and  (ii) any net increase  in
cash reserves for Operating Expenditures during such period required by any debt
instrument  for  the  repayment  of  principal,  interest  or  premium. Adjusted
Operating Surplus does not include that portion of Operating Surplus included in
clause (a)(i) of the definition of Operating Surplus.
 
     'Adjusted Property' means any property the Carrying Value of which has been
adjusted pursuant to Section 5.5(d)(i) or 5.5(d)(ii). Once an Adjusted  Property
is  deemed distributed  by, and  recontributed to,  the Partnership  for federal
income tax purposes upon  a termination thereof pursuant  to Section 708 of  the
Code, such property shall thereafter constitute a Contributed Property until the
Carrying  Value of  such property is  subsequently adjusted  pursuant to Section
5.5(d)(i) or 5.5(d)(ii).
 
     'Affiliate' means,  with  respect to  any  Person, any  other  Person  that
directly   or  indirectly  through  one  or  more  intermediaries  controls,  is
controlled by or is under common  control with (either directly or  indirectly),
the Person in question. As used herein, the term 'control' means the possession,
direct  or  indirect, of  the  power to  direct or  cause  the direction  of the
management and  policies  of  a  Person, whether  through  ownership  of  voting
securities, by contract or otherwise.
 
     'Aggregate  Remaining Net Positive Adjustments' means, as of the end of any
taxable period, the  sum of the  Remaining Net Positive  Adjustments of all  the
Partners.
 
     'Agreed Allocation' means any allocation, other than a Required Allocation,
of  an item  of income, gain,  loss or  deduction pursuant to  the provisions of
Section  6.1,  including,   without  limitation,  a   Curative  Allocation   (if
appropriate to the context in which the term 'Agreed Allocation' is used).
 
     'Agreed  Value' of any Contributed Property  means the fair market value of
such property or other consideration at  the time of contribution as  determined
by  the Managing General Partner using such reasonable method of valuation as it
may adopt;  provided, however,  that the  Agreed Value  of any  property  deemed
contributed  to the Partnership for federal income tax purposes upon termination
and reconstitution  thereof  pursuant  to  Section 708  of  the  Code  shall  be
determined  in accordance with Section  5.5(c)(i). Subject to Section 5.5(c)(i),
the Managing General  Partner shall, in  its discretion, use  such method as  it
deems  reasonable  and appropriate  to allocate  the  aggregate Agreed  Value of
Contributed Properties contributed to the Partnership in a single or  integrated
transaction  among each  separate property on  a basis proportional  to the fair
market value of each Contributed Property.
 
     'Agreement'  means  this   Amended  and  Restated   Agreement  of   Limited
Partnership   of  National  Propane  Partners,  L.P.,  as  it  may  be  amended,
supplemented or restated from time to time.
 
                                      A-2
 


<PAGE>

<PAGE>
     'Assignee' means a  Non-citizen Assignee or  a Person to  whom one or  more
Units  have been transferred in a manner  permitted under this Agreement and who
has executed and delivered a Transfer Application as required by this Agreement,
but who has not been admitted as a Substituted Limited Partner.
 
     'Associate' means, when used  to indicate a  relationship with any  Person,
(a)  any corporation or organization of which such Person is a director, officer
or partner or is, directly or indirectly, the owner of 20% or more of any  class
of voting stock or other voting interest; (b) any trust or other estate in which
such  Person has at least  a 20% beneficial interest or  as to which such Person
serves as trustee or in  a similar fiduciary capacity;  and (c) any relative  or
spouse  of  such  Person, or  any  relative of  such  spouse, who  has  the same
principal residence as such Person.
 
     'Audit Committee'  means a  committee  of the  Board  of Directors  of  the
Managing  General Partner  (or upon  the Triarc  Merger, of  the Special General
Partner) composed entirely of two or more directors who are neither officers nor
employees of the  General Partners or  officers, directors or  employees of  any
Affiliate of either of the General Partners.
 
     'Available  Cash' means,  with respect to  any Quarter ending  prior to the
Liquidation Date,
 
          (a) the sum of  (i) all cash and  cash equivalents of the  Partnership
     Group  on hand at the end of such Quarter, and (ii) all additional cash and
     cash  equivalents  of  the  Partnership  Group  on  hand  on  the  date  of
     determination of Available Cash with respect to such Quarter resulting from
     borrowings  for working capital purposes made subsequent to the end of such
     Quarter, less
 
          (b) the amount of any cash  reserves that is necessary or  appropriate
     in the reasonable discretion of the Managing General Partner to (i) provide
     for  the proper conduct of the business of the Partnership Group (including
     reserves for future capital expenditures) subsequent to such Quarter,  (ii)
     comply  with  applicable law  or  any loan  agreement,  security agreement,
     mortgage, debt instrument  or other  agreement or obligation  to which  any
     member  of the Partnership Group is a party  or by which it is bound or its
     assets are subject or (iii)  provide funds for distributions under  Section
     6.4  or  6.5 in  respect of  any one  or  more of  the next  four Quarters;
     provided, however, that the Managing General Partner may not establish cash
     reserves pursuant to (iii)  above if the effect  of such reserves would  be
     that  the  Partnership  is  unable  to  distribute  the  Minimum  Quarterly
     Distribution on  all  Common  Units  with respect  to  such  Quarter;  and,
     provided  further,  that  disbursements  made by  a  Group  Member  or cash
     reserves established, increased or  reduced after the  end of such  Quarter
     but  on or before the date of  determination of Available Cash with respect
     to such Quarter shall be deemed  to have been made, established,  increased
     or reduced, for purposes of determining Available Cash, within such Quarter
     if the Managing General Partner so determines.
 
     Notwithstanding the foregoing, 'Available Cash' with respect to the Quarter
in  which the  Liquidation Date  occurs and  any subsequent  Quarter shall equal
zero.
 
     'Bank Credit  Facility'  means the  Credit  Agreement among  the  Operating
Partnership,  the First National  Bank of Boston, as  Administrative Agent and a
Lender, Bank  of America  NT &  SA,  as a  Lender and  BA Securities,  Inc.,  as
Syndication Agent.
 
     'Book  Basis Derivative Items' means any item of income, deduction, gain or
loss included in the determination  of Net Income or  Net Loss that is  computed
with   reference  to  the   Carrying  Value  of   an  Adjusted  Property  (e.g.,
depreciation, depletion, or gain or loss with respect to an Adjusted Property).
 
     'Book-Down Event' means an  event which triggers  a negative adjustment  to
the Capital Accounts of the Partners pursuant to Section 5.5(d).
 
     'Book-Tax Disparity' means with respect to any item of Contributed Property
or  Adjusted  Property, as  of  the date  of  any determination,  the difference
between the Carrying Value of such Contributed Property or Adjusted Property and
the adjusted basis thereof for  federal income tax purposes  as of such date.  A
Partner's  share  of  the  Partnership's  Book-Tax  Disparities  in  all  of its
Contributed Property and Adjusted Property  will be reflected by the  difference
between such Partner's Capital Account balance as maintained pursuant to Section
5.5 and the hypothetical balance of such
 
                                      A-3
 


<PAGE>

<PAGE>
Partner's  Capital Account  computed as  if it  had been  maintained strictly in
accordance with federal income tax accounting principles.
 
     'Book-Up Event' means an event which triggers a positive adjustment to  the
Capital Accounts of the Partners pursuant to Section 5.5(d).
 
     'Business  Day' means  Monday through  Friday of  each week,  except that a
legal holiday  recognized as  such by  the government  of the  United States  of
America  or the states of New  York or Iowa shall not  be regarded as a Business
Day.
 
     'Capital Account'  means  the  capital account  maintained  for  a  Partner
pursuant  to Section 5.5.  The 'Capital Account'  of a Partner  in respect of an
Unsubordinated General Partner Interest, a Common Unit, a Subordinated Unit,  an
Incentive  Distribution Right  or any  other Partnership  Interest shall  be the
amount which  such  Capital Account  would  be if  such  Unsubordinated  General
Partner  Interest, Common Unit, Subordinated  Unit, Incentive Distribution Right
or other Partnership Interest were the only interest in the Partnership held  by
a  Partner from and after the date  on which such Unsubordinated General Partner
Interest, Common Unit, Subordinated Unit, Incentive Distribution Right or  other
Partnership Interest was first issued.
 
     'Capital  Contribution' means any cash, cash  equivalents or the Net Agreed
Value of  Contributed Property  that a  Partner contributes  to the  Partnership
pursuant to this Agreement.
 
     'Capital  Improvements' means (a) additions  or improvements to the capital
assets owned by  any Group Member  or (b)  the acquisition of  existing, or  the
construction  of  new, capital  assets  (including retail  distribution outlets,
propane  tanks,  pipeline  systems,  storage  facilities,  appliance  showrooms,
training facilities and related assets), made to increase the operating capacity
of  the Partnership Group above the  operating capacity of the Partnership Group
existing  immediately  prior  to  such  addition,  improvement,  acquisition  or
construction.
 
     'Capital Surplus' has the meaning assigned to such term in Section 6.3(a).
 
     'Carrying  Value' means  (a) with  respect to  a Contributed  Property, the
Agreed Value of such property reduced (but not below zero) by all  depreciation,
amortization   and  cost  recovery  deductions  charged  to  the  Partners'  and
Assignees' Capital Accounts  in respect  of such Contributed  Property, and  (b)
with  respect  to any  other Partnership  property, the  adjusted basis  of such
property for federal income tax purposes,  all as of the time of  determination.
The  Carrying  Value of  any property  shall be  adjusted from  time to  time in
accordance with  Sections  5.5(d)(i)  and 5.5(d)(ii)  and  to  reflect  changes,
additions  or  other  adjustments to  the  Carrying Value  for  dispositions and
acquisitions of Partnership  properties, as deemed  appropriate by the  Managing
General Partner.
 
     'Cause'  means (x) a  court of competent jurisdiction  has entered a final,
non-appealable judgment finding the Managing  General Partner liable for  actual
fraud,  gross  negligence or  willful or  wanton misconduct  in its  capacity as
general partner of the Partnership or (y) the Special General Partner, prior  to
the Triarc Merger, does not have the same directors on its Board of Directors as
those of the Managing General Partner.
 
     'Certificate'  means a certificate, substantially in  the form of Exhibit A
to this  Agreement or  in such  other form  as may  be adopted  by the  Managing
General  Partner  in  its  discretion,  issued  by  the  Partnership  evidencing
ownership of one or more Common Units or  a certificate, in such form as may  be
adopted  by  the  Managing General  Partner  in  its discretion,  issued  by the
Partnership evidencing ownership of one or more other Partnership Interests.
 
     'Certificate of  Limited  Partnership'  means the  Certificate  of  Limited
Partnership of the Partnership filed with the Secretary of State of the State of
Delaware   as  referenced  in  Section  2.1,  as  such  Certificate  of  Limited
Partnership may be amended, supplemented or restated from time to time.
 
     'Citizenship Certification' means a properly completed certificate in  such
form as may be specified by the Managing General Partner by which an Assignee or
a  Limited Partner certifies that such Assignee  or Limited Partner (and if such
Assignee or Limited  Partner is  a nominee holding  for the  account of  another
Person,  that to  the best of  its knowledge  such other Person)  is an Eligible
Citizen.
 
     'claim' has the meaning assigned to such term in Section 7.13(c).
 
                                      A-4
 


<PAGE>

<PAGE>
     'Closing Date' means the first date on  which Common Units are sold by  the
Partnership  to the Underwriters pursuant to  the provisions of the Underwriting
Agreement.
 
     'Closing Price' has the meaning assigned to such term in Section 15.1(a).
 
     'Code' means the Internal  Revenue Code of 1986,  as amended and in  effect
from time to time. Any reference herein to a specific section or sections of the
Code  shall be deemed to  include a reference to  any corresponding provision of
future law.
 
     'Combined Interest'  has  the meaning  assigned  to such  term  in  Section
11.3(a).
 
     'Commission' means the United States Securities and Exchange Commission.
 
     'Common   Unit'  means  a  Unit  representing  a  fractional  part  of  the
Partnership Interests of all Limited Partners  and Assignees and of the  General
Partners  (exclusive  of their  interest  as holders  of  Unsubordinated General
Partner Interests or holders  of the Incentive  Distribution Rights) and  having
the  rights  and obligations  specified  with respect  to  Common Units  in this
Agreement. The term 'Common Unit' does not refer to a Subordinated Unit prior to
its conversion into a Common Unit pursuant to the terms of this Agreement.
 
     'Common Unit Arrearage' means,  with respect to  any Common Unit,  whenever
issued,  as to any Quarter within the  Subordination Period, the excess, if any,
of (a) the Minimum  Quarterly Distribution with respect  to such Common Unit  in
respect  of such Quarter over (b) the sum of all Available Cash distributed with
respect to  such Common  Unit in  respect of  such Quarter  pursuant to  Section
6.4(a)(i).
 
     'Contributed  Property' means each property or other asset, in such form as
may be permitted  by the Delaware  Act, but excluding  cash, contributed to  the
Partnership  (or  deemed  contributed  to  the  Partnership  on  termination and
reconstitution thereof pursuant to Section 708  of the Code). Once the  Carrying
Value  of a  Contributed Property is  adjusted pursuant to  Section 5.5(d), such
property shall no longer constitute a Contributed Property, but shall be  deemed
an Adjusted Property.
 
     'Contribution and Conveyance Agreements' means (i) that certain Conveyance,
Contribution  and Assumption Agreement, dated as  of the Closing Date, among the
General Partners, the  Partnership and  the Operating Partnership  and (ii)  the
Contribution  and Assumption Agreement, dated as  of the Closing Date, among the
General Partners,  the Operating  Partnership and  National Sales  and  Service,
Inc.,   together  with  the  additional  conveyance  documents  and  instruments
contemplated or referenced thereunder.
 
     'Converted Unit' has the meaning assigned to such term in Section 6.7(b).
 
     'Cumulative Common Unit Arrearage' means, with respect to any Common  Unit,
whenever  issued, and as of the  end of any Quarter, the  excess, if any, of (a)
the sum  resulting from  adding together  the  Common Unit  Arrearage as  to  an
Initial  Common Unit  for each of  the Quarters within  the Subordination Period
ending on  or before  the last  day of  such Quarter  over (b)  the sum  of  any
distributions  theretofore made  pursuant to  Section 6.4(a)(ii)  and the second
sentence of Section 6.5  with respect to an  Initial Common Unit (including  any
distributions to be made in respect of the last of such Quarters).
 
     'Curative  Allocation' means  any allocation  of an  item of  income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(xi).
 
     'Current Market Price'  has the meaning  assigned to such  term in  Section
15.1(a).
 
     'Date   of  Delivery'  has  the  meaning  assigned  to  such  term  in  the
Underwriting Agreement.
 
     'Delaware Act' means the Delaware Revised Uniform Limited Partnership  Act,
6  Del C. SS17-101, et  seq., as amended, supplemented  or restated from time to
time, and any successor to such statute.
 
     'Departing Partner'  means  a  former  General  Partner,  whether  Managing
General Partner or Special General Partner, from and after the effective date of
any  withdrawal or  removal of such  former General Partner  pursuant to Section
11.1 or 11.2.
 
     'Economic Risk of Loss'  has the meaning set  forth in Treasury  Regulation
Section 1.752-2(a).
 
     'Eligible  Citizen'  means  a Person  qualified  to own  interests  in real
property in jurisdictions in which any Group Member does business or proposes to
do business from time to time, and whose status
 
                                      A-5
 


<PAGE>

<PAGE>
as a Limited Partner or Assignee does not or would not subject such Group Member
to a significant risk of cancellation or forfeiture of any of its properties  or
any interest therein.
 
     'Event  of Withdrawal'  has the  meaning assigned  to such  term in Section
11.1(a).
 
     'Exchange  Unit'  has  the  meaning  assigned  to  such  term  in   Section
5.5(c)(ii).
 
     'First  Liquidation Target Amount' has the meaning assigned to such term in
Section 6.1(c)(i)(D).
 
     'First Target Distribution' means $0.577 per Unit per Quarter (except  with
respect to the period commencing on the Closing Date and ending on September 30,
1996,  it means  the product  of $0.577  multiplied by  a fraction  of which the
numerator is the number of days in the period commencing on the Closing Date and
ending on September 30, 1996,  and of which the  denominator is 92), subject  to
adjustment in accordance with Sections 6.6 and 6.8.
 
     'General  Partners'  means the  Managing  General Partner  and  the Special
General Partner as holders of  the Unsubordinated General Partner Interests  and
their  successors  and permitted  assigns as  the  managing general  partner and
special general partner, respectively,  of the Partnership.  This term does  not
refer  to the holder of a Subordinated  Unit by virtue of such Subordinated Unit
ownership even if such Unit is a general partner interest.
 
     'Group' means  a Person  that with  or  through any  of its  Affiliates  or
Associates  has any agreement,  arrangement or understanding  for the purpose of
acquiring, holding,  voting (except  voting  pursuant to  a revocable  proxy  or
consent given to such Person in response to a proxy or consent solicitation made
to 10 or more Persons) or disposing of any Partnership Securities with any other
Person  that beneficially owns,  or whose Affiliates  or Associates beneficially
own, directly or indirectly, Partnership Securities.
 
     'Group Member' means a member of the Partnership Group.
 
     'Holder' as used in Section 7.13, has the meaning assigned to such term  in
Section 7.13(a).
 
     'Incentive  Distribution Right' means a non-voting non-managing Partnership
Interest issued to the Managing General Partner in connection with the  transfer
of  its assets  to the  Partnership pursuant  to Section  5.2, which Partnership
Interest shall confer upon  the holder thereof only  the rights and  obligations
specifically  provided in this Agreement  with respect to Incentive Distribution
Rights (and  no other  rights otherwise  available to  or other  obligations  of
holders of a Partnership Interest). Such Partnership Interest shall be a general
partner  interest  unless  either  of  the General  Partners  (or  any  of their
Affiliates who holds such Partnership Interest) elects to convert such  interest
into  a limited  partner interest  at which  point the  Managing General Partner
shall amend the Partnership Agreement to convert such Partnership Interest  into
a limited partner interest.
 
     'Incentive  Distributions'  means any  amount  of cash  distributed  to the
holders of the  Incentive Distribution  Rights pursuant  to Sections  6.4(a)(v),
(vi) and (vii) and 6.4(b)(iii), (iv) and (v).
 
     'Indemnified  Persons' has  the meaning  assigned to  such term  in Section
7.13(c).
 
     'Indemnitee' means (a) each General Partner, any Departing Partner and  any
Person  who  is or  was  an Affiliate  of  one of  the  General Partners  or any
Departing Partner, (b) any Person who  is or was a director, officer,  employee,
agent  or trustee  of the  Partnership, the  Operating Partnership  or any other
Subsidiary, (c) any Person who is  or was an officer, director, employee,  agent
or  trustee of the one  of the General Partners or  any Departing Partner or any
such Affiliate, (d) any Person who is or was serving at the request of a General
Partner or any Departing Partner or  any such Affiliate as a director,  officer,
employee, partner, agent, fiduciary or trustee of another Person; provided, that
a   Person  shall  not   be  an  Indemnitee   by  reason  of   providing,  on  a
fee-for-services basis, trustee, fiduciary or custodial services.
 
     'Initial Common Units' means the Common Units sold in the Initial Offering.
 
     'Initial Limited Partners' means the Underwriters, in each case upon  being
admitted to the Partnership in accordance with Section 10.1.
 
     'Initial  Offering' means the initial offering  and sale of Common Units to
the public, as described in the Registration Statement.
 
     'Initial Unit Price'  means (a) with  respect to the  Common Units and  the
Subordinated  Units, the initial public offering  price per Common Unit at which
the Underwriters offered the Common Units to
 
                                      A-6
 


<PAGE>

<PAGE>
the public for sale as set forth on the cover page of the prospectus included as
part of the Registration  Statement and first  issued at or  after the time  the
Registration  Statement first became effective or  (b) with respect to any other
class or series of Units,  the price per Unit at  which such class or series  of
Units  is  initially sold  by  the Partnership,  as  determined by  the Managing
General  Partner,  in  each  case  adjusted  as  the  Managing  General  Partner
determines  to be appropriate to give effect to any distribution, subdivision or
combination of Units.
 
     'Interim Capital  Transactions' means  the following  transactions if  they
occur  prior to the Liquidation Date: (a) borrowings, refinancings or refundings
of indebtedness and  sales of debt  securities (other than  for working  capital
purposes  and other  than for  items purchased on  open account  in the ordinary
course of business) by any  Group Member; (b) sales  of equity interests by  any
Group  Member (including Initial Common Units  sold to the Underwriters pursuant
to the exercise of the Over-allotment Option); and (c) sales or other  voluntary
or  involuntary dispositions of  any assets of  any Group Member  other than (w)
sales or other dispositions of inventory in the ordinary course of business, (x)
sales or other dispositions of  other current assets, including receivables  and
accounts  in the ordinary course of business, (y) sales or other dispositions of
assets as part of normal retirements or replacements (z) like kind exchanges  of
operating  assets to the extent that the  operating assets received are of equal
or greater value.
 
     'Issue Price'  means  the price  at  which a  Unit  is purchased  from  the
Partnership,  after  taking into  account any  sales commission  or underwriting
discount charged to the Partnership.
 
     'Limited Partner' means,  unless the  context otherwise  requires, (a)  the
Organizational  Limited Partner, each Initial  Limited Partner, each Substituted
Limited Partner, each Additional Limited Partner, any Partner upon the change of
its status from General  Partner to Limited Partner  pursuant to Sections  4.12,
5.8(g),  5.8(h),  11.1(d), 11.3(b)  or 13.1(l)  and (b)  solely for  purposes of
Articles V, VI, VII and IX and Sections 12.3 and 12.4, each Assignee.
 
     'Liquidation Date' means (a)  in the case  of an event  giving rise to  the
dissolution  of the Partnership of the type  described in clauses (a) and (b) of
the first sentence of Section 12.2, the date on which the applicable time period
during which  the  holders of  Outstanding  Units have  the  right to  elect  to
reconstitute  the Partnership and continue its business has expired without such
an election being made, and  (b) in the case of  any other event giving rise  to
the dissolution of the Partnership, the date on which such event occurs.
 
     'Liquidator'  means  the  Managing General  Partner  or one  or  more other
Persons selected  by  the Managing  General  Partner to  perform  the  functions
described in Section 12.3.
 
     'Managing  General  Partner'  means National  Propane  Corporation  and its
successors and assigns as managing general partner of the Partnership.
 
     'Merger Agreement' has the meaning assigned to such term in Section 14.1.
 
     'Minimum Quarterly Distribution' means $0.525 per Unit per Quarter  (except
with  respect  to  the period  commencing  on  the Closing  Date  and  ending on
September 30, 1996, it means the product  of $0.525 multiplied by a fraction  of
which  the  numerator is  the number  of days  in the  period commencing  on the
Closing Date and ending on September 30,  1996, and of which the denominator  is
92), subject to adjustment in accordance with Sections 6.6 and 6.8.
 
     'National  Propane  Corporation'  means  National  Propane  Corporation,  a
Delaware corporation  which is  currently the  Managing General  Partner of  the
Partnership.
 
     'National  Securities  Exchange'  means  an  exchange  registered  with the
Commission under  Section  6(a) of  the  Securities  Exchange Act  of  1934,  as
amended,  supplemented or restated from time to  time, and any successor to such
statute, or the Nasdaq Stock Market or any successor thereto.
 
     'Net Agreed Value' means, (a) in the case of any Contributed Property,  the
Agreed  Value of such property reduced by  any liabilities either assumed by the
Partnership upon such  contribution or to  which such property  is subject  when
contributed,  and (b) in  the case of  any property distributed  to a Partner or
Assignee by the Partnership, the  Partnership's Carrying Value of such  property
(as  adjusted  pursuant to  Section  5.5(d)(ii)) at  the  time such  property is
distributed, reduced by any indebtedness
 
                                      A-7
 


<PAGE>

<PAGE>
either assumed by such  Partner or Assignee upon  such distribution or to  which
such  property  is subject  at  the time  of  distribution, in  either  case, as
determined under Section 752 of the Code.
 
     'Net Income'  means, for  any taxable  year,  the excess,  if any,  of  the
Partnership's  items  of income  and  gain (other  than  those items  taken into
account in the computation of Net Termination Gain or Net Termination Loss)  for
such taxable year over the Partnership's items of loss and deduction (other than
those items taken into account in the computation of Net Termination Gain or Net
Termination  Loss) for such taxable year.  The items included in the calculation
of Net Income shall  be determined in accordance  with Section 5.5(b) and  shall
not  include any items  specially allocated under  Section 6.1(d); provided that
the determination of the items that have been specially allocated under  Section
6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.
 
     'Net  Loss'  means,  for any  taxable  year,  the excess,  if  any,  of the
Partnership's items of  loss and deduction  (other than those  items taken  into
account  in the computation of Net Termination Gain or Net Termination Loss) for
such taxable year over  the Partnership's items of  income and gain (other  than
those items taken into account in the computation of Net Termination Gain or Net
Termination  Loss) for such taxable year.  The items included in the calculation
of Net Loss shall be determined in accordance with Section 5.5(b) and shall  not
include  any items specially  allocated under Section  6.1(d); provided that the
determination of  the items  that have  been specially  allocated under  Section
6.1(d) shall be made as if Section 6.1(d)(xii) were not in this Agreement.
 
     'Net  Positive Adjustments' means, with respect to any Partner, the excess,
if any, of the  total positive adjustments over  the total negative  adjustments
made  to the  Capital Account  of such  Partner pursuant  to Book-Up  Events and
Book-Down Events.
 
     'Net Termination Gain' means, for any  taxable year, the sum, if  positive,
of  all items of income,  gain, loss or deduction  recognized by the Partnership
after the  Liquidation Date.  The items  included in  the determination  of  Net
Termination Gain shall be determined in accordance with Section 5.5(b) and shall
not  include any items of income, gain or loss specially allocated under Section
6.1(d).
 
     'Net Termination Loss' means, for any  taxable year, the sum, if  negative,
of  all items of income,  gain, loss or deduction  recognized by the Partnership
after the  Liquidation Date.  The items  included in  the determination  of  Net
Termination Loss shall be determined in accordance with Section 5.5(b) and shall
not  include any items of income, gain or loss specially allocated under Section
6.1(d).
 
     'Non-citizen Assignee' means a Person whom the Managing General Partner has
determined in its discretion does not  constitute an Eligible Citizen and as  to
whose   Partnership  Interest  the  Managing  General  Partner  has  become  the
Substituted Limited Partner, pursuant to Section 4.10.
 
     'Nonrecourse  Built-in  Gain'  means   with  respect  to  any   Contributed
Properties  or  Adjusted Properties  that are  subject to  a mortgage  or pledge
securing a Nonrecourse Liability, the amount  of any taxable gain that would  be
allocated  to the Partners pursuant  to Sections 6.2(b)(i)(A), 6.2(b)(ii)(A) and
6.2(b)(iii) if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.
 
     'Nonrecourse Deductions'  means any  and all  items of  loss, deduction  or
expenditures (described in Section 705(a)(2)(B) of the Code) that, in accordance
with  the principles of Treasury Regulation Section 1.704-2(b), are attributable
to a Nonrecourse Liability.
 
     'Nonrecourse Liability' has  the meaning set  forth in Treasury  Regulation
Section 1.752-1(a)(2).
 
     'Notes'  means  the $125  million  of First  Mortgage  Notes issued  by the
Managing General Partner and assumed by the Operating Partnership in conjunction
with the Initial Offering.
 
     'Notice of Election to Purchase' has  the meaning assigned to such term  in
Section 15.1(b) hereof.
 
     'Operating   Expenditures'  means   all  Partnership   Group  expenditures,
including, but not limited to, taxes, reimbursements of the General Partners and
their Affiliates, debt  service payments, and  capital expenditures, subject  to
the following:
 
          (a)  Payments (including prepayments)  of principal of  and premium on
     indebtedness shall not be  an Operating Expenditure if  the payment is  (i)
     required in connection with the sale or other disposition of assets or (ii)
     made  in  connection  with  the refinancing  or  refunding  of indebtedness
 
                                      A-8
 


<PAGE>

<PAGE>
     with the  proceeds  from  new  indebtedness or  from  the  sale  of  equity
     interests.  For  purposes of  the  foregoing, at  the  election and  in the
     reasonable discretion  of  the Managing  General  Partner, any  payment  of
     principal  or premium shall be  deemed to be refunded  or refinanced by any
     indebtedness incurred or to be incurred by the Partnership Group within 180
     days before or after such payment to the extent of the principal amount  of
     such indebtedness.
 
          (b)  Operating Expenditures shall not include (i) capital expenditures
     made  for  Acquisitions  or  for  Capital  Improvements,  (ii)  payment  of
     transaction  expenses  relating to  Interim  Capital Transactions  or (iii)
     distributions to Partners. Where capital expenditures are made in part  for
     Acquisitions  or for Capital  Improvements and in  part for other purposes,
     the Managing General  Partner's good faith  allocation between the  amounts
     paid for each shall be conclusive.
 
     'Operating  Partnership' means  National Propane, L.P.,  a Delaware limited
partnership, and any successors thereto.
 
     'Operating Partnership Agreement' means the Amended and Restated  Agreement
of  Limited  Partnership of  the Operating  Partnership, as  it may  be amended,
supplemented or restated from time to time.
 
     'Operating Surplus,' means, with respect to any period ending prior to  the
Liquidation Date, on a cumulative basis and without duplication,
 
          (a)  the sum of (i) $15,400,000 plus  all cash and cash equivalents of
     the Partnership Group on hand  as of the close  of business on the  Closing
     Date,  (ii)  all cash  receipts  of the  Partnership  Group for  the period
     beginning on the Closing Date and ending with the last day of such  period,
     other  than cash receipts from Interim  Capital Transactions (except to the
     extent specified  in  Section 6.5)  and  (iii)  all cash  receipts  of  the
     Partnership Group after the end of such period but on or before the date of
     determination  of Operating Surplus  with respect to  such period resulting
     from borrowings for working capital purposes, less
 
          (b) the sum of (i) Operating Expenditures for the period beginning  on
     the  Closing Date and ending with the last  day of such period and (ii) the
     amount of cash reserves  that is necessary or  advisable in the  reasonable
     discretion  of the  Managing General  Partner to  provide funds  for future
     Operating  Expenditures,   provided,  however,   that  disbursements   made
     (including  contributions to a Group Member or disbursements on behalf of a
     Group Member) or cash reserves established, increased or reduced after  the
     end  of such period but on or before the date of determination of Available
     Cash with  respect  to such  period  shall be  deemed  to have  been  made,
     established,  increased or  reduced for  purposes of  determining Operating
     Surplus, within such period if the Managing General Partner so determines.
 
     Notwithstanding the  foregoing, 'Operating  Surplus'  with respect  to  the
Quarter  in which the  Liquidation Date occurs and  any subsequent Quarter shall
equal zero.
 
     'Opinion of Counsel' means a written opinion of counsel (who may be regular
counsel to  Triarc, the  Partnership or  the General  Partners or  any of  their
Affiliates)  acceptable  to  the  Managing  General  Partner  in  its reasonable
discretion.
 
     'Organizational Limited  Partner'  means Triarc,  in  its capacity  as  the
organizational limited partner of the Partnership pursuant to this Agreement.
 
     'Outstanding'   means,   with  respect   to  Partnership   Securities,  all
Partnership Securities  that are  issued  by the  Partnership and  reflected  as
Outstanding   on  the  Partnership's  books  and  records  as  of  the  date  of
determination; provided, however, that if at any time any Person or Group (other
than the General Partners  or their Affiliates or  their successors or  assigns)
beneficially  owns  20% or  more  of any  Outstanding  Units of  any  class then
Outstanding, all Units owned by such Person  or Group shall not be voted on  any
matter  and shall not be considered to  be Outstanding when sending notices of a
meeting of Unitholders to vote on any matter (unless otherwise required by law),
calculating required votes, determining  the presence of a  quorum or for  other
similar  purposes under this  Agreement, except that such  Common Units shall be
considered to be Outstanding  for purposes of  Section 11.1(b)(iv) (such  Common
Units  shall  not,  however,  be  treated as  a  separate  class  of Partnership
Securities for purposes of this Agreement).
 
                                      A-9
 


<PAGE>

<PAGE>
     'Over-allotment  Option'  means  the  over-allotment  option  to   purchase
additional  Common Units granted to the Underwriters by the Partnership pursuant
to the Underwriting Agreement.
 
     'Parity Units' means  Common Units  and all  other Units  having rights  to
distributions or in liquidation ranking on a parity with the Common Units.
 
     'Partner Nonrecourse Debt' has the meaning set forth in Treasury Regulation
Section 1.704-2(b)(4).
 
     'Partner  Nonrecourse  Debt  Minimum Gain'  has  the meaning  set  forth in
Treasury Regulation Section 1.704-2(i)(2).
 
     'Partner Nonrecourse Deductions' means any and all items of loss, deduction
or expenditure  (including, without  limitation,  any expenditure  described  in
Section  705(a)(2)(B) of  the Code) that,  in accordance with  the principles of
Treasury  Regulation  Section   1.704-2(i),  are  attributable   to  a   Partner
Nonrecourse Debt.
 
     'Partners' means the General Partners, the Limited Partners and the holders
of Common Units, Subordinated Units and Incentive Distribution Rights.
 
     'Partnership'  means National  Propane Partners,  L.P., a  Delaware limited
partnership, and any successors thereto.
 
     'Partnership Group' means  the Partnership, the  Operating Partnership  and
any Subsidiary of either such entity, treated as a single consolidated entity.
 
     'Partnership  Interest' means an  interest in the  Partnership, which shall
include Unsubordinated  General Partner  Interests, Common  Units,  Subordinated
Units,  Incentive  Distribution Rights  and other  Partnership Securities,  or a
combination thereof or interest therein, as the case may be.
 
     'Partnership Minimum Gain' means that amount determined in accordance  with
the principles of Treasury Regulation Section 1.704-2(d).
 
     'Partnership  Security'  means any  class or  series  of Unit,  any option,
right, warrant or  appreciation rights relating  thereto, or any  other type  of
equity  interest that  the Partnership may  lawfully issue, or  any unsecured or
secured debt obligation of the Partnership that is convertible into any class or
series of equity interests of the Partnership.
 
     'Percentage Interest' means as of the date of such determination (a) as  to
the  General Partners  (in their  capacity as  General Partners  with respect to
their Unsubordinated General Partner Interests without reference to any Units or
limited partner  interests held  by them),  2.0%, (b)  as to  any Unitholder  or
Assignee holding Units, the product of (i) 98% less the percentage applicable to
clause  (c) multiplied by (ii) the quotient of  the number of Units held by such
Unitholder or Assignee divided by the total number of all Outstanding Units, and
(c) as  to  the holders  of  additional  Partnership Securities  issued  by  the
Partnership in accordance with Section 5.6, the percentage established as a part
of  such  issuance.  The  Percentage  Interest  with  respect  to  an  Incentive
Distribution Right shall at all times be zero.
 
     'Person' means an individual or  a corporation, limited liability  company,
partnership,  joint  venture, trust,  unincorporated  organization, association,
government agency or political subdivision thereof or other entity.
 
     'Per Unit  Capital Amount'  means, as  of any  date of  determination,  the
Capital  Account, stated  on a  per Unit  basis, underlying  any Unit  held by a
Person other than a General  Partner or any Affiliate  of a General Partner  who
holds Units.
 
     'Pro Rata' means (a) when modifying Units or any class thereof, apportioned
equally  among all designated Units in accordance with their relative Percentage
Interests, (b) when modifying Partners, Unitholders and Assignees, in accordance
with their  respective  Percentage  Interests, (c)  when  modifying  holders  of
Incentive   Distribution  Rights,  apportioned  equally  among  all  holders  of
Incentive  Distribution  Rights  in  accordance  with  the  relative  number  of
Incentive  Distribution Rights held  by each such holder  and (d) when modifying
the General Partners, apportioned 50% to the Managing General Partner and 50% to
the Special General Partner, provided, however,  to the extent an allocation  of
losses  pursuant to Section 6.1(b) or Section 6.1(c)(ii) would cause the Special
General Partner to
 
                                      A-10
 


<PAGE>

<PAGE>
have a  deficit balance  in its  Adjusted Capital  Account at  the end  of  such
taxable year (or increase any existing deficit in its Adjusted Capital Account),
then  Pro  Rata shall  mean 100%  to Managing  General Partner  and zero  to the
Special General Partner.
 
     'Purchase Date' means the date  determined by the Managing General  Partner
as the date for purchase of all Outstanding Units (other than Units owned by the
General Partners and their Affiliates) pursuant to Article XV.
 
     'Quarter' means, unless the context requires otherwise, a fiscal quarter of
the Partnership.
 
     'Recapture  Income' means any gain  recognized by the Partnership (computed
without regard to any adjustment  required by Sections 734  or 743 of the  Code)
upon  the disposition of any property or asset of the Partnership, which gain is
characterized  as  ordinary  income  because  it  represents  the  recapture  of
deductions previously taken with respect to such property or asset.
 
     'Record  Date' means the  date established by  the Managing General Partner
for determining (a) the identity of the Record Holders entitled to notice of, or
to vote at, any  meeting of Unitholders  or entitled to vote  by ballot or  give
approval  of  Partnership action  in writing  without a  meeting or  entitled to
exercise rights  in respect  of any  lawful  action of  Unitholders or  (b)  the
identity  of Record Holders entitled to receive any report or distribution or to
participate in any offer.
 
     'Record Holder' means the Person in whose name a Common Unit is  registered
on the books of the Transfer Agent as of the opening of business on a particular
Business  Day, or with respect to a  holder of an Unsubordinated General Partner
Interest,  a  Subordinated  Unit,  an  Incentive  Distribution  Right  or  other
Partnership  Interest,  the Person  in  whose name  such  Unsubordinated General
Partner Interest,  Subordinated  Unit,  Incentive Distribution  Right  or  other
Partnership  Interest  is registered  on the  books  which the  Managing General
Partner has caused to  be kept as  of the opening of  business on such  Business
Day.
 
     'Redeemable   Interests'  means  any  Partnership  Interests  for  which  a
redemption notice  has been  given,  and has  not  been withdrawn,  pursuant  to
Section 4.11.
 
     'Registration  Statement'  means  the Registration  Statement  on  Form S-1
(Registration No.  333-2768),  as  it has  been  or  as it  may  be  amended  or
supplemented  from time  to time, filed  by the Partnership  with the Commission
under the Securities Act to register the  offering and sale of the Common  Units
in the Initial Offering.
 
     'Remaining  Net Positive  Adjustments' means as  of the end  of any taxable
period, (i) with respect to the Unitholders holding Common Units or Subordinated
Units, the excess of (a) the Net Positive Adjustments of the Unitholders holding
Common Units or Subordinated Units as of the end of such period over (b) the sum
of those Partners Share of Additional Book Basis Derivative Items for each prior
taxable period, (ii)  with respect  to the General  Partners as  holders of  the
Unsubordinated  General Partner  Interests, the excess  of (a)  the Net Positive
Adjustments of the General Partners  with respect to the Unsubordinated  General
Partner  Interests as of the end of such  period over (b) the sum of the General
Partners Share of  Additional Book Basis  Derivative Items with  respect to  the
Unsubordinated  General  Partner Interests  for each  prior taxable  period, and
(iii) with respect to the holders  of Incentive Distribution Rights, the  excess
of  (a) the  Net Positive Adjustments  of the holders  of Incentive Distribution
Rights as of the end of such period over (b) the sum of the Share of  Additional
Book  Basis Derivative Items of the holders of the Incentive Distribution Rights
for each prior taxable period.
 
     'Remaining Subordinated Units'  has the  meaning assigned to  such term  in
Section 6.1(d)(x) hereof.
 
     'Required  Allocations' means (a) any  limitation imposed on any allocation
of Net Losses or Net Termination  Losses under Section 6.1(b) or 6.1(c)(ii)  and
(b)  any allocation of  an item of  income, gain, loss  or deduction pursuant to
Section 6.1(d)(i), 6.1(d)(ii), 6.1(d)(iv), 6.1(d)(vii) or 6.1(d)(ix).
 
     'Residual Gain' or 'Residual Loss' means any  item of gain or loss, as  the
case  may  be, of  the Partnership  recognized for  federal income  tax purposes
resulting from a sale, exchange or  other disposition of a Contributed  Property
or  Adjusted Property, to the extent such item  of gain or loss is not allocated
pursuant to Section  6.2(b)(i)(A) or 6.2(b)(ii)(A),  respectively, to  eliminate
Book-Tax Disparities.
 
     'Restricted Activity' means the retail sales of propane to end users in the
continental United States.
 
                                      A-11
 


<PAGE>

<PAGE>
     'Second Liquidation Target Amount' has the meaning assigned to such term in
Section 6.1(c)(i)(E).
 
     'Second  Target Distribution' means $0.665 per Unit (except with respect to
the period commencing on the Closing Date  and ending on September 30, 1996,  it
means  the product of $0.665 multiplied by  a fraction of which the numerator is
equal to the number  of days in  the period commencing on  the Closing Date  and
ending  on September 30, 1996,  and of which the  denominator is 92), subject to
adjustment in accordance with Sections 6.6 and 6.8.
 
     'Securities Act' means the Securities Act of 1933, as amended, supplemented
or restated from time to time and any successor to such statute.
 
     'Share of Additional Book Basis Derivative Items' means in connection  with
any allocation of Additional Book Basis Derivative Items for any taxable period,
(i)  with respect to the Unitholders holding Common Units or Subordinated Units,
the amount that bears  the same ratio to  such Additional Book Basis  Derivative
Items as such Partner's Remaining Net Positive Adjustments as of the end of such
period  bears to  the Aggregate  Remaining Net  Positive Adjustments  as of that
time,  (ii)  with  respect   to  the  General  Partners   (as  holders  of   the
Unsubordinated  General Partner Interests), the amount that bears the same ratio
to such additional Book  Basis Derivative Items as  such Partners Remaining  Net
Positive   Adjustments  with  respect  to  the  Unsubordinated  General  Partner
Interests as of  the end of  such Period  bears to the  Aggregate Remaining  Net
Positive  Adjustment as  of that  time, and (iii)  with respect  to the Partners
holding Incentive Distribution Rights, the amount  that bears the same ratio  to
such  Additional  Book  Basis Derivative  Items  as the  Remaining  Net Positive
Adjustments of the Partners holding the Incentive Distribution Rights as of  the
end  of such period bears to the Aggregate Remaining Net Positive Adjustments as
of that time.
 
     'Special Approval' means approval by a majority of the members of the Audit
Committee.
 
     'Special General  Partner' means  National Propane  SGP, Inc.,  a  Delaware
corporation  and a wholly-owned  subsidiary of National  Propane Corporation and
its successors and assigns as special general partner of the Partnership.
 
     'Subordinated Unit'  means a  Unit representing  a fractional  part of  the
Partnership  Interests of  all Limited  Partners and  Assignees and  the General
Partners (other than as holder  of the Unsubordinated General Partner  Interests
or  as holder of  the Incentive Distribution  Rights) and having  the rights and
obligations specified with respect to Subordinated Units in this Agreement.  The
term  'Subordinated Unit' as  used herein does  not include a  Common Unit. Such
Partnership Interest shall be a non-managing general partner interest until  (a)
pursuant  to  Section  13.1(l),  the  Managing General  Partner  or  any  of its
Affiliates elects to  convert such  Units into  a limited  partner interest,  at
which  point the Managing General Partner  shall amend the Partnership Agreement
to convert such Partnership Interest into a limited partner interest or (b)  the
conversion  of such  Unit into a  limited partner interest  pursuant to Sections
5.8(g) or 5.8(h) hereof, in which case, immediately prior to such transfer  such
Unit shall convert into a limited partner interest.
 
     'Subordination  Period' means the period commencing on the Closing Date and
ending on the first to occur of the following dates:
 
          (a) the first  day of  any Quarter beginning  after June  30, 2001  in
     respect  of which  (i) (A) distributions  of Available  Cash from Operating
     Surplus on each of the Outstanding Common Units and Subordinated Units with
     respect to  each of  the  three consecutive,  non-overlapping  four-Quarter
     periods  immediately preceding such date equaled or exceeded the sum of the
     Minimum  Quarterly  Distribution  on  all  Outstanding  Common  Units   and
     Subordinated  Units  during such  periods  and (B)  the  Adjusted Operating
     Surplus generated  during each  of the  three consecutive,  non-overlapping
     four-Quarter  periods immediately  preceding such date  equaled or exceeded
     the sum of  the Minimum Quarterly  Distribution on all  of the  Outstanding
     Common  Units and Subordinated Units, plus  the related distribution on the
     Unsubordinated General  Partner Interests,  during  such periods  and  (ii)
     there are no Cumulative Common Unit Arrearages; and
 
          (b)  the date on  which the Managing  General Partner is  removed as a
     general partner of the  Partnership upon the requisite  vote by holders  of
     Outstanding  Units under circumstances where Cause does not exist and Units
     held by the Managing  General Partner and its  Affiliates are not voted  in
     favor of such removal.
 
                                      A-12
 


<PAGE>

<PAGE>
     'Subsidiary'  means, with respect to any Person, (a) a corporation of which
more than 50%  of the voting  power of  shares entitled (without  regard to  the
occurrence  of any contingency)  to vote in  the election of  directors or other
governing body of such corporation is owned, directly or indirectly, at the date
of determination, by such Person, by one or more Subsidiaries of such Person  or
a  combination thereof, (b) a partnership  (whether general or limited) in which
such Person or a Subsidiary of such  Person is, at the date of determination,  a
general or limited partner of such partnership, but only if more than 50% of the
partnership  interests of such  partnership (considering all  of the partnership
interests  of  the  partnership  as  a  single  class)  is  owned,  directly  or
indirectly,  at  the date  of  determination, by  such  Person, by  one  or more
Subsidiaries of such Person, or a  combination thereof, or (c) any other  Person
(other  than a corporation or  a partnership) in which  such Person, one or more
Subsidiaries of such Person, or  a combination thereof, directly or  indirectly,
at  the date of determination, has (i) at least a majority ownership interest or
(ii) the power to elect or direct the election of a majority of the directors or
other governing body of such Person.
 
     'Substituted Holder of Incentive Distribution Rights' means a Person who is
admitted to  the  Partnership  as  a holder  of  Incentive  Distribution  Rights
pursuant  to Section 10.5  in place of  and with all  the rights of  a holder of
Incentive Distribution  Rights  and  who  is shown  as  a  holder  of  Incentive
Distribution Rights on the books and records of the Partnership.
 
     'Substituted  Unitholder' means a Person who is admitted as a Unitholder to
the Partnership pursuant to Section 10.2 in place of and with all the rights  of
a  Unitholder and who is shown  as a Unitholder on the  books and records of the
Partnership.
 
     'Surviving Business  Entity'  has the  meaning  assigned to  such  term  in
Section 14.2(b).
 
     'Third  Target Distribution' means $0.863 per  Unit (except with respect to
the period commencing on the Closing Date  and ending on September 30, 1996,  it
means  the product of $0.863 multiplied by  a fraction of which the numerator is
equal to the number  of days in  the period commencing on  the Closing Date  and
ending  on September 30, 1996,  and of which the  denominator is 92), subject to
adjustment in accordance with Sections 6.6 and 6.8.
 
     'Trading Day' has the meaning assigned to such term in Section 15.1(a).
 
     'Transfer' has the meaning assigned to such term in Section 4.4(a).
 
     'Transfer Agent' means such bank, trust company or other Person  (including
the  Managing General Partner  or one of  its Affiliates) as  shall be appointed
from time to time by the Partnership to act as registrar and transfer agent  for
the Units.
 
     'Transfer  Application' means an application  and agreement for transfer of
Units in  the  form set  forth  on  the back  of  a  Certificate or  in  a  form
substantially to the same effect in a separate instrument.
 
     'Triarc' means Triarc Companies, Inc., a Delaware corporation.
 
     'Triarc  Loan' means the $40.7 million loan made on the Closing Date by the
Operating Partnership to Triarc.
 
     'Triarc Merger' has the meaning assigned to such term in Section 4.7.
 
     'Underwriter' means each Person named as an underwriter in Exhibit A to the
Purchase Agreement that purchases Common Units pursuant thereto.
 
     'Underwriting   Agreement'    means   the    Purchase   Agreement,    dated
               , 1996, among the Underwriters, the Managing General Partner, the
Partnership  and certain  other parties,  providing for  the purchase  of Common
Units by such Underwriters.
 
     'Unit' means a Partnership Interest of a Limited Partner or Assignee or the
Managing General Partner or the Special  General Partner in the Partnership  and
shall  include Common Units and Subordinated Units but shall not include (x) the
Unsubordinated General Partner Interests  or (y) Incentive Distribution  Rights.
All  Units issued by  the Partnership to  holders who are  unaffiliated with the
General Partners shall  be limited  partner interests and  shall remain  limited
partner  interests  even  if  subsequently acquired  by  either  of  the General
Partners or any of their Affiliates.
 
     'Unitholders' means the holders of Common Units and Subordinated Units.
 
                                      A-13
 


<PAGE>

<PAGE>
     'Unit Majority' means, during the Subordination Period, at least a majority
of the Outstanding Common Units voting as a class and at least a majority of the
Outstanding Subordinated Units  voting as a  class, and thereafter,  at least  a
majority of the Outstanding Units.
 
     'Unpaid MQD' has the meaning assigned to such term in Section 6.1(c)(i)(B).
 
     'Unrealized  Gain' attributable to any  item of Partnership property means,
as of any  date of determination,  the excess, if  any, of (a)  the fair  market
value of such property as of such date (as determined under Section 5.5(d)) over
(b) the Carrying Value of such property as of such date (prior to any adjustment
to be made pursuant to Section 5.5(d) as of such date).
 
     'Unrealized  Loss' attributable to any  item of Partnership property means,
as of any date of determination, the  excess, if any, of (a) the Carrying  Value
of such property as of such date (prior to any adjustment to be made pursuant to
Section  5.5(d) as of such date) over (b) the fair market value of such property
as of such date (as determined under Section 5.5(d)).
 
     'Unrecovered Capital'  means at  any  time, with  respect  to a  Unit,  the
Initial  Unit  Price  less the  sum  of all  distributions  constituting Capital
Surplus  theretofore  made  in  respect  of  an  Initial  Common  Unit  and  any
distributions  of cash (or the Net Agreed Value of any distributions in kind) in
connection with the dissolution and  liquidation of the Partnership  theretofore
made  in respect  of an  Initial Common Unit,  adjusted as  the Managing General
Partner determines  to  be  appropriate  to give  effect  to  any  distribution,
subdivision or combination of such Units.
 
     'Unsubordinated  General Partner Interests' are the General Partners rights
to their allocations and distributions  described herein exclusive of any  right
the  General Partners  have as  holders of  Common Units,  Subordinated Units or
Incentive Distribution Rights  and representing  a 2%  Percentage Interest.  The
Managing General Partner shall possess all management rights of the Partnership.
At  the  closing, the  Unsubordinated General  Partner  Interests shall  be held
Pro-Rata by the General Partners.
 
     'U.S. GAAP' means  United States Generally  Accepted Accounting  Principles
consistently applied.
 
     'Withdrawal  Opinion of Counsel'  has the meaning assigned  to such term in
Section 11.1(b).
 
1.2 CONSTRUCTION
 
     Unless the  context  requires  otherwise:  (a) any  pronoun  used  in  this
Agreement  shall include the corresponding  masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural  and
vice  versa;  (b) references  to  Articles and  Sections  refer to  Articles and
Sections of  this Agreement;  and (c)  'include' or  'includes' means  includes,
without limitation, and 'including' means including, without limitation.
 
                                   ARTICLE II
                                  ORGANIZATION
 
2.1 FORMATION
 
     The   Managing  General  Partner,  the  Special  General  Partner  and  the
Organizational Limited  Partner  have previously  formed  the Partnership  as  a
limited  partnership pursuant to  the provisions of the  Delaware Act and hereby
amend and  restate the  original Agreement  of Limited  Partnership of  National
Propane  Partners, L.P.  in its entirety.  This amendment  and restatement shall
become effective on the date of this Agreement. Except as expressly provided  to
the  contrary in this Agreement, the rights  and obligations of the Partners and
the administration,  dissolution and  termination of  the Partnership  shall  be
governed  by  the  Delaware  Act.  All  Partnership  Interests  shall constitute
personal property of the owner thereof for all purposes.
 
2.2 NAME
 
     The name of the Partnership shall be 'National Propane Partners, L.P.'  The
Partnership's  business may  be conducted under  any other name  or names deemed
necessary or appropriate by the Managing General Partner in its sole discretion,
including   the   name   of   the   Managing   General   Partner.   The    words
 
                                      A-14
 


<PAGE>

<PAGE>
'Limited  Partnership,'  'L.P.,' 'Ltd.'  or similar  words  or letters  shall be
included in the Partnership's name where necessary for the purpose of  complying
with the laws of any jurisdiction that so requires. The Managing General Partner
in  its discretion may change  the name of the Partnership  at any time and from
time to time and shall  notify the Limited Partners of  such change in the  next
regular communication to the Limited Partners.
 
2.3 REGISTERED OFFICE; REGISTERED AGENT; PRINCIPAL OFFICE; OTHER OFFICES
 
     Unless  and until changed  by the Managing  General Partner, the registered
office of the  Partnership in the  State of  Delaware shall be  located at  1209
Orange Street, New Castle County, Wilmington, Delaware 19801, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered  office shall be  CT Corporation System. The  principal office of the
Partnership shall be  located at Suite  1700, IES Tower,  200 1st Street,  S.E.,
P.O. Box 2067, Cedar Rapids, Iowa 52401-2067 or such other place as the Managing
General  Partner  may from  time  to time  designate  by notice  to  the Limited
Partners. The Partnership  may maintain offices  at such other  place or  places
within  or outside the State  of Delaware as the  Managing General Partner deems
necessary or appropriate. The address of  the Managing General Partner shall  be
Suite  1700, IES Tower, 200 1st Street,  S.E., P.O. Box 2067, Cedar Rapids, Iowa
52401-2067 or such other place as the Managing General Partner may from time  to
time designate by notice to the Limited Partners.
 
2.4 PURPOSE AND BUSINESS
 
     The  purpose and nature of the business  to be conducted by the Partnership
shall be to (a) serve as a limited partner in the Operating Partnership and,  in
connection  therewith, to exercise all the  rights and powers conferred upon the
Partnership as a limited  partner in the Operating  Partnership pursuant to  the
Operating  Partnership Agreement  or otherwise,  (b) engage  directly in,  or to
enter  into  or  form  any  corporation,  partnership,  joint  venture,  limited
liability  company or  other arrangement to  engage indirectly  in, any business
activity that  the  Operating Partnership  is  permitted  to engage  in  by  the
Operating Partnership Agreement and, in connection therewith, to exercise all of
the  rights and powers conferred upon the Partnership pursuant to the agreements
relating to such business activity, (c) engage directly in, or to enter into  or
form  any corporation, partnership, joint  venture, limited liability company or
other arrangement  to  engage  indirectly  in, any  business  activity  that  is
approved  by the Managing General Partner and which lawfully may be conducted by
a limited partnership organized pursuant to the Delaware Act and, in  connection
therewith,  to  exercise  all  of  the  rights  and  powers  conferred  upon the
Partnership pursuant to the agreements  relating to such business activity,  and
(d)  do anything necessary or appropriate to the foregoing, including the making
of capital  contributions or  loans  to a  Group  Member. The  Managing  General
Partner,  the Special General Partner and their Affiliates have no obligation or
duty to  the Partnership,  the  Special General  Partner, the  Unitholders,  the
Limited  Partners, or the Assignees to propose or approve, and in its discretion
may decline  to  propose or  approve,  the conduct  by  the Partnership  of  any
business.
 
2.5 POWERS
 
     The  Partnership  shall be  empowered to  do  any and  all acts  and things
necessary, appropriate, proper, advisable, incidental  to or convenient for  the
furtherance and accomplishment of the purposes and business described in Section
2.4 and for the protection and benefit of the Partnership.
 
2.6 POWER OF ATTORNEY
 
     (a)  Each Unitholder, Limited Partner  and each Assignee hereby constitutes
and appoints the Managing General Partner  and, if a Liquidator shall have  been
selected  pursuant to Section 12.3, the Liquidator, severally (and any successor
to the Liquidator by  merger, transfer, assignment,  election or otherwise)  and
each  of their  authorized officers and  attorneys-in-fact, as the  case may be,
with  full  power   of  substitution,  as   his  true  and   lawful  agent   and
attorney-in-fact,  with full power  and authority in his  name, place and stead,
to:
 
                                      A-15
 


<PAGE>

<PAGE>
          (i) execute, swear to,  acknowledge, deliver, file  and record in  the
     appropriate  public  offices  (A)  all  certificates,  documents  and other
     instruments (including  this  Agreement  and  the  Certificate  of  Limited
     Partnership  and all amendments or restatements hereof or thereof) that the
     Managing General Partner or the  Liquidator deems necessary or  appropriate
     to  form,  qualify  or  continue  the  existence  or  qualification  of the
     Partnership as a limited partnership (or a partnership in which the limited
     partners have limited liability) in the State of Delaware and in all  other
     jurisdictions  in  which  the  Partnership  may  conduct  business  or  own
     property; (B) all  certificates, documents and  other instruments that  the
     Managing  General Partner or the  Liquidator deems necessary or appropriate
     to  reflect,  in  accordance  with   its  terms,  any  amendment,   change,
     modification  or  restatement  of  this  Agreement;  (C)  all certificates,
     documents and other instruments (including conveyances and a certificate of
     cancellation) that the  Managing General  Partner or  the Liquidator  deems
     necessary  or appropriate to reflect the dissolution and liquidation of the
     Partnership pursuant to the terms of this Agreement; (D) all  certificates,
     documents  and  other instruments  relating  to the  admission, withdrawal,
     removal or  substitution  of  any  Partner pursuant  to,  or  other  events
     described in, Article IV, X, XI or XII; (E) all certificates, documents and
     other  instruments relating to the determination of the rights, preferences
     and privileges  of any  class or  series of  Partnership Securities  issued
     pursuant  to Section  5.6; and  (F) all  certificates, documents  and other
     instruments (including agreements and a certificate of merger) relating  to
     a merger or consolidation of the Partnership pursuant to Article XIV; and
 
          (ii)  execute,  swear to,  acknowledge, deliver,  file and  record all
     ballots, consents, approvals,  waivers, certificates,  documents and  other
     instruments  necessary or  appropriate, in  the discretion  of the Managing
     General Partner  or the  Liquidator, to  make, evidence,  give, confirm  or
     ratify  any vote, consent, approval, agreement or other action that is made
     or given by the Partners hereunder or is consistent with the terms of  this
     Agreement or is necessary or appropriate, in the discretion of the Managing
     General  Partner or  the Liquidator, to  effectuate the terms  or intent of
     this Agreement; provided, that when required  by Section 13.3 or any  other
     provision   of  this  Agreement  that   establishes  a  percentage  of  the
     Unitholders or the Limited Partners or of the Limited Partners of any class
     or series required to take any action, the Managing General Partner and the
     Liquidator may  exercise  the  power  of  attorney  made  in  this  Section
     2.6(a)(ii)  only  after  the necessary  vote,  consent or  approval  of the
     Unitholders or the  Limited Partners  or of  the Limited  Partners of  such
     class or series, as applicable.
 
     Nothing  contained in this Section 2.6(a) shall be construed as authorizing
the Managing General Partner to amend  this Agreement except in accordance  with
Article XIII or as may be otherwise expressly provided for in this Agreement.
 
     (b)  The foregoing power  of attorney is hereby  declared to be irrevocable
and a power coupled with an interest,  and it shall survive and, to the  maximum
extent  permitted by law, not be affected by the subsequent death, incompetency,
disability,  incapacity,   dissolution,  bankruptcy   or  termination   of   any
Unitholder,  Limited Partner or Assignee and the  transfer of all or any portion
of such Unitholder's, Limited Partner's  or Assignee's Partnership Interest  and
shall  extend  to  such  Unitholder's, Limited  Partner's  or  Assignee's heirs,
successors, assigns and personal representatives. Each such Unitholder,  Limited
Partner  or Assignee hereby agrees to be bound by any representation made by the
Managing General Partner or the Liquidator acting in good faith pursuant to such
power of attorney; and each such Unitholder, Limited Partner or Assignee, to the
maximum extent permitted by law, hereby waives any and all defenses that may  be
available  to contest,  negate or disaffirm  the action of  the Managing General
Partner or the Liquidator taken in good faith under such power of attorney. Each
Limited Partner or Assignee  shall execute and deliver  to the Managing  General
Partner or the Liquidator, within 15 days after receipt of the request therefor,
such  further  designation,  powers of  attorney  and other  instruments  as the
Managing General Partner or  the Liquidator deems  necessary to effectuate  this
Agreement and the purposes of the Partnership.
 
                                      A-16
 


<PAGE>

<PAGE>
2.7 TERM
 
     The  Partnership commenced  upon the filing  of the  Certificate of Limited
Partnership in accordance with the Delaware Act and shall continue in  existence
until  the close  of Partnership  business on  December 31,  2086, or  until the
earlier termination  of the  Partnership in  accordance with  the provisions  of
Article XII.
 
2.8 TITLE TO PARTNERSHIP ASSETS
 
     Title  to Partnership assets,  whether real, personal  or mixed and whether
tangible or intangible, shall  be deemed to  be owned by  the Partnership as  an
entity, and no Partner or Assignee, individually or collectively, shall have any
ownership  interest in such Partnership assets  or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
a General Partner, one or more of its Affiliates or one or more nominees, as the
Managing General Partner may determine. The General Partners hereby declare  and
warrant  that any Partnership assets for which  record title is held in the name
of a General Partner or  one or more of its  Affiliates or one or more  nominees
shall  be held by such General Partner or  such Affiliate or nominee for the use
and benefit  of  the Partnership  in  accordance  with the  provisions  of  this
Agreement;  provided,  however,  that  the Managing  General  Partner  shall use
reasonable efforts to cause record title to such assets (other than those assets
in respect of which the Managing General Partner determines that the expense and
difficulty of conveyancing  makes transfer  of record title  to the  Partnership
impracticable)   to  be  vested  in  the   Partnership  as  soon  as  reasonably
practicable; provided, further, that, prior to the withdrawal or removal of  the
General  Partner holding record title or as soon thereafter as practicable, such
General Partner shall use  reasonable efforts to effect  the transfer of  record
title  to the Partnership and, prior to  any such transfer, will provide for the
use of such  assets in a  manner satisfactory to  the Managing General  Partner;
provided, further, notwithstanding the foregoing with respect to the transfer of
assets  pursuant to the Contribution and Conveyance Agreement, the provisions of
the Contribution and Conveyance Agreement shall control. All Partnership  assets
shall  be recorded as the property of  the Partnership in its books and records,
irrespective of the  name in which  record title to  such Partnership assets  is
held.
 
                                  ARTICLE III
                           RIGHTS OF LIMITED PARTNERS
 
3.1 LIMITATION OF LIABILITY
 
     The  Limited Partners and the Assignees  shall have no liability under this
Agreement except as expressly provided in this Agreement or the Delaware Act.
 
3.2 MANAGEMENT OF BUSINESS
 
     No Limited Partner or Assignee (other than the Managing General Partner, or
any of its  Affiliates or  any officer,  director, employee,  partner, agent  or
trustee  of  the Managing  General  Partner or  any  of its  Affiliates,  or any
director, employee or agent of a Group Member, in its capacity as such, if  such
Person  shall also be  a Limited Partner  or Assignee) shall  participate in the
operation, management or control (within the meaning of the Delaware Act) of the
Partnership's business, transact any business in the Partnership's name or  have
the  power to sign documents  for or otherwise bind  the Partnership. Any action
taken by any Affiliate of the Managing General Partner or any officer, director,
employee, partner, agent or  trustee of the Managing  General Partner or any  of
its  Affiliates, or any  director, employee or  agent of a  Group Member, in its
capacity as such, shall not be deemed to be participation in the control of  the
business  of the Partnership by a limited partner of the Partnership (within the
meaning of Section 17-303(a) of the  Delaware Act) and shall not affect,  impair
or  eliminate  the  limitations on  the  liability  of the  Limited  Partners or
Assignees under this Agreement.
 
                                      A-17
 


<PAGE>

<PAGE>
3.3 OUTSIDE ACTIVITIES OF THE LIMITED PARTNERS
 
     Subject to  the provisions  of  Section 7.5,  which  shall continue  to  be
applicable  to  the  Persons referred  to  therein, regardless  of  whether such
Persons shall also  be Limited  Partners or  Assignees, any  Limited Partner  or
Assignee  shall be  entitled to  and may have  business interests  and engage in
business activities in addition to those relating to the Partnership,  including
business  interests and  activities in  direct competition  with the Partnership
Group. Neither the Partnership nor any of the other Partners or Assignees  shall
have  any rights  by virtue of  this Agreement  in any business  ventures of any
Limited Partner or Assignee.
 
3.4 RIGHTS OF LIMITED PARTNERS
 
     (a) In addition to other rights provided by this Agreement or by applicable
law, and except as  limited by Section 3.4(b),  each Limited Partner shall  have
the  right, for a purpose reasonably  related to such Limited Partner's interest
as a limited partner in the  Partnership, upon reasonable written demand and  at
such Limited Partner's own expense:
 
          (i)  to obtain  information regarding the  status of  the business and
     financial condition of the Partnership;
 
          (ii) promptly  after  becoming available,  to  obtain a  copy  of  the
     Partnership's federal, state and local tax returns for each year;
 
          (iii)  to have furnished to  him, a current list  of the name and last
     known business, residence or mailing address of each Partner;
 
          (iv) to  have furnished  to him,  a  copy of  this Agreement  and  the
     Certificate  of Limited  Partnership and  all amendments  thereto, together
     with a copy of the  executed copies of all  powers of attorney pursuant  to
     which  this  Agreement,  the  Certificate of  Limited  Partnership  and all
     amendments thereto have been executed;
 
          (v)  to  obtain  information  regarding  the  amount  of  cash  and  a
     description  and statement  of the  Net Agreed  Value of  any other Capital
     Contribution  by  each  Partner  and  which  each  Partner  has  agreed  to
     contribute in the future, and the date on which each became a Partner; and
 
          (vi)  to obtain  such other information  regarding the  affairs of the
     Partnership as is just and reasonable.
 
     (b) The General Partners  may keep confidential  from the Limited  Partners
and  Assignees, for such  period of time  as the Managing  General Partner deems
reasonable, (i) any  information that  the Managing  General Partner  reasonably
believes  to be  in the nature  of trade  secrets or (ii)  other information the
disclosure of which the Managing General  Partner in good faith believes (A)  is
not  in  the best  interests  of the  Partnership  Group, (B)  could  damage the
Partnership Group  or  (C) that  any  Group Member  is  required by  law  or  by
agreement  with any third party to keep confidential (other than agreements with
Affiliates the primary  purpose of which  is to circumvent  the obligations  set
forth in this Section 3.4).
 
                                   ARTICLE IV
                   CERTIFICATES; RECORD HOLDERS; TRANSFER OF
                      PARTNERSHIP INTERESTS; REDEMPTION OF
                             PARTNERSHIP INTERESTS
4.1 CERTIFICATES
 
     Upon  the Partnership's issuance  of Common Units  or Subordinated Units to
any Person, the Partnership shall issue one or more Certificates in the name  of
such  Person evidencing the number  of such Units being  so issued. In addition,
(a) upon a General Partner's request, the  Partnership shall issue to it one  or
more  Certificates in the General Partners' name evidencing their Unsubordinated
General Partner Interests  in the Partnership  and (b) upon  the request of  any
Person owning Incentive
 
                                      A-18
 


<PAGE>

<PAGE>
Distribution  Rights, the  Partnership shall  issue to  such Person  one or more
certificates evidencing such Incentive  Distribution Rights. Certificates  shall
be  executed on behalf  of the Partnership  by the Managing  General Partner. No
Common Unit  Certificate  shall be  valid  for any  purpose  until it  has  been
countersigned   by  the  Transfer  Agent.   The  Partners  holding  Certificates
evidencing Subordinated Units  may exchange such  Certificates for  Certificates
evidencing  Common Units on or  after the date on  which such Subordinated Units
are converted  into  Common Units  pursuant  to the  terms  of Section  5.8.  In
addition,  the holder of any Partnership Interest that is converted, pursuant to
this Agreement, from a general partner interest into a limited partner interest,
may exchange  such certificates  for new  certificates evidencing  such  limited
partner status.
 
4.2 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES
 
     (a)  If any mutilated Certificate is surrendered to the Transfer Agent, the
Managing General Partner  on behalf of  the Partnership shall  execute, and  the
Transfer  Agent  shall  countersign  and deliver  in  exchange  therefor,  a new
Certificate  evidencing  the  same  number  of  Units  as  the  Certificate   so
surrendered.
 
     (b)  The Managing  General Partner  shall execute,  and the  Transfer Agent
shall countersign and  deliver a  new Certificate  in place  of any  Certificate
previously issued if the Record Holder of the Certificate:
 
          (i)  makes proof by  affidavit, in form  and substance satisfactory to
     the Partnership,  that  a  previously issued  Certificate  has  been  lost,
     destroyed or stolen;
 
          (ii) requests the issuance of a new Certificate before the Partnership
     has  notice that the Certificate has been acquired by a purchaser for value
     in good faith and without notice of an adverse claim;
 
          (iii) if requested by the  Partnership, delivers to the Partnership  a
     bond, in form and substance satisfactory to the Partnership, with surety or
     sureties  and with fixed or open  penalty as the Partnership may reasonably
     direct, in its sole discretion, to indemnify the Partnership, the  Partners
     and the Transfer Agent against any claim that may be made on account of the
     alleged loss, destruction or theft of the Certificate; and
 
          (iv)  satisfies  any  other  reasonable  requirements  imposed  by the
     Partnership.
 
     If a Limited Partner or Assignee  fails to notify the Partnership within  a
reasonable  time after  he has  notice of  the loss,  destruction or  theft of a
Certificate, and  a transfer  of the  Units represented  by the  Certificate  is
registered  before the Partnership, the Managing General Partner or the Transfer
Agent receives  such notification,  the  Limited Partner  or Assignee  shall  be
precluded  from making any  claim against the  Partnership, the General Partners
and the Transfer Agent for such transfer or for a new Certificate.
 
     (c) As  a condition  to the  issuance  of any  new Certificate  under  this
Section  4.2, the  Partnership may  require the payment  of a  sum sufficient to
cover any  tax or  other governmental  charge that  may be  imposed in  relation
thereto  and any other expenses (including the fees and expenses of the Transfer
Agent) reasonably connected therewith.
 
4.3 RECORD HOLDERS
 
     The Partnership shall  be entitled to  recognize the Record  Holder as  the
partner  or Assignee with respect to  any Partnership Interest and, accordingly,
shall not be bound to recognize any  equitable or other claim to or interest  in
such Partnership Interest on the part of any other Person, regardless of whether
the  Partnership shall have actual or  other notice thereof, except as otherwise
provided by law or any applicable rule, regulation, guideline or requirement  of
any  National Securities  Exchange on  which the  Units are  listed for trading.
Without limiting the foregoing, when a  Person (such as a broker, dealer,  bank,
trust  company or clearing corporation  or an agent of  any of the foregoing) is
acting as nominee, agent  or in some other  representative capacity for  another
Person  in acquiring and/or holding Units, as between the Partnership on the one
hand, and such other Persons on the other, such representative Person (a)  shall
be   the   Partner  or   Assignee  (as   the   case  may   be)  of   record  and
 
                                      A-19
 


<PAGE>

<PAGE>
beneficially, (b) must execute and deliver a Transfer Application and (c)  shall
be  bound  by this  Agreement and  shall have  the rights  and obligations  of a
partner or Assignee (as the  case may be) hereunder and  as, and to the  extent,
provided for herein.
 
4.4 TRANSFER GENERALLY
 
     (a)  The term  'transfer,' when  used in this  Agreement with  respect to a
Partnership Interest,  shall be  deemed to  refer to  a transaction  by which  a
General  Partner  assigns  its Unsubordinated  General  Partnership  Interest to
another Person, by which a Unitholder assigns a Unit to another Person who is or
becomes a  partner  or  an  Assignee,  by  which  the  holder  of  an  Incentive
Distribution  Right  assigns such  Partnership Interest  to another  Person, and
includes a sale, assignment, gift, pledge, encumbrance, hypothecation, mortgage,
exchange or any other disposition by law or otherwise.
 
     (b) No Partnership  Interest shall  be transferred,  in whole  or in  part,
except in accordance with the terms and conditions set forth in this Article IV.
Any  transfer  or  purported transfer  of  a  Partnership Interest  not  made in
accordance with this Article IV shall be null and void.
 
     (c) Nothing contained  in this Agreement  shall be construed  to prevent  a
disposition  by any shareholder of a General Partner of any or all of the issued
and outstanding capital stock of a General Partner.
 
     (d) Nothing contained in this Article  IV, or elsewhere in this  Agreement,
shall   preclude  the  settlement  of  any  transactions  involving  Partnership
Interests entered  into  through  the  facilities  of  any  National  Securities
Exchange on which such Partnership Interests are listed for trading.
 
4.5 REGISTRATION AND TRANSFER OF UNITS
 
     (a)  The  Partnership shall  keep  or cause  to be  kept  on behalf  of the
Partnership a register in  which, subject to such  reasonable regulations as  it
may  prescribe and subject to the  provisions of Section 4.5(b), the Partnership
will provide for the registration and  transfer of Units. The Transfer Agent  is
hereby  appointed registrar  and transfer agent  for the  purpose of registering
Common Units  and  transfers  of  such Common  Units  as  herein  provided.  The
Partnership  shall not  recognize transfers  of Certificates  representing Units
unless such transfers are effected in the manner described in this Section  4.5.
Upon  surrender  for  registration  of  transfer of  any  Units  evidenced  by a
Certificate, and subject to  the provisions of  Section 4.5(b), the  appropriate
officers  on behalf of the Partnership shall  execute, and in the case of Common
Units, the Transfer  Agent shall  countersign and deliver,  in the  name of  the
holder  or the designated transferee or transferees, as required pursuant to the
holder's  instructions,  one  or  more  new  Certificates  evidencing  the  same
aggregate number of Units as was evidenced by the Certificate so surrendered.
 
     (b) Except as otherwise provided in Section 4.10, the Partnership shall not
recognize any transfer of Units until the Certificates evidencing such Units are
surrendered  for registration of transfer  and such Certificates are accompanied
by a Transfer Application duly executed  by the transferee (or the  transferee's
attorney-in-fact  duly authorized in writing). No charge shall be imposed by the
Partnership for such transfer; provided, that as a condition to the issuance  of
any  new Certificate  under this  Section 4.5,  the Partnership  may require the
payment of a sum sufficient to cover  any tax or other governmental charge  that
may be imposed with respect thereto.
 
     (c)  Units may be transferred only in  the manner described in this Section
4.5. The transfer of any  Units and the admission of  any new Partner shall  not
constitute an amendment to this Agreement.
 
     (d)  Until admitted as  a Substituted Unitholder  pursuant to Section 10.2,
the Record  Holder of  a Unit  shall be  an Assignee  in respect  of such  Unit.
Unitholders  may include custodians, nominees or  any other individual or entity
in its own or any representative capacity.
 
     (e) A transferee  who has  completed and delivered  a Transfer  Application
shall  be deemed to have (i) requested admission as a Substituted Unitholder, as
applicable, (ii) agreed to comply with and be bound by and to have executed this
Agreement, (iii) represented and warranted  that such transferee has the  right,
power  and authority  and, if  an individual,  the capacity  to enter  into this
Agreement, (iv)
 
                                      A-20
 


<PAGE>

<PAGE>
granted the powers of  attorney set forth  in this Agreement  and (v) given  the
consents and approvals and made the waivers contained in this Agreement.
 
     (f) The Managing General Partner and Special General Partner shall have the
right at any time to transfer their Subordinated Units and Common Units (whether
issued  upon conversion of the  Subordinated Units or otherwise)  to one or more
Persons.
 
4.6 TRANSFER OF A GENERAL PARTNER'S UNSUBORDINATED GENERAL PARTNER INTEREST
 
     Except for (a) an exchange by the Special General Partner of any portion of
its Unsubordinated General Partner  Interest pursuant to Section  4.12 or (b)  a
transfer  by one of the General  Partners of all, but not  less than all, of its
Unsubordinated General  Partner Interest  to (i)  an Affiliate  of such  General
Partner or (ii) another Person in connection with the merger or consolidation of
such General Partner with or into another Person or the transfer by such General
Partner  of all or substantially  all of its assets  to another Person, which in
any such case, shall only  be limited by the provisions  of this Section 4.6  or
4.7  (whichever is applicable), prior to June  30, 2006, a General Partner shall
not transfer all or any part of its Unsubordinated General Partner Interest to a
Person unless such transfer  has been approved by  the prior written consent  or
vote of the holders of at least a Unit Majority. Notwithstanding anything herein
to  the contrary, no  transfer by a  General Partner of  all or any  part of its
Unsubordinated General Partner  Interest to  another Person  shall be  permitted
unless  (A)  the transferee  agrees  to assume  the  rights and  duties  of such
transferring General Partner under this Agreement and the Operating  Partnership
Agreement  and to be bound by the provisions of this Agreement and the Operating
Partnership Agreement, (B) the Partnership  receives an Opinion of Counsel  that
such  transfer would not result in the  loss of limited liability of any Limited
Partner or of  any limited  partner of the  Operating Partnership  or cause  the
Partnership or the Operating Partnership to be treated as an association taxable
as  a corporation or otherwise  to be taxed as an  entity for federal income tax
purposes (to the extent not already so treated or taxed) and (C) such transferee
also agrees to purchase all (or the appropriate portion thereof, if  applicable)
of  the partnership interest of the  transferring General Partner as the general
partner of each other Group Member. In the case of a transfer pursuant to and in
compliance with this Section 4.6, the  transferee or successor (as the case  may
be)  shall, subject to compliance with the terms of Section 10.3, be admitted to
the Partnership as a  General Partner immediately prior  to the transfer of  the
Unsubordinated  General Partner  Interest, and  the business  of the Partnership
shall continue without dissolution.
 
4.7 MERGER OR LIQUIDATION OF THE MANAGING GENERAL PARTNER INTO TRIARC
 
     Notwithstanding anything else herein contained (including the provisions of
Section 4.6  hereof),  National  Propane Corporation  as  the  Managing  General
Partner  (or  an  Affiliate of  National  Propane Corporation  that  becomes the
successor Managing General Partner) may, without any consent of the Unitholders,
merge or liquidate  into Triarc  (the 'Triarc Merger');  provided, however  that
prior  to the Triarc Merger  (a) the Partnership received  an Opinion of Counsel
that such transfer  would not result  in the  loss of limited  liability of  any
Limited  Partner or of any limited partner of the Operating Partnership or cause
the Partnership or Operating Partnership to be treated as an association taxable
as a corporation or otherwise  to be taxed as an  entity for federal income  tax
purposes  (to  the extent  not already  so  treated or  taxed), (b)  the Special
General Partner has  a 1%  Unsubordinated General Partner  Interest and  1.0101%
general  partner  interest  in the  Operating  Partnership and  (c)  the Special
General Partner has been capitalized by Triarc so that at the time of the Triarc
Merger, the  Special General  Partner has  a net  worth equal  to at  least  $15
million  independent of its interest in  the Partnership Group. Such transfer of
the Managing General Partner's Unsubordinated General Partner Interests upon the
Triarc Merger shall not be an Event of Withdrawal and the surviving entity as  a
result  of the  Triarc Merger shall  automatically be admitted  hereunder as the
Managing General Partner of the Partnership and as the Managing General  Partner
of  the other Group Members.  If a merger or  liquidation does not qualify under
Section 4.7, such merger or liquidation may still not require Unitholder consent
if it qualifies as not requiring consent pursuant to Section 4.6. To the  extent
that the Delaware Act requires consent, Unitholders by becoming Limited Partners
hereby grant such consent.
 
                                      A-21
 


<PAGE>

<PAGE>
4.8 TRANSFER OF INCENTIVE DISTRIBUTION RIGHTS
 
     A  holder of Incentive Distribution  Rights may transfer any  or all of the
Incentive Distribution Rights  held by such  holder without any  consent of  the
Unitholders.  The Managing General  Partner shall have  the authority (but shall
not be  required) to  adopt  such reasonable  restrictions  on the  transfer  of
Incentive  Distribution Rights and requirements  for registering the transfer of
Incentive Distribution  Rights as  the  Managing General  Partner, in  its  sole
discretion, shall determine are necessary or appropriate.
 
4.9 RESTRICTIONS ON TRANSFERS
 
     (a) Notwithstanding the other provisions of this Article IV, no transfer of
any  Partnership Interest shall be  made if such transfer  would (i) violate the
then applicable federal or state securities laws or rules and regulations of the
Commission,  any  state   securities  commission  or   any  other   governmental
authorities  with jurisdiction over such  transfer, (ii) terminate the existence
or qualification of the Partnership or the Operating Partnership under the  laws
of  the jurisdiction  of its  formation, or (iii)  cause the  Partnership or the
Operating Partnership to be treated as  an association taxable as a  corporation
or  otherwise to be taxed  as an entity for federal  income tax purposes (to the
extent not already so treated or taxed).
 
     (b) The Managing General Partner may impose restrictions on the transfer of
Partnership Interests if a  subsequent Opinion of  Counsel determines that  such
restrictions  are necessary to avoid a  significant risk of the Partnership's or
the Operating Partnership's becoming taxable as a corporation or otherwise to be
taxed as an  entity for  federal income tax  purposes. The  restrictions may  be
imposed  by making  such amendments  to this  Agreement as  the Managing General
Partner  may  determine  to   be  necessary  or   appropriate  to  impose   such
restrictions;  provided, however, that  any amendment that  the Managing General
Partner believes, in the exercise of its reasonable discretion, could result  in
the  delisting or suspension of  trading of any class  of Units on the principal
National Securities Exchange on which such class of Units is then traded must be
approved, prior to such amendment being effected,  by the holders of at least  a
majority of the Outstanding Units of such class.
 
     (c)  The transfer of a  Subordinated Unit that has  converted into a Common
Unit shall be subject to the restrictions imposed by Section 6.7(b).
 
4.10 CITIZENSHIP CERTIFICATES; NON-CITIZEN ASSIGNEES
 
     (a) If any  Group Member is  or becomes  subject to any  federal, state  or
local  law or regulation  that, in the reasonable  determination of the Managing
General Partner, creates a substantial risk of cancellation or forfeiture of any
property in which  the Group Member  has an interest  based on the  nationality,
citizenship  or  other related  status of  a Partner  or Assignee,  the Managing
General Partner may request any Partner  or Assignee to furnish to the  Managing
General  Partner,  within 30  days after  receipt of  such request,  an executed
Citizenship Certification or such other information concerning his  nationality,
citizenship or other related status (or, if the Partner or Assignee is a nominee
holding for the account of another Person, the nationality, citizenship or other
related status of such Person) as the Managing General Partner may request. If a
Partner  or Assignee fails to furnish to the Managing General Partner within the
aforementioned 30-day period such  Citizenship Certification or other  requested
information  or  if  upon receipt  of  such Citizenship  Certification  or other
requested information  the  General  Partner  determines,  with  the  advice  of
counsel,  that a Partner or Assignee is not an Eligible Citizen, the Partnership
Interests owned by such  Partner or Assignee shall  be subject to redemption  in
accordance  with  the  provisions of  Section  4.11. In  addition,  the Managing
General Partner may require that the status  of any such Partner or Assignee  be
changed  to that of a Non-citizen  Assignee and, thereupon, the Managing General
Partner shall be  substituted for such  Non-citizen Assignee as  the Partner  in
respect of his Units.
 
     (b)  The Managing  General Partner  shall, in  exercising voting  rights in
respect of Units held by it  on behalf of Non-citizen Assignees, distribute  the
votes  in the same ratios as the votes of Partners (including without limitation
the General  Partners) in  respect  of Units  other  than those  of  Non-citizen
Assignees are cast, either for, against or abstaining as to the matter.
 
                                      A-22
 


<PAGE>

<PAGE>
     (c) [Intentionally Deleted]
 
     (d)  At  any time  after he  can and  does  certify that  he has  become an
Eligible Citizen, a Non-citizen Assignee  may, upon application to the  Managing
General Partner, request admission as a Substituted Limited Partner with respect
to any Units of such Non-citizen Assignee not redeemed pursuant to Section 4.11,
and  upon his admission  pursuant to Section 10.2,  the Managing General Partner
shall cease to be deemed to be the Limited Partner in respect of the Non-citizen
Assignee's Units.
 
4.11 REDEMPTION OF PARTNERSHIP INTERESTS OF NON-CITIZEN ASSIGNEES
 
     (a) If at any  time a Partner  or Assignee fails  to furnish a  Citizenship
Certification  or other information requested within the 30-day period specified
in Section 4.10(a),  or if  upon receipt  of such  Citizenship Certification  or
other  information the Managing  General Partner determines,  with the advice of
counsel, that a Partner or Assignee is not an Eligible Citizen, the  Partnership
may,  unless  the Partner  or Assignee  establishes to  the satisfaction  of the
Managing General Partner that such Partner or Assignee is an Eligible Citizen or
has transferred his Partnership Interests to a Person who is an Eligible Citizen
and who  furnishes  a satisfactory  Citizenship  Certification to  the  Managing
General Partner prior to the date fixed for redemption as provided below, redeem
the Partnership Interest of such Partner or Assignee as follows:
 
          (i)  The Managing General  Partner shall, not later  than the 30th day
     before the date  fixed for  redemption, give  notice of  redemption to  the
     Partner  or Assignee, at his last address  designated on the records of the
     Partnership or the Transfer Agent, by registered or certified mail, postage
     prepaid. The notice shall be deemed to have been given when so mailed.  The
     notice   shall  specify  the  Redeemable  Interests,  the  date  fixed  for
     redemption, the place of payment, that payment of the redemption price will
     be made  upon  surrender  of  the  Certificate  evidencing  the  Redeemable
     Interests  and that on and  after the date fixed  for redemption no further
     allocations or  distributions  to  which  the  Partner  or  Assignee  would
     otherwise be entitled in respect of the Redeemable Interests will accrue or
     be made.
 
          (ii)  The aggregate redemption price for Redeemable Interests shall be
     an amount equal to the Current  Market Price (the date of determination  of
     which  shall be the date fixed  for redemption) of Partnership Interests of
     the class  to  be so  redeemed  multiplied  by the  number  of  Partnership
     Interests  of each such class included  among the Redeemable Interests. The
     redemption price shall be paid, in  the discretion of the Managing  General
     Partner,  in cash or by delivery of a promissory note of the Partnership in
     the principal amount of the redemption price, bearing interest at the  rate
     of  8% annually and payable in three equal annual installments of principal
     together with accrued and  unpaid interest, commencing  one year after  the
     redemption date.
 
          (iii)  Upon surrender by or  on behalf of the  Partner or Assignee, at
     the place  specified  in  the  notice of  redemption,  of  the  Certificate
     evidencing  the Redeemable Interests, duly endorsed in blank or accompanied
     by an assignment  duly executed in  blank, the Partner  or Assignee or  his
     duly  authorized representative  shall be  entitled to  receive the payment
     therefor.
 
          (iv) After the redemption date,  Redeemable Interests shall no  longer
     constitute issued and Outstanding Partnership Interests.
 
     (b)  The  provisions  of this  Section  4.11  shall also  be  applicable to
Partnership Interests  held by  a Partner  or Assignee  as nominee  of a  Person
determined to be other than an Eligible Citizen.
 
     (c) Nothing in this Section 4.11 shall prevent the recipient of a notice of
redemption  from transferring  his Partnership  Interests before  the redemption
date if such transfer is otherwise permitted under this Agreement. Upon  receipt
of  notice of such a transfer, the  General Partner shall withdraw the notice of
redemption, provided the transferee of  such Partnership Interests certifies  to
the  satisfaction of the Managing General Partner in a Citizenship Certification
delivered in connection  with the Transfer  Application that he  is an  Eligible
Citizen.  If the  transferee fails to  make such  certification, such redemption
shall be effected from the transferee on the original redemption date.
 
                                      A-23
 


<PAGE>

<PAGE>
4.12 EXCHANGE BY SPECIAL GENERAL PARTNER OF ITS UNSUBORDINATED GENERAL PARTNER
  INTEREST AND ITS INTEREST IN THE OPERATING PARTNERSHIP
 
     If the Managing  General Partner  has not  entered into  the Triarc  Merger
pursuant  to Section 4.7, then the Special  General Partner may, at any time, in
one or more exchanges and in its  sole discretion, exchange all or a portion  of
its  Unsubordinated General Partner  Interest together with  an equal portion of
its partnership interest in the Operating Partnership for Units having rights to
distributions of Available Cash from Operating Surplus equal to the distribution
rights with  respect  to such  Available  Cash  from Operating  Surplus  of  the
combined  effective  percentage interest  in the  Partnership and  the Operating
Partnership that the Special General Partner  exchanged. For example, as of  the
Closing Date the Special General Partner's combined effective 2% interest in the
Partnership  and the Operating Partnership would be exchanged into 223,419 Units
(or 242,765 Units if the over-allotment option is exercised, notwithstanding the
fact that the  Special General Partner  is not required  to make any  additional
capital contribution upon the exercise of the over-allotment option). Additional
capital  contributions pursuant to Section 5.2 will increase the number of Units
into which  such combined  interest  is exchanged.  The  Units received  by  the
Special  General  Partner pursuant  to this  Section 4.12  shall be  (x) limited
partner interests and  (b) issued  as a  combination of  Subordinated Units  and
Common  Units;  the proportion  of  the Subordinated  Units  to the  total Units
received in this exchange shall be  in the same proportion that the  unconverted
Subordinated  Units initially  issued pursuant  to Section  5.2 hereof  that are
outstanding immediately before such exchange represent in relation to the  total
Subordinated  Units initially issued pursuant to Section 5.2 hereof. The Special
General Partner at  the time of  such exchange  will have the  same rights  with
respect  to  its Common  Units and  Subordinated Units  (including the  right to
Cumulative Common Unit Arrearages) as the rights possessed by other  Unitholders
of  such Units, except, however, Units received  upon such exchange will have an
aggregate capital account equal to the aggregate capital account of the combined
interest in  the Partnership  and  the Operating  Partnership that  the  Special
General  Partner exchanged.  Common Units issued  pursuant to  this Section 4.12
shall be subject to the restrictions of Section 6.7(b). Upon an exchange by  the
Special  General Partner of  all of its  Unsubordinated General Partner Interest
and its partnership interest in  the Operating Partnership, the Special  General
Partner  will no  longer be  the Special General  Partner hereunder  and will no
longer be obligated,  pursuant to Section  5.2, to make  any additional  Capital
Contributions.
 
                                   ARTICLE V
          CAPITAL CONTRIBUTIONS AND ISSUANCE OF PARTNERSHIP INTERESTS
 
5.1 ORGANIZATIONAL CONTRIBUTIONS
 
     In connection with the formation of the Partnership under the Delaware Act,
the  Managing  General Partner  and  the Special  General  Partner each  made an
initial Capital Contribution to the Partnership in the amount of $10.00, for  an
interest  in the Partnership and each has  been admitted as a General Partner of
the Partnership, and the Organizational Limited Partner made an initial  Capital
Contribution  to the Partnership in the amount of $980.00 for an interest in the
Partnership and has been admitted as  a Limited Partner of the Partnership.  The
Managing  General Partner shall have a managing general partner interest and the
Special General Partner will have a non-managing general partner interest. As of
the Closing Date, the  interest of the Organizational  Limited Partner shall  be
redeemed  as provided in the Contribution  and Conveyance Agreement; the initial
Capital Contributions  of each  Partner  shall thereupon  be refunded;  and  the
Organizational  Limited  Partner shall  cease  to be  a  Limited Partner  of the
Partnership. Ninety-eight percent of any interest or other profit that may  have
resulted  from the investment or other use of such initial Capital Contributions
shall be allocated and  distributed to the  Organizational Limited Partner,  and
the  balance thereof shall be allocated and distributed to the General Partners,
Pro Rata.
 
                                      A-24
 


<PAGE>

<PAGE>
5.2 CONTRIBUTIONS BY GENERAL PARTNERS
 
     On the  Closing  Date  and  pursuant to  the  Contribution  and  Conveyance
Agreement,  the Managing General Partner shall contribute to the Partnership, as
a Capital Contribution,  all of its  limited partner interest  in the  Operating
Partnership  in  exchange  for (i)  the  continuation of  its  1% Unsubordinated
General Partner Interest, subject to all of the rights, privileges and duties of
the Managing General Partner under  this Agreement, (ii) 4,533,638  Subordinated
Units and (iii) all of the Incentive Distribution Rights. Simultaneously, on the
Closing  Date and  pursuant to  the Contribution  and Conveyance  Agreement, the
Special General  Partner  shall  contribute  to the  Partnership  as  a  Capital
Contribution all of its limited partner interest in the Operating Partnership in
exchange  for the continuation of its 1% Unsubordinated General Partner Interest
relating to the Special General Partner subject to all of the rights, privileges
and duties of  the Special General  Partner under this  Agreement. In  addition,
upon  the  issuance  of  any additional  limited  partnership  interests  by the
Partnership (other than  (a) the  conversion of general  partner interests  into
limited  partner interests pursuant  to Sections 4.12,  5.8(g), 5.8(h), 11.1(d),
11.3(b) or  13.1(l), or  (b) the  issuance of  the Common  Units issued  in  the
Initial  Offering or pursuant to the Over-Allotment Option), each of the General
Partners shall be required  to make, additional  Capital Contributions equal  to
1/98th  of  any  amount contributed  to  the  Partnership in  exchange  for such
Additional Units. Except as set forth in the immediately preceding sentence  and
Article  XII, the General Partners shall not be obligated to make any additional
Capital Contributions to the Partnership.
 
5.3 CONTRIBUTIONS BY INITIAL LIMITED PARTNERS
 
     (a) On the Closing Date and pursuant to the Underwriting Agreement and  the
Contribution  and Conveyance Agreement, each Underwriter shall contribute to the
Partnership cash in an amount equal to the Issue Price per Initial Common  Unit,
multiplied by the number of Common Units specified in the Underwriting Agreement
to  be purchased  by such  Underwriter at  the 'Closing  Date,' as  such term is
defined  in  the   Underwriting  Agreement.   In  exchange   for  such   Capital
Contributions  by the Underwriters, the Partnership  shall issue Common Units to
each Underwriter on whose behalf such Capital Contribution is made in an  amount
equal  to the  quotient obtained  by dividing (i)  the cash  contribution to the
Partnership by or  on behalf of  such Underwriter  by (ii) the  Issue Price  per
Initial Common Unit.
 
     (b)  Upon the exercise of the Over-allotment Option, each Underwriter shall
contribute to the Partnership  cash in an  amount equal to  the Issue Price  per
Initial  Common Unit, multiplied by the number  of Common Units specified in the
Underwriting Agreement  to be  purchased  by such  Underwriter  at the  Date  of
Delivery.  In exchange for  such Capital Contributions  by the Underwriters, the
Partnership shall issue Common  Units to each Underwriter  on whose behalf  such
Capital  Contribution is  made in  an amount equal  to the  quotient obtained by
dividing (i) the cash contributions to the  Partnership by or on behalf of  such
Underwriter by (ii) the Issue Price per Initial Common Unit.
 
     (c)  No Limited Partner Partnership Interests will be issued or issuable as
of or at the Closing Date other  than (i) the Common Units issuable pursuant  to
subparagraph  (a) hereof  in aggregate  number equal  to 6,190,476  and (ii) the
'Additional Units' as  such term  is defined  in the  Underwriting Agreement  in
aggregate  number up  to 928,571  issuable upon  exercise of  the Over-allotment
Option pursuant to subparagraph (b) hereof.
 
5.4 INTEREST AND WITHDRAWAL
 
     No interest shall be paid by  the Partnership on Capital Contributions.  No
Partner or Assignee shall be entitled to the withdrawal or return of its Capital
Contribution,  except to the extent, if any, that distributions made pursuant to
this Agreement or upon termination of the Partnership may be considered as  such
by law and then only to the extent provided for in this Agreement. Except to the
extent  expressly provided in this Agreement,  no Partner or Assignee shall have
priority over any other Partner or Assignee  either as to the return of  Capital
Contributions  or as to profits, losses  or distributions. Any such return shall
be a compromise to which all Partners and Assignees agree within the meaning  of
17-502(b) of the Delaware Act.
 
                                      A-25
 


<PAGE>

<PAGE>
5.5 CAPITAL ACCOUNTS
 
     (a)  The Partnership shall maintain for each Partner (or a beneficial owner
of Partnership Interests held by a nominee in any case in which the nominee  has
furnished  the  identity of  such owner  to the  Partnership in  accordance with
Section 6031(c)  of the  Code or  any other  method acceptable  to the  Managing
General Partner in its sole discretion) owning a Partnership Interest a separate
Capital Account with respect to such Partnership Interest in accordance with the
rules  of Treasury  Regulation Section  1.704-1(b)(2)(iv). Such  Capital Account
shall be increased by (i)  the amount of all  Capital Contributions made to  the
Partnership with respect to such Partnership Interest pursuant to this Agreement
and   (ii)  all  items  of  Partnership  income  and  gain  (including,  without
limitation, income and gain exempt from tax) computed in accordance with Section
5.5(b) and  allocated with  respect  to such  Partnership Interest  pursuant  to
Section  6.1, and decreased by (x) the amount of cash or Net Agreed Value of all
actual and deemed distributions  of cash or property  made with respect to  such
Partnership Interest pursuant to this Agreement and (y) all items of Partnership
deduction and loss computed in accordance with Section 5.5(b) and allocated with
respect to such Partnership Interest pursuant to Section 6.1.
 
     (b)  For purposes of computing the amount of any item of income, gain, loss
or deduction  which is  to be  allocated pursuant  to Article  VI and  is to  be
reflected  in the Partners' Capital Accounts, the determination, recognition and
classification of  any  such  item  shall be  the  same  as  its  determination,
recognition  and  classification  for federal  income  tax  purposes (including,
without limitation, any  method of depreciation,  cost recovery or  amortization
used for that purpose), provided, that:
 
          (i)  Solely for purposes of this Section 5.5, the Partnership shall be
     treated as owning directly  its proportionate share  (as determined by  the
     Managing  General  Partner  based  upon  the  provisions  of  the Operating
     Partnership Agreement) of all property owned by the Operating Partnership.
 
          (ii) All  fees  and other  expenses  incurred by  the  Partnership  to
     promote the sale of (or to sell) a Partnership Interest that can neither be
     deducted  nor amortized under Section  709 of the Code,  if any, shall, for
     purposes of Capital Account maintenance, be treated as an item of deduction
     at the  time  such  fees and  other  expenses  are incurred  and  shall  be
     allocated  among the  Partners pursuant  to Section  6.1. To  the extent an
     adjustment to the adjusted tax basis  of any Partnership asset pursuant  to
     Section  734(b) or  743(b) of  the Code  is required,  pursuant to Treasury
     Regulation Section  1.704-1(b)(2)(iv)(m),  to  be  taken  into  account  in
     determining  Capital Accounts, the amount of such adjustment in the Capital
     Accounts shall be treated as an item of gain or loss.
 
          (iii) Except  as otherwise  provided  in Treasury  Regulation  Section
     1.704-1(b)(2)(iv)(m),  the computation of  all items of  income, gain, loss
     and deduction shall be  made without regard to  any election under  Section
     754 of the Code which may be made by the Partnership and, as to those items
     described  in  Section 705(a)(1)(B)  or 705(a)(2)(B)  of the  Code, without
     regard to the fact that  such items are not  includable in gross income  or
     are  neither currently  deductible nor  capitalized for  federal income tax
     purposes.
 
          (iv) Any income, gain or loss attributable to the taxable  disposition
     of any Partnership property shall be determined as if the adjusted basis of
     such  property as of such  date of disposition were  equal in amount to the
     Partnership's Carrying Value with respect to such property as of such date.
 
          (v) In accordance with the requirements of Section 704(b) of the Code,
     any deductions for depreciation, cost recovery or amortization attributable
     to any Contributed Property shall be determined as if the adjusted basis of
     such property on the date it was acquired by the Partnership were equal  to
     the  Agreed Value of such property.  Upon an adjustment pursuant to Section
     5.5(d) to  the  Carrying  Value  of any  Partnership  property  subject  to
     depreciation,  cost recovery  or amortization,  any further  deductions for
     such depreciation,  cost  recovery  or amortization  attributable  to  such
     property  shall be determined (A) as if the adjusted basis of such property
     were equal to  the Carrying  Value of such  property immediately  following
     such  adjustment and  (B) using  a rate  of depreciation,  cost recovery or
     amortization  derived  from  the  same  method  and  useful  life  (or,  if
     applicable, the remaining useful life) as is applied for federal income tax
     purposes;  provided, however, that, if the  asset has a zero adjusted basis
     for federal income tax purposes, depreciation,
 
                                      A-26
 


<PAGE>

<PAGE>
     cost recovery  or amortization  deductions shall  be determined  using  any
     reasonable method that the General Partner may adopt.
 
          (vi)  If the  Partnership's adjusted  basis in  a depreciable  or cost
     recovery property is reduced  for federal income  tax purposes pursuant  to
     Section  48(q)(1) or  48(q)(3) of  the Code,  the amount  of such reduction
     shall,  solely  for  purposes  hereof,  be  deemed  to  be  an   additional
     depreciation or cost recovery deduction in the year such property is placed
     in  service and shall  be allocated among the  Partners pursuant to Section
     6.1. Any restoration of such basis pursuant to Section 48(q)(2) of the Code
     shall, to  the extent  possible, be  allocated in  the same  manner to  the
     Partners to whom such deemed deduction was allocated.
 
     (c) (i) Except as otherwise provided in Section 5.5(c)(ii), a transferee of
a  Partnership  Interest shall  succeed to  a  pro rata  portion of  the Capital
Account of the transferor relating  to the Partnership Interest so  transferred;
provided, however, that, if the transfer causes a termination of the Partnership
under  Section  708(b)(1)(B)  of  the  Code,  the  Partnership's  properties and
liabilities shall be deemed (i) to  have been distributed in liquidation of  the
Partnership  to the Partners (including any transferee of a Partnership Interest
that is a party  to the transfer causing  such termination) pursuant to  Section
12.4  (after adjusting the  balance of the  Capital Accounts of  the Partners as
provided  in  Section  5.5(d)(ii))  and   recontributed  by  such  Partners   in
reconstitution  of the Partnership or (ii) to be treated as mandated by Treasury
Regulations issued pursuant to Section 704 and 708 of the Code. Any such  deemed
contribution  or  distribution shall  be treated  as  an actual  contribution or
distribution, as the  case may be,  for purposes  of this Section  5.5. In  such
event,  the  Carrying Values  of the  Partnership  properties shall  be adjusted
immediately prior  to  such deemed  contribution  and distribution  pursuant  to
Section  5.5(d)(ii) and  such Carrying Values  shall then  constitute the Agreed
Values of such properties upon such deemed contribution to the new  Partnership.
The  Capital Accounts of such new  Partnership shall be maintained in accordance
with the principles of this Section 5.5.
 
     (ii) Immediately prior to  (x) the transfer of  a Subordinated Unit  (other
than  a transfer  to an  Affiliate of the  Managing General  Partner, unless the
Managing General Partner elects to have this subparagraph 5.5(c)(ii) apply), (y)
the transfer  of a  Subordinated Unit  that  has converted  into a  Common  Unit
pursuant  to  Section 5.8  by  a holder  thereof or  (z)  the transfer  of Units
received upon the  exchange of all  or a portion  of the Unsubordinated  General
Partner  Interests into Units  ('Exchange Units') pursuant  to Section 4.12, the
Capital Account  maintained for  such Person  with respect  to its  Subordinated
Units,  converted  Subordinated  Units  or Exchange  Units  will  (A)  first, be
allocated to the  Subordinated Units, converted  Subordinated Units or  Exchange
Units  to be transferred in an amount equal  to the product of (x) the number of
such Subordinated Units, converted  Subordinated Units or  Exchange Units to  be
transferred  and (y)  the Per  Unit Capital  Amount for  a Common  Unit, and (B)
second, any remaining balance  in such Capital Account  will be retained by  the
transferor,  regardless  of  whether  it has  retained  any  Subordinated Units,
converted Subordinated Units or Exchange  Units. Following any such  allocation,
the  transferor's  Capital  Account,  if any,  maintained  with  respect  to the
retained Subordinated Units, converted Subordinated Units or Exchange Units,  if
any,  will  have  a balance  equal  to  the amount  allocated  under  clause (B)
hereinabove, and the  transferee's Capital Account  established with respect  to
the  transferred Subordinated  Units, converted  Subordinated Units  or Exchange
Units will  have  a balance  equal  to the  amount  allocated under  clause  (A)
hereinabove.
 
     (d) (i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Units for cash or Contributed
Property  or the conversion of the General Partner's Combined Interest to Common
Units pursuant to Section 11.3(b) (or upon the occurrence of other event  listed
in  such regulation), the Capital Account of all Partners and the Carrying Value
of each  Partnership  property  immediately  prior to  such  issuance  shall  be
adjusted  upward or downward  to reflect any Unrealized  Gain or Unrealized Loss
attributable to  such  Partnership  property,  as if  such  Unrealized  Gain  or
Unrealized  Loss had  been recognized  on an actual  sale of  each such property
immediately prior to  such issuance and  had been allocated  to the Partners  at
such  time pursuant  to Section 6.1(c).  In determining such  Unrealized Gain or
Unrealized Loss,  the  aggregate  cash  amount and  fair  market  value  of  all
Partnership  assets (including,  without limitation,  cash or  cash equivalents)
immediately prior to the issuance of additional Units shall be determined by the
Managing General Partner  using such reasonable  method of valuation  as it  may
adopt;    provided,    however,    that    the    Managing    General   Partner,
 
                                      A-27
 


<PAGE>

<PAGE>
in arriving at  such valuation,  must take fully  into account  the fair  market
value  of the Partnership Interests  of all Partners at  such time. The Managing
General Partner shall  allocate such  aggregate value  among the  assets of  the
Partnership (in such manner as it determines in its discretion to be reasonable)
to arrive at a fair market value for individual properties.
 
     (ii)  In accordance with  Treasury Regulation Section 1.704-1(b)(2)(iv)(f),
immediately prior  to any  actual or  deemed distribution  to a  Partner of  any
Partnership  property  (other  than  a  distribution  of  cash  that  is  not in
redemption or retirement of a Partnership Interest), the Capital Accounts of all
Partners and the Carrying  Value of all Partnership  property shall be  adjusted
upward   or  downward  to  reflect  any   Unrealized  Gain  or  Unrealized  Loss
attributable to  such  Partnership  property,  as if  such  Unrealized  Gain  or
Unrealized Loss had been recognized in a sale of such property immediately prior
to  such distribution for an amount equal to its fair market value, and had been
allocated to  the  Partners,  at  such time,  pursuant  to  Section  6.1(c).  In
determining  such Unrealized Gain  or Unrealized Loss  the aggregate cash amount
and fair market value of all Partnership assets (including, without  limitation,
cash  or cash equivalents) immediately prior to  a distribution shall (A) in the
case of an actual distribution which is not made pursuant to Section 12.4 or  in
the  case of a deemed distribution occurring as a result of a termination of the
Partnership pursuant to Section 708 of the Code, be determined and allocated  in
the  same manner as that provided  in Section 5.5(d)(i) or (B)  in the case of a
liquidating distribution pursuant to Section  12.4, be determined and  allocated
by the Liquidator using such reasonable method of valuation as it may adopt.
 
5.6 ISSUANCES OF ADDITIONAL PARTNERSHIP SECURITIES
 
     (a)   Subject  to  Section  5.7,   the  Partnership  may  issue  additional
Partnership Securities for any Partnership purpose at any time and from time  to
time  to such Persons for such consideration and on such terms and conditions as
shall be established by the Managing General Partner in its sole discretion, all
without the approval of any Unitholders or Limited Partners.
 
     (b) Each additional  Partnership Security  authorized to be  issued by  the
Partnership  pursuant to Section 5.6(a) may be issued in one or more classes, or
one or more  series of any  such classes, with  such designations,  preferences,
rights, powers and duties (which may be senior to existing classes and series of
Partnership  Securities), as shall  be fixed by the  Managing General Partner in
the  exercise  of  its  sole  discretion,  including  (i)  the  right  to  share
Partnership  profits and  losses or  items thereof; (ii)  the right  to share in
Partnership distributions; (iii) the rights upon dissolution and liquidation  of
the  Partnership; (iv)  whether, and  the terms  and conditions  upon which, the
Partnership may redeem  the Partnership Security;  (v) whether such  Partnership
Security  is issued with the privilege of conversion or exchange and, if so, the
terms and  conditions  of  such  conversion or  exchange;  (vi)  the  terms  and
conditions  upon which  each Partnership Security  will be  issued, evidenced by
certificates and assigned or transferred; and  (vii) the right, if any, of  each
such  Partnership  Security to  vote on  Partnership matters,  including matters
relating to the relative rights, preferences and privileges of such  Partnership
Security.
 
     (c)  The Managing General Partner is hereby authorized and directed to take
all actions that it deems necessary  or appropriate in connection with (i)  each
issuance  of  Partnership  Securities pursuant  to  this Section  5.6,  (ii) the
conversion of  a  general  partner  interest into  a  limited  partner  interest
pursuant  to  the terms  of this  Agreement, (iii)  the admission  of Additional
Limited Partners and  (iv) all additional  issuances of Partnership  Securities.
The  Managing General Partner is further  authorized and directed to specify the
relative rights,  powers  and  duties of  the  holders  of the  Units  or  other
Partnership  Securities being so  issued. The Managing  General Partner shall do
all things  necessary to  comply with  the Delaware  Act and  is authorized  and
directed  to do all things  it deems to be  necessary or advisable in connection
with any future  issuance of Partnership  Securities or in  connection with  the
conversion  of  a  general  partner interest  into  a  limited  partner interest
pursuant to the terms of this Agreement, including compliance with any  statute,
rule, regulation or guideline of any federal, state or other governmental agency
or  any National  Securities Exchange  on which  the Units  or other Partnership
Securities are listed for trading.
 
                                      A-28
 


<PAGE>

<PAGE>
5.7 LIMITATIONS ON ISSUANCE OF ADDITIONAL PARTNERSHIP SECURITIES
 
     The issuance of  Partnership Securities  pursuant to Section  5.6 shall  be
subject to the following restrictions and limitations:
 
          (a)  During the Subordination Period,  the Partnership shall not issue
     an  aggregate  of  more  than  3,095,238  additional  Parity  Units  or  an
     equivalent  number of Partnership Securities having rights to distributions
     or in liquidation ranking on a parity with the Common Units, or ranking  on
     parity  with, or prior or senior to,  the Subordinated Units in either case
     without the prior approval of the  holders of a Unit Majority. In  applying
     this  limitation,  there  shall  be excluded  Common  Units  issued  (A) in
     connection  with  the  exercise  of  the  Over-allotment  Option,  (B)   in
     accordance  with  Sections  5.7(b)  and  5.7(c),  (C)  upon  conversion  of
     Subordinated Units  pursuant  to  Section  5.8, (D)  for  purchase  by  the
     Managing  General  Partner or  any  other Group  Member  in respect  of, or
     otherwise issued  upon, the  exercise of  options granted  by the  Managing
     General  Partner or any other Group Member  pursuant to any of its employee
     benefit plan or otherwise in connection with the employee benefits plans of
     the Managing  General Partner  or  any other  Group  Member, (E)  upon  the
     exchange   of  all   or  a  portion   of  the   Special  General  Partner's
     Unsubordinated General Partner Interests and of its partnership interest in
     the Operating Partnership pursuant to Section 4.12 and (F) in the event  of
     a combination or subdivision of Common Units.
 
          (b) The Partnership may also issue an unlimited number of Parity Units
     or  an  equivalent  number  of Partnership's  Securities  having  rights to
     distributions or  in liquidation  ranking on  a parity  with, or  prior  or
     senior  to, the Subordinated Units, in either case, prior to the end of the
     Subordination Period and without the  prior approval of the Unitholders  if
     such  issuance occurs  (i) in connection  with an Acquisition  or a Capital
     Improvement or (ii)  within 365  days of, and  the net  proceeds from  such
     issuance are used to repay debt incurred in connection with, an Acquisition
     or  a Capital Improvement,  in each case where  such Acquisition or Capital
     Improvement involves assets that, if acquired by the Partnership as of  the
     date  that is one year prior to the  first day of the Quarter in which such
     Acquisition is  to be  consummated or  such Capital  Improvement is  to  be
     completed, would have resulted in an increase in:
 
             (A)  the  amount of  Adjusted  Operating Surplus  generated  by the
        Partnership on a per-Unit basis (for all Outstanding Units) with respect
        to each of  the four most  recently completed Quarters  (on a pro  forma
        basis as described below) as compared to
 
             (B)  the actual amount  of Adjusted Operating  Surplus generated by
        the Partnership on  a per-Unit  basis (for all  Outstanding Units)  with
        respect to each of such four Quarters (or if the issuances of Units with
        respect to an Acquisition or Capital Improvement occurs within the first
        full  four  quarters  from  the Closing  Date,  then  Adjusted Operating
        Surplus as  utilized  in clause  (i)  and (ii)  shall  be based  on  the
        Partnership's  pro forma  amount of  Adjusted Operating  Surplus for any
        quarter (as reflected in the Registration Statement) in which there  was
        no actual performance).
 
          The  amount in  clause (i)  shall be determined  on a  pro forma basis
     assuming that (A) all of the  Parity Units or Partnership Securities to  be
     issued in connection with or within 365 days of such Acquisition or Capital
     Improvement  had  been issued  and  outstanding, (B)  all  indebtedness for
     borrowed  money  to  be  incurred  or  assumed  in  connection  with   such
     Acquisition  or Capital Improvement (other  than any such indebtedness that
     is to be repaid with the proceeds of such debt issuance) had been  incurred
     or  assumed,  in each  case  as of  the  commencement of  such four-Quarter
     period, (C) the  personnel expenses that  would have been  incurred by  the
     Partnership  in  the operation  of the  acquired  assets are  the personnel
     expenses for employees to be retained  by the Partnership in the  operation
     of  the acquired assets,  and (D) the non-personnel  costs and expenses are
     computed on the  same basis  as those incurred  by the  Partnership in  the
     operation  of the Partnership's business  at similarly situated Partnership
     facilities.
 
          (c) The Partnership may also issue an unlimited number of Parity Units
     or  an  equivalent  number  of  Partnership  Securities  having  rights  to
     distributions  or in liquidation ranking on  a parity with the Common Units
     or ranking on parity with, or  prior or senior to, the Subordinated  Units,
     in either case prior to the end of the Subordination Period and without the
     approval of the
 
                                      A-29
 


<PAGE>

<PAGE>
     Unitholders  if the  proceeds from  such issuance  are used  exclusively to
     repay up  to  $50 million  of  indebtedness of  a  Group Member  where  the
     aggregate amount of distributions that would have been paid with respect to
     such  newly  issued  Units  or  Partnership  Securities,  plus  the related
     distributions on the Unsubordinated General Partner Interests in respect of
     the four-Quarter period  ending prior to  the first day  of the Quarter  in
     which  the issuance is to be consummated (assuming such additional Units or
     Partnership Securities had been Outstanding throughout such period and that
     distributions equal to  the distributions  that were actually  paid on  the
     Outstanding Units during the period were paid on such additional Units) did
     not  exceed the interest costs actually  incurred during such period on the
     indebtedness that  is  to be  repaid  (or,  if such  indebtedness  was  not
     outstanding throughout the entire period, would have been incurred had such
     indebtedness been outstanding for the entire period).
 
          (d)  During the Subordination Period,  the Partnership shall not issue
     additional Partnership  Securities having  rights  to distributions  or  in
     liquidation  ranking prior or senior to the Common Units, without the prior
     approval of the holders of a Unit Majority.
 
          (e) No fractional Units shall be issued by the Partnership.
 
5.8 CONVERSION OF SUBORDINATED UNITS
 
     (a) A  total  of  1,133,410  of the  Outstanding  Subordinated  Units  plus
one-quarter  (25%) of the Subordinated Units, if any, previously issued pursuant
to Section 4.12 will  convert into Common  Units on a  one-for-one basis on  the
first  day after  the Record  Date for  distribution in  respect of  any Quarter
ending on or after June 30, 1999, in respect of which:
 
          (i) distributions  under Section  6.4 in  respect of  all  Outstanding
     Common  Units  and Subordinated  Units with  respect to  each of  the three
     consecutive, non-overlapping  four-Quarter  periods  immediately  preceding
     such  date equals or exceeds the  sum of the Minimum Quarterly Distribution
     on all of the Outstanding Common  Units and Subordinated Units during  such
     periods;
 
          (ii)  the Adjusted Operating Surplus generated  during each of the two
     consecutive, non-overlapping  four-Quarter  periods  immediately  preceding
     such  date equals or exceeds the  sum of the Minimum Quarterly Distribution
     on all of  the Outstanding Common  Units and Subordinated  Units, plus  the
     related  distribution  on  the  Unsubordinated  General  Partner Interests,
     during such periods; and
 
          (iii) the Cumulative Common Unit Arrearage on all of the Common  Units
     is zero.
 
     (b)  An additional 1,133,410  of the Outstanding  Subordinated Units plus a
number of additional Outstanding Subordinated  Units equal to one quarter  (25%)
of  the total Units previously issued pursuant to Section 4.12 will convert into
Common Units on a one-for-one basis on  the first day after the Record Date  for
distribution  in respect  of any Quarter  ending on  or after June  30, 2000, in
respect of which:
 
          (i) distributions  under Section  6.4 in  respect of  all  Outstanding
     Common  Units  and Subordinated  Units with  respect to  each of  the three
     consecutive, non-overlapping  four-Quarter  periods  immediately  preceding
     such  date equals or exceeds the  sum of the Minimum Quarterly Distribution
     on all of the Outstanding Common  Units and Subordinated Units during  such
     periods;
 
          (ii)  the Adjusted Operating Surplus generated  during each of the two
     consecutive, non-overlapping  four-Quarter  periods  immediately  preceding
     such  date equals or exceeds the  sum of the Minimum Quarterly Distribution
     on all of  the Outstanding Common  Units and Subordinated  Units, plus  the
     related  distribution  on  the  Unsubordinated  General  Partner Interests,
     during such periods; and
 
          (iii) the Cumulative Common Unit Arrearage on all of the Common  Units
     is zero;
 
provided,  however, that the  conversion of Subordinated  Units pursuant to this
Section 5.8(b) may not occur until at least one year following the conversion of
Subordinated Units pursuant to Section 5.8(a).
 
     (c) In the event that less  than all of the Outstanding Subordinated  Units
shall  convert into Common Units pursuant to  Section 5.8(a) or 5.8(b) at a time
when there shall be more than one holder
 
                                      A-30
 


<PAGE>

<PAGE>
of Subordinated Units,  then, unless all  of the holders  of Subordinated  Units
shall  agree to a  different allocation, the  Subordinated Units that  are to be
converted into Common Units shall be allocated among the holders of Subordinated
Units pro rata  based on the  number of  Subordinated Units owned  by each  such
holder.
 
     (d)  Any  Subordinated  Units  that are  not  converted  into  Common Units
pursuant to  Sections  5.8(a) and  (b)  shall convert  into  Common Units  on  a
one-for-one  basis on the first day  following the Record Date for distributions
in respect of the final Quarter of the Subordination Period.
 
     (e) Notwithstanding any  other provision  of this Agreement,  all the  then
Outstanding Subordinated Units will automatically convert into Common Units on a
one-for-one  basis as set forth  in, and pursuant to  the terms of, Section 11.4
hereof.
 
     (f) A Subordinated  Unit that  has converted into  a Common  Unit shall  be
subject to the provisions of Section 6.7(b).
 
     (g) A Subordinated Unit (if not previously converted into a limited partner
interest pursuant to the terms of this Agreement) that converts to a Common Unit
shall  automatically become a limited partner  interest immediately prior to the
time of  such conversion  into a  Common Unit.  This conversion  into a  limited
partner  interest  shall  be effective  even  if  such Unit  is  subject  to the
restrictions of Section 6.7(b).
 
     (h) A Subordinated Unit (if not previously converted into a limited partner
interest pursuant to the  terms of this  Agreement) shall automatically  convert
into a limited partner interest in the hands of the transferor immediately prior
to the transfer of such Unit to a Person who is not an Affiliate of the Managing
General Partner.
 
5.9 LIMITED PREEMPTIVE RIGHT
 
     Except  as provided in  this Section 5.9  and Section 5.2,  no Person shall
have any preemptive,  preferential or other  similar right with  respect to  the
issuance  of any Partnership Security, whether unissued, held in the treasury or
hereafter created. The Managing General Partner  shall have the right, which  it
may  from time to time assign  in whole or in part  to any of its Affiliates, to
purchase Partnership Securities from the  Partnership whenever, and on the  same
terms  that, the Partnership issues Partnership Securities to Persons other than
the Managing General  Partner and  its Affiliates,  to the  extent necessary  to
maintain  the Percentage Interests of the  General Partners and their Affiliates
equal  to  that  which  existed  immediately  prior  to  the  issuance  of  such
Partnership Securities.
 
5.10 SPLITS AND COMBINATION
 
     (a)  Subject to Sections 5.10(d), 6.6  and 6.8 (dealing with adjustments of
distribution levels),  the  Partnership may  make  a Pro  Rata  distribution  of
Partnership  Securities to  all Record  Holders or  may effect  a subdivision or
combination of Partnership  Securities so long  as, after any  such event,  each
Partner  shall have  the same Percentage  Interest in the  Partnership as before
such event, and any amounts calculated on a per Unit basis (including any Common
Unit Arrearage or  Cumulative Common Unit  Arrearage) or stated  as a number  of
Units  (including the number of Subordinated Units that may convert prior to the
end of the  Subordination Period and  the number of  additional Parity Units  or
Partnership  Securities having rights to distributions or in liquidation ranking
on a parity with or prior or senior to the Subordinated Units that may be issued
pursuant to Section 5.7 without a Unitholder vote) are proportionately  adjusted
retroactive to the beginning of the Partnership.
 
     (b) Whenever such a distribution, subdivision or combination of Partnership
Securities  is declared, the Managing General Partner shall select a Record Date
as of which the distribution, subdivision or combination shall be effective  and
shall  send notice thereof  at least 20 days  prior to such  Record Date to each
Record Holder as  of a date  not less  than 10 days  prior to the  date of  such
notice. The Managing General Partner also may cause a firm of independent public
accountants  selected by it to calculate the number of Partnership Securities to
be held  by  each  Record  Holder after  giving  effect  to  such  distribution,
subdivision  or combination. The  Managing General Partner  shall be entitled to
rely on any  certificate provided  by such firm  as conclusive  evidence of  the
accuracy of such calculation.
 
                                      A-31
 


<PAGE>

<PAGE>
     (c)  Promptly following any such  distribution, subdivision or combination,
the Partnership  may issue  Certificates to  the Record  Holders of  Partnership
Securities  as  of the  applicable Record  Date representing  the new  number of
Partnership Securities  held by  such Record  Holders, or  the Managing  General
Partner  may adopt such other  procedures as it may  deem appropriate to reflect
such changes.  If any  such combination  results in  a smaller  total number  of
Partnership   Securities  Outstanding,  the  Partnership  shall  require,  as  a
condition to  the delivery  to a  Record  Holder of  such new  Certificate,  the
surrender  of any  Certificate held by  such Record Holder  immediately prior to
such Record Date.
 
     (d) The Partnership shall not issue fractional Units upon any distribution,
subdivision  or  combination  of  Units.  If  a  distribution,  subdivision   or
combination  of Units would result  in the issuance of  fractional Units but for
the provisions of Section 5.7(e) and this Section 5.10(d), each fractional  Unit
shall  be rounded to the nearest whole Unit  (and a 0.5 Unit shall be rounded to
the next higher Unit).
 
5.11 FULLY PAID AND NON-ASSESSABLE NATURE OF LIMITED PARTNER PARTNERSHIP
INTERESTS
 
     All Limited Partner  Partnership Interests either  (a) issued pursuant  to,
and in accordance with the requirements of, this Article V or (b) converted from
a general partner interest into a limited partner interest pursuant to the terms
of  this  Agreement  shall  be fully  paid  and  non-assessable  Limited Partner
Partnership Interests in the Partnership,  except as such non-assessability  may
be affected by Section 17-607 of the Delaware Act.
 
                                      A-32



<PAGE>

<PAGE>
                                   ARTICLE VI
                         ALLOCATIONS AND DISTRIBUTIONS
 
6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSE
 
     For  purposes of  maintaining the Capital  Accounts and  in determining the
rights of  the Partners  among themselves,  the Partnership's  items of  income,
gain,  loss and deduction (computed in  accordance with Section 5.5(b)) shall be
allocated among  the Partners  in  each taxable  year  (or portion  thereof)  as
provided hereinbelow.
 
     (a) Net Income. After giving effect to the special allocations set forth in
Section  6.1(d), Net Income for each taxable year and all items of income, gain,
loss and deduction taken into account  in computing Net Income for such  taxable
year shall be allocated as follows:
 
          (i)  First,  100%  to  the  General  Partners,  in  proportion  to the
     aggregate Net Losses allocated to the General Partners pursuant to  Section
     6.1(b)(iii)  for all previous taxable years, until the aggregate Net Income
     allocated to the General Partners  pursuant to this Section 6.1(a)(ii)  for
     the  current taxable year  and all previous  taxable years is  equal to the
     aggregate Net Losses allocated to the General Partners pursuant to  Section
     6.1(b)(iii) for all previous taxable years;
 
          (ii)  Second,  100%  to the  General  Partners, in  proportion  to the
     aggregate Net Losses allocated to the General Partners pursuant to  Section
     6.1(b)(ii)  for  all  previous  taxable  years,  and  the  Unitholders,  in
     accordance with their respective Percentage Interests, until the  aggregate
     Net  Income allocated to such Partners  pursuant to this Section 6.1(a)(ii)
     for the current taxable year and all previous taxable years is equal to the
     aggregate Net  Losses  allocated  to  such  Partners  pursuant  to  Section
     6.1(b)(ii) for all previous taxable years; and
 
          (iii)  Third, the balance,  if any, 100% to  the General Partners, Pro
     Rata, and the  Unitholders in accordance  with their respective  Percentage
     Interests.
 
     (b) Net Losses. After giving effect to the special allocations set forth in
Section  6.1(d), Net  Losses for  each taxable period  and all  items of income,
gain, loss and  deduction taken into  account in computing  Net Losses for  such
taxable period shall be allocated as follows:
 
          (i)   First,  100%  to  the  General   Partners,  Pro  Rata,  and  the
     Unitholders, in  accordance  with their  respective  Percentage  Interests,
     until the aggregate Net Losses allocated pursuant to this Section 6.1(b)(i)
     for the current taxable year and all previous taxable years is equal to the
     aggregate  Net  Income  allocated  to  such  Partners  pursuant  to Section
     6.1(a)(iii) for all previous taxable years, provided, however, that the Net
     Losses shall not  be allocated pursuant  to this Section  6.1(b)(i) to  the
     extent  that such allocation  would cause any Unitholder  to have a deficit
     balance in its Adjusted Capital Account at the end of such taxable year (or
     increase any existing deficit balance in its Adjusted Capital Account);
 
          (ii)  Second,  100%  to  the  General  Partners,  Pro  Rata,  and  the
     Unitholders  in  accordance  with  their  respective  Percentage Interests;
     provided, however, that Net Losses shall not be allocated pursuant to  this
     Section  6.1(b)(ii)  to the  extent that  such  allocation would  cause any
     Unitholder to have a deficit balance in its Adjusted Capital Account at the
     end of such taxable year (or  increase any existing deficit balance in  its
     Adjusted Capital Account); and
 
          (iii) Third, the balance,  if any, 100%  to the  General Partners, Pro
     Rata.
 
     (c) Net Termination Gains  and Losses. After giving  effect to the  special
allocations  set forth in  Section 6.1(d), all  items of income,  gain, loss and
deduction  taken  into  account  in  computing  Net  Termination  Gain  or   Net
Termination  Loss for such taxable period shall  be allocated in the same manner
as such Net Termination Gain or Net Termination Loss is allocated hereunder. All
allocations under  this  Section 6.1(c)  shall  be made  after  Capital  Account
balances have been adjusted by all other allocations provided under this Section
6.1  and after all  distributions of Available Cash  provided under Sections 6.4
and 6.5 have  been made;  provided, however, that  solely for  purposes of  this
Section  6.1(c), Capital Accounts  shall not be  adjusted for distributions made
pursuant to Section 12.4.
 
                                      A-33
 


<PAGE>

<PAGE>
     (i) If a Net Termination Gain is recognized (or deemed recognized  pursuant
to  Section  5.5(d)), such  Net Termination  Gain shall  be allocated  among the
Partners in the following manner (and the Capital Accounts of the Partners shall
be increased by the amount so allocated in each of the following subclauses,  in
the  order listed, before an allocation is  made pursuant to the next succeeding
subclause):
 
          (A) First, to  each Partner having  a deficit balance  in its  Capital
     Account,  in the  proportion that such  deficit balance bears  to the total
     deficit balances in the Capital Accounts  of all Partners, until each  such
     Partner  has been allocated Net Termination  Gain equal to any such deficit
     balance in its Capital Account;
 
          (B) Second, 98% to all Unitholders holding Common Units, in proportion
     to their relative Percentage Interests, and 2% to the General Partners, Pro
     Rata, until  the  Capital Account  in  respect  of each  Common  Unit  then
     Outstanding is equal to the sum of (1) its Unrecovered Capital plus (2) the
     Minimum Quarterly Distribution for the Quarter during which the Liquidation
     Date  occurs, reduced by any distribution  pursuant to Section 6.4(a)(i) or
     (b)(i) with  respect to  such  Common Unit  for  such Quarter  (the  amount
     determined  pursuant  to  this clause  (2)  is hereinafter  defined  as the
     'Unpaid MQD') plus (3) any then existing Cumulative Common Unit Arrearage;
 
          (C) Third, if such Net Termination Gain is recognized (or is deemed to
     be recognized) prior to the expiration of the Subordination Period, 98%  to
     all Unitholders holding Subordinated Units, in proportion to their relative
     Percentage  Interests, and 2% to the  General Partners, Pro Rata, until the
     Capital Account  in  respect of  each  Subordinated Unit  then  Outstanding
     equals  the sum of (1) its  Unrecovered Capital, determined for the taxable
     year (or portion thereof)  to which this allocation  of gain relates,  plus
     (2)  the Minimum  Quarterly Distribution for  the Quarter  during which the
     Liquidation Date occurs,  reduced by any  distribution pursuant to  Section
     6.4(a)(iii) with respect to such Subordinated Unit for such Quarter;
 
          (D)  Fourth, 98% to all Unitholders, in accordance with their relative
     Percentage Interests, and 2% to the  General Partners, Pro Rata, until  the
     Capital Account in respect of each Common Unit then Outstanding is equal to
     the  sum of (1) its Unrecovered Capital,  plus (2) the Unpaid MQD, plus (3)
     any then existing Cumulative Common Unit Arrearage, plus (4) the excess  of
     (aa)  the First Target Distribution less the Minimum Quarterly Distribution
     for each Quarter of  the Partnership's existence  over (bb) the  cumulative
     per  Unit  amount  of  any  distributions  of  Operating  Surplus  that was
     distributed pursuant to Sections 6.4(a)(iv) and 6.4(b)(ii) (the sum of  (1)
     plus (2) plus (3) plus (4) is hereinafter defined as the 'First Liquidation
     Target Amount');
 
          (E)  Fifth,  86.7526% to  all  Unitholders, in  accordance  with their
     relative Percentage Interests,  11.2268% to  the holders  of the  Incentive
     Distribution  Rights, Pro  Rata, and 2.0206%  to the  General Partners, Pro
     Rata, until  the  Capital Account  in  respect  of each  Common  Unit  then
     Outstanding is equal to the sum of (1) the First Liquidation Target Amount,
     plus  (2) the excess of (aa) the  Second Target Distribution less the First
     Target Distribution for  each Quarter of  the Partnership's existence  over
     (bb)  the  cumulative per  Unit amount  of  any distributions  of Operating
     Surplus that was distributed pursuant to Sections 6.4(a)(v) and 6.4(b)(iii)
     (the sum of (1) plus (2) is hereinafter defined as the 'Second  Liquidation
     Target Amount');
 
          (F)  Sixth,  76.5464% to  all  Unitholders, in  accordance  with their
     relative Percentage Interests,  21.4340% to  the holders  of the  Incentive
     Distribution  Rights, Pro  Rata, and 2.0206%  to the  General Partners, Pro
     Rata, until  the  Capital Account  in  respect  of each  Common  Unit  then
     Outstanding  is  equal to  the  sum of  (1)  the Second  Liquidation Target
     Amount, plus (2) the excess of (aa) the Third Target Distribution less  the
     Second  Target Distribution for each Quarter of the Partnership's existence
     over (bb) the cumulative per Unit amount of any distributions of  Operating
     Surplus   that  was   distributed  pursuant  to   Sections  6.4(a)(vi)  and
     6.4(b)(iv); and
 
          (G) Finally,  any remaining  amount 51.0309%  to all  Unitholders,  in
     accordance  with  their  relative  Percentage  Interests,  46.9485%  to the
     holders of the Incentive Distribution Rights, Pro Rata, and 2.0206% to  the
     General Partners, Pro Rata.
 
     (ii) If a Net Termination Loss is recognized (or deemed recognized pursuant
to  Section  5.5(d)), such  Net Termination  Loss shall  be allocated  among the
Partners in the following manner:
 
                                      A-34
 


<PAGE>

<PAGE>
          (A) First, if such Net Termination Loss is recognized (or is deemed to
     be recognized) prior to the conversion of the last Outstanding Subordinated
     Unit, 98% to the Unitholders  holding Subordinated Units, in proportion  to
     their  relative Percentage Interests,  and 2% to  the General Partners, Pro
     Rata, until the Capital Account in  respect of each Subordinated Unit  then
     Outstanding has been reduced to zero;
 
          (B) Second, 98% to all Unitholders holding Common Units, in proportion
     to their relative Percentage Interests, and 2% to the General Partners, Pro
     Rata,  until  the  Capital Account  in  respect  of each  Common  Unit then
     Outstanding has been reduced to zero;
 
          (C) Third, 100% to  the General Partners, Pro  Rata until the  Capital
     Account of the Special General Partner has been reduced to zero; and
 
          (D) Fourth, the balance, if any, 100% to the Managing General Partner.
 
     (d)  Special  Allocations.  Notwithstanding  any  other  provision  of this
Section 6.1, the following  special allocations shall be  made for such  taxable
period:
 
          (i)  Partnership  Minimum Gain  Chargeback. Notwithstanding  any other
     provision of this Section  6.1, if there is  a net decrease in  Partnership
     Minimum  Gain during any Partnership taxable  period, each Partner shall be
     allocated items of  Partnership income and  gain for such  period (and,  if
     necessary,  subsequent  periods)  in  the manner  and  amounts  provided in
     Treasury   Regulation    Sections    1.704-2(f)(6),    1.704-2(g)(2)    and
     1.704-2(j)(2)(i),  or any successor provision. For purposes of this Section
     6.1(d),  each  Partner's   Adjusted  Capital  Account   balance  shall   be
     determined,  and the allocation of income  or gain required hereunder shall
     be effected, prior to the application of any other allocations pursuant  to
     this  Section 6.1(d)  with respect  to such  taxable period  (other than an
     allocation pursuant to Sections  6.1(d)(vi) and 6.1(d)(vii)). This  Section
     6.1(d)(i)   is  intended  to  comply  with  the  Partnership  Minimum  Gain
     chargeback requirement in Treasury Regulation Section 1.704-2(f) and  shall
     be interpreted consistently therewith.
 
          (ii)   Chargeback   of   Partner   Nonrecourse   Debt   Minimum  Gain.
     Notwithstanding the  other  provisions  of this  Section  6.1  (other  than
     Section  6.1(d)(i)),  except  as provided  in  Treasury  Regulation Section
     1.704-2(i)(4), if  there is  a  net decrease  in Partner  Nonrecourse  Debt
     Minimum  Gain during  any Partnership  taxable period,  any Partner  with a
     share of Partner  Nonrecourse Debt Minimum  Gain at the  beginning of  such
     taxable  period shall be allocated items of Partnership income and gain for
     such period  (and, if  necessary,  subsequent periods)  in the  manner  and
     amounts   provided  in  Treasury   Regulation  Sections  1.704-2(i)(4)  and
     1.704-2(j)(2)(ii), or  any  successor  provisions.  For  purposes  of  this
     Section  6.1(d), each Partner's  Adjusted Capital Account  balance shall be
     determined, and the allocation of  income or gain required hereunder  shall
     be  effected, prior to the application of any other allocations pursuant to
     this Section  6.1(d),  other  than  Section 6.1(d)(i)  and  other  than  an
     allocation pursuant to Sections 6.1(d)(vi) and 6.1(d)(vii), with respect to
     such taxable period. This Section 6.1(d)(ii) is intended to comply with the
     chargeback  of items of income and  gain requirement in Treasury Regulation
     Section 1.704-2(i)(4) and shall be interpreted consistently therewith.
 
          (iii) Priority Allocations.
 
             (A) If the amount of cash or  the Net Agreed Value of any  property
        distributed  (except cash  or property  distributed pursuant  to Section
        12.4) to any Unitholder with respect to its Units for a taxable year  is
        greater  (on a per Unit basis) than the amount of cash or the Net Agreed
        Value of property distributed to  the other Unitholders with respect  to
        their  Units (on a  per Unit basis), then  (1) each Unitholder receiving
        such greater  cash or  property distribution  shall be  allocated  gross
        income in an amount equal to the product of (aa) the amount by which the
        distribution  (on  a  per Unit  basis)  to such  Unitholder  exceeds the
        distribution (on  a per  Unit basis)  to the  Unitholders receiving  the
        smallest  distribution  and  (bb)  the  number  of  Units  owned  by the
        Unitholder receiving  the  greater  distribution; and  (2)  the  General
        Partners  shall be  allocated, Pro  Rata, gross  income in  an aggregate
        amount equal to 2/98th of the sum of the amounts allocated in clause (1)
        above.
 
             (B) After the  application of  Section 6.1(d)(iii)(A),  all or  any
        portion  of the remaining items of  Partnership gross income or gain for
        the taxable period, if any, shall be allocated
 
                                      A-35
 


<PAGE>

<PAGE>
        100% to the holders  of Incentive Distribution  Rights, Pro Rata,  until
        the aggregate amount of such items allocated to the holders of Incentive
        Distribution  Rights pursuant  to this paragraph  6.1(d)(iii)(B) for the
        current taxable year  and all  previous taxable  years is  equal to  the
        cumulative  amount of all Incentive Distributions made to the holders of
        Incentive Distribution Rights from  the Closing Date to  a date 45  days
        after the end of the current taxable year.
 
          (iv)  Qualified Income Offset.  In the event  any Partner unexpectedly
     receives  any  adjustments,  allocations  or  distributions  described   in
     Treasury Regulation Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-
     1(b)(2)(ii)(d)(5),  or 1.704-1(b)(2)(ii)(d)(6), items of Partnership income
     and gain shall  be specially  allocated to such  Partner in  an amount  and
     manner  sufficient to  eliminate, to  the extent  required by  the Treasury
     Regulations promulgated  under  Section 704(b)  of  the Code,  the  deficit
     balance,   if  any,  in  its  Adjusted  Capital  Account  created  by  such
     adjustments, allocations  or distributions  as quickly  as possible  unless
     such  deficit balance is otherwise eliminated pursuant to Section 6.1(d)(i)
     or (ii).
 
          (v) Gross Income Allocations. In the  event any Partner has a  deficit
     balance in its Capital Account at the end of any Partnership taxable period
     in  excess of the sum of (A) the amount such Partner is required to restore
     pursuant to  the provisions  of  this Agreement  and  (B) the  amount  such
     Partner  is  deemed obligated  to restore  pursuant to  Treasury Regulation
     Sections 1.704-2(g)  and 1.704-2(i)(5),  such  Partner shall  be  specially
     allocated  items of Partnership gross income and gain in the amount of such
     excess as quickly  as possible;  provided, that an  allocation pursuant  to
     this  Section 6.1(d)(v) shall be  made only if and  to the extent that such
     Partner would have  a deficit balance  in its Capital  Account as  adjusted
     after  all other  allocations provided  for in  this Section  6.1 have been
     tentatively made as if this Section 6.1(d)(v) were not in this Agreement.
 
          (vi) Nonrecourse Deductions.  Nonrecourse Deductions  for any  taxable
     period  shall  be  allocated  to  the  Partners  in  accordance  with their
     respective Percentage Interests. If the Managing General Partner determines
     in its good faith discretion that the Partnership's Nonrecourse  Deductions
     must  be  allocated  in  a  different  ratio  to  satisfy  the  safe harbor
     requirements of the Treasury  Regulations promulgated under Section  704(b)
     of the Code, the Managing General Partner is authorized, upon notice to the
     other  Partners, to revise the prescribed  ratio to the numerically closest
     ratio that does satisfy such requirements.
 
          (vii) Partner Nonrecourse  Deductions. Partner Nonrecourse  Deductions
     for  any taxable period shall  be allocated 100% to  the Partner that bears
     the Economic Risk of Loss with  respect to the Partner Nonrecourse Debt  to
     which  such Partner  Nonrecourse Deductions are  attributable in accordance
     with Treasury Regulation Section 1.704-2(i). If more than one Partner bears
     the Economic Risk of Loss with respect to a Partner Nonrecourse Debt,  such
     Partner  Nonrecourse  Deductions  attributable thereto  shall  be allocated
     between or among such Partners in accordance with the ratios in which  they
     share such Economic Risk of Loss.
 
          (viii)  Nonrecourse Liabilities.  For purposes  of Treasury Regulation
     Section 1.752-3(a)(3), the Partners  agree that Nonrecourse Liabilities  of
     the  Partnership in  excess of  the sum  of (A)  the amount  of Partnership
     Minimum Gain and (B) the total amount of Nonrecourse Built-in Gain shall be
     allocated among the Partners in accordance with their respective Percentage
     Interests.
 
          (ix) Code Section 754 Adjustments. To the extent an adjustment to  the
     adjusted  tax basis of any Partnership  asset pursuant to Section 734(b) or
     743(c) of the  Code is  required, pursuant to  Treasury Regulation  Section
     1.704-1(b)(2)(iv)(m),  to  be  taken into  account  in  determining Capital
     Accounts, the amount of  such adjustment to the  Capital Accounts shall  be
     treated  as an item of  gain (if the adjustment  increases the basis of the
     asset) or loss (if the adjustment  decreases such basis), and such item  of
     gain  or loss  shall be  specially allocated  to the  Partners in  a manner
     consistent with the manner in which their Capital Accounts are required  to
     be adjusted pursuant to such Section of the Treasury regulations.
 
          (x)  Economic  Uniformity. At  the  election of  the  Managing General
     Partner with  respect to  any taxable  period ending  upon, or  after,  the
     termination  of the Subordination Period, all or a portion of the remaining
     items of Partnership gross  income or gain for  such taxable period,  after
     taking  into account allocations pursuant to Sections 6.1(d)(iii), shall be
     allocated 100% to each Partner holding
 
                                      A-36
 


<PAGE>

<PAGE>
     Subordinated Units  that  are Outstanding  as  of the  termination  of  the
     Subordination  Period ('Remaining Subordinated Units') in the proportion of
     the number of  Remaining Subordinated  Units held  by such  Partner to  the
     total  number of Remaining Subordinated  Units then Outstanding, until each
     such Partner has  been allocated an  amount of gross  income or gain  which
     increases  the Capital  Account maintained  with respect  to such Remaining
     Subordinated Units to an amount equal to  the product of (A) the number  of
     Remaining  Subordinated Units  held by  such Partner  and (B)  the Per Unit
     Capital Amount for  a Common  Unit. The purpose  of this  allocation is  to
     establish  uniformity  between  the Capital  Accounts  underlying Remaining
     Subordinated Units and the Capital Accounts underlying Common Units held by
     Persons  other  than  a  Managing   General  Partner  and  its   Affiliates
     immediately  prior to the  conversion of such  Remaining Subordinated Units
     into Common Units. At the election of the Special General Partner,  similar
     allocations  shall be made to it with respect to Exchange Units in order to
     produce economic uniformity with the Initial Common Units. This  allocation
     method  for establishing such economic uniformity will only be available to
     the General  Partners if  the  method for  allocating the  Capital  Account
     maintained with respect to the Subordinated Units or Exchange Units between
     the  transferred and retained Subordinated Units or Exchange Units pursuant
     to Section 5.5(c)(ii) does not  otherwise provide such economic  uniformity
     to the Subordinated Units or Exchange Units.
 
          (xi) Curative Allocation.
 
             (A)  Notwithstanding any other provision of this Section 6.1, other
        than the Required Allocations, the  Required Allocations shall be  taken
        into  account in  making the Agreed  Allocations so that,  to the extent
        possible, the net amount  of items of income,  gain, loss and  deduction
        allocated  to each Partner pursuant to  the Required Allocations and the
        Agreed Allocations, together, shall be equal  to the net amount of  such
        items  that would  have been  allocated to  each such  Partner under the
        Agreed Allocations had the Required Allocations and the related Curative
        Allocation  not   otherwise  been   provided   in  this   Section   6.1.
        Notwithstanding the preceding sentence, Required Allocations relating to
        (1) Nonrecourse Deductions shall not be taken into account except to the
        extent  that there has  been a decrease in  Partnership Minimum Gain and
        (2) Partner  Nonrecourse  Deductions shall  not  be taken  into  account
        except  to  the  extent  that  there  has  been  a  decrease  in Partner
        Nonrecourse Debt  Minimum Gain.  Allocations  pursuant to  this  Section
        6.1(d)(xi)(A) shall only be made with respect to Required Allocations to
        the  extent the Managing General Partner reasonably determines that such
        allocations will otherwise be  inconsistent with the economic  agreement
        among  the  Partners.  Further,  allocations  pursuant  to  this Section
        6.1(d)(xi)(A) shall be deferred with respect to allocations pursuant  to
        clauses  (1) and (2)  hereof to the extent  the Managing General Partner
        reasonably determines that such allocations  are likely to be offset  by
        subsequent Required Allocations.
 
             (B)  The Managing General Partner shall have reasonable discretion,
        with respect to  each taxable  period, to  (1) apply  the provisions  of
        Section  6.1(d)(xi)(A) in whatever order is  most likely to minimize the
        economic distortions  that  might  otherwise result  from  the  Required
        Allocations,   and  (2)  divide  all  allocations  pursuant  to  Section
        6.1(d)(xi)(A) among the Partners in a manner that is likely to  minimize
        such economic distortions.
 
          (xii)  Corrective  Allocations.  In  the event  of  any  allocation of
     Additional Book  Basis  Derivative Items  or  any Book-Down  Event  or  any
     recognition of a Net Termination Loss, the following rules shall apply:
 
             (A)  In  the  case  of  any  allocation  of  Additional  Book Basis
        Derivative Items  (other  than  an  allocation  of  Unrealized  Gain  or
        Unrealized  Loss  under  Section 5.5(d)  hereof),  the  Managing General
        Partner shall allocate, Pro Rata,  additional items of gross income  and
        gain  away  from the  holders of  Incentive  Distribution Rights  to the
        Unitholders and the General Partners,  or additional items of  deduction
        and  loss  away from  the Unitholders  and the  General Partners  to the
        holders of Incentive Distribution Rights,  Pro Rata, to the extent  that
        the  Additional Book Basis Derivative Items allocated to the Unitholders
        or the  General Partners  exceed their  Share of  Additional Book  Basis
        Derivative  Items.  For this  purpose, the  Unitholders and  the General
        Partners  shall   be  treated   as  being   allocated  Additional   Book
 
                                      A-37
 


<PAGE>

<PAGE>
        Basis  Derivative Items  to the extent  that such  Additional Book Basis
        Derivative Items have reduced the amount of income that would  otherwise
        have been allocated to the Unitholders or the General Partners under the
        Partnership  Agreement  (e.g.,  Additional Book  Basis  Derivative Items
        taken into account  in computing  cost of  goods sold  would reduce  the
        amount  of  book income  otherwise  available for  allocation  among the
        Partners). Any allocation made  pursuant to this Section  6.1(d)(xii)(A)
        shall  be made after all of the  other Agreed Allocations have been made
        as if this Section  6.1(d)(xii) were not in  this Agreement and, to  the
        extent necessary, shall require the reallocation of items that have been
        allocated pursuant to such other Agreed Allocations.
 
             (B) In the case of any negative adjustments to the Capital Accounts
        of the Partners resulting from a Book-Down Event or from the recognition
        of  a Net Termination Loss, such  negative adjustment (1) shall first be
        allocated, to  the  extent  of  the  Aggregate  Remaining  Net  Positive
        Adjustments,  in such a manner, as reasonably determined by the Managing
        General Partner,  that  to the  extent  possible the  aggregate  Capital
        Accounts  of the holders of Incentive Distribution Rights will equal the
        amount which  would  have been  the  holders of  Incentive  Distribution
        Rights  Capital Account balance if no prior Book-Up Events had occurred,
        and (2) any negative adjustment in excess of the Aggregate Remaining Net
        Positive Adjustments  shall  be  allocated pursuant  to  Section  6.1(c)
        hereof.
 
             (C)   In  making  the  allocations   required  under  this  Section
        6.1(d)(xii), the Managing General Partner,  in its sole discretion,  may
        apply  whatever conventions or other  methodology it deems reasonable to
        satisfy the purpose of this Section 6.1(d)(xii).
 
6.2 ALLOCATIONS FOR TAX PURPOSES
 
     (a) Except as otherwise provided  herein, for federal income tax  purposes,
each  item of  income, gain,  loss and  deduction shall  be allocated  among the
Partners in the same manner as its correlative item of 'book' income, gain, loss
or deduction is allocated pursuant to Section 6.1.
 
     (b) In  an attempt  to  eliminate Book-Tax  Disparities attributable  to  a
Contributed  Property  or  Adjusted  Property,  items  of  income,  gain,  loss,
depreciation, amortization and cost recovery  deductions shall be allocated  for
federal income tax purposes among the Partners as follows:
 
          (i) (A) In the case of a Contributed Property, such items attributable
     thereto  shall be allocated among the Partners in the manner provided under
     Section 704(c) of the  Code that takes into  account the variation  between
     the  Agreed Value of  such property and  its adjusted basis  at the time of
     contribution;  and  (B)  any  item  of  Residual  Gain  or  Residual   Loss
     attributable  to  a  Contributed  Property  shall  be  allocated  among the
     Partners in the same manner as its correlative item of 'book' gain or  loss
     is allocated pursuant to Section 6.1.
 
          (ii)  (A) In the  case of an  Adjusted Property, such  items shall (1)
     first, be allocated  among the  Partners in  a manner  consistent with  the
     principles  of  Section  704(c)  of  the  Code  to  take  into  account the
     Unrealized Gain or Unrealized  Loss attributable to  such property and  the
     allocations  thereof pursuant to Section 5.5(d)(i) or (ii), and (2) second,
     in the  event  such property  was  originally a  Contributed  Property,  be
     allocated   among  the  Partners  in   a  manner  consistent  with  Section
     6.2(b)(i)(A);  and  (B)  any  item  of  Residual  Gain  or  Residual   Loss
     attributable  to an Adjusted Property shall be allocated among the Partners
     in the  same manner  as its  correlative item  of 'book'  gain or  loss  is
     allocated pursuant to Section 6.1.
 
          (iii)  The  Managing General  Partner  shall apply  the  principles of
     Treasury Regulation Section 1.704-3(d) to eliminate Book-Tax Disparities.
 
     (c)  For  the  proper  administration  of  the  Partnership  and  for   the
preservation  of uniformity of the Units (or  any class or classes thereof), the
Managing  General  Partner  shall  have  sole  discretion  to  (i)  adopt   such
conventions  as it deems appropriate in  determining the amount of depreciation,
amortization and cost  recovery deductions;  (ii) make  special allocations  for
federal  income  tax purposes  of income  (including, without  limitation, gross
income) or  deductions; and  (iii) amend  the provisions  of this  Agreement  as
appropriate  (x) to reflect the proposal or promulgation of Treasury regulations
under Section 704(b) or Section 704(c) of the Code or (y) otherwise to  preserve
or achieve uniformity of the
 
                                      A-38
 


<PAGE>

<PAGE>
Units  (or any class or classes thereof). The Managing General Partner may adopt
such conventions,  make  such  allocations  and make  such  amendments  to  this
Agreement  as  provided  in  this  Section  6.2(c)  only  if  such  conventions,
allocations or  amendments would  not  have a  material  adverse effect  on  the
Partners, the holders of any class or classes of Units issued and Outstanding or
the  Partnership, and if such allocations  are consistent with the principles of
Section 704 of the Code.
 
     (d) The  Managing  General  Partner  in its  discretion  may  determine  to
depreciate  or amortize the portion of an adjustment under Section 743(b) of the
Code attributable to unrealized  appreciation in any  Adjusted Property (to  the
extent of the unamortized Book-Tax Disparity) using a predetermined rate derived
from  the depreciation  or amortization  method and  useful life  applied to the
Partnership's common basis of such  property, despite any inconsistency of  such
approach   with  Proposed  Treasury   Regulation  Section  1.168-2(n),  Treasury
Regulation Section 1.167(c)-l(a)(6) or the legislative history of Section 197 of
the Code.  If  the  Managing  General Partner  determines  that  such  reporting
position  cannot reasonably  be taken,  the Managing  General Partner  may adopt
depreciation and amortization conventions  under which all purchasers  acquiring
Units  in the same month would receive depreciation and amortization deductions,
based upon the same applicable rate as  if they had purchased a direct  interest
in  the Partnership's property.  If the Managing General  Partner chooses not to
utilize such aggregate method,  the Managing General Partner  may use any  other
reasonable  depreciation and amortization conventions to preserve the uniformity
of the intrinsic tax characteristics of any Units that would not have a material
adverse effect on the  Limited Partners or  the Record Holders  of any class  or
classes of Units.
 
     (e)  Any gain  allocated to  the Partners  upon the  sale or  other taxable
disposition of any Partnership asset shall, to the extent possible, after taking
into account other required allocations of gain pursuant to this Section 6.2, be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners  (or their predecessors  in interest) have  been allocated  any
deductions  directly or indirectly giving rise to the treatment of such gains as
Recapture Income.
 
     (f) All items of income, gain, loss, deduction and credit recognized by the
Partnership for federal  income tax purposes  and allocated to  the Partners  in
accordance  with the provisions hereof shall be determined without regard to any
election under Section 754  of the Code  which may be  made by the  Partnership;
provided,  however,  that  such allocations,  once  made, shall  be  adjusted as
necessary or appropriate  to take  into account those  adjustments permitted  or
required by Sections 734 and 743 of the Code.
 
     (g)  Each item of Partnership income, gain, loss and deduction attributable
to transferred Unsubordinated General Partner  Interest or to transferred  Units
or  Incentive Distribution  Rights, shall  for federal  income tax  purposes, be
determined on an  annual basis  and prorated  on a  monthly basis  and shall  be
allocated  to the Partners as  of the opening of the  New York Stock Exchange on
the first  Business  Day of  each  month; provided,  however,  that (i)  if  the
Underwriter's  Over-allotment Option is not exercised, such items for the period
beginning on the Closing Date and ending on  the last day of the month in  which
the  Closing Date occurs shall be allocated to Partners as of the opening of the
New York Stock Exchange on the first  Business Day of the next succeeding  month
or  (ii) if the Underwriters Over-allotment  Option is exercised, such items for
the period beginning on the Closing Date and ending on the last day of the month
in which the Date of  Delivery occurs shall be allocated  to the Partners as  of
the opening of the New York Stock Exchange on the first Business Day of the next
succeeding  month; and provided, further,  that gain or loss  on a sale or other
disposition of any assets of the  Partnership other than in the ordinary  course
of business shall be allocated to the Partners as of the opening of the New York
Stock Exchange on the first Business Day of the month in which such gain or loss
is  recognized for federal income tax purposes. The Managing General Partner may
revise, alter or otherwise  modify such methods of  allocation as it  determines
necessary,  to the extent permitted  or required by Section  706 of the Code and
the regulations or rulings promulgated thereunder.
 
     (h) Allocations that  would otherwise  be made  to a  Unitholder under  the
provisions  of this Article VI shall instead  be made to the beneficial owner of
Units held by  a nominee  in any  case in which  the nominee  has furnished  the
identity  of such owner to the Partnership in accordance with Section 6031(c) of
the Code or any other method acceptable  to the Managing General Partner in  its
sole discretion.
 
                                      A-39
 


<PAGE>

<PAGE>
6.3 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS; DISTRIBUTIONS TO RECORD
HOLDERS
 
     (a)  Within 45 days following  the end of each  Quarter commencing with the
Quarter ending on September 30, 1996, an amount equal to 100% of Available  Cash
with  respect to such Quarter  shall, subject to Section  17-607 of the Delaware
Act, be distributed in accordance with this Article VI by the Partnership to the
Partners as of the Record Date selected  by the Managing General Partner in  its
reasonable  discretion.  All  amounts  of  Available  Cash  distributed  by  the
Partnership on any date from any source shall be deemed to be Operating  Surplus
until  the sum of all  amounts of Available Cash  theretofore distributed by the
Partnership to the Partners pursuant to Section 6.4 equals the Operating Surplus
from the Closing Date  through the close of  the immediately preceding  Quarter.
Any  remaining amounts of Available Cash  distributed by the Partnership on such
date shall,  except  as otherwise  provided  in Section  6.5,  be deemed  to  be
'CapitalSurplus.'All  distributions  required to  be  made under  this Agreement
shall be made subject to Section 17-607 of the Delaware Act.
 
     (b) In the event of the dissolution and liquidation of the Partnership, all
receipts received during  or after  the Quarter  in which  the Liquidation  Date
occurs,  other than  from borrowings described  in (a)(ii) of  the definition of
Available Cash, shall be applied and distributed solely in accordance with,  and
subject to the terms and conditions of, Section 12.4.
 
     (c)  The Managing General Partner shall  have the discretion to treat taxes
paid by the Partnership on behalf of,  or amounts withheld with respect to,  all
or  less than all of  the Partners, as a distribution  of Available Cash to such
Partners.
 
     (d) Each distribution in respect of a Partnership Interest shall be paid by
the Partnership, directly  or through the  Transfer Agent or  through any  other
Person  or agent, only to  the Record Holder of  such Partnership Interest as of
the Record Date set  for such distribution. Such  payment shall constitute  full
payment  and  satisfaction of  the Partnership's  liability  in respect  of such
payment, regardless of any claim of any Person who may have an interest in  such
payment by reason of an assignment or otherwise.
 
6.4 DISTRIBUTIONS OF AVAILABLE CASH FROM OPERATING SURPLUS
 
     (a) During Subordination Period. Available Cash with respect to any Quarter
within  the Subordination Period that is deemed to be Operating Surplus pursuant
to the provisions of Section 6.3 or 6.5 shall, subject to Section 17-607 of  the
Delaware Act, be distributed as follows, except as otherwise required by Section
5.6(b) in respect of additional Partnership Securities issued pursuant thereto:
 
          (i)  First, 98% to the Unitholders holding Common Units, in proportion
     to their relative Percentage Interests, and 2% to the General Partners, Pro
     Rata, until there has been distributed in respect of each Common Unit  then
     Outstanding  an amount equal to the Minimum Quarterly Distribution for such
     Quarter;
 
          (ii)  Second,  98%  to  the  Unitholders  holding  Common  Units,   in
     proportion  to their relative  Percentage Interests, and  2% to the General
     Partners, Pro Rata,  until there has  been distributed in  respect of  each
     Common  Unit then Outstanding an amount equal to the Cumulative Common Unit
     Arrearage existing with respect to such Quarter;
 
          (iii) Third, 98%  to the  Unitholders holding  Subordinated Units,  in
     proportion  to their relative  Percentage Interests, and  2% to the General
     Partners, Pro Rata,  until there has  been distributed in  respect of  each
     Subordinated Unit then Outstanding an amount equal to the Minimum Quarterly
     Distribution for such Quarter;
 
          (iv) Fourth, 98% to all Unitholders, in accordance with their relative
     Percentage Interests, and 2% to the General Partners, Pro Rata, until there
     has  been distributed  in respect of  each Unit then  Outstanding an amount
     equal to  the excess  of the  First Target  Distribution over  the  Minimum
     Quarterly Distribution for such Quarter;
 
          (v)  Fifth,  86.7526% to  all  Unitholders, in  accordance  with their
     relative Percentage Interests,  11.2268% to  the holders  of the  Incentive
     Distribution  Rights, Pro  Rata, and 2.0206%  to the  General Partners, Pro
     Rata, until  there  has been  distributed  in  respect of  each  Unit  then
     Outstanding an amount equal to the excess of the Second Target Distribution
     over the First Target Distribution for such Quarter;
 
                                      A-40



<PAGE>

<PAGE>
          (vi)  Sixth,  76.5464% to  all Unitholders,  in accordance  with their
     relative Percentage Interests,  21.4330% to  the holders  of the  Incentive
     Distribution  Rights, Pro  Rata, and 2.0206%  to the  General Partners, Pro
     Rata, until  there  has been  distributed  in  respect of  each  Unit  then
     Outstanding  an amount equal to the excess of the Third Target Distribution
     over the Second Target Distribution for such Quarter; and
 
          (vii) Thereafter,  51.0309% to  all  Unitholders, in  accordance  with
     their  relative  Percentage  Interests,  46.9485%  to  the  holders  of the
     Incentive Distribution  Rights,  Pro  Rata,  and  2.0206%  to  the  General
     Partners, Pro Rata;
 
provided,  however,  if the  Minimum  Quarterly Distribution,  the  First Target
Distribution, the Second Target Distribution  and the Third Target  Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution  of  Available Cash  that is  deemed to  be Operating  Surplus with
respect  to  any  Quarter  will  be  made  solely  in  accordance  with  Section
6.4(a)(vii).
 
     (b)  After Subordination Period. Available Cash with respect to any Quarter
after the Subordination Period that is  deemed to be Operating Surplus  pursuant
to  the  provisions of  Section 6.3  or 6.5,  subject to  Section 17-607  of the
Delaware Act, shall be distributed as  follows, except as otherwise required  by
Section  5.6(b) in respect of  additional Partnership Securities issued pursuant
thereto:
 
          (i) First, 98% to all  Unitholders, in accordance with their  relative
     Percentage Interests, and 2% to the General Partners, Pro Rata, until there
     has  been distributed  in respect of  each Unit then  Outstanding an amount
     equal to the Minimum Quarterly Distribution for such Quarter;
 
          (ii) Second, 98% to all Unitholders, in accordance with their relative
     Percentage Interests, and 2% to the General Partners, Pro Rata, until there
     has been distributed  in respect of  each Unit then  Outstanding an  amount
     equal  to  the excess  of the  First Target  Distribution over  the Minimum
     Quarterly Distribution for such Quarter;
 
          (iii) Third, 86.7526%  to all  Unitholders, in  accordance with  their
     relative Percentage Interests, and 11.2268% to the holders of the Incentive
     Distribution  Rights, Pro  Rata, and 2.0206%  to the  General Partners, Pro
     Rata, until  there  has been  distributed  in  respect of  each  Unit  then
     Outstanding an amount equal to the excess of the Second Target Distribution
     over the First Target Distribution for such Quarter;
 
          (iv)  Fourth, 76.5464%  to all  Unitholders, in  accordance with their
     relative Percentage Interests, and 21.4330% to the holders of the Incentive
     Distribution Rights, Pro  Rata, and  2.0206% to the  General Partners,  Pro
     Rata,  until  there  has been  distributed  in  respect of  each  Unit then
     Outstanding an amount equal to the excess of the Third Target  Distribution
     over the Second Target Distribution for such Quarter; and
 
          (v)  Thereafter, 51.0309% to all Unitholders, in accordance with their
     relative Percentage Interests, and 46.9485% to the holders of the Incentive
     Distribution Rights, Pro  Rata, and  2.0206% to the  General Partners,  Pro
     Rata;
 
provided,  however, that if the Minimum Quarterly Distribution, the First Target
Distribution, the Second Target Distribution  and the Third Target  Distribution
have been reduced to zero pursuant to the second sentence of Section 6.6(a), the
distribution  of  Available Cash  that is  deemed to  be Operating  Surplus with
respect to any Quarter will be made solely in accordance with Section 6.4(b)(v).
 
6.5 DISTRIBUTIONS OF AVAILABLE CASH FROM CAPITAL SURPLUS
 
     Available Cash  that  is deemed  to  be  Capital Surplus  pursuant  to  the
provisions  of Section 6.3 shall, subject to Section 17-607 of the Delaware Act,
be distributed, unless the provisions of  Section 6.3 require otherwise, 98%  to
all  Unitholders, in accordance with their relative Percentage Interests, and 2%
to the General Partners, Pro Rata, until a hypothetical holder of a Common  Unit
acquired on the
 
                                      A-41



<PAGE>

<PAGE>
Closing  Date has received with  respect to such Common  Unit, during the period
since the Closing Date through such  date, distributions of Available Cash  that
are  deemed to be  Capital Surplus in  an aggregate amount  equal to the Initial
Unit Price. Available Cash that  is deemed to be  Capital Surplus shall then  be
distributed  98% to  all Unitholders  holding Common  Units, in  accordance with
their relative Percentage Interests, and 2%  to the General Partners, Pro  Rata,
until there has been distributed in respect of each Common Unit then Outstanding
an  amount  equal  to  the Cumulative  Common  Unit  Arrearage.  Thereafter, all
Available Cash shall be distributed as if it were Operating Surplus and shall be
distributed in accordance with Section 6.4.
 
6.6 ADJUSTMENT OF MINIMUM QUARTERLY DISTRIBUTION AND TARGET DISTRIBUTION LEVELS
 
     (a) The Minimum Quarterly  Distribution, First Target Distribution,  Second
Target  Distribution,  Third  Target Distribution,  Common  Unit  Arrearages and
Cumulative Common Unit Arrearages shall be proportionately adjusted in the event
of  any  distribution,  combination  or  subdivision  (whether  effected  by   a
distribution  payable  in  Units or  otherwise)  of Units  or  other Partnership
Securities in accordance with  Section 5.10. In the  event of a distribution  of
Available  Cash that is deemed  to be from Capital  Surplus, the then applicable
Minimum  Quarterly  Distribution,  First  Target  Distribution,  Second   Target
Distribution  and Third  Target Distribution  shall be  adjusted proportionately
downward to equal the product  obtained by multiplying the otherwise  applicable
Minimum   Quarterly  Distribution,  First  Target  Distribution,  Second  Target
Distribution and Third Target Distribution, as the case may be, by a fraction of
which the numerator is the Unrecovered  Capital of the Common Units  immediately
after  giving effect to  such distribution and  of which the  denominator is the
Unrecovered Capital of the  Common Units immediately prior  to giving effect  to
such distribution.
 
     (b)  The Minimum Quarterly Distribution,  First Target Distribution, Second
Target Distribution  and Third  Target  Distribution shall  also be  subject  to
adjustment pursuant to Section 6.8.
 
6.7 SPECIAL PROVISIONS RELATING TO THE HOLDERS OF SUBORDINATED UNITS
 
     (a)  Except  with  respect to  the  right  to vote  on  or  approve matters
requiring the vote  or approval of  a percentage of  the holders of  Outstanding
Common  Units and the right to participate  in allocations of income, gain, loss
and deduction and distributions made with respect to Common Units, the holder of
a Subordinated Unit shall have all of the rights and obligations of a Unitholder
holding Common Units  hereunder; provided,  however, that  immediately upon  the
conversion  of Subordinated Units into Common Units pursuant to Section 5.8, the
Unitholder holding  a Subordinated  Unit shall  possess all  of the  rights  and
obligations of a Unitholder holding Common Units hereunder, including, the right
to  vote as a Common  Unitholder and the right  to participate in allocations of
income, gain, loss and deduction and  distributions made with respect to  Common
Units;  provided, however, that  such converted Subordinated  Units shall remain
subject to the provisions of Sections 5.5(c)(ii), 6.1(d)(x) and 6.7(b).
 
     (b) The Unitholder holding (i) a Subordinated Unit which has converted into
a Common Unit pursuant to Section 5.8  or (ii) a Common Unit issued pursuant  to
Section  4.12 (such  Units described  in (i)  and (ii)  are referred  to in this
Section 6.7(b)  as  'Converted  Units')  shall  not  be  issued  a  Common  Unit
Certificate,  and shall  not be  permitted to transfer  its Converted  Unit to a
Person which is not an Affiliate of  the holder until such time as the  Managing
General  Partner determines, based  on advice of counsel,  that a Converted Unit
should have, as a substantive matter, like intrinsic economic and federal income
tax characteristics, in  all material  respects, to the  intrinsic economic  and
federal income tax characteristics of an Initial Common Unit. In connection with
the  condition imposed by this Section  6.7(b), the Managing General Partner may
take whatever reasonable steps  are required to  provide economic uniformity  to
the  Converted  Units in  preparation for  a transfer  of such  Converted Units,
including the  application  of  Sections  5.5(c)(ii)  and  6.1(d)(x);  provided,
however,  that no  such steps may  be taken  that would have  a material adverse
effect on  the  Unitholders holding  Common  Units represented  by  Common  Unit
Certificates.
 
                                      A-42
 


<PAGE>

<PAGE>
6.8 ENTITY-LEVEL TAXATION
 
     If  legislation is  enacted or the  interpretation of  existing language is
modified by the relevant governmental authority which causes the Partnership  or
the  Operating  Partnership  to  be  treated  as  an  association  taxable  as a
corporation or otherwise subjects the  Partnership or the Operating  Partnership
to  entity-level taxation for  federal income tax  purposes, the then applicable
Minimum  Quarterly  Distribution,  First  Target  Distribution,  Second   Target
Distribution  and Third  Target Distribution shall  be adjusted to  equal to the
product obtained by multiplying (a) the amount thereof by (b) one minus the  sum
of  (i) the highest marginal federal  corporate (or other entity, as applicable)
income tax rate of the  Partnership for the taxable  year of the Partnership  in
which  such Quarter occurs  (expressed as a percentage)  plus (ii) the effective
overall state and local income tax  rate (expressed as a percentage)  applicable
to  the Partnership for  the calendar year  next preceding the  calendar year in
which such  Quarter  occurs  (after  taking into  account  the  benefit  of  any
deduction  allowable for federal income tax purposes with respect to the payment
of state and local income taxes), but only to the extent of the increase in such
rates resulting from such legislation or interpretation. Such effective  overall
state  and local income tax  rate shall be determined  for the taxable year next
preceding the first taxable year during  which the Partnership or the  Operating
Partnership is taxable for federal income tax purposes as an association taxable
as a corporation or is otherwise subject to entity-level taxation by determining
such rate as if the Partnership or the Operating Partnership had been subject to
such state and local taxes during such preceding taxable year.
 
                                  ARTICLE VII
                      MANAGEMENT AND OPERATION OF BUSINESS
 
7.1 MANAGEMENT
 
     (a)  The  Managing General  Partner shall  conduct,  direct and  manage all
activities of the Partnership.  Except as otherwise  expressly provided in  this
Agreement,   all  management  powers  over  the  business  and  affairs  of  the
Partnership shall be exclusively vested in the Managing General Partner, and  no
Special  General Partner (unless it becomes Managing General Partner pursuant to
Section 11.1(d) hereof), Unitholder, Limited Partner or Assignee shall have  any
management  power over the business and  affairs of the Partnership. In addition
to the  powers  now  or  hereafter  granted  a  general  partner  of  a  limited
partnership  under applicable law  or which are granted  to the Managing General
Partner under  any  other provision  of  this Agreement,  the  Managing  General
Partner,  subject to Section 7.3, shall have  full power and authority to do all
things and on such terms  as it, in its sole  discretion, may deem necessary  or
appropriate  to conduct the business of  the Partnership, to exercise all powers
set forth in Section  2.5 and to  effectuate the purposes  set forth in  Section
2.4, including the following:
 
          (i) the making of any expenditures, the lending or borrowing of money,
     the  assumption or guarantee of, or other contracting for, indebtedness and
     other liabilities,  the  issuance  of evidences  of  indebtedness  and  the
     incurring of any other obligations;
 
          (ii)  the making of tax, regulatory and other filings, or rendering of
     periodic  or  other  reports  to  governmental  or  other  agencies  having
     jurisdiction over the business or assets of the Partnership;
 
          (iii)  the  acquisition, disposition,  mortgage,  pledge, encumbrance,
     hypothecation or exchange of any or all of the assets of the Partnership or
     the merger or  other combination of  the Partnership with  or into  another
     Person  subject,  however,  to  any prior  approval  that  may  be required
     pursuant to Section 7.3;
 
          (iv) the use of the assets of the Partnership (including cash on hand)
     for any purpose consistent with the terms of this Agreement, including  the
     financing  of the conduct  of the operations of  the Partnership Group, the
     lending of funds to other Persons (including the Operating Partnership, the
     General Partners and their Affiliates), the repayment of obligations of any
     member of the Partnership Group and the making of capital contributions  to
     the any member of the Partnership Group;
 
          (v)  the  negotiation,  execution and  performance  of  any contracts,
     conveyances or  other instruments  (including  instruments that  limit  the
     liability of the Partnership under contractual
 
                                      A-43
 


<PAGE>

<PAGE>
     arrangements to all or particular assets of the Partnership, with the other
     party  to the contract to have no  recourse against the General Partners or
     their assets  other than  its interest  in the  Partnership, even  if  same
     results  in  the  terms of  the  transaction  being less  favorable  to the
     Partnership than would otherwise be the case);
 
          (vi) the distribution of Partnership cash;
 
          (vii) the selection  and dismissal of  employees (including  employees
     having  titles  such  as  'president,'  'vice  president,'  'secretary' and
     'treasurer') and agents,  outside attorneys,  accountants, consultants  and
     contractors  and the determination of their compensation and other terms of
     employment or hiring;
 
          (viii) the  maintenance  of such  insurance  for the  benefit  of  the
     Partnership Group and the Partners as it deems necessary or appropriate;
 
          (ix)  the  formation of,  or acquisition  of an  interest in,  and the
     contribution of property and the making of loans to, any further limited or
     general partnerships, joint ventures,  corporations or other  relationships
     (including  the  acquisition  of  interests in,  and  the  contributions of
     property to, the Operating Partnership from time to time);
 
          (x) the control of any matters affecting the rights and obligations of
     the Partnership, including the bringing and defending of actions at law  or
     in  equity  and otherwise  engaging in  the conduct  of litigation  and the
     incurring of legal expense and the settlement of claims and litigation;
 
          (xi)  the  indemnification  of  any  Person  against  liabilities  and
     contingencies to the extent permitted by law;
 
          (xii)  the  entering  into  of listing  agreements  with  any National
     Securities Exchange and the delisting of some or all of the Units from,  or
     requesting  that trading be suspended on, any such exchange (subject to any
     prior approval that may be required under Section 4.9);
 
          (xiii) the purchase, sale or other acquisition or disposition of Units
     or, unless  restricted  or  prohibited  by Section  5.7,  the  issuance  of
     additional Units or other Partnership Securities; and
 
          (xiv)   the  undertaking  of   any  action  in   connection  with  the
     Partnership's participation  in the  Operating Partnership  as the  limited
     partner.
 
     (b)  Notwithstanding any other  provision of this  Agreement, the Operating
Partnership  Agreement,  the  Delaware  Act  or  any  applicable  law,  rule  or
regulation,  each of the  Partners and Assignees  and each other  Person who may
acquire an interest  in Units  hereby (i)  approves, ratifies  and confirms  the
execution,  delivery and  performance by  the parties  thereto of  the Operating
Partnership  Agreement,   the  Underwriting   Agreement,  the   Conveyance   and
Contribution  Agreement,  the Triarc  Loan documents,  the agreements  and other
documents filed  as  exhibits  to  the Registration  Statement,  and  the  other
agreements  described in or filed as a  part of the Registration Statement; (ii)
agrees that the Managing General Partner (on  its own or through any officer  of
the  Partnership) is authorized  to execute, deliver  and perform the agreements
referred to  in clause  (i) of  this sentence  and the  other agreements,  acts,
transactions  and  matters  described  in or  contemplated  by  the Registration
Statement on behalf of the Partnership without any further act, approval or vote
of the  Partners or  the  Assignees or  the other  Persons  who may  acquire  an
interest  in Units; and (iii) agrees that the execution, delivery or performance
by the Managing General  Partner, any Group  Member or any  Affiliate of any  of
them,  of this  Agreement or  any agreement  authorized or  permitted under this
Agreement (including  the  exercise  by  the Managing  General  Partner  or  any
Affiliate  of the  Managing General Partner  of the rights  accorded pursuant to
Article XV), shall not  constitute a breach by  the Managing General Partner  of
any  duty  that  the  Managing  General Partner  may  owe  the  Partnership, the
Unitholders, the Limited Partners, the Assignees or any other Persons under this
Agreement (or any other agreements) or of  any duty stated or implied by law  or
equity.
 
7.2 CERTIFICATE OF LIMITED PARTNERSHIP
 
     The  Managing  General  Partner  has  caused  the  Certificate  of  Limited
Partnership to be filed with the Secretary of State of the State of Delaware  as
required by the Delaware Act and shall use all reasonable efforts to cause to be
filed  such  other  certificates  or  documents  as  may  be  determined  by the
 
                                      A-44



<PAGE>

<PAGE>
Managing  General Partner in its sole  discretion to be reasonable and necessary
or appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware or any other state in which the  Partnership
may elect to conduct business or own property. To the extent that such action is
determined  by  the  Managing  General  Partner in  its  sole  discretion  to be
reasonable and necessary or appropriate, the Managing General Partner shall file
amendments to and restatements of the Certificate of Limited Partnership and  do
all  things necessary  or appropriate to  maintain the Partnership  as a limited
partnership (or  a  partnership  in  which the  limited  partners  have  limited
liability)  under the  laws of the  State of Delaware  or of any  other state in
which the Partnership may elect to conduct business or own property. Subject  to
the  terms of Section 3.3(a) the Managing General Partner shall not be required,
before or after filing, to deliver or mail a copy of the Certificate of  Limited
Partnership,  any  qualification  document  or  any  amendment  thereto  to  any
Unitholder, Limited Partner or Assignee.
 
7.3 RESTRICTIONS ON MANAGING GENERAL PARTNER'S AUTHORITY
 
     (a) The Managing General Partner may  not, without written approval of  the
specific  act by  holders of all  of the  Outstanding Units or  by other written
instrument executed and delivered by all of the Outstanding Units subsequent  to
the  date of this Agreement, take any action in contravention of this Agreement,
including, except as otherwise  provided in this  Agreement, (i) committing  any
act  that would  make it  impossible to  carry on  the ordinary  business of the
Partnership; (ii) possessing  Partnership property, or  assigning any rights  in
specific  Partnership  property, for  other  than a  Partnership  purpose; (iii)
admitting a Person as a Partner; (iv) amending this Agreement in any manner;  or
(v)  transferring  all  or  any  part  of  its  Unsubordinated  General  Partner
Interests.
 
     (b) Except  as provided  in  Articles XII  and  XIV, the  Managing  General
Partner  may not sell, exchange or otherwise dispose of all or substantially all
of the  Partnership's assets  in a  single transaction  or a  series of  related
transactions or approve on behalf of the Partnership the sale, exchange or other
disposition  of  all  or  substantially  all  of  the  assets  of  the Operating
Partnership, without  the approval  of  holders of  at  least a  Unit  Majority;
provided,  however, that this provision shall not preclude or limit the Managing
General Partner's ability to mortgage,  pledge, hypothecate or grant a  security
interest  in  all or  substantially  all of  the  assets of  the  Partnership or
Operating Partnership and shall not  apply to any forced sale  of any or all  of
the  assets  of  the  Partnership  or  Operating  Partnership  pursuant  to  the
foreclosure of, or  other realization  upon, any such  encumbrance. Without  the
approval  of holders of at  least a Unit Majority,  the Managing General Partner
shall not, on behalf  of the Partnership,  (i) consent to  any amendment to  the
Operating  Partnership Agreement  or, except  as expressly  permitted by Section
7.9(d), take any  action permitted to  be taken  by a partner  of the  Operating
Partnership,  in either case, that  would have a material  adverse effect on the
Partnership as  a  partner  of  the Operating  Partnership  or  (ii)  except  as
permitted  under Sections 4.6, 11.1 and 11.2,  elect or cause the Partnership to
elect a successor general partner of the Operating Partnership.
 
     (c) At all times while serving  as the general partner of the  Partnership,
the  Managing General Partner shall not make any dividend or distribution on, or
repurchase any shares of, its stock or take any other action within its  control
if  the effect  of such  action would  cause its  net worth,  independent of its
interest in the Partnership Group, to be less than $15.0 million.
 
7.4 REIMBURSEMENT OF THE GENERAL PARTNERS
 
     (a) Except as provided in this Section 7.4 and elsewhere in this  Agreement
or  in the  Operating Partnership Agreement,  the General Partners  shall not be
compensated for their services as general partners of any Group Member.
 
     (b) The General Partners  shall be reimbursed on  a monthly basis, or  such
other  basis  as  the  Managing  General  Partner  may  determine  in  its  sole
discretion, for (i) all direct and indirect expenses that they incur or payments
they make  on behalf  of  the Partnership  (including salary,  bonus,  incentive
compensation  and other  amounts paid  to any  Person, including  Affiliates, to
perform services  for  the  Partnership  or for  the  General  Partners  in  the
discharge  of their duties to the Partnership),  and (ii) all other necessary or
appropriate expenses  allocable  to  the  Partnership  or  otherwise  reasonably
incurred
 
                                      A-45
 


<PAGE>

<PAGE>
by  the Managing General Partner in  connection with operating the Partnership's
business  (including  expenses  allocated  to  the  General  Partners  by  their
Affiliates).  The Managing General Partner shall determine the expenses that are
allocable to the Partnership in any reasonable manner determined by the Managing
General Partner in its sole discretion. Reimbursements pursuant to this  Section
7.4  shall be  in addition  to any  reimbursement to  the General  Partners as a
result of indemnification pursuant to Section 7.7.
 
     (c) Subject  to Section  5.7, the  Managing General  Partner, in  its  sole
discretion  and without the approval of the  Limited Partners (who shall have no
right to  vote in  respect thereof),  may propose  and adopt  on behalf  of  the
Partnership  employee benefit  plans, employee  programs and  employee practices
(including plans,  programs and  practices involving  the issuance  of Units  or
options  to  purchase  Units), or  cause  the Partnership  to  issue Partnership
Securities in connection with or pursuant to any employee benefit plan, employee
program or employee  practice maintained  or sponsored by  the Managing  General
Partner  or any of its Affiliates, in each  case for the benefit of employees of
the Managing General Partner, any Group Member or any Affiliate, or any of them,
in respect of services performed, directly or indirectly, for the benefit of the
Partnership Group. The  Partnership agrees  to issue  and sell  to the  Managing
General  Partner  or  any  of  its Affiliates  any  Units  or  other Partnership
Securities that the Managing General Partner  or such Affiliate is obligated  to
provide  to any employees pursuant to  any such employee benefit plans, employee
programs or  employee  practices.  Expenses incurred  by  the  Managing  General
Partner in connection with any such plans, programs and practices (including the
net  cost to the  Managing General Partner  or such Affiliate  of Units or other
Partnership Securities  purchased  by  the  Managing  General  Partner  or  such
Affiliate  from the Partnership  to fulfill options or  awards under such plans,
programs and practices) shall be  reimbursed in accordance with Section  7.4(b).
Any  and  all obligations  of the  Managing General  Partner under  any employee
benefit plans, employee programs or  employee practices adopted by the  Managing
General Partner as permitted by this Section 7.4(c) shall constitute obligations
of  the Managing General Partner hereunder and shall be assumed by any successor
Managing General  Partner approved  pursuant  to Section  11.1  or 11.2  or  the
transferee   of  or  successor   to  all  of   the  Managing  General  Partner's
Unsubordinated General  Partnership  Interests  as  a  general  partner  in  the
Partnership pursuant to Section 4.6 or 4.7.
 
7.5 OUTSIDE ACTIVITIES
 
     (a)  Subject to Section 7.5(g), after the Closing Date, each of the General
Partners, for so long as it is  a general partner of the Partnership, shall  not
engage in any business or activity or incur any debts or liabilities (other than
tax  liabilities) except in connection with or incidental to (i) its performance
as general  partner  of  one  or  more Group  Members  or  as  described  in  or
contemplated  by  the  Registration  Statement, (ii)  the  acquiring,  owning or
disposing of debt or  equity securities in any  Group Member, (iii) holding  and
making   investments  in  Subsidiaries   and  pledging  its   interest  in  such
Subsidiaries to secure indebtedness of  such Subsidiaries, (iv) the  acquisition
of  businesses or  assets to be  used by a  Group Member and  (v) permitting its
employees to perform services for its Affiliates, including Affiliates  engaging
in an activity permitted by Section 7.5(b).
 
     (b) The Affiliates of the General Partners may engage in any activity other
than a Restricted Activity.
 
     (c)  Except as restricted  by Sections 7.5(a)  or (b), each  of the General
Partners and their Affiliates  shall have the right  to engage in businesses  of
every  type and description and other activities for profit and to engage in and
possess an  interest  in  other business  ventures  of  any and  every  type  or
description, whether in businesses engaged in or anticipated to be engaged in by
any Group Member, independently or with others, including business interests and
activities  in direct competition with the  business and activities of any Group
Member, and none of the same shall constitute a breach of this Agreement or  any
duty  express or implied by law to any  Group Member or any Partner or Assignee.
Neither any Group Member,  any Limited Partner nor  any other Person shall  have
any  rights by virtue of this  Agreement, the Operating Partnership Agreement or
the partnership  relationship  established hereby  or  thereby in  any  business
ventures of any Indemnitee.
 
     (d)  Notwithstanding anything  to the contrary  in this  Agreement, (i) the
engaging in  competitive activities  by  any Indemnitees  other than  a  General
Partner in accordance with the provisions of this
 
                                      A-46
 


<PAGE>

<PAGE>
Section  7.5 is hereby approved by the  Partnership and all Partners and (ii) it
shall be deemed not to  be a breach of the  General Partners' fiduciary duty  or
any  other obligation  of any  type whatsoever of  the General  Partners for any
Affiliate of  a  General  Partner  to engage  in  such  business  interests  and
activities  in preference to or to  the exclusion of the Partnership (including,
without limitation,  the General  Partners and  their Affiliates  shall have  no
obligation to present business opportunities to the Partnership).
 
     (e)  The General Partners and any of  their Affiliates may acquire Units or
other Partnership Securities in addition to  those acquired on the Closing  Date
and,  except  as otherwise  provided  in this  Agreement,  shall be  entitled to
exercise all rights of an Assignee  or Limited Partner, as applicable,  relating
to such Units or Partnership Securities.
 
     (f)  The term 'Affiliates' when used in Section 7.5(b) and (c) with respect
to the General Partners shall not include any Group Member or any Subsidiary  of
the any Group Member.
 
     (g)  To the  extent the Managing  General Partner is  merged or liquidated,
pursuant to  Section 4.7,  into Triarc,  the restrictions  contained in  Section
7.5(a)  shall no longer apply  to the Managing General  Partner and the Managing
General Partner may engage in any activity other than a Restricted Activity. The
restrictions contained in Section 7.5(a), even after a merger or liquidation  of
the  Managing General  Partner, shall continue  to apply to  the Special General
Partner.
 
7.6 LOANS FROM THE GENERAL PARTNERS; LOANS OR CONTRIBUTIONS FROM THE
PARTNERSHIP; CONTRACTS WITH AFFILIATES; CERTAIN RESTRICTIONS ON THE GENERAL
PARTNERS
 
     (a) The General Partners or any of their Affiliates thereof may lend to any
Group Member, and any Group Member may  borrow from the General Partners or  any
of  their  Affiliates, funds  needed or  desired  by the  Group Member  for such
periods of  time  and  in such  amounts  as  the Managing  General  Partner  may
determine;  provided, however, that in  any such case the  lending party may not
charge the borrowing party interest at a  rate greater than the rate that  would
be  charged the borrowing party or impose  terms less favorable to the borrowing
party than  would be  charged or  imposed on  the borrowing  party by  unrelated
lenders  on comparable loans made on an arms'-length basis (without reference to
the lending  party's financial  abilities or  guarantees). The  borrowing  party
shall  reimburse  the lending  party for  any costs  (other than  any additional
interest costs) incurred by the lending  party in connection with the  borrowing
of  such funds. For purposes of this Section 7.6(a) and Section 7.6(b), the term
'Group Member' shall include any Affiliate of a Group Member that is  controlled
by the Group Member.
 
     (b) The Partnership may lend or contribute to any Group Member, the General
Partners  or any of their Affiliates, and any Group Member, the General Partners
or their  Affiliates  may  borrow  from the  Partnership,  funds  on  terms  and
conditions  established in the sole discretion  of the Managing General Partner;
provided, however, that  the Partnership may  not charge the  Group Member,  the
Managing General Partner or its Affiliates interest at a rate less than the rate
that  would  be charged  to  the Group  Member,  the General  Partners  or their
Affiliates, by unrelated  lenders on comparable  loans, provided, however,  that
notwithstanding  anything else  herein contained,  the Operating  Partnership is
permitted to make the  Triarc Loan substantially on  the terms described in  the
Registration  Statement.  The  foregoing  authority shall  be  exercised  by the
Managing General Partner in its sole  discretion and shall not create any  right
or benefit in favor of any Group Member or any other Person.
 
     (c) The Managing General Partner may itself, or may enter into an agreement
with  any of  its Affiliates  to, render services  to a  Group Member  or to the
Managing General Partner in the discharge of its duties as a general partner  of
the Partnership. Any services rendered to a Group Member by the Managing General
Partner  (other than  services it  renders in  its capacity  as Managing General
Partner) or any of its Affiliates shall be on terms that are fair and reasonable
to the Partnership;  provided, however,  that the requirements  of this  Section
7.6(c)  shall be deemed satisfied as to  (i) any transaction approved by Special
Approval, (ii) any transaction, the terms of which are no less favorable to  the
Partnership  than those generally being provided  to or available from unrelated
third parties, or (iii) any transaction  that, taking into account the  totality
of  the relationships between the parties involved (including other transactions
that  may  be  particularly  favorable   or  advantageous  to  the   Partnership
 
                                      A-47
 


<PAGE>

<PAGE>
Group),  is equitable  to the Partnership  Group. The provisions  of Section 7.4
shall apply to the rendering of services described in this Section 7.6(c).
 
     (d) The  Partnership Group  may transfer  assets to  joint ventures,  other
partnerships,  corporations,  limited  liability  companies  or  other  business
entities in which it  is or thereby  becomes a participant  upon such terms  and
subject  to such conditions as are consistent with this Agreement and applicable
law.
 
     (e) Neither the General  Partners nor any of  their Affiliates shall  sell,
transfer  or convey any property to, or  purchase any property from, or pursuant
to Section  7.6(a)  or 7.6(b)  make  any loans  to  or borrow  funds,  from  the
Partnership,  directly or indirectly,  except pursuant to  transactions that are
fair and reasonable to the Partnership; provided, however, that the requirements
of this  Section  7.6(e)  shall  be  deemed  to  be  satisfied  as  to  (i)  the
transactions  effected pursuant to the Conveyance and Contribution Agreement and
any other transactions (including the Triarc Loan) described in or  contemplated
by  the  Registration  Statement,  (ii)  any  transaction  approved  by  Special
Approval, (iii) any transaction, the terms of which are no less favorable to the
Partnership than those generally being  provided to or available from  unrelated
third parties, or (iv) any transaction that, taking into account the totality of
the  relationships between  the parties  involved (including  other transactions
that may  be particularly  favorable  or advantageous  to the  Partnership),  is
equitable  to the Partnership. With respect to any contribution of assets to the
Partnership in exchange for Units,  the Audit Committee, in determining  whether
the  appropriate number of Units are being  issued, may take into account, among
other things, the fair market value of the assets, the liquidated and contingent
liabilities assumed, the tax basis in  the assets, the extent to which  tax-only
allocations  to  the  transferor  will  protect  the  existing  partners  of the
Partnership against  a  low tax  basis,  and such  other  factors as  the  Audit
Committee deems relevant under the circumstances.
 
     (f)  The General Partners  and their Affiliates will  have no obligation to
permit any Group Member to use any facilities or assets of the General  Partners
and  their Affiliates, except as may be  provided in contracts entered into from
time to  time  specifically  dealing with  such  use,  nor shall  there  be  any
obligation on the part of the General Partners or their Affiliates to enter into
such contracts.
 
     (g)   Without   limitation   of  Sections   7.6(a)   through   7.6(f),  and
notwithstanding anything to the contrary in this Agreement, the existence of the
conflicts of  interest  described  in  the  Registration  Statement  are  hereby
approved by all Partners.
 
7.7 INDEMNIFICATION
 
     (a)  To the fullest extent permitted by  law but subject to the limitations
expressly provided in this Agreement,  all Indemnitees shall be indemnified  and
held  harmless by the Partnership  from and against any  and all losses, claims,
damages, liabilities,  joint  or several,  expenses  (including legal  fees  and
expenses),  judgments, fines, penalties, interest,  settlements or other amounts
arising from any and all claims, demands, actions, suits or proceedings, whether
civil, criminal, administrative or investigative, in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, by reason of
its status as an Indemnitee, provided, that in each case the Indemnitee acted in
good faith and in a manner that such Indemnitee reasonably believed to be in, or
not opposed to, the best interests of  the Partnership and, with respect to  any
criminal  proceeding,  had  no  reasonable  cause  to  believe  its  conduct was
unlawful; provided, further,  no indemnification  pursuant to  this Section  7.7
shall  be available  to the General  Partners with respect  to their obligations
incurred  pursuant  to  the  Underwriting   Agreement  or  the  Conveyance   and
Contribution  Agreement (other than obligations incurred by the Managing General
Partner on  behalf  of  the  Partnership  or  the  Operating  Partnership).  The
termination  of any action,  suit or proceeding  by judgment, order, settlement,
conviction or  upon a  plea of  nolo contendere,  or its  equivalent, shall  not
create  a presumption  that the  Indemnitee acted in  a manner  contrary to that
specified above. Any indemnification pursuant to this Section 7.7 shall be  made
only  out of  the assets of  the Partnership,  it being agreed  that the General
Partners shall not be personally liable for such indemnification and shall  have
no obligation to contribute or loan any monies or property to the Partnership to
enable it to effectuate such indemnification.
 
                                      A-48
 


<PAGE>

<PAGE>
     (b)  To the fullest extent permitted by law, expenses (including legal fees
and expenses) incurred by an Indemnitee  who is indemnified pursuant to  Section
7.7(a)  in defending any  claim, demand, action, suit  or proceeding shall, from
time to time, be advanced by the  Partnership prior to the final disposition  of
such  claim, demand, action, suit or  proceeding upon receipt by the Partnership
of any undertaking by or on behalf of the Indemnitee to repay such amount if  it
shall  be determined that  the Indemnitee is  not entitled to  be indemnified as
authorized in this Section 7.7.
 
     (c) The indemnification provided by this  Section 7.7 shall be in  addition
to  any other rights to which an Indemnitee may be entitled under any agreement,
pursuant to any vote of the holders of Outstanding Units, as a matter of law  or
otherwise,  both as to actions in the Indemnitee's capacity as an Indemnitee and
as  to  actions  in  any  other  capacity  (including  any  capacity  under  the
Underwriting  Agreement), and shall continue as  to an Indemnitee who has ceased
to serve  in  such  capacity and  shall  inure  to the  benefit  of  the  heirs,
successors, assigns and administrators of the Indemnitee.
 
     (d)  The Partnership may  purchase and maintain  (or reimburse the Managing
General Partner or its Affiliates for the  cost of) insurance, on behalf of  the
General  Partners,  their  Affiliates and  such  other Persons  as  the Managing
General Partner  shall determine,  against any  liability that  may be  asserted
against  or expense that may  be incurred by such  Person in connection with the
Partnership's  activities  or  such  Person's   activities  on  behalf  of   the
Partnership,  regardless  of whether  the Partnership  would  have the  power to
indemnify such  Person  against such  liability  under the  provisions  of  this
Agreement.
 
     (e)  For purposes of this  Section 7.7, the Partnership  shall be deemed to
have requested an Indemnitee to serve  as fiduciary of an employee benefit  plan
whenever  the performance by  it of its  duties to the  Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants  or
beneficiaries  of the plan; excise taxes  assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute  'fines'
within  the meaning of  Section 7.7(a); and  action taken or  omitted by it with
respect to any  employee benefit plan  in the  performance of its  duties for  a
purpose  reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall  be deemed to be for  a purpose which is in,  or
not opposed to, the best interests of the Partnership.
 
     (f)  In no event may an Indemnitee subject the Limited Partners to personal
liability by  reason  of  the  indemnification  provisions  set  forth  in  this
Agreement.
 
     (g)  An Indemnitee shall not be denied  indemnification in whole or in part
under this Section 7.7 because the Indemnitee had an interest in the transaction
with respect  to  which  the  indemnification applies  if  the  transaction  was
otherwise permitted by the terms of this Agreement.
 
     (h)  The  provisions  of  this  Section 7.7  are  for  the  benefit  of the
Indemnitees, their heirs, successors, assigns  and administrators and shall  not
be deemed to create any rights for the benefit of any other Persons.
 
     (i)  No  amendment,  modification or  repeal  of  this Section  7.7  or any
provision hereof shall in  any manner terminate, reduce  or impair the right  of
any past, present or future Indemnitee to be indemnified by the Partnership, nor
the obligations of the Partnership to indemnify any such Indemnitee under and in
accordance  with the  provisions of  this Section  7.7 as  in effect immediately
prior to such amendment, modification or  repeal with respect to claims  arising
from  or  relating to  matters occurring,  in whole  or in  part, prior  to such
amendment, modification or repeal, regardless of  when such claims may arise  or
be asserted.
 
7.8 LIABILITY OF INDEMNITEES
 
     (a)  Notwithstanding anything to the contrary  set forth in this Agreement,
no Indemnitee  shall be  liable for  monetary damages  to the  Partnership,  the
Limited Partners, the Assignees or any other Persons who have acquired interests
in  the Units, for losses  sustained or liabilities incurred  as a result of any
act or omission if such Indemnitee acted in good faith.
 
     (b) Subject to its obligations and  duties as Managing General Partner  set
forth  in Section 7.1(a), the  Managing General Partner may  exercise any of the
powers granted to it  by this Agreement  and perform any  of the duties  imposed
upon  it hereunder either directly or by  or through its agents, and the General
 
                                      A-49
 


<PAGE>

<PAGE>
Partners shall not be responsible for  any misconduct or negligence on the  part
of any such agent appointed by the Managing General Partner in good faith.
 
     (c)  Any  amendment, modification  or  repeal of  this  Section 7.8  or any
provision hereof shall be prospective only and  shall not in any way affect  the
limitations  on  the liability  to the  Partnership,  the Limited  Partners, the
General Partners,  and  the Partnership's  and  each of  the  General  Partners'
directors,   officers  and  employees  under  this  Section  7.8  as  in  effect
immediately prior  to such  amendment, modification  or repeal  with respect  to
claims arising from or relating to matters occurring, in whole or in part, prior
to  such amendment, modification  or repeal, regardless of  when such claims may
arise or be asserted.
 
7.9 RESOLUTION OF CONFLICTS OF INTEREST
 
     (a) Unless otherwise expressly provided in this Agreement or the  Operating
Partnership  Agreement,  whenever a  potential  conflict of  interest  exists or
arises between one of the General Partner or any of their Affiliates, on the one
hand, and  the  Partnership,  the  Operating Partnership,  any  Partner  or  any
Assignee,  on  the other,  any resolution  or  course of  action by  the General
Partners or their Affiliates  in respect of such  conflict of interest shall  be
permitted and deemed approved by all Partners, and shall not constitute a breach
of  this Agreement,  of the  Operating Partnership  Agreement, of  any agreement
contemplated herein or  therein, or  of any  duty stated  or implied  by law  or
equity,  if  the resolution  or course  of action  is, or  by operation  of this
Agreement is deemed to be, fair and reasonable to the Partnership. The  Managing
General  Partner shall  be authorized  but not  required in  connection with the
resolution of such conflict of interest to seek Special Approval of a resolution
of such  conflict  or  course  of  action. Any  conflict  of  interest  and  any
resolution  of such conflict  of interest shall be  conclusively deemed fair and
reasonable to the Partnership if such conflict of interest or resolution is  (i)
approved by Special Approval, (ii) on terms no less favorable to the Partnership
than those generally being provided to or available from unrelated third parties
or  (iii)  fair to  the Partnership,  taking  into account  the totality  of the
relationships between the  parties involved (including  other transactions  that
may  be particularly favorable or advantageous to the Partnership). The Managing
General Partner may also  adopt a resolution  or course of  action that has  not
received  Special Approval.  The Managing  General Partner  (including the Audit
Committee in connection with Special Approval) shall be authorized in connection
with its determination of what is  'fair and reasonable' to the Partnership  and
in  connection with its resolution  of any conflict of  interest to consider (A)
the relative interests of any party to such conflict, agreement, transaction  or
situation  and  the benefits  and  burdens relating  to  such interest;  (B) any
customary or  accepted  industry  practices  and  any  customary  or  historical
dealings  with  a  particular  Person;  (C)  any  applicable  generally accepted
accounting practices  or principles;  and  (D) such  additional factors  as  the
Managing  General Partner (including the Audit Committee) determines in its sole
discretion to be  relevant, reasonable or  appropriate under the  circumstances.
Nothing  contained in this Agreement,  however, is intended to,  nor shall it be
construed  to,  require  the  Managing  General  Partner  (including  the  Audit
Committee)  to consider the interests of  any Person other than the Partnership.
In the absence  of bad faith  by the Managing  General Partner, the  resolution,
action  or terms so made, taken or provided by the Managing General Partner with
respect to such matter shall  not constitute a breach  of this Agreement or  any
other  agreement contemplated herein or a breach of any standard of care or duty
imposed herein or therein or, to the extent permitted by law, under the Delaware
Act or any other law, rule or regulation.
 
     (b) Whenever  this Agreement  or any  other agreement  contemplated  hereby
provides that the Managing General Partner or any of its Affiliates is permitted
or  required to make  a decision (i)  in its 'sole  discretion' or 'discretion,'
that it deems 'necessary or appropriate' or 'necessary or advisable' or under  a
grant of similar authority or latitude, except as otherwise provided herein, the
Managing  General Partner or  such Affiliate shall be  entitled to consider only
such interests and factors as it desires and shall have no duty or obligation to
give  any  consideration  to  any   interest  of,  or  factors  affecting,   the
Partnership,  the Operating  Partnership, any  Limited Partner  or any Assignee,
(ii) it may  make such decision  in its sole  discretion (regardless of  whether
there  is  a  reference to  'sole  discretion' or  'discretion')  unless another
express standard is  provided for,  or (iii) in  'good faith'  or under  another
express standard, the Managing General Partner or such Affiliate shall act under
such express
 
                                      A-50
 


<PAGE>

<PAGE>
standard and shall not be subject to any other or different standards imposed by
this  Agreement,  the  Operating  Partnership  Agreement,  any  other  agreement
contemplated hereby  or  under  the Delaware  Act  or  any other  Law,  rule  or
regulation.  In addition, any  actions taken by the  Managing General Partner or
such Affiliate  consistent with  the standards  of 'reasonable  discretion'  set
forth  in  the definitions  of  Available Cash  or  Operating Surplus  shall not
constitute a  breach  of  any  duty  of the  Managing  General  Partner  to  the
Partnership  or the Limited Partners. The Managing General Partner shall have no
duty, express or  implied, to  sell or  otherwise dispose  of any  asset of  the
Partnership  Group. No borrowing by any Group  Member or the approval thereof by
the Managing General Partner shall be deemed to constitute a breach of any  duty
of  the Managing General Partner  to the Partnership or  the Limited Partners by
reason of the fact that the purpose  or effect of such borrowing is directly  or
indirectly  to  (A)  enable  distributions  to  the  General  Partners  or their
Affiliates (including in their capacities as Limited Partners or Unitholders) to
exceed 2% of  the total amount  distributed to  all partners or  (B) hasten  the
expiration  of the  Subordination Period or  the conversion  of any Subordinated
Units into Common Units.
 
     (c) Whenever  a  particular transaction,  arrangement  or resolution  of  a
conflict  of  interest  is  required  under  this  Agreement  to  be  'fair  and
reasonable' to any Person, the fair  and reasonable nature of such  transaction,
arrangement  or resolution shall be considered in  the context of all similar or
related transactions.
 
     (d) The  Unitholders  hereby authorize  the  Managing General  Partner,  on
behalf  of the Partnership as a partner of a Group Member, to approve of actions
by the general partner of such  Group Member similar to those actions  permitted
to be taken by the Managing General Partner pursuant to this Section 7.9.
 
7.10 OTHER MATTERS CONCERNING THE MANAGING GENERAL PARTNER
 
     (a)  The Managing General Partner may rely and shall be protected in acting
or  refraining  from  acting   upon  any  resolution,  certificate,   statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture or
other  paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
 
     (b)  The  Managing  General  Partner   may  consult  with  legal   counsel,
accountants,  appraisers, management  consultants, investment  bankers and other
consultants and advisers  selected by it,  and any  act taken or  omitted to  be
taken  in reliance upon  the opinion (including  an Opinion of  Counsel) of such
Persons as to matters that the  Managing General Partner reasonably believes  to
be  within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with  such
opinion.
 
     (c) The Managing General Partner shall have the right, in respect of any of
its  powers or obligations hereunder, to act  through any of its duly authorized
officers, a duly appointed attorney or attorneys-in-fact or the duly  authorized
officers of the Partnership.
 
     (d)  Any standard of care  and duty imposed by  this Agreement or under the
Delaware Act or any applicable law, rule or regulation shall be modified, waived
or limited, to the extent permitted by  law, as required to permit the  Managing
General  Partner to act under this Agreement or any other agreement contemplated
by this Agreement and to make any decision pursuant to the authority  prescribed
in this Agreement, so long as such action is reasonably believed by the Managing
General  Partner to be in,  or not inconsistent with,  the best interests of the
Partnership.
 
7.11 INDEMNIFICATION OF NATIONAL PROPANE SGP, INC. BY NATIONAL PROPANE
CORPORATION
 
     National Propane Corporation (and after  the Triarc Merger, Triarc)  hereby
agrees  to indemnify, defend  and hold harmless National  Propane SGP, Inc. from
and against any  liabilities, losses  or damages  it may  suffer or  incur as  a
result  of the status of National Propane SGP,  Inc. as a general partner of the
Partnership or  any other  Group Member  or  for any  other reason  (whether  by
operation of law, contract or agreement or otherwise) arising from any liability
with  respect to  the Notes or  the Bank  Credit Facility (or  arising under any
document or instrument relating thereto), any liability assumed by, or purported
to be assumed  by, any  member of the  Partnership Group  from National  Propane
Corporation
 
                                      A-51
 


<PAGE>

<PAGE>
or  National Propane SGP, Inc.,  any account payable or  other trade payable, or
any other liability of any nature whatsover  no matter how or when arising.  The
conversion of all or a portion of the Unsubordinated General Partner Interest of
Triarc  into limited  partner interests  pursuant to  Section 11.1(d)  shall not
affect Triarc's indemnification obligation to National Propane SGP, Inc.
 
7.12 PURCHASE OR SALE OF UNITS
 
     The Managing  General Partner  may  cause the  Partnership to  purchase  or
otherwise  acquire Units; provided that, except as permitted pursuant to Section
4.11, the Managing  General Partner may  not cause the  Partnership to  purchase
Subordinated Units during the Subordination Period. As long as Units are held by
any  Group  Member,  such Units  shall  not  be considered  outstanding  for any
purpose, except as otherwise  provided herein. The  Managing General Partner  or
any  Affiliate of  the Managing General  Partner may also  purchase or otherwise
acquire and sell or otherwise dispose of  Units for its own account, subject  to
the provisions of Articles IV and X.
 
7.13 REGISTRATION RIGHTS OF THE GENERAL PARTNERS AND THEIR AFFILIATES
 
     (a)  If (i) the General Partners or  any Affiliate of either of the General
Partners (including for  purposes of this  Section 7.13, any  Person that is  an
Affiliate of the General Partners at the date hereof notwithstanding that it may
later  cease to be  an Affiliate of  the General Partners)  holds Units or other
Partnership Securities  that  it  desires to  sell  and  (ii) Rule  144  of  the
Securities  Act (or  any successor  rule or regulation  to Rule  144) or another
exemption from registration is not available to enable such holder of Units (the
'Holder') to dispose of the  number of Units or  other securities it desires  to
sell  at the time it desires to  do so without registration under the Securities
Act, then upon the  request of either  of the General Partners  or any of  their
Affiliates,  the  Partnership  shall file  with  the Commission  as  promptly as
practicable after  receiving such  request, and  use all  reasonable efforts  to
cause to become effective and remain effective for a period of not less than six
months  following its effective  date or such shorter  period as shall terminate
when all  Units or  other Partnership  Securities covered  by such  registration
statement  have been  sold, a  registration statement  under the  Securities Act
registering the offering  and sale of  the number of  Units or other  securities
specified  by the Holder;  provided, however, that the  Partnership shall not be
required to  effect  more than  three  registrations pursuant  to  this  Section
7.13(a);  and provided further, however, that  if the Audit Committee determines
in its good faith judgment that a postponement of the requested registration for
up to six  months would  be in  the best interests  of the  Partnership and  its
Partners  due to a pending transaction, investigation or other event, the filing
of such registration statement or the effectiveness thereof may be deferred  for
up  to  six months,  but  not thereafter.  In  connection with  any registration
pursuant to the immediately preceding  sentence, the Partnership shall  promptly
prepare  and file (x) such documents as  may be necessary to register or qualify
the securities subject to  such registration under the  securities laws of  such
states  as the Holder shall reasonably  request; provided, however, that no such
qualification shall be required in any jurisdiction where, as a result  thereof,
the  Partnership  would  become subject  to  general  service of  process  or to
taxation or qualification to do business as a foreign corporation or partnership
doing business in such jurisdiction solely as a result of such registration, and
(y) such documents  as may  be necessary  to apply for  listing or  to list  the
securities  subject to such registration on such National Securities Exchange as
the Holder shall reasonably request,  and do any and  all other acts and  things
that may reasonably be necessary or advisable to enable the Holder to consummate
a  public sale  of such  Units in such  states. Except  as set  forth in Section
7.12(c), all costs  and expenses of  any such registration  and offering  (other
than   the  underwriting  discounts  and  commissions)  shall  be  paid  by  the
Partnership, without reimbursement by the Holder.
 
     (b) If the  Partnership shall at  any time propose  to file a  registration
statement  under the Securities Act for an  offering of equity securities of the
Partnership for cash  (other than  an offering  relating solely  to an  employee
benefit  plan), the Partnership shall use all reasonable efforts to include such
number or amount of securities held by the Holder in such registration statement
as the Holder shall request. If  the proposed offering pursuant to this  Section
7.13(b)  shall be an underwritten offering, then, in the event that the managing
underwriter of such offering advises the  Partnership and the Holder in  writing
that  in its  opinion the inclusion  of all  or some of  the Holder's securities
would adversely and materially affect
 
                                      A-52
 


<PAGE>

<PAGE>
the success of the offering, the Partnership shall include in such offering only
that number or amount, if  any, of securities held by  the Holder which, in  the
opinion of the managing underwriter, will not so adversely and materially affect
the  offering. Except as set forth in Section 7.13(c), all costs and expenses of
any such registration and  offering (other than  the underwriting discounts  and
commissions)  shall be  paid by  the Partnership,  without reimbursement  by the
Holder.
 
     (c) If  underwriters  are  engaged  in  connection  with  any  registration
referred to in this Section 7.13, the Partnership shall provide indemnification,
representations,  covenants, opinions and other assurance to the underwriters in
form and substance  reasonably satisfactory  to such  underwriters. Further,  in
addition  to and not in limitation of the Partnership's obligation under Section
7.7, the Partnership shall,  to the fullest extent  permitted by law,  indemnify
and  hold  harmless the  Holder,  its officers,  directors  and each  Person who
controls the Holder  (within the meaning  of the Securities  Act) and any  agent
thereof  (collectively,  'Indemnified  Persons')  against  any  losses,  claims,
demands, actions, causes of action, assessments, damages, liabilities (joint  or
several),  costs  and  expenses (including  interest,  penalties  and reasonable
attorneys' fees and disbursements), resulting  to, imposed upon, or incurred  by
the  Indemnified Persons,  directly or indirectly,  under the  Securities Act or
otherwise (hereinafter referred to in this  Section 7.13(c) as a 'claim' and  in
the  plural as 'claims') based upon, arising out of or resulting from any untrue
statement or alleged  untrue statement  of any  material fact  contained in  any
registration   statement  under  which  any  Units  were  registered  under  the
Securities Act or  any state  securities or Blue  Sky laws,  in any  preliminary
prospectus (if used prior to the effective date of such registration statement),
or  in any summary or final prospectus or in any amendment or supplement thereto
(if used during the period the Partnership is required to keep the  registration
statement current), or arising out of, based upon or resulting from the omission
or  alleged omission  to state  therein a  material fact  required to  be stated
therein or  necessary  to  make  the statements  made  therein  not  misleading;
provided,  however, that the Partnership shall  not be liable to any Indemnified
Person to the extent that any such claim arises out of, is based upon or results
from an untrue  statement or  alleged untrue  statement or  omission or  alleged
omission made in such registration statement, such preliminary, summary or final
prospectus  or such amendment or supplement,  in reliance upon and in conformity
with written information furnished  to the Partnership by  or on behalf of  such
Indemnified Person specifically for use in the preparation thereof.
 
     (d)  The provisions  of Section  7.13(a) and  7.13(b) shall  continue to be
applicable with respect to  the General Partners (and  any of their  Affiliates)
after it ceases to be a Partner of the Partnership, during a period of two years
subsequent to the effective date of such cessation and for so long thereafter as
is  required  for the  Holder  to sell  all of  the  Units or  other Partnership
Securities with respect to  which it has requested  during such two-year  period
inclusion  in a  registration statement otherwise  filed or  that a registration
statement be  filed;  provided,  however,  that the  Partnership  shall  not  be
required to file successive registration statements covering the same securities
for  which registration was demanded during such two-year period. The provisions
of Section 7.13(c) shall continue in effect thereafter.
 
     (e) Any request to register Partnership Securities pursuant to this Section
7.13 shall (i)  specify the Partnership  Securities intended to  be offered  and
sold by the Person making the request, (ii) express such Person's present intent
to  offer such shares for  distribution, (iii) describe the  nature or method of
the proposed offer  and sale  of Partnership  Securities, and  (iv) contain  the
undertaking  of such  Person to provide  all such information  and materials and
take all action as may be required in order to permit the Partnership to  comply
with  all applicable  requirements in connection  with the  registration of such
Partnership Securities.
 
7.14 RELIANCE BY THIRD PARTIES
 
     Notwithstanding anything  to the  contrary in  this Agreement,  any  Person
dealing  with  the Partnership  shall be  entitled to  assume that  the Managing
General Partner and any  officer of the Managing  General Partner authorized  by
the  Managing  General  Partner to  act  on behalf  of  or  in the  name  of the
Partnership has full power and authority to encumber, sell, or otherwise use  in
any manner any and all assets of the Partnership and to enter into any contracts
on behalf of the Partnership, and such Person shall be entitled to deal with the
Managing  General Partner or  any such officer  as if it  were the Partnership's
sole party  in interest,  both legally  and beneficially.  Each Limited  Partner
hereby
 
                                      A-53
 


<PAGE>

<PAGE>
waives any and all defenses or other remedies that may be available against such
Person  to  contest, negate  or  disaffirm any  action  of the  Managing General
Partner or any such  officer in connection  with any such  dealing. In no  event
shall  any Person dealing with the Managing  General Partner or any such officer
be obligated to  ascertain that the  terms of the  Agreement have been  complied
with  or to inquire into the necessity or expedience of any act or action of the
Managing General  Partner  or any  such  officer. Each  and  every  certificate,
document  or  other instrument  executed  on behalf  of  the Partnership  by the
Managing General Partner  or any such  officer shall be  conclusive evidence  in
favor of any and every Person relying thereon or claiming thereunder that (a) at
the  time  of  the  execution  and delivery  of  such  certificate,  document or
instrument, this  Agreement  was  in  full force  and  effect,  (b)  the  Person
executing  and  delivering such  certificate,  document or  instrument  was duly
authorized and empowered to do so for  and on behalf of the Partnership and  (c)
such  certificate, document  or instrument  was duly  executed and  delivered in
accordance with the terms and provisions  of this Agreement and is binding  upon
the Partnership.
 
                                  ARTICLE VIII
                     BOOKS, RECORDS, ACCOUNTING AND REPORTS
 
8.1 RECORDS AND ACCOUNTING
 
     The  Managing  General  Partner shall  keep  or  cause to  be  kept  at the
principal office of the Partnership  appropriate books and records with  respect
to  the Partnership's  business, including  all books  and records  necessary to
provide to the Unitholders any information  required to be provided pursuant  to
Section  3.4(a).  Any  books and  records  maintained  by or  on  behalf  of the
Partnership in the regular course of  its business, including the record of  the
Record  Holders and Assignees of Units or other Partnership Securities, books of
account and records of  Partnership proceedings, may  be kept on,  or be in  the
form  of, computer disks, hard drives,  punch cards, magnetic tape, photographs,
micrographics or any other information storage device; provided, that the  books
and  records so  maintained are  convertible into  clearly legible  written form
within a  reasonable period  of time.  The  books of  the Partnership  shall  be
maintained,  for financial reporting purposes, on an accrual basis in accordance
with U.S. GAAP.
 
8.2 FISCAL YEAR
 
     The fiscal year of the Partnership shall be the calendar year.
 
8.3 REPORTS
 
     (a) As soon as practicable, but in  no event later than 120 days after  the
close of each fiscal year of the Partnership, the Managing General Partner shall
cause  to be mailed or  furnished to each Record  Holder of a Unit  as of a date
selected by the  Managing General Partner  in its discretion,  an annual  report
containing  financial statements of the Partnership  for such fiscal year of the
Partnership, presented in accordance with  U.S. GAAP, including a balance  sheet
and statements of operations, Partnership equity and cash flows, such statements
to  be  audited by  a firm  of  independent public  accountants selected  by the
Managing General Partner.
 
     (b) As soon as practicable,  but in no event later  than 90 days after  the
close of each Quarter except the last Quarter of each year, the Managing General
Partner  shall cause to be mailed or furnished  to each Record Holder of a Unit,
as of a  date selected  by the  Managing General  Partner in  its discretion,  a
report  containing unaudited  financial statements  of the  Partnership and such
other information as may  be required by applicable  law, regulation or rule  of
any  National Securities Exchange on which the  Units are listed for trading, or
as the Managing General Partner determines to be necessary or appropriate.
 
                                      A-54
 


<PAGE>

<PAGE>
                                   ARTICLE IX
                                  TAX MATTERS
 
9.1 TAX RETURNS AND INFORMATION
 
     The Partnership shall timely file all  returns of the Partnership that  are
required  for federal, state and  local income tax purposes  on the basis of the
accrual method and  a taxable year  ending on December  31. The tax  information
reasonably required by Record Holders for federal and state income tax reporting
purposes  with respect to  a taxable year  shall be furnished  to them within 90
days of the close of the calendar  year in which the Partnership's taxable  year
ends.  The classification, realization  and recognition of  income, gain, losses
and deductions and other items shall be on the accrual method of accounting  for
federal income tax purposes.
 
9.2 TAX ELECTIONS
 
     (a)  The Partnership shall make the election  under Section 754 of the Code
in accordance with applicable regulations thereunder, subject to the reservation
of the right  to seek  to revoke  any such  election upon  the Managing  General
Partner's  determination that  such revocation is  in the best  interests of the
Unitholders. Notwithstanding  any  other  provision herein  contained,  for  the
purposes  of computing  the adjustments  under Section  743(b) of  the Code, the
Managing General  Partner shall  be authorized  (but not  required) to  adopt  a
convention  whereby the price paid by a transferee of Units will be deemed to be
the lowest quoted closing price of the Units on any National Securities Exchange
on which such Units are traded during the calendar month in which such  transfer
is deemed to occur pursuant to Section 6.2(g) without regard to the actual price
paid by such transferee.
 
     (b)  The Partnership shall elect to  deduct expenses incurred in organizing
the Partnership ratably over a sixty-month period as provided in Section 709  of
the Code.
 
     (c) Except as otherwise provided herein, the Managing General Partner shall
determine  whether the Partnership should make  any other elections permitted by
the Code.
 
9.3 TAX CONTROVERSIES
 
     Subject  to  the  provisions  hereof,  the  Managing  General  Partner   is
designated as the Tax Matters Partner (as defined in the Code) and is authorized
and  required to  represent the  Partnership (at  the Partnership's  expense) in
connection  with  all   examinations  of  the   Partnership's  affairs  by   tax
authorities, including resulting administrative and judicial proceedings, and to
expend   Partnership  funds  for  professional  services  and  costs  associated
therewith. Each Partner agrees  to cooperate with  the Managing General  Partner
and  to do or  refrain from doing any  or all things  reasonably required by the
Managing General Partner to conduct such proceedings.
 
9.4 WITHHOLDING
 
     Notwithstanding any other provision of this Agreement, the Managing General
Partner is authorized to take any action that it determines in its discretion to
be  necessary  or  appropriate  to  cause  the  Partnership  and  the  Operating
Partnership  to comply with  any withholding requirements  established under the
Code or any  other federal, state  or local law  including, without  limitation,
pursuant  to Sections 1441, 1442, 1445 and 1446  of the Code. To the extent that
the Partnership is required  or elects to  withhold and pay  over to any  taxing
authority  any amount resulting from the allocation or distribution of income to
any Partner or  Assignee (including,  without limitation, by  reason of  Section
1446  of the Code), the amount withheld may be treated as a distribution of cash
pursuant to Section 6.3 in the amount of such withholding from such Partner.
 
                                      A-55
 


<PAGE>

<PAGE>
                                   ARTICLE X
                             ADMISSION OF PARTNERS
 
10.1 ADMISSION OF INITIAL LIMITED PARTNERS
 
     Upon the issuance by the Partnership of Common Units to the Underwriters as
described in  Section  5.3 in  connection  with  the Initial  Offering  and  the
execution  by each Underwriter  of a Transfer  Application, the Managing General
Partner shall  admit the  Underwriters  to the  Partnership as  Initial  Limited
Partners in respect of the Common Units purchased by them.
 
10.2 ADMISSION OF SUBSTITUTED UNITHOLDER
 
     By  transfer of a Unit  by a Unitholder in  accordance with Article IV, the
transferor shall  be deemed  to have  given  the transferee  the right  to  seek
admission  as a Substituted Unitholder subject to  the conditions of, and in the
manner permitted under,  this Agreement.  A transferor of  a Certificate  shall,
however,  only have the authority  to convey to a  purchaser or other transferee
who does  not  execute and  deliver  a Transfer  Application  (a) the  right  to
negotiate  such Certificate to a purchaser or other transferee and (b) the right
to transfer the right to request  admission as a Substituted Unitholder to  such
purchaser  or  other  transferee  in  respect  of  the  transferred  Units. Each
transferee of a Unit  (including any nominee holder  or an agent acquiring  such
Unit  for the account  of another Person)  who executes and  delivers a Transfer
Application shall, by virtue of such execution and delivery, be an Assignee  and
be deemed to have applied to become a Substituted Unitholder with respect to the
Units  so transferred to  such Person. Such Assignee  shall become a Substituted
Unitholder (x) at such  time as the Managing  General Partner consents  thereto,
which  consent may be given  or withheld in the  Managing General Partner's sole
discretion and (y) when any such admission is shown on the books and records  of
the  Partnership.  If such  consent  is withheld,  such  transferee shall  be an
Assignee. An Assignee shall  have an interest in  the Partnership equivalent  to
that  of a Unitholder  with respect to  allocations and distributions, including
liquidating distributions, of  the Partnership.  With respect  to voting  rights
attributable  to Units that are held  by Assignees, the Managing General Partner
shall be  deemed  to  be the  Unitholder  with  respect thereto  and  shall,  in
exercising  the voting rights in respect of  such Units on any matter, vote such
Units at the written direction of the Assignee who is the Record Holder of  such
Units.  If no such written direction is  received, such Units will not be voted.
An Assignee shall have no other rights of a Unitholder.
 
10.3 ADMISSION OF SUCCESSOR OR TRANSFEREE GENERAL PARTNERS
 
     A successor General Partner  approved pursuant to Section  11.1 or 11.2  or
the  transferee of  or successor  to all  of a  General Partner's Unsubordinated
General Partner Interests pursuant to Section 4.6 or 4.7, who is proposed to  be
admitted  as a successor or transferee General  Partner shall be admitted to the
Partnership as a General Partner, effective immediately prior to the  withdrawal
or  removal  of the  General Partner  pursuant to  Section 11.1  or 11.2  or the
transfer of a General  Partner's Unsubordinated General  Partner Interests as  a
general  partner in  the Partnership pursuant  to Section 4.6  or 4.7; provided,
however, that  no  such  successor  or  transferee  shall  be  admitted  to  the
Partnership  until compliance with the terms of  Section 4.6 or 4.7 has occurred
and such successor or transferee has executed and delivered such other documents
or instruments as may be required  to effect such admission. Any such  successor
or  transferee shall, subject to the terms  hereof, carry on the business of the
Partnership and the Operating Partnership without dissolution.
 
10.4 ADMISSION OF ADDITIONAL LIMITED PARTNERS
 
     (a) A  Person (other  than  an Initial  Limited  Partner or  a  Substituted
Limited  Partner)  who  makes  a  Capital  Contribution  to  the  Partnership in
accordance with  this Agreement  shall  be admitted  to  the Partnership  as  an
Additional  Limited Partner only upon furnishing to the Managing General Partner
(i) evidence of acceptance in form satisfactory to the Managing General  Partner
of  all of the  terms and conditions  of this Agreement,  including the power of
attorney granted in Section 2.6, and (ii) such other
 
                                      A-56
 


<PAGE>

<PAGE>
documents or  instruments as  may be  required  in the  sole discretion  of  the
Managing  General Partner  to effect  such Person's  admission as  an Additional
Limited Partner.
 
     (b) Notwithstanding anything to  the contrary in  this Section 10.4,  other
than  pursuant to Section 10.4(c), no Person  shall be admitted as an Additional
Limited Partner  without the  consent  of the  Managing General  Partner,  which
consent  may  be  given  or  withheld in  the  Managing  General  Partner's sole
discretion. The admission of any Person  as an Additional Limited Partner  shall
become  effective on the date upon which the  name of such Person is recorded as
such in the books and records of  the Partnership, following the consent of  the
Managing General Partner to such admission.
 
     (c)  Upon (i) conversion of general  partner interests into limited partner
interests pursuant  to  Sections  4.12,  5.8(g),  5.8(h),  11.1(d),  11.3(b)  or
13.1(l),  the holder of such Partnership Interests  shall be deemed to have been
admitted to the Partnership as a Limited Partner in respect of such  Partnership
Interests.
 
10.5 ADMISSION OF SUBSTITUTED HOLDER OF INCENTIVE DISTRIBUTION RIGHTS
 
     By  transfer of  an Incentive Distribution  Right by a  Holder of Incentive
Distribution Rights  in accordance  with  Article IV,  the transferor  shall  be
deemed to have given the transferee the right to seek admission as a Substituted
Holder of Incentive Distribution Rights subject to the conditions of, and in the
manner  permitted under,  this Agreement. A  transferor of a  Certificate for an
Incentive Distribution Right shall, however,  only have the authority to  convey
to  a purchaser  or other  transferee who  does not  execute and  deliver to the
Managing General Partner a  satisfactory Transfer Application  (a) the right  to
negotiate such Certificate to a subsequent purchaser or other transferee and (b)
the  right to transfer the right to request admission as a Substituted Holder of
Incentive Distribution Rights to such  purchaser or other transferee in  respect
of  the  transferred  Incentive  Distribution  Rights.  Each  transferee  of  an
Incentive Distribution Right (including any nominee holder or an agent acquiring
such Incentive  Distribution  Right  for  the account  of  another  Person)  who
executes  and delivers a  satisfactory Transfer Application  shall, by virtue of
such execution and delivery,  be an Assignee  and be deemed  to have applied  to
become a Substituted Holder of Incentive Distribution Rights with respect to the
Incentive  Distribution Right so transferred to such Person. Such Assignee shall
become a Substituted Holder of Incentive Distribution Rights (x) at such time as
the Managing General  Partner consents thereto,  which consent may  be given  or
withheld  in the  Managing General Partner's  sole discretion, and  (y) when any
such admission is shown  on the books  and records of  the Partnership. If  such
consent  is withheld,  such transferee shall  be an Assignee.  An Assignee shall
have an interest in the Partnership equivalent to that of a Holder of  Incentive
Distribution  Rights with  respect to  allocations and  distributions, including
liquidating distributions, of  the Partnership.  With respect  to voting  rights
attributable  to an Incentive Distribution Right that are held by Assignees, the
Managing General  Partner  shall  be  deemed  to  be  the  Holder  of  Incentive
Distribution  Rights with  respect thereto and  shall, in  exercising the voting
rights in respect of such Incentive Distribution Rights on any matter, vote such
Incentive Distribution Rights at  the written direction of  the Assignee who  is
the  Record Holder  of such  Incentive Distribution  Rights. If  no such written
direction is received, such Incentive Distribution Rights will not be voted.  An
Assignee  shall  have no  other  rights of  a  Holder of  Incentive Distribution
Rights.
 
10.6 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP
 
     To effect the  admission to the  Partnership of any  Partner, the  Managing
General  Partner  shall  take  all steps  necessary  and  appropriate  under the
Delaware Act to amend the records  of the Partnership to reflect such  admission
and,  if  necessary, to  prepare as  soon  as practicable  an amendment  to this
Agreement and, if required  by law, the Managing  General Partner shall  prepare
and  file  an  amendment to  the  Certificate  of Limited  Partnership,  and the
Managing General Partner may for this purpose, among others, exercise the  power
of attorney granted pursuant to Section 2.6.
 
                                      A-57
 


<PAGE>

<PAGE>
                                   ARTICLE XI
                       WITHDRAWAL OR REMOVAL OF PARTNERS
 
11.1 WITHDRAWAL OF THE GENERAL PARTNERS
 
     (a) The Managing General Partner shall be deemed to have withdrawn from the
Partnership  upon the occurrence of  any one of the  following events (each such
event herein referred to as an 'Event of Withdrawal');
 
          (i) the  Managing  General  Partner  voluntarily  withdraws  from  the
     Partnership by giving written notice to the other Partners (and it shall be
     deemed  that the  Managing General Partner  has withdrawn  pursuant to this
     Section 11.1(a)(i) if the Managing General Partner voluntarily withdraws as
     general partner of the Operating Partnership);
 
          (ii) the  Managing General  Partner  transfers all  of its  rights  as
     Managing General Partner pursuant to Section 4.6;
 
          (iii)  the  Managing General  Partner is  removed pursuant  to Section
     11.2;
 
          (iv) the Managing General Partner  (A) makes a general assignment  for
     the  benefit of  creditors; (B) files  a voluntary  bankruptcy petition for
     relief under Chapter 7  of the United States  Bankruptcy Code; (C) files  a
     petition or answer seeking for itself a liquidation, dissolution or similar
     relief  (but not a  reorganization) under any  law; (D) files  an answer or
     other pleading admitting or failing to contest the material allegations  of
     a  petition filed against  the Managing General Partner  in a proceeding of
     the type described in clauses (A)-(C)  of this Section 11.1(a)(iv); or  (E)
     seeks, consents to or acquiesces in the appointment of a trustee (but not a
     debtor  in  possession), receiver  or  liquidator of  the  Managing General
     Partner or  of all  or any  substantial part  of its  properties;  provided
     however  that none of the events listed in (A)-(E) hereof shall be an Event
     of Default if (x) such event takes  place after the Triarc Merger, (y)  the
     Managing  General Partner is Triarc or  its Affiliates, and (z) the Special
     General Partner is a  non-bankrupt General Partner  of the Partnership  and
     the  Operating  Partnership at  the time  of the  events described  in this
     Section 11.1(a)(iv) occur;
 
          (v) a final and non-appealable order of relief under Chapter 7 of  the
     United  States  Bankruptcy  Code is  entered  by a  court  with appropriate
     jurisdiction pursuant to a voluntary or involuntary petition by or  against
     the Managing General Partner;
 
          (vi)  in the  event the Managing  General Partner is  a corporation, a
     certificate of  dissolution or  its equivalent  is filed  for the  Managing
     General Partner, or 90 days expire after the date of notice to the Managing
     General Partner of revocation of its charter without a reinstatement of its
     charter, under the laws of its state of incorporation; or
 
          (vii)  (A) in the event the Managing General Partner is a partnership,
     the dissolution  and commencement  of winding  up of  the Managing  General
     Partner;  (B) in the event  the Managing General Partner  is acting in such
     capacity by virtue of being  a trustee of a  trust, the termination of  the
     trust;  (C) in the event the Managing  General Partner is a natural person,
     his death or adjudication of incompetency;  and (D) otherwise in the  event
     of the termination of the Managing General Partner.
 
     If  an Event of  Withdrawal specified in Section  11.1(a)(iv), (v), (vi) or
(vii)(A), (B) or (D) occurs, the withdrawing Managing General Partner shall give
notice to  the  Limited Partners  within  30  days after  such  occurrence.  The
Partners  hereby  agree that  only the  Events of  Withdrawal described  in this
Section 11.1 shall result in the withdrawal of the Managing General Partner from
the Partnership.
 
     (b) Withdrawal of the  Managing General Partner  from the Partnership  upon
the  occurrence of an Event of Withdrawal  shall not constitute a breach of this
Agreement under the following circumstances: (i)  at any time during the  period
beginning  on the  Closing Date and  ending at 12:00  midnight, Eastern Standard
Time, on June 30,  2006, the Managing General  Partner voluntarily withdraws  by
giving  at least  90 days' advance  notice of  its intention to  withdraw to the
Limited Partners; provided that prior to the effective date of such  withdrawal,
the  withdrawal is approved by Unitholders holding  at least a Unit Majority and
the Managing General Partner delivers to  the Partnership an Opinion of  Counsel
 
                                      A-58
 


<PAGE>

<PAGE>
('Withdrawal  Opinion of Counsel') that such withdrawal (following the selection
of the successor Managing General Partner) would  not result in the loss of  the
limited  liability  of  any Limited  Partner  as described  in  the Registration
Statement or of the  limited partner of the  Operating Partnership or cause  the
Partnership or the Operating Partnership to be treated as an association taxable
as  a corporation or otherwise  to be taxed as an  entity for federal income tax
purposes (to the extent not previously treated as such); (ii) at any time  after
12:00  midnight, Eastern Standard  Time, on June 30,  2006, the Managing General
Partner voluntarily withdraws by giving at least 90 days' advance notice to  the
Unitholders,  such  withdrawal to  take  effect on  the  date specified  in such
notice; (iii) at any  time that the  Managing General Partner  ceases to be  the
Managing  General Partner pursuant to Section 11.1(a)(ii) or is removed pursuant
to Section 11.2;  or (iv) notwithstanding  clause (i) of  this sentence, at  any
time  that the Managing General Partner voluntarily withdraws by giving at least
90 days' advance notice  of its intention to  withdraw to the Unitholders,  such
withdrawal  to take effect on  the date specified in the  notice, if at the time
such notice  is given  one Person  and its  Affiliates (other  than the  General
Partners and their Affiliates) own beneficially or of record or control at least
50%  of the  Outstanding Common  Units. The  withdrawal of  the Managing General
Partner from the Partnership upon the occurrence of an Event of Withdrawal shall
also constitute  the  withdrawal of  the  Managing General  Partner  as  general
partner  of the  other Group  Members. If the  Managing General  Partner gives a
notice of  withdrawal pursuant  to Section  11.1(a)(i), the  holders of  a  Unit
Majority, may, prior to the effective date of such withdrawal, elect a successor
Managing  General Partner. The  Person so elected  as successor Managing General
Partner shall automatically become  the successor general  partner of the  other
Group Members. If, prior to the effective date of the Managing General Partner's
withdrawal, a successor is not selected by the Unitholders as provided herein or
the   Partnership  does  not  receive  a  Withdrawal  Opinion  of  Counsel,  the
Partnership shall be dissolved  in accordance with  Section 12.1. Any  successor
Managing  General Partner elected  in accordance with the  terms of this Section
11.1 shall be subject to the provisions of Section 10.3.
 
     (c) An Event of Withdrawal of the Managing General Partner shall also be an
Event of Withdrawal of the Special  General Partner from the Partnership and  as
general  partner  of other  Group Members  at the  same time  and upon  the same
conditions as set forth in Section 11.1(b) with respect to the Managing  General
Partner.
 
     (d)  The occurrence after the Triarc Merger of an event otherwise described
in Section  11.1(a)(iv)(A), (B),  (C),  (D) and  (E) that  is  not an  Event  of
Withdrawal pursuant to Section 11.1(a)(iv) shall result in (i) the conversion of
Triarc's  1%  Unsubordinated General  Partner Interests  into a  limited partner
interest having the  same rights  to distributions  of cash  and allocations  of
income,  gain, loss or  deduction and obligation to  restore its deficit capital
account as  provided for  in Section  12.8 as  the holder  of 1%  Unsubordinated
General Partner Interests were entitled and/or obligated but having no rights to
participate  in the  management of the  Partnership, (ii)  the Partnership shall
continue without the approval of the  Unitholders and (iii) the Special  General
Partner  shall become the Managing General  Partner of the Partnership and shall
have all the rights, authority and powers given to the Managing General  Partner
pursuant to this Agreement.
 
11.2 REMOVAL OF THE MANAGING GENERAL PARTNER
 
     The  Managing General Partner may be removed if such removal is approved by
the Unitholders holding 66 2/3% of  the Outstanding Units (including Units  held
by  the General Partners and their Affiliates).  Any such action by such holders
for removal of the Managing General  Partner must also provide for the  election
of  a  successor General  Partner by  the  Unitholders holding  at least  a Unit
Majority (including Units held  by the General  Partners and their  Affiliates).
Such  removal  shall  be  effective immediately  following  the  admission  of a
successor Managing General Partner pursuant to Section 10.3. The removal of  the
Managing  General Partner shall also automatically constitute the removal of the
Managing General Partner  as general partner  of the other  Group Members. If  a
Person is elected as a successor Managing General Partner in accordance with the
terms  of  this Section  11.2,  such Person  shall,  upon admission  pursuant to
Section 10.3, automatically become  the successor general  partner of the  other
Group  Members. The  right of  the holders  of Outstanding  Units to  remove the
Managing General Partner shall not exist or be exercised unless the  Partnership
has received an opinion
 
                                      A-59
 


<PAGE>

<PAGE>
opining  as  to the  matters covered  by  a Withdrawal  Opinion of  Counsel. Any
successor Managing General Partner elected in accordance with the terms of  this
Section 11.2 shall be subject to the provisions of Section 10.3.
 
11.3 INTEREST OF DEPARTING PARTNER AND SUCCESSOR GENERAL PARTNER
 
     (a)  In the event of  (i) withdrawal of the  Managing General Partner under
circumstances where  such withdrawal  does not  violate this  Agreement or  (ii)
removal  of the  Managing General  Partner by  the holders  of Outstanding Units
under circumstances where Cause does not exist, if a successor Managing  General
Partner  is elected in  accordance with the  terms of Section  11.1 or 11.2, the
Departing Partner shall have the option exercisable prior to the effective  date
of  the departure of such Departing Partner to require its successor to purchase
the Unsubordinated General Partner Interests  of all the Departing Partners  and
the  partnership interests of all the Departing Partners as the general partners
in  the   other  Group   Members  and   their  Incentive   Distribution   Rights
(collectively,  the 'Combined Interest') in exchange for an amount in cash equal
to the fair market value of such Combined Interest, such amount to be determined
and payable as of the effective date  of its departure. If the Managing  General
Partner  is removed by the Unitholders under circumstances where Cause exists or
if the  Managing  General  Partner  withdraws  under  circumstances  where  such
withdrawal  violates this Agreement or  the Operating Partnership Agreement, and
if a  successor General  Partner is  elected  in accordance  with the  terms  of
Section 11.1 or 11.2, such successor shall have the option, exercisable prior to
the  effective date of the departure of  all the Departing Partners, to purchase
the Combined Interest  of all  of the Departing  Partners for  such fair  market
value  of such Combined Interest. In either event, all of the Departing Partners
shall be  entitled to  receive  all reimbursements  due such  Departing  Partner
pursuant  to Section 7.4, including  any employee-related liabilities (including
severance liabilities),  incurred  in connection  with  the termination  of  any
employees  employed  by the  Managing  General Partner  for  the benefit  of the
Partnership or the other Group Members.
 
     For purposes  of  this  Section  11.3(a), the  fair  market  value  of  the
Departing  Partners' Combined Interest shall  be determined by agreement between
the Departing Partners and their successor or, failing agreement within 30  days
after   the  effective  date  of  such  Departing  Partners'  departure,  by  an
independent investment banking firm or other independent expert selected by  the
Departing  Partners  and their  successor,  which, in  turn,  may rely  on other
experts, and the determination of which  shall be conclusive as to such  matter.
If  such parties  cannot agree upon  one independent investment  banking firm or
other independent  expert  within 45  days  after  the effective  date  of  such
departure, then the Departing Partners shall designate an independent investment
banking  firm  or other  independent expert,  the Departing  Partners' successor
shall designate  an independent  investment banking  firm or  other  independent
expert,  and such  firms or  experts shall  mutually select  a third independent
investment  banking  firm  or   independent  expert,  which  third   independent
investment  banking firm  or other independent  expert shall  determine the fair
market value of the Combined Interest.  In making its determination, such  third
independent investment banking firm or other independent expert may consider the
then  current trading  price of  Units, on  any National  Securities Exchange on
which Units are then listed, the  value of the Partnership's assets, the  rights
and obligations of the General Partners and other factors it may deem relevant.
 
     (b)  If the Combined Interest  is not purchased in  the manner set forth in
Section 11.3(a),  the Departing  Partners will  have the  right to  convert  the
Combined Interest into Common Units representing limited partner interests or to
receive  cash from the  Partnership in exchange for  such Combined Interest. The
Departing Partners'  Combined  Interest shall  be  converted into  Common  Units
pursuant  to a valuation made by an investment banking firm or other independent
expert  selected  pursuant  to  Section  11.3(a),  without  reduction  in   such
Partnership  Interest (but  subject to proportionate  dilution by  reason of the
admission of its successor). Any  successor General Partner shall indemnify  the
Departing Partners as to all debts and liabilities of the Partnership arising on
or  after the date  on which the  Departing Partners become  Limited Partners or
have their Combined Interests purchased pursuant to this Agreement. For purposes
of this  Agreement, conversion  of the  General Partners'  Combined Interest  to
Common  Units will be characterized as if the General Partners contributed their
Combined Interest to  the Partnership in  exchange for the  newly issued  Common
Units.
 
                                      A-60
 


<PAGE>

<PAGE>
     (c)  If a successor General Partner is elected in accordance with the terms
of Section 11.1  or 11.2  and the  option described  in Section  11.3(a) is  not
exercised  by the party entitled to do  so, the successor General Partner shall,
at the effective  date of its  admission to the  Partnership, contribute to  the
Partnership  cash in an  amount equal to 1/99th  of the Net  Agreed Value of the
Partnership's assets on such date. In such event, such successor General Partner
shall, subject to the following sentence, be entitled to half of such Percentage
Interest  of  all  Partnership  allocations  and  distributions  and  any  other
allocations  and distributions to which the Departing Partners as holders of the
2% Unsubordinated  General Partner  Interests were  entitled. In  addition,  the
successor  General Partner shall  cause this Agreement to  be amended to reflect
that, from and after the date of such successor General Partner's admission, the
successor General  Partner's  interest  in  all  Partnership  distributions  and
allocations  shall be 1%, and that of  the holders of Outstanding Units shall be
99%.
 
11.4 TERMINATION OF SUBORDINATION PERIOD, CONVERSION OF SUBORDINATED UNITS AND
EXTINGUISHMENT OF CUMULATIVE COMMON UNIT ARREARAGES
 
     Notwithstanding any provision  of this Agreement,  if the Managing  General
Partner  is removed as a general  partner of the Partnership under circumstances
where Cause does  not exist and  Units held  by the General  Partners and  their
Affiliates  are not voted in favor of such removal, (i) the Subordination Period
will  end  and   all  Outstanding  Subordinated   Units  will  immediately   and
automatically  convert into  Common Units  on a  one-for-one basis  and (ii) all
Cumulative Common Unit Arrearages on the Common Units will be extinguished.
 
11.5 WITHDRAWAL OF LIMITED PARTNERS
 
     No Limited Partner shall have any  right to withdraw from the  Partnership;
provided,  however,  that when  a  transferee of  a  Limited Partner's  Units or
Incentive Distribution Rights becomes a Record Holder of the Units or  Incentive
Distribution  Rights  so transferred,  such  transferring Limited  Partner shall
cease  to  be  a  Limited  Partner  with  respect  to  the  Units  or  Incentive
Distribution Rights so transferred.
 
                                  ARTICLE XII
                          DISSOLUTION AND LIQUIDATION
 
12.1 DISSOLUTION
 
     (a)  The Partnership shall not be dissolved by the admission of Substituted
Limited Partners  or  Additional Limited  Partners  or  by the  admission  of  a
successor  General Partner in accordance with  the terms of this Agreement. Upon
the removal  or withdrawal  of  the Managing  General  Partner, if  a  successor
General  Partner is  elected pursuant to  Section 11.1 or  11.2, the Partnership
shall not be  dissolved and such  successor General Partner  shall continue  the
business  of the  Partnership. The Partnership  shall dissolve,  and (subject to
Section 12.2) its affairs shall be wound up, upon:
 
          (i) the expiration of its term as provided in Section 2.7;
 
          (ii) an  Event  of  Withdrawal  of the  Managing  General  Partner  as
     provided  in  Section 11.1(a)  (other than  Section 11.1(a)(ii)),  unless a
     successor is elected and an Opinion  of Counsel is received as provided  in
     Section  11.1(b) or 11.2 and such  successor is admitted to the Partnership
     pursuant to Section 10.3;
 
          (iii) an election to dissolve the Partnership by the Managing  General
     Partner that is approved by the holders of a Unit Majority;
 
          (iv)  entry of  a decree  of judicial  dissolution of  the Partnership
     pursuant to the provisions of the Delaware Act; or
 
          (v) the sale of all or substantially all of the assets and  properties
     of the Partnership Group.
 
                                      A-61
 


<PAGE>

<PAGE>
12.2 CONTINUATION OF THE BUSINESS OF THE PARTNERSHIP AFTER DISSOLUTION
 
     Upon  (a) dissolution of  the Partnership following  an Event of Withdrawal
caused by the withdrawal or removal of the Managing General Partner as  provided
in  Section 11.1(a)(i)  or (iii)  and the  failure of  the Partners  to select a
successor to  such Departing  Partner pursuant  to Section  11.1 or  11.2,  then
within  90 days thereafter, or (b) dissolution  of the Partnership upon an event
constituting an Event of Withdrawal as defined in Section 11.1(a)(iv), (v), (vi)
or (vii),  then,  to  the maximum  extent  permitted  by law,  within  180  days
thereafter,  the  holders  of a  Unit  Majority  may elect  to  reconstitute the
Partnership and continue its business on the same terms and conditions set forth
in this Agreement  by forming a  new limited partnership  on terms identical  to
those  set forth in this Agreement and having as the successor general partner a
Person approved by the holders  of a Unit Majority.  Unless such an election  is
made within the applicable time period as set forth above, the Partnership shall
conduct only activities necessary to wind up its affairs. If such an election is
so made, then:
 
          (i)  the reconstituted Partnership shall continue until the end of the
     term set forth in Section 2.7  unless earlier dissolved in accordance  with
     this Article XII;
 
          (ii)  if  the successor  General Partner  is  not the  former Managing
     General Partner, then the interest of  the former General Partner shall  be
     treated in the manner provided in Section 11.3; and
 
          (iii)  all necessary steps shall be taken to cancel this Agreement and
     the Certificate of Limited Partnership and to enter into and, as necessary,
     to file a new partnership agreement and certificate of limited partnership,
     and the successor general partner may for this purpose exercise the  powers
     of  attorney granted the Managing General  Partner pursuant to Section 2.6;
     provided, that the right  of the holders  of a Unit  Majority to approve  a
     successor  General Partner and to reconstitute and to continue the business
     of the Partnership  shall not  exist and may  not be  exercised unless  the
     Partnership has received an Opinion of Counsel that (x) the exercise of the
     right  would not  result in  the loss of  limited liability  of any Limited
     Partner  and  (y)  neither  the  Partnership,  the  reconstituted   limited
     partnership   nor  the  Operating  Partnership   would  be  treated  as  an
     association taxable as a corporation or  otherwise be taxable as an  entity
     for  federal  income  tax  purposes  upon the  exercise  of  such  right to
     continue.
 
12.3 LIQUIDATOR
 
     Upon dissolution of  the Partnership, unless  the Partnership is  continued
under  an  election to  reconstitute and  continue  the Partnership  pursuant to
Section 12.2, the Managing General Partner  shall select one or more Persons  to
act as Liquidator. The Liquidator shall be entitled to receive such compensation
for  its services as  may be approved by  holders of at least  a majority of the
Outstanding Units. The Liquidator shall agree not to resign at any time  without
15  days' prior notice and may be removed at any time, with or without cause, by
notice of removal approved by holders of at least a majority of the  Outstanding
Common  Units and Subordinated Units voting as a single class. Upon dissolution,
removal or resignation of the Liquidator, a successor and substitute  Liquidator
(who  shall have and  succeed to all  rights, powers and  duties of the original
Liquidator) shall within 30 days thereafter be approved by holders of at least a
majority of the  Outstanding Common  Units and  Subordinated Units  voting as  a
single  class. The right to approve a  successor or substitute Liquidator in the
manner provided herein shall be  deemed to refer also  to any such successor  or
substitute  Liquidator  approved  in  the  manner  herein  provided.  Except  as
expressly provided in this  Article XII, the Liquidator  approved in the  manner
provided  herein shall have  and may exercise,  without further authorization or
consent of any  of the  parties hereto,  all of  the powers  conferred upon  the
Managing  General Partner under the terms of  this Agreement (but subject to all
of the applicable limitations, contractual  and otherwise, upon the exercise  of
such  powers, other than the limitation on  sale set forth in Section 7.3(b)) to
the extent necessary or desirable in  the good faith judgment of the  Liquidator
to carry out the duties and functions of the Liquidator hereunder for and during
such  period of time as shall be  reasonably required in the good faith judgment
of the Liquidator to complete the winding up and liquidation of the  Partnership
as provided for herein.
 
                                      A-62
 


<PAGE>

<PAGE>
12.4 LIQUIDATION
 
     The  Liquidator shall proceed to dispose  of the assets of the Partnership,
discharge its liabilities, and otherwise wind up its affairs in such manner  and
over  such period as the Liquidator determines to be in the best interest of the
Partners, subject to Section 17-804 of the Delaware Act and the following:
 
          (a) Disposition of Assets. The assets may be disposed of by public  or
     private  sale or by  distribution in kind  to one or  more Partners on such
     terms as the  Liquidator and  such Partner or  Partners may  agree. If  any
     property  is distributed in kind, the  Partner receiving the property shall
     be deemed for purposes  of Section 12.4(c) to  have received cash equal  to
     its  fair market  value; and contemporaneously  therewith, appropriate cash
     distributions must be made  to the other Partners.  The Liquidator may,  in
     its  absolute discretion, defer liquidation of the Partnership's assets for
     a reasonable time if it  determines that an immediate  sale of part or  all
     the  Partnership's assets would be impractical or would cause undue loss to
     the Partners. The  Liquidator may, in  its absolute discretion,  distribute
     the  Partnership's assets  in kind  if it determines  that a  sale would be
     impractical or would cause undue loss to the partners.
 
          (b) Discharge of Liabilities.  Liabilities of the Partnership  include
     amounts  owed to Partners  otherwise than in  respect of their distribution
     rights under Article VI. With respect  to any liability that is  contingent
     or is otherwise not yet due and payable, the Liquidator shall either settle
     such  claim for such amount as it thinks appropriate or establish a reserve
     of cash or other assets to provide  for its payment. When paid, any  unused
     portion  of  the reserve  shall  be distributed  as  additional liquidation
     proceeds.
 
          (c) Liquidation Distributions. All property and all cash in excess  of
     that required to discharge liabilities as provided in Section 12.4(b) shall
     be  distributed to the Partners  in accordance with, and  to the extent of,
     the positive balances in their  respective Capital Accounts, as  determined
     after taking into account all Capital Account adjustments (other than those
     made  by reason of distributions pursuant  to this Section 12.4(c)) for the
     taxable year  of  the  Partnership  during which  the  liquidation  of  the
     Partnership  occurs (with such date of occurrence being determined pursuant
     to   Treasury   Regulation,   Section   1.704-1(b)(2)(ii)(g)),   and   such
     distribution  shall be made by the end  of such taxable year (or, if later,
     within 90 days after said date of such occurrence).
 
12.5 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP
 
     Upon the completion of the distribution of Partnership cash and property as
provided in Section 12.4 in connection with the liquidation of the  Partnership,
the  Partnership shall be terminated and  the Certificate of Limited Partnership
and all qualifications of  the Partnership as a  foreign limited partnership  in
jurisdictions  other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.
 
12.6 RETURN OF CONTRIBUTIONS
 
     The General Partners shall not be personally liable for, and shall have  no
obligation  to contribute or loan  any monies or property  to the Partnership to
enable it to effectuate, the return of the Capital Contributions of the  holders
of  any  Partnership  Interest,  or  any  portion  thereof,  it  being expressly
understood that any such return shall be made solely from Partnership assets.
 
12.7 WAIVER OF PARTITION
 
     To the maximum  extent permitted  by law,  each Partner  hereby waives  any
right to partition of the Partnership property.
 
12.8 CAPITAL ACCOUNT RESTORATION
 
     No  Limited  Partner  shall have  any  obligation to  restore  any negative
balance in its Capital Account upon liquidation of the Partnership. The  Special
General  Partner shall have no obligation to restore any negative balance in its
Capital Account upon the  liquidation of the  Partnership. The Managing  General
Partner  shall  be obligated  to  restore any  negative  balance in  its Capital
Account upon liquidation of its
 
                                      A-63
 


<PAGE>

<PAGE>
interest in the Partnership by  the end of the  taxable year of the  Partnership
during  which such liquidation  occurs, or, if  later, within 90  days after the
date of such liquidation.
 
                                  ARTICLE XIII
                      AMENDMENT OF PARTNERSHIP AGREEMENT;
                             MEETINGS; RECORD DATE
 
13.1 AMENDMENT TO BE ADOPTED SOLELY BY THE MANAGING GENERAL PARTNER
 
     Each Partner agrees that the Managing General Partner, without the approval
of any  Partner or  Assignee, may  amend  any provision  of this  Agreement,  to
execute,  swear to, acknowledge, deliver, file and record whatever documents may
be required in connection therewith, to reflect:
 
          (a) a  change in  the name  of the  Partnership, the  location of  the
     principal place of business of the Partnership, the registered agent of the
     Partnership or the registered office of the Partnership;
 
          (b)  admission,  substitution, withdrawal  or  removal of  Partners in
     accordance with this Agreement;
 
          (c) a change  that, in  the sole  discretion of  the Managing  General
     Partner, is necessary or advisable to qualify or continue the qualification
     of  the Partnership as a limited partnership  or a partnership in which the
     Limited Partners have limited liability under  the laws of any state or  to
     ensure  that  the Partnership  and the  Operating  Partnership will  not be
     treated as an association taxable as a corporation or otherwise taxed as an
     entity for federal  income tax purposes  (except approval of  holders of  a
     Unit  Majority  will  be  required  if such  amendment  would  result  in a
     delisting or suspension of trading of the Common Units);
 
          (d) a change  that, in  the sole  discretion of  the Managing  General
     Partner,  (i) does  not adversely  affect the  Unitholders in  any material
     respect, (ii) is necessary  or advisable to  (A) satisfy any  requirements,
     conditions or guidelines contained in any opinion, directive, order, ruling
     or  regulation  of any  federal or  state agency  or judicial  authority or
     contained in any federal or state  statute (including the Delaware Act)  or
     (B)  facilitate the  trading of  the Units  (including the  division of any
     class or classes of Outstanding Units into different classes to  facilitate
     uniformity of tax consequences within such classes of Units) or comply with
     any  rule, regulation, guideline or  requirement of any National Securities
     Exchange on which the Units are  or will be listed for trading,  compliance
     with any of which the Managing General Partner determines in its discretion
     to  be in the best interests of  the Partnership and the Unitholders, (iii)
     is necessary or advisable in connection  with action taken by the  Managing
     General Partner pursuant to Section 5.10, or (iv) is required to effect the
     intent  expressed  in  the  Registration Statement  or  the  intent  of the
     provisions  of  this  Agreement  or  is  otherwise  contemplated  by   this
     Agreement;
 
          (e) a change in the fiscal year or taxable year of the Partnership and
     any  changes that, in  the discretion of the  Managing General Partner, are
     necessary or  advisable as  a result  of a  change in  the fiscal  year  or
     taxable  year of the Partnership including, if the Managing General Partner
     shall so determine, a change in  the definition of 'Quarter' and the  dates
     on which distributions are to be made by the Partnership;
 
          (f)  an amendment  that is  necessary, in  the Opinion  of Counsel, to
     prevent the  Partnership,  or  the General  Partners  or  their  directors,
     officers,  trustees or  agents from  in any  manner being  subjected to the
     provisions  of  the  Investment  Company  Act  of  1940,  as  amended,  the
     Investment  Advisers Act of  1940, as amended,  or 'plan asset' regulations
     adopted under  the Employee  Retirement  Income Security  Act of  1974,  as
     amended, regardless of whether such are substantially similar to plan asset
     regulations  currently applied or proposed  by the United States Department
     of Labor;
 
          (g) subject to  the terms of  Section 5.7, an  amendment that, in  the
     discretion  of the General Partner, is necessary or advisable in connection
     with the authorization of  issuance of any class  or series of  Partnership
     Securities pursuant to Section 5.6;
 
                                      A-64
 


<PAGE>

<PAGE>
          (h)  any amendment expressly permitted in this Agreement to be made by
     the Managing General Partner acting alone;
 
          (i) an amendment  effected, necessitated or  contemplated by a  Merger
     Agreement approved in accordance with Section 14.3;
 
          (j)  an  amendment that,  in the  discretion  of the  Managing General
     Partner, is necessary or  advisable to reflect, account  for and deal  with
     appropriately  the formation  by the Partnership  of, or  investment by the
     Partnership  in,  any  corporation,  partnership,  joint  venture,  limited
     liability  company or other entity other than the Operating Partnership, in
     connection with the conduct by  the Partnership of activities permitted  by
     the terms of Section 2.4;
 
          (k) [Intentionally Deleted]
 
          (l)  an amendment, that  effectuates the conversion of  some or all of
     the Units or  Incentive Distribution  Rights held by  the Managing  General
     Partner  or any of its Affiliates from being general partner interests into
     being limited partner interests  at the election of  either of the  General
     Partners or any of their Affiliates holding such Partnership Interests;
 
          (m) any other amendments substantially similar to the foregoing.
 
13.2 AMENDMENT PROCEDURES
 
     Except  as  provided in  Sections  13.1 and  13.3,  all amendments  to this
Agreement  shall  be  made  in  accordance  with  the  following   requirements.
Amendments  to this Agreement may be proposed only by or with the consent of the
Managing General Partner  which consent  may be given  or withheld  in its  sole
discretion.  A proposed  amendment shall be  effective upon its  approval by the
holders of at least  a majority of  the Outstanding Units,  unless a greater  or
different  percentage is required under this  Agreement or by Delaware law. Each
proposed amendment that  requires the  approval of  the holders  of a  specified
percentage  of Outstanding Units shall  be set forth in  a writing that contains
the text  of the  proposed amendment.  If  such an  amendment is  proposed,  the
Managing  General  Partner  shall seek  the  written approval  of  the requisite
percentage of Outstanding Units or call a meeting of the Unitholders to consider
and vote on such proposed amendment.  The Managing General Partner shall  notify
all Record Holders upon final adoption of any such proposed amendments.
 
13.3 AMENDMENT REQUIREMENTS
 
     (a)  Notwithstanding the provisions of Sections 13.1 and 13.2, no provision
of this Agreement that establishes a percentage of Outstanding Units required to
take any action shall be amended, altered, changed, repealed or rescinded in any
respect that would  have the effect  of reducing such  voting percentage  unless
such  amendment is approved  by the written  consent or the  affirmative vote of
holders of Outstanding  Units whose aggregate  Outstanding Units constitute  not
less than the voting requirement sought to be reduced.
 
     (b)  Notwithstanding the provisions of Sections 13.1 and 13.2, no amendment
to this Agreement may (i) enlarge the obligations of any Limited Partner without
its consent, unless  such shall be  deemed to have  occurred as a  result of  an
amendment approved pursuant to Section 13.3(c), (ii) enlarge the obligations of,
restrict in any way any action by or rights of, or reduce in any way the amounts
distributable,  reimbursable or otherwise payable to the General Partners or any
of their Affiliates without its consent, which  may be given or withheld in  its
sole discretion, (iii) change Section 12.1(a) or (c), or (iv) change the term of
the  Partnership or, except as set forth in Section 12.1(c), give any Person the
right to dissolve the Partnership.
 
     (c) Except as provided in Section  14.3, and except as otherwise  provided,
and  without limitation  of the  Managing General  Partner's authority  to adopt
amendments to this Agreement as contemplated in Section 13.1, any amendment that
would have a material adverse effect on  the rights or preferences of any  class
of  Partnership Interests in relation to  other classes of Partnership Interests
must be approved by the holders of  not less than a majority of the  Partnership
Interests of the class affected.
 
     (d)  Notwithstanding  any other  provision  of this  Agreement,  except for
amendments pursuant to Section 7.3 or  13.1 and except as otherwise provided  by
Section 14.3(b), no amendments shall become
 
                                      A-65
 


<PAGE>

<PAGE>
effective without the approval of the holders of at least 90% of the Outstanding
Common  Units  and  Subordinated  Units  voting as  a  single  class  unless the
Partnership obtains an Opinion of Counsel to the effect that such amendment will
not affect the limited liability of any Limited Partner under applicable law.
 
     (e) Except as  provided in Section  13.1, this Section  13.3 shall only  be
amended  with the  approval of the  holders of  at least 90%  of the Outstanding
Units.
 
13.4 SPECIAL MEETINGS
 
     All acts of  Unitholders to be  taken pursuant to  this Agreement shall  be
taken  in the  manner provided  in this  Article XIII.  Special meetings  of the
Unitholders may be  called by  the Managing  General Partner  or by  Unitholders
owning  20% or more of the Outstanding Units of the class or classes for which a
meeting is proposed. Unitholders shall call  a special meeting by delivering  to
the  Managing General Partner one  or more requests in  writing stating that the
signing Unitholders wish to call a special meeting and indicating the general or
specific purposes for which the special meeting is to be called. Within 60  days
after receipt of such a call from Unitholders or within such greater time as may
be  reasonably necessary for the Partnership to comply with any statutes, rules,
regulations, listing agreements or similar requirements governing the holding of
a meeting or the solicitation of proxies for use at such a meeting, the Managing
General Partner shall  send a notice  of the meeting  to the Unitholders  either
directly  or indirectly through the Transfer Agent. A meeting shall be held at a
time and place determined  by the Managing  General Partner on  a date not  less
than  10 days nor more than 60 days  after the mailing of notice of the meeting.
Unitholders shall not vote on matters  that would cause the Limited Partners  to
be  deemed to be taking  part in the management and  control of the business and
affairs of  the  Partnership  so  as  to  jeopardize  the  Unitholders'  limited
liability  under the  Delaware Act or  the law of  any other state  in which the
Partnership is qualified to do business.
 
13.5 NOTICE OF A MEETING
 
     Notice of a meeting called pursuant to  Section 13.4 shall be given to  the
Record  Holders in writing  by mail or  other means of  written communication in
accordance with Section 16.1. The notice shall  be deemed to have been given  at
the  time  when  deposited  in  the  mail or  sent  by  other  means  of written
communication.
 
13.6 RECORD DATE
 
     For purposes of  determining the Unitholders  entitled to notice  of or  to
vote at a meeting of the Limited Partners or to give approvals without a meeting
as  provided in  Section 13.11,  the Managing General  Partner may  set a Record
Date, which shall not be less than 10 nor more than 60 days before (a) the  date
of  the meeting  (unless such requirement  conflicts with  any rule, regulation,
guideline or requirement of any National Securities Exchange on which the  Units
are  listed  for  trading, in  which  case  the rule,  regulation,  guideline or
requirement of such exchange  shall govern) or (b)  in the event that  approvals
are  sought without a  meeting, the date  by which Unitholders  are requested in
writing by the Managing General Partner to give such approvals.
 
13.7 ADJOURNMENT
 
     When a meeting is adjourned  to another time or  place, notice need not  be
given  of the adjourned meeting and a new  Record Date need not be fixed, if the
time and place thereof are announced at the meeting at which the adjournment  is
taken,  unless such adjournment shall be for more than 45 days. At the adjourned
meeting, the  Partnership  may  transact  any business  which  might  have  been
transacted  at the original meeting. If the adjournment is for more than 45 days
or if a  new Record Date  is fixed for  the adjourned meeting,  a notice of  the
adjourned meeting shall be given in accordance with this Article XIII.
 
                                      A-66
 


<PAGE>

<PAGE>
13.8 WAIVER OF NOTICE; APPROVAL OF MEETING; APPROVAL OF MINUTES
 
     The transactions of any meeting of Unitholders, however called and noticed,
and whenever held, shall be as valid as if occurred at a meeting duly held after
regular  call and notice, if  a quorum is present either  in person or by proxy,
and if, either before or after the meeting, Unitholders representing such quorum
who were present  in person or  by proxy and  entitled to vote,  sign a  written
waiver  of notice or an approval of the holding of the meeting or an approval of
the minutes  thereof.  All  waivers  and  approvals  shall  be  filed  with  the
Partnership  records or made a part of the minutes of the meeting. Attendance of
a Unitholder at a meeting  shall constitute a waiver  of notice of the  meeting,
except when the Unitholder does not approve, at the beginning of the meeting, of
the  transaction of any business  because the meeting is  not lawfully called or
convened; and except that attendance at a  meeting is not a waiver of any  right
to disapprove the consideration of matters required to be included in the notice
of the meeting, but not so included, if the disapproval is expressly made at the
meeting.
 
13.9 QUORUM
 
     The  holders of a majority of the Outstanding Units of the class or classes
for which a  meeting has been  called represented  in person or  by proxy  shall
constitute  a quorum at a meeting of Unitholders of such class or classes unless
any such action  by the Unitholders  requires approval by  holders of a  greater
percentage  of  such Units,  in  which case  the  quorum shall  be  such greater
percentage. At any meeting of the Unitholders duly called and held in accordance
with this Agreement at which a quorum is present, the act of Unitholders holding
Outstanding Units that in the aggregate represent a majority of the  Outstanding
Units  entitled to  vote and be  present in person  or by proxy  at such meeting
shall be deemed to constitute  the act of all  Unitholders, unless a greater  or
different  percentage  is  required  with  respect  to  such  action  under  the
provisions of this Agreement, in which  case the act of the Unitholders  holding
Outstanding  Units  that in  the aggregate  represent at  least such  greater or
different percentage shall be required. The Unitholders present at a duly called
or held meeting at which a quorum  is present may continue to transact  business
until adjournment, notwithstanding the withdrawal of enough Unitholders to leave
less  than a quorum, if any action taken (other than adjournment) is approved by
the required percentage of Outstanding Units specified in this Agreement. In the
absence of a quorum  any meeting of  Unitholders may be  adjourned from time  to
time  by  the  affirmative  vote  of  holders of  at  least  a  majority  of the
Outstanding Units  represented  either in  person  or  by proxy,  but  no  other
business may be transacted, except as provided in Section 13.7.
 
13.10 CONDUCT OF A MEETING
 
     The Managing General Partner shall have full power and authority concerning
the  manner  of conducting  any meeting  of the  Unitholders or  solicitation of
approvals in writing, including the  determination of Persons entitled to  vote,
the existence of a quorum, the satisfaction of the requirements of Section 13.4,
the  conduct  of  voting,  the  validity  and  effect  of  any  proxies  and the
determination of any  controversies, votes or  challenges arising in  connection
with  or  during  the meeting  or  voting.  The Managing  General  Partner shall
designate a  Person  to serve  as  chairman of  any  meeting and  shall  further
designate a Person to take the minutes of any meeting. All minutes shall be kept
with  the records of the Partnership maintained by the Managing General Partner.
The Managing General  Partner may  make such other  regulations consistent  with
applicable  law  and this  Agreement  as it  may  deem advisable  concerning the
conduct of  any meeting  of  the Unitholders  or  solicitation of  approvals  in
writing,  including regulations  in regard  to the  appointment of  proxies, the
appointment and duties of inspectors of votes and approvals, the submission  and
examination  of  proxies  and other  evidence  of  the right  to  vote,  and the
revocation of approvals in writing.
 
13.11 ACTION WITHOUT A MEETING
 
     If authorized by the Managing General Partner, any action that may be taken
at a meeting of the Unitholders may be taken without a meeting if an approval in
writing setting forth the  action so taken is  signed by Unitholders owning  not
less  than  the  minimum  percentage  of the  Outstanding  Units  that  would be
necessary to  authorize or  take  such action  at a  meeting  at which  all  the
Unitholders were
 
                                      A-67
 


<PAGE>

<PAGE>
present  and voted (unless  such provision conflicts  with any rule, regulation,
guideline or requirement of any National Securities Exchange on which the  Units
are  listed  for  trading, in  which  case  the rule,  regulation,  guideline or
requirement of  such exchange  shall govern).  Prompt notice  of the  taking  of
action without a meeting shall be given to the Unitholders who have not approved
in  writing. The  Managing General Partner  may specify that  any written ballot
submitted to Unitholders for the purpose of taking any action without a  meeting
shall  be returned to the Partnership within the time period, which shall be not
less than  20 days,  specified by  the  Managing General  Partner. If  a  ballot
returned  to  the  Partnership  does not  vote  all  of the  Units  held  by the
Unitholders the Partnership shall be deemed  to have failed to receive a  ballot
for  the Units that were not  voted. If approval of the  taking of any action by
the Unitholders is solicited  by any Person  other than by or  on behalf of  the
Managing  General Partner, the written approvals  shall have no force and effect
unless and until  (a) they are  deposited with  the Partnership in  care of  the
Managing  General Partner, (b) approvals sufficient  to take the action proposed
are dated as  of a  date not  more than  90 days  prior to  the date  sufficient
approvals  are deposited with the  Partnership and (c) an  Opinion of Counsel is
delivered to the  Managing General Partner  to the effect  that the exercise  of
such  right and the action  proposed to be taken  with respect to any particular
matter (i) will not cause the Limited Partners to be deemed to be taking part in
the management and control of the business and affairs of the Partnership so  as
to  jeopardize the  Limited Partners' limited  liability, and  (ii) is otherwise
permissible under  the state  statutes  then governing  the rights,  duties  and
liabilities of the Partnership and the Partners.
 
13.12 VOTING AND OTHER RIGHTS
 
     (a)  Only those Record Holders of the Units on the Record Date set pursuant
to Section 13.6 (and also subject to the limitations contained in the definition
of 'Outstanding') shall be entitled to notice  of, and to vote at, a meeting  of
Limited  Partners or to act  with respect to matters as  to which the holders of
the Outstanding Units have the right to  vote or to act. All references in  this
Agreement to votes of, or other acts that may be taken by, the Outstanding Units
shall  be deemed to be references to the  votes or acts of the Record Holders of
such Outstanding Units.
 
     (b) With respect to Units that are  held for a Person's account by  another
Person  (such as a broker, dealer,  bank, trust company or clearing corporation,
or an agent of any of the  foregoing), in whose name such Units are  registered,
such  other Person  shall, in  exercising the voting  rights in  respect of such
Units on any matter,  and unless the arrangement  between such Persons  provides
otherwise,  vote such Units in favor of, and at the direction of, the Person who
is the beneficial owner, and the Partnership  shall be entitled to assume it  is
so  acting without further inquiry. The  provisions of this Section 13.12(b) (as
well as all other provisions of this Agreement) are subject to the provisions of
Section 4.3.
 
                                  ARTICLE XIV
                                     MERGER
 
14.1 AUTHORITY
 
     The Partnership may  merge or  consolidate with one  or more  corporations,
business  trusts  or associations,  real  estate investment  trusts,  common law
trusts or unincorporated businesses, including a general partnership or  limited
partnership,  formed under the laws of the  State of Delaware or any other state
of the United States of  America, pursuant to a  written agreement of merger  or
consolidation ('Merger Agreement') in accordance with this Article XIV.
 
14.2 PROCEDURE FOR MERGER OR CONSOLIDATION
 
     Merger  or consolidation  of the Partnership  pursuant to  this Article XIV
requires the prior  approval of the  Managing General Partner.  If the  Managing
General  Partner shall determine, in the  exercise of its discretion, to consent
to the merger or consolidation, the  Managing General Partner shall approve  the
Merger Agreement, which shall set forth:
 
          (a)  The names and jurisdictions of  formation or organization of each
     of the business entities proposing to merge or consolidate;
 
                                      A-68
 


<PAGE>

<PAGE>
          (b) The name  and jurisdictions  of formation or  organization of  the
     business  entity that  is to survive  the proposed  merger or consolidation
     (the 'Surviving Business Entity');
 
          (c) The terms and conditions of the proposed merger or consolidation;
 
          (d) The  manner  and basis  of  exchanging or  converting  the  equity
     securities of each constituent business entity for, or into, cash, property
     or  general or limited partner interests, rights, securities or obligations
     of the Surviving Business Entity; and (i) if any general or limited partner
     interests, securities or rights of any constituent business entity are  not
     to be exchanged or converted solely for, or into, cash, property or general
     or  limited  partner interests,  rights, securities  or obligations  of the
     Surviving Business Entity, the cash, property or general or limited partner
     interests, rights, securities  or obligations of  any limited  partnership,
     corporation,  trust  or other  entity  (other than  the  Surviving Business
     Entity) which the  holders of  such general or  limited partner  interests,
     securities  or rights are to receive in exchange for, or upon conversion of
     their general or limited partner interests, securities or rights, and  (ii)
     in  the case of securities represented  by certificates, upon the surrender
     of such certificates, which  cash, property or  general or limited  partner
     interests,  rights,  securities or  obligations  of the  Surviving Business
     Entity or any general or  limited partnership, corporation, trust or  other
     entity  (other than the  Surviving Business Entity),  or evidences thereof,
     are to be delivered;
 
          (e) A statement  of any changes  in the constituent  documents or  the
     adoption  of  new constituent  documents  (the articles  or  certificate of
     incorporation, articles  of trust,  declaration  of trust,  certificate  or
     agreement  of  limited partnership  or other  similar charter  or governing
     document) of the Surviving Business Entity to be effected by such merger or
     consolidation;
 
          (f) The effective time  of the merger,  which may be  the date of  the
     filing  of the certificate  of merger pursuant  to Section 14.4  or a later
     date specified in or determinable  in accordance with the Merger  Agreement
     (provided, that if the effective time of the merger is to be later than the
     date  of the filing of the certificate  of merger, the effective time shall
     be fixed no later than the time of the filing of the certificate of  merger
     and stated therein); and
 
          (g)  Such  other provisions  with respect  to  the proposed  merger or
     consolidation as  are  deemed  necessary or  appropriate  by  the  Managing
     General Partner.
 
14.3 APPROVAL BY UNITHOLDERS OF MERGER OR CONSOLIDATION
 
     (a)  The  Managing  General  Partner,  upon  its  approval  of  the  Merger
Agreement, shall direct  that the  Merger Agreement be  submitted to  a vote  of
Unitholders,  whether at a special meeting or by written consent, in either case
in accordance with the requirements of Article XIII. A copy or a summary of  the
Merger  Agreement shall be included in or  enclosed with the notice of a special
meeting or the written consent.
 
     (b) The Merger Agreement shall  be approved upon receiving the  affirmative
vote  or consent of the  holders of a Unit  Majority unless the Merger Agreement
contains any provision that, if contained in an amendment to this Agreement, the
provisions of  this Agreement  or the  Delaware Act  would require  the vote  or
consent  of a  greater percentage of  the Outstanding  Units or of  any class of
Unitholders, in which  case such  greater percentage  vote or  consent shall  be
required for approval of the Merger Agreement.
 
     (c)  After such approval by vote or  consent of the Unitholders, and at any
time prior to the filing of the certificate of merger pursuant to Section  14.4,
the merger or consolidation may be abandoned pursuant to provisions therefor, if
any, set forth in the Merger Agreement.
 
14.4 CERTIFICATE OF MERGER
 
     Upon  the  required  approval  by  the  Managing  General  Partner  and the
Unitholders of a Merger Agreement, a certificate of merger shall be executed and
filed with the Secretary of  State of the State  of Delaware in conformity  with
the requirements of the Delaware Act.
 
                                      A-69
 


<PAGE>

<PAGE>
14.5 EFFECT OF MERGER
 
     (a) At the effective time of the certificate of merger:
 
          (i)  all of the rights, privileges and  powers of each of the business
     entities that has merged or consolidated, and all property, real,  personal
     and  mixed, and  all debts due  to any  of those business  entities and all
     other things  and causes  of action  belonging to  each of  those  business
     entities  shall be  vested in the  Surviving Business Entity  and after the
     merger or consolidation  shall be  the property of  the Surviving  Business
     Entity to the extent they were of each constituent business entity;
 
          (ii) the title to any real property vested by deed or otherwise in any
     of  those constituent business entities shall not  revert and is not in any
     way impaired because of the merger or consolidation;
 
          (iii) all rights of creditors and  all liens on or security  interests
     in  property  of  any  of  those  constituent  business  entities  shall be
     preserved unimpaired; and
 
          (iv) all debts, liabilities and  duties of those constituent  business
     entities shall attach to the Surviving Business Entity, and may be enforced
     against  it to the same extent as  if the debts, liabilities and duties had
     been incurred or contracted by it.
 
     (b) A merger or consolidation effected  pursuant to this Article shall  not
be  deemed to result in  a transfer or assignment  of assets or liabilities from
one entity to another.
 
                                   ARTICLE XV
                             RIGHT TO ACQUIRE UNITS
 
15.1 RIGHT TO ACQUIRE UNITS
 
     (a) Notwithstanding any other provision of  this Agreement, if at any  time
not  more  than  20%  of  the total  Partnership  Interests  of  any  class then
Outstanding are  held by  Persons  other than  the  General Partners  and  their
Affiliates,  the Managing General Partner shall then have the right, which right
it may  assign and  transfer in  whole  or in  part to  the Partnership  or  any
Affiliate  of the Managing General Partner,  exercisable in its sole discretion,
to purchase all, but  not less than  all, of the  Partnership Interests of  such
class then Outstanding held by Persons other than the General Partners and their
Affiliates,  at the greater of (x) the Current Market Price as of the date three
business days prior to the date that the notice described in Section 15.1(b)  is
mailed  and (y) the highest  price paid by the General  Partners or any of their
Affiliates for any such Partnership Interest purchased during the 90-day  period
preceding  the date that the  notice described in Section  15.1(b) is mailed. As
used in this Agreement, (i) 'Current Market  Price' as of any date of any  class
of  Partnership  Interests  listed  or  admitted  to  trading  on  any  National
Securities  Exchange  means  the  average  of  the  daily  Closing  Prices   (as
hereinafter  defined)  per Limited  Partner Interest  of such  class for  the 20
consecutive Trading  Days (as  hereinafter defined)  immediately prior  to  such
date;  (ii) 'Closing Price' for  any day means the last  sale price on such day,
regular way, or in case no such sale takes place on such day, the average of the
closing bid  and asked  prices  on such  day, regular  way,  in either  case  as
reported in the principal consolidated transaction reporting system with respect
to  securities  listed  or  admitted  for  trading  on  the  principal  National
Securities  Exchange  (other  than  the  Nasdaq  Stock  Market)  on  which   the
Partnership Interests of such class are listed or admitted to trading or, if the
Partnership Interests of such class are not listed or admitted to trading on any
National  Securities Exchange  (other than  the Nasdaq  Stock Market),  the last
quoted price on such day or, if not  so quoted, the average of the high bid  and
low  asked prices on such day in the over-the-counter market, as reported by the
Nasdaq Stock Market or such other system then in use, or, if on any such day the
Partnership Interests of such class are not quoted by any such organization, the
average of  the closing  bid and  asked prices  on such  day as  furnished by  a
professional  market maker making a market  in the Partnership Interests of such
class selected by the Managing General Partner, or if on any such day no  market
maker  is making a market  in the Partnership Interests  of such class, the fair
value of such Partnership Interests on such day as determined reasonably and  in
good  faith by the General Partner; and (iii) 'Trading Day' means a day on which
the principal National Securities Exchange on which the Partnership Interests of
any class are listed or admitted to trading is
 
                                      A-70
 


<PAGE>

<PAGE>
open for the transaction of business or, if Partnership Interests of a class are
not listed or admitted to trading on any National Securities Exchange, a day  on
which banking institutions in New York City generally are open.
 
     (b)  If the Managing General Partner, any Affiliate of the Managing General
Partner or the Partnership elects to exercise the right to purchase  Partnership
Interests  granted  pursuant to  Section 15.1(a),  the Managing  General Partner
shall deliver to  the Transfer Agent  notice of such  election to purchase  (the
'Notice  of Election to Purchase') and shall  cause the Transfer Agent to mail a
copy of such Notice of Election to Purchase to the Record Holders of Partnership
Interests (as of  a Record  Date selected by  the Managing  General Partner)  at
least  10, but not more than 60, days prior to the Purchase Date. Such Notice of
Election to Purchase  shall also be  published for  a period of  at least  three
consecutive days in at least two daily newspapers of general circulation printed
in the English language and published in the Borough of Manhattan, New York. The
Notice  of Election to  Purchase shall specify  the Purchase Date  and the price
(determined in accordance with Section  15.1(a)) at which Partnership  Interests
will  be purchased and state that the Managing General Partner, its Affiliate or
the Partnership,  as  the case  may  be,  elects to  purchase  such  Partnership
Interests,   upon  surrender  of   Certificates  representing  such  Partnership
Interests in exchange  for payment, at  such office or  offices of the  Transfer
Agent  as the Transfer Agent may specify, or  as may be required by any National
Securities Exchange on which the Partnership Interests are listed or admitted to
trading. Any such Notice of  Election to Purchase mailed  to a Record Holder  of
Partnership Interests at his address as reflected in the records of the Transfer
Agent  shall be conclusively  presumed to have been  given regardless of whether
the owner receives such notice. On or  prior to the Purchase Date, the  Managing
General  Partner, its Affiliate  or the Partnership,  as the case  may be, shall
deposit with  the  Transfer  Agent cash  in  an  amount sufficient  to  pay  the
aggregate  purchase price of all of the Partnership Interests to be purchased in
accordance with this Section 15.1. If  the Notice of Election to Purchase  shall
have  been duly given as aforesaid at least  10 days prior to the Purchase Date,
and if on or prior to the  Purchase Date the deposit described in the  preceding
sentence  has been made for the benefit  of the holders of Partnership Interests
subject to purchase as provided herein,  then from and after the Purchase  Date,
notwithstanding  that  any  Certificate  shall  not  have  been  surrendered for
purchase, all rights of the holders of such Partnership Interests (including any
rights pursuant to Articles  IV, V, VI, and  XII) shall thereupon cease,  except
the  right to receive the purchase  price (determined in accordance with Section
15.1(a)) for Partnership Interests therefor, without interest, upon surrender to
the Transfer Agent of the Certificates representing such Partnership  Interests,
and  such Partnership Interests  shall thereupon be deemed  to be transferred to
the Managing General Partner, its Affiliate or the Partnership, as the case  may
be,  on the  record books  of the  Transfer Agent  and the  Partnership, and the
General Partner  or  any Affiliate  of  the  Managing General  Partner,  or  the
Partnership,  as the case  may be, shall be  deemed to be the  owner of all such
Partnership Interests from and after the Purchase Date and shall have all rights
as the owner  of such Partnership  Interests (including all  rights as owner  of
such Partnership Interests pursuant to Articles IV, V, VI and XII).
 
     (c)  At  any  time  from  and  after the  Purchase  Date,  a  holder  of an
Outstanding Partnership Interest subject to purchase as provided in this Section
15.1 may surrender his Certificate  evidencing such Partnership Interest to  the
Transfer  Agent  in exchange  for  payment of  the  amount described  in Section
15.1(a), therefor, without interest thereon.
 
                                  ARTICLE XVI
                               GENERAL PROVISIONS
 
16.1 ADDRESSES AND NOTICES
 
     Any  notice,  demand,  request,  report  or  proxy  materials  required  or
permitted  to be  given or made  to a  Partner or Assignee  under this Agreement
shall be in writing and shall be  deemed given or made when delivered in  person
or  when sent  by first class  United States mail  or by other  means of written
communication to the  Partner or Assignee  at the address  described below.  Any
notice, payment or report to be given or made to a Partner or Assignee hereunder
shall  be deemed conclusively to have been  given or made, and the obligation to
give  such   notice   or   report   or   to   make   such   payment   shall   be
 
                                      A-71
 


<PAGE>

<PAGE>
deemed  conclusively to have been fully  satisfied, upon sending of such notice,
payment or report to  the Record Holder of  such Unit or Incentive  Distribution
Right  at  his address  as shown  on the  records  of the  Transfer Agent  or as
otherwise shown on the  records of the Partnership,  regardless of any claim  of
any  Person who may have an interest  in such Unit, Incentive Distribution Right
or the Unsubordinated General Partner Interest of a General Partner by reason of
any assignment  or otherwise.  An  affidavit or  certificate  of making  of  any
notice, payment or report in accordance with the provisions of this Section 16.1
executed  by the General Partner, the Transfer Agent or the mailing organization
shall be prima facie evidence of the giving or making of such notice, payment or
report. If any notice,  payment or report  addressed to a  Record Holder at  the
address of such Record Holder appearing on the books and records of the Transfer
Agent  or the Partnership is returned by the United States Post Office marked to
indicate that the  United States Postal  Service is unable  to deliver it,  such
notice, payment or report and any subsequent notices, payments and reports shall
be  deemed to have been  duly given or made  without further mailing (until such
time as such Record Holder or another Person notifies the Transfer Agent or  the
Partnership of a change in his address) if they are available for the Partner or
Assignee  at the principal  office of the  Partnership for a  period of one year
from the date of the giving or making  of such notice, payment or report to  the
other  Partners and  Assignees. Any  notice to  the Partnership  shall be deemed
given if received by the Managing General Partner at the principal office of the
Partnership designated pursuant to  Section 2.3. The  General Partners may  rely
and  shall  be protected  in  relying on  any notice  or  other document  from a
Partner, Assignee or other Person if believed by it to be genuine.
 
16.2 FURTHER ACTION
 
     The  parties  shall  execute  and   deliver  all  documents,  provide   all
information  and  take or  refrain from  taking  action as  may be  necessary or
appropriate to achieve the purposes of this Agreement.
 
16.3 BINDING EFFECT
 
     This Agreement  shall be  binding upon  and  inure to  the benefit  of  the
parties  hereto and  their heirs,  executors, administrators,  successors, legal
representatives and permitted assigns.
 
16.4 INTEGRATION
 
     This Agreement constitutes  the entire agreement  among the parties  hereto
pertaining  to the subject matter hereof and supersedes all prior agreements and
understandings pertaining thereto.
 
16.5 CREDITORS
 
     None of the provisions of  this Agreement shall be  for the benefit of,  or
shall be enforceable by, any creditor of the Partnership.
 
16.6 WAIVER
 
     No  failure  by any  party to  insist  upon the  strict performance  of any
covenant, duty, agreement  or condition  of this  Agreement or  to exercise  any
right  or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.
 
16.7 COUNTERPARTS
 
     This Agreement may be executed in counterparts, all of which together shall
constitute an agreement binding on all the parties hereto, notwithstanding  that
all  such parties are not  signatories to the original  or the same counterpart.
Each party shall become  bound by this Agreement  immediately upon affixing  its
signature  hereto or, in the  case of a Person  acquiring a Unit, upon accepting
the certificate  evidencing such  Unit or  executing and  delivering a  Transfer
Application  as herein  described, independently of  the signature  of any other
party.
 
                                      A-72
 


<PAGE>

<PAGE>
16.8 APPLICABLE LAW
 
     This Agreement shall be  construed in accordance with  and governed by  the
laws  of the State of Delaware, without regard to the principles of conflicts of
law.
 
16.9 INVALIDITY OF PROVISIONS
 
     If any  provision of  this  Agreement is  or  becomes invalid,  illegal  or
unenforceable  in any respect, the validity,  legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
 
16.10 CONSENT OF PARTNERS
 
     Each Partner hereby expressly  consents and agrees  that, whenever in  this
Agreement  it is specified that an action may be taken upon the affirmative vote
or consent of less than  all of the Partners, such  action may be so taken  upon
the concurrence of less than all of the Partners and each Partner shall be bound
by the results of such action.
 
                                      A-73



<PAGE>

<PAGE>
     IN  WITNESS WHEREOF, the parties hereto  have executed this Agreement as of
the date first written above.
 
                                          Managing General Partner:
                                          National Propane Corporation
 
                                          By:
                                             ...................................
                                            NAME:
                                            TITLE:
 
                                          Special General Partner:
                                          National Propane SGP, Inc.
 
                                          By:
                                             ...................................
                                            NAME:
                                            TITLE:
 
                                          Organizational Limited Partner:
                                          Triarc Companies, Inc.
 
                                          By:
                                             ...................................
                                            NAME:
                                            TITLE:
 
                                          Limited Partners
 
                                          All Limited Partners now and hereafter
                                          admitted as  Limited Partners  of  the
                                          Partnership,  pursuant  to  powers  of
                                          attorney now and hereafter executed in
                                          favor of, and granted and delivered to
                                          the Managing General Partner.
 
                                          By:
                                             ...................................
 
                                      A-74
 


<PAGE>

<PAGE>
                          EXHIBIT A TO THE AMENDED AND
                  RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
                        NATIONAL PROPANE PARTNERS, L.P.
 
                      CERTIFICATE EVIDENCING COMMON UNITS
                     REPRESENTING LIMITED PARTNER INTERESTS
                        NATIONAL PROPANE PARTNERS, L.P.
 
No.   Common Units
 
     National Propane  Corporation,  a  Delaware corporation,  as  the  Managing
General   Partner  of  National  Propane  Partners,  L.P.,  a  Delaware  limited
partnership (the 'Partnership'),  hereby certifies  that (the  'Holder') is  the
registered  owner of                  Common Units  representing limited partner
interests in the Partnership (the 'Common  Units') transferable on the books  of
the  Partnership, in  person or by  duly authorized attorney,  upon surrender of
this Certificate  properly  endorsed  and accompanied  by  a  properly  executed
application  for transfer of  the Common Units  represented by this Certificate.
The rights, preferences and  limitations of the Common  Units are set forth  in,
and  this Certificate  and the  Common Units  represented hereby  are issued and
shall in all respects be subject to the terms and provisions of, the Amended and
Restated Agreement of Limited Partnership of National Propane Partners, L.P., as
amended,  supplemented  or  restated  from   time  to  time  (the   'Partnership
Agreement').  Copies of the  Partnership Agreement are  on file at,  and will be
furnished without charge on delivery of  written request to the Partnership  at,
the  principal office of the  Partnership located at Suite  1700, IES Tower, 200
1st Street, S.E., Cedar  Rapids, Iowa 52401. Capitalized  terms used herein  but
not defined shall have the meaning given them in the Partnership Agreement.
 
     The  Holder, by accepting this Certificate, is deemed to have (i) requested
admission as, and  agreed to become,  a Limited  Partner and to  have agreed  to
comply with and be bound by and to have executed the Partnership Agreement, (ii)
represented  and warranted  that the Holder  has all right,  power and authority
and, if an  individual, the  capacity necessary  to enter  into the  Partnership
Agreement,  (iii) granted the powers of attorney provided for in the Partnership
Agreement and  (iv)  made the  waivers  and  given the  consents  and  approvals
contained in the Partnership Agreement.
 
     This  Certificate shall  not be  valid for any  purpose unless  it has been
countersigned and registered by the Transfer Agent and Registrar.
 
<TABLE>
<S>                                                       <C>
Dated:                                                    NATIONAL PROPANE CORPORATION,
                                                          as Managing General Partner
 
Countersigned and Registered by:
 
                                                          By:
            as Transfer Agent and Registrar               President
 
                          By:                             By:
                  Authorized Signature                    Secretary
</TABLE>
 
                                      A-75



<PAGE>

<PAGE>
[REVERSE OF CERTIFICATE]
 
                                 ABBREVIATIONS
 
     The  following abbreviations, when  used in the inscription  on the face of
this Certificate, shall be construed as follows according to applicable laws  or
regulations:
 
<TABLE>
<S>           <C>                              <C>
TEN COM --    as tenants in common             UNIF GIFT MIN ACT:
TEN ENT --    as tenants by the entireties     ........................ Custodian ........................
JT TEN --     as joint tenants with right of   (Cust)                                           (Minor)
              survivorship and not as          under Uniform Gifts to Minors
              tenants in common                Act .......................................................
                                                               State
</TABLE>
 
     Additional abbreviations, though not in the above list, may also be used.
 
                           ASSIGNMENT OF COMMON UNITS
                                       IN
                        NATIONAL PROPANE PARTNERS, L.P.
              IMPORTANT NOTICE REGARDING INVESTOR RESPONSIBILITIES
          DUE TO TAX SHELTER STATUS OF NATIONAL PROPANE PARTNERS, L.P.
 
     You  have acquired  an interest in  National Propane  Partners, L.P., Suite
1700, IES Tower, 200 1st Street, S.E., Cedar Rapids, Iowa 52401, whose  taxpayer
identification  number is  42-1453040. The  Internal Revenue  Service has issued
National Propane Partners, L.P. the  following tax shelter registration  number:
       .
 
     YOU MUST REPORT THIS REGISTRATION NUMBER TO THE INTERNAL REVENUE SERVICE IF
YOU CLAIM ANY DEDUCTION, LOSS, CREDIT, OR OTHER TAX BENEFIT OR REPORT ANY INCOME
BY REASON OF YOUR INVESTMENT IN NATIONAL PROPANE PARTNERS, L.P.
 
     You  must report the registration  number as well as  the name and taxpayer
identification number of NATIONAL PROPANE PARTNERS, L.P. on Form 8271. FORM 8271
MUST BE ATTACHED TO THE RETURN ON  WHICH YOU CLAIM THE DEDUCTION, LOSS,  CREDIT,
OR  OTHER  TAX BENEFIT  OR REPORT  ANY INCOME  BY REASON  OF YOUR  INVESTMENT IN
NATIONAL PROPANE PARTNERS, L.P.
 
     If you transfer your interest in National Propane Partners, L.P. to another
person, you  are  required  by the  Internal  Revenue  Service to  keep  a  list
containing  (a) that person's name,  address and taxpayer identification number,
(b) the date on which you transferred the interest and (c) the name, address and
tax shelter registration number of National Propane Partners, L.P. If you do not
want to keep such a list, you  must (1) send the information specified above  to
the  Partnership, which will keep the list for  this tax shelter, and (2) give a
copy of this  notice to  the person  to whom  you transfer  your interest.  Your
failure  to comply with any of the above-described responsibilities could result
in the imposition of a penalty under Section 6707(b) or 6708(a) of the  Internal
Revenue  Code of  1986, as amended,  unless such failure  is shown to  be due to
reasonable cause.
 
     ISSUANCE OF A REGISTRATION NUMBER DOES NOT INDICATE THAT THIS INVESTMENT OR
THE CLAIMED  TAX BENEFITS  HAVE  BEEN REVIEWED,  EXAMINED,  OR APPROVED  BY  THE
INTERNAL REVENUE SERVICE.
 
                                      A-76
 


<PAGE>

<PAGE>
     FOR VALUE RECEIVED, .............................. hereby assigns, conveys,
sells and transfers unto .......................................................
 
<TABLE>
<S>                                                                   <C>
 .......................................................  ........................................................
            (Please print or typewrite name                       (Please insert Social Security or other
                and address of Assignee)                              identifying number of Assignee)
</TABLE>

 ..................................... Common Units representing limited partner
interests  evidenced by this Certificate,  subject to the Partnership Agreement,
and does hereby irrevocably constitute and appoint ..... as its attorney-in-fact
with full power of substitution to transfer  the same on  the books of  National
Propane  Partners, L.P.

<TABLE>
<S>                                                           <C>
Date: ............................................ NOTE:  The signature to any endorsement hereon must correspond
                                                          with the name as written upon the face of this
                                                          Certificate in every particular, without alternation,
                                                          enlargement or change.
 
SIGNATURE(S) MUST BE GUARANTEED BY A MEMBER FIRM OF THE
NATIONAL ASSOCIATION OF SECURITIES DEALERS, INC. OR BY A  ........................................................
COMMERCIAL BANK OR TRUST COMPANY                          (Signature)
SIGNATURE(S) GUARANTEED
                                                          ........................................................
                                                          (Signature)
</TABLE>
 
     No  transfer of the Common Units evidenced hereby will be registered on the
books of the Partnership, unless the Certificate evidencing the Common Units  to
be  transferred is surrendered  for registration or  transfer and an Application
for Transfer of Common Units has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the Partnership  will
furnish  on request without charge. A transferor  of the Common Units shall have
no duty to the transferee with respect to execution of the transfer  application
in  order for  such transferee  to obtain  registration of  the transfer  of the
Common Units.
 
                                      A-77



<PAGE>

<PAGE>
                    APPLICATION FOR TRANSFER OF COMMON UNITS
 
     The undersigned ('Assignee') hereby applies for transfer to the name of the
Assignee of the Common Units evidenced hereby.
 
     The  Assignee (a) requests  admission as a  Substituted Limited Partner and
agrees to comply  with and be  bound by,  and hereby executes,  the Amended  and
Restated  Agreement of  Limited Partnership  of National  Propane Partners, L.P.
(the 'Partnership'), as  amended, supplemented  or restated to  the date  hereof
(the 'Partnership Agreement'), (b) represents and warrants that the Assignee has
all  right, power and authority and, if an individual, the capacity necessary to
enter into the Partnership Agreement, (c) appoints the Managing General  Partner
of  the Partnership and, if  a Liquidator shall be  appointed, the Liquidator of
the Partnership  as  the  Assignee's  attorney-in-fact  to  execute,  swear  to,
acknowledge   and  file   any  document,  including,   without  limitation,  the
Partnership Agreement and any amendment  thereto and the Certificate of  Limited
Partnership   of  the  Partnership  and  any  amendment  thereto,  necessary  or
appropriate for the Assignee's admission as a Substituted Limited Partner and as
a party to the Partnership Agreement,  (d) gives the power of attorney  provided
for  in  the Partnership  Agreement, and  (e)  makes the  waivers and  gives the
consents and approvals contained in the Partnership Agreement. Capitalized terms
not defined herein have the meanings  assigned to such terms in the  Partnership
Agreement.
 
Date:.................................
 
<TABLE>
<S>                                                       <C>
 .......................................................  ........................................................
 
SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE                    SIGNATURE OF ASSIGNEE
 
 .......................................................  ........................................................
 
      PURCHASE PRICE INCLUDING COMMISSIONS, IF ANY                      NAME AND ADDRESS OF ASSIGNEE
</TABLE>
 
Type of Entity (check one):
 
<TABLE>
<S>                               <C>                               <C>
[ ]         Individual            [ ]         Partnership           [ ]         Corporation
 
[ ]         Trust                 [ ]         Other (specify)  .....................................
</TABLE>
 
Nationality (check one)
 
<TABLE>
<S>                                  <C>                               <C>
[ ]         U.S. Citizen, Resident or Domestic Entity
[ ]         Foreign Corporation                  [ ]         Non-resident Alien
</TABLE>
 
     If  the  U.S. Citizen,  Resident  or Domestic  Entity  box is  checked, the
following certification must be completed.
 
     Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
'Code'), the Partnership must withhold tax with respect to certain transfers  of
property  if a holder of an interest in  the Partnership is a foreign person. To
inform the  Partnership that  no withholding  is required  with respect  to  the
undersigned  interestholder's interest  in it, the  undersigned hereby certifies
the following  (or, if  applicable, certifies  the following  on behalf  of  the
interestholder).
 
Complete Either A or B:
 
A.      Individual Interestholder
 
        1.         I  am not a  non-resident alien  for purposes  of U.S. income
        taxation.
 
        2.      My U.S. taxpayer identification number (Social Security Number)
        is  ....................................................................
 
                                      A-78
 


<PAGE>

<PAGE>
        3.      My home address is  .......................................... .
 
B.      Partnership, Corporation or Other Interestholder
 
        1.       .............................................. is not a foreign
                            (NAME OF INTERESTHOLDER)
       corporation, foreign  partnership, foreign  trust or  foreign estate  (as
        those terms are defined in the Code and Treasury Regulations).
 
        2.         The interestholder's  U.S. employer  identification number is
         ..................................................................... .
 
        3.      The  interestholder's office address and place of  incorporation
        (if applicable) is......................................................
 .                                                          .
 
        The  interestholder agrees to  notify the Partnership  within sixty (60)
days of the date the interestholder becomes a foreign person.
 
        The interestholder understands that this certificate may be disclosed to
the Internal Revenue  Service by the  Partnership and that  any false  statement
contained herein could be punishable by fine, imprisonment or both.
 
        Under  penalties  of  perjury,  I  declare  that  I  have  examined this
certification and to the best of my knowledge and belief it is true, correct and
complete and, if  applicable, I further  declare that I  have authority to  sign
this document on behalf of
 
                          ..........................
                             NAME OF INTERESTHOLDER
 
                          ..........................
                               SIGNATURE AND DATE
 
                          ..........................
                             TITLE (IF APPLICABLE)
 
     Note:  If the Assignee  is a broker, dealer,  bank, trust company, clearing
corporation, other nominee holder or  an agent of any  of the foregoing, and  is
holding  for  the  account  of  any other  person,  this  application  should be
completed by an  officer thereof or,  in the case  of a broker  or dealer, by  a
registered  representative who is  a member of  a registered national securities
exchange or a member  of the National Association  of Securities Dealers,  Inc.,
or,  in the  case of  any other  nominee holder,  a person  performing a similar
function. If the  Assignee is a  broker, dealer, bank,  trust company,  clearing
corporation,  other nominee owner or an agent of any of the foregoing, the above
certification as to any person  for whom the signee  will hold the Common  Units
shall be made to the best of the Assignee's knowledge.
 
                                      A-79
 


<PAGE>

<PAGE>
                      [THIS PAGE INTENTIONALLY LEFT BLANK]



<PAGE>

<PAGE>
                                                                      APPENDIX B
 
     No  transfer of the Common Units evidenced hereby will be registered on the
books of the Partnership, unless the Certificate evidencing the Common Units  to
be  transferred is surrendered  for registration or  transfer and an Application
for Transfer of Common Units has been executed by a transferee either (a) on the
form set forth below or (b) on a separate application that the Partnership  will
furnish  on request without charge. A transferor  of the Common Units shall have
no duty to the transferee with respect to execution of the transfer  application
in  order for  such transferee  to obtain  registration of  the transfer  of the
Common Units.
 
                    APPLICATION FOR TRANSFER OF COMMON UNITS
 
     The undersigned ('Assignee') hereby applies for transfer to the name of the
Assignee of the Common Units evidenced hereby.
 
     The Assignee (a) requests  admission as a  Substituted Limited Partner  and
agrees  to comply  with and be  bound by,  and hereby executes,  the Amended and
Restated Agreement of  Limited Partnership  of National  Propane Partners,  L.P.
(the  'Partnership'), as  amended, supplemented or  restated to  the date hereof
(the 'Partnership Agreement'), (b) represents and warrants that the Assignee has
all right, power and authority and, if an individual, the capacity necessary  to
enter  into the Partnership Agreement, (c) appoints the Managing General Partner
of the Partnership and,  if a Liquidator shall  be appointed, the Liquidator  of
the  Partnership  as  the  Assignee's  attorney-in-fact  to  execute,  swear to,
acknowledge  and  file   any  document,  including,   without  limitation,   the
Partnership  Agreement and any amendment thereto  and the Certificate of Limited
Partnership  of  the  Partnership  and  any  amendment  thereto,  necessary   or
appropriate for the Assignee's admission as a Substituted Limited Partner and as
a  party to the Partnership  Ageement, (d) gives the  power of attorney provided
for in  the Partnership  Agreement, and  (e)  makes the  waivers and  gives  the
consents and approvals contained in the Partnership Agreement. Capitalized terms
not  defined herein have the meanings assigned  to such terms in the Partnership
Agreement.
 
Date:.................................
 
Date:.................................
 
<TABLE>
<S>                                                        <C>
                                                           ......................................................
 ........................................................                  SIGNATURE OF ASSIGNEE
 SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
 
                                                           ......................................................
                                                                        NAME AND ADDRESS OF ASSIGNEE
 ........................................................
      PURCHASE PRICE INCLUDING COMMISSIONS, IF ANY
</TABLE>
 
Type of Entity (check one):
 
 [ ] Individual               [ ] Partnership  [ ] Corporation
 
 [ ]  Trust                   [  ] Other  (specify)
 
Nationality (check one)
 
                  [ ] U.S. Citizen, Resident or Domestic Entity
 
                  [ ] Foreign Corporation               [ ] Non-resident Alien
 
                                      B-1
 


<PAGE>

<PAGE>
     If  the  U.S. Citizen,  Resident  or Domestic  Entity  box is  checked, the
following certification must be completed.
 
     Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the
'Code'), the Partnership must withhold tax with respect to certain transfers  of
property  if a holder of an interest in  the Partnership is a foreign person. To
inform the  Partnership that  no withholding  is required  with respect  to  the
undersigned  interestholder's interest  in it, the  undersigned hereby certifies
the following  (or, if  applicable, certifies  the following  on behalf  of  the
interestholder).
 
Complete Either A or B:
 
A. Individual Interestholder
 
   1. I am not a non-resident alien for purposes of U.S. income taxation.
 
   2. My U.S. taxpayer identification number (Social Security Number) is
 
       ....................................................................... .
 
   3. My home address is  .................................................... .
 
B. Partnership, Corporation or Other Interestholder
 
   1.  ........................................................ is not a foreign
                                     (NAME OF INTERESTHOLDER)
      corporation,  foreign  partnership, foreign  trust  or foreign  estate (as
      those terms are defined in the Code and Treasury Regulations).
 
   2. The interestholder's U.S. employer identification number is  ........... .
 
   3. The interestholder's office address and place of incorporation (if
      applicable) is
 
       ....................................................................... .
 
     The interestholder agrees to notify the Partnership within sixty (60)  days
of the date the interestholder becomes a foreign person.
 
     The  interestholder understands that  this certificate may  be disclosed to
the Internal Revenue  Service by the  Partnership and that  any false  statement
contained herein could be punishable by fine, imprisonment or both.
 
     Under   penalties  of  perjury,  I  declare   that  I  have  examined  this
certification and to the best of my knowledge and belief it is true, correct and
complete and, if  applicable, I further  declare that I  have authority to  sign
this document on behalf of
 
                        .................................
                             NAME OF INTERESTHOLDER
 
                        .................................
                               SIGNATURE AND DATE
 
                        .................................
                             TITLE (IF APPLICABLE)
 
     Note:  If the Assignee  is a broker, dealer,  bank, trust company, clearing
corporation, other nominee holder or  an agent of any  of the foregoing, and  is
holding  for  the  account  of  any other  person,  this  application  should be
completed by an  officer thereof or,  in the case  of a broker  or dealer, by  a
registered  representative who is  a member of  a registered national securities
exchange or a member  of the National Association  of Securities Dealers,  Inc.,
or,  in the  case of  any other  nominee holder,  a person  performing a similar
function. If the  Assignee is a  broker, dealer, bank,  trust company,  clearing
corporation,  other nominee owner or an agent of any of the foregoing, the above
certification as to any person for whom the Assignee will hold the Common  Units
shall be made to the best of the Assignee's knowledge.
 
                                      B-2



<PAGE>

<PAGE>
                                                                      APPENDIX C
 
                           GLOSSARY OF CERTAIN TERMS
 
     Acquisition:  Any transaction in which any  member of the Partnership Group
acquires (through an asset acquisition, merger, stock acquisition or other  form
of  investment)  control over  all or  a  portion of  the assets,  properties or
business of another Person for the purpose of increasing the operating  capacity
or revenues of the Partnership Group above the operating capacity or revenues of
the Partnership Group existing immediately prior to such transaction.
 
     Adjusted  Operating Surplus: With respect  to any period, Operating Surplus
generated during  such period,  as  adjusted to  (a) exclude  Operating  Surplus
attributable  to (i) any net increase  in working capital borrowings during such
period and (ii) any  net reduction in cash  reserves for Operating  Expenditures
that otherwise increased the Operating Surplus generated during such period, and
(b)  include  (i) any  net decrease  in working  capital borrowings  during such
period, and (ii) any  net increase in cash  reserves for Operating  Expenditures
during  such  period  required  by  any debt  instrument  for  the  repayment of
principal, interest or premium on indebtedness. Adjusted Operating Surplus  does
not  include that portion of Operating Surplus  included in clause (a)(i) of the
definition of Operating Surplus.
 
     Affiliate: With respect  to any  Person, another Person  that controls,  is
controlled  by or is under common  control with (either directly or indirectly),
such  Person  (including,  with  respect   to  the  General  Partners,   without
limitation,  Triarc, DWG Acquisition Group, L.P.,  Nelson Peltz, Peter W. May or
any of their respective Affiliates).  For purposes of this definition  'control'
of a Person means the ability to direct or cause the direction of the management
and  policies of such Person whether through the ownership of voting securities,
by contract or otherwise.
 
     Audit Committee: A  committee of  the board  of directors  of the  Managing
General  Partner or the Special General Partner composed entirely of two or more
directors who are  neither officers nor  employees of such  General Partner  nor
officers,  directors  or  employees of  any  Affiliate of  such  General Partner
(except that such directors may be directors of both General Partners).
 
     Available Cash:  With respect  to any  fiscal quarter  of the  Partnership,
prior to liquidation of the Partnership:
 
          (a)  the sum of (i)  all cash and cash  equivalents of the Partnership
     Group on hand at the end of such quarter, and (ii) all additional cash  and
     cash  equivalents  of  the  Partnership  Group  on  hand  on  the  date  of
     determination of Available Cash with respect to such quarter resulting from
     borrowings for working capital purposes made subsequent to the end of  such
     quarter, less
 
          (b)  the amount of any cash  reserves that is necessary or appropriate
     in the reasonable discretion of the Managing General Partner to (i) provide
     for the  proper conduct  of the  business of  the Partnership  Group,  (ii)
     comply  with  applicable law  or  any loan  agreement,  security agreement,
     mortgage, debt instrument  or other  agreement or obligation  to which  any
     member  of the Partnership Group is a party  or by which it is bound or its
     assets are subject, or (iii) provide funds for distributions to Unitholders
     and the General Partners  in respect of  any one or more  of the next  four
     quarters;  provided,  however, that  the Managing  General Partner  may not
     establish cash  reserves pursuant  to (iii)  above if  the effect  of  such
     reserves  would be that the Partnership is unable to distribute the Minimum
     Quarterly Distribution on all  Common Units with  respect to such  quarter;
     and provided further, that disbursements made or cash reserves established,
     increased or reduced after the end of any quarter but on or before the date
     on  which  the  Partnership makes  its  distribution of  Available  Cash in
     respect of such  quarter shall be  deemed to have  been made,  established,
     increased or reduced for purposes of determining Available Cash within such
     quarter  if the Managing General Partner so determines. Notwithstanding the
     foregoing, 'Available Cash' after the liquidation of the Partnership occurs
     shall equal zero.
 
     Bank  Credit   Facility:  The   $40  million   acquisition  facility   (the
'Acquisition  Facility')  and  the  $15 million  working  capital  facility (the
'Working Capital Facility'), both entered into by the Operating Partnership.
 
                                      C-1
 


<PAGE>

<PAGE>
     BTU: British  thermal unit.  The quantity  of heat  required to  raise  the
temperature of one pound of water by one degree Fahrenheit.
 
     Capital  Account: The capital account maintained  for a Partner pursuant to
the Partnership Agreement.  The Capital  Account of a  partner in  respect of  a
General  Partner  Interest, a  Common Unit,  a  Subordinated Unit,  an Incentive
Distribution Right or any other Partnership  Interest shall be the amount  which
such  Capital Account  would be if  such general partner  interest, Common Unit,
Subordinated Unit, Incentive Distribution  Right, or other Partnership  Interest
were  the only interest in the Partnership held  by a Partner from and after the
date on which  such general  partner interest, Common  Unit, Subordinated  Unit,
Incentive Distribution Right or other Partnership Interest was first issued.
 
     Capital Improvements: Additions or improvements to the capital assets owned
by  any member of  the Partnership Group  or the acquisition  of existing or the
construction of  new  capital  assets  (including,  without  limitation,  retail
distribution  outlets,  propane  tanks,  pipeline  systems,  storage facilities,
appliance showrooms, training facilities and  related assets), made to  increase
the  operating capacity of the Partnership  Group over the operating capacity of
the Partnership Group existing immediately prior to such addition,  improvement,
acquisition or construction.
 
     Capital Surplus: All Available Cash distributed by the Partnership from any
source will be treated as being distributed from Operating Surplus until the sum
of  all Available  Cash distributed  since the  commencement of  the Partnership
equals the  Operating  Surplus as  of  the end  of  the quarter  prior  to  such
distribution.  Any  excess Available  Cash  will be  deemed  to be  from Capital
Surplus.
 
     Cause: Means (A)  a court of  competent jurisdiction has  entered a  final,
non-appealable  judgment finding the Managing  General Partner liable for actual
fraud, gross negligence  or willful or  wanton misconduct in  its capacity as  a
general  partner of the Partnership or (B) the Special General Partner, prior to
the Triarc Merger does not have the same directors on its Board of Directors  as
the Managing General Partner.
 
     Closing  Date:  The  first date  on  which  Common Units  are  sold  by the
Partnership to the Underwriters pursuant  to the provisions of the  Underwriting
Agreement.
 
     Common   Unit  Arrearage:  The  amount   by  which  the  Minimum  Quarterly
Distribution in respect of a quarter during the Subordination Period exceeds the
distribution of Available  Cash from  Operating Surplus actually  made for  such
quarter  on a Common  Unit, cumulative for  such quarter and  all prior quarters
during the Subordination Period.
 
     Common Units:  A Unit  representing a  fractional part  of the  Partnership
Interests  of all partners of the Partnership  and assignees of any such limited
partner's interest and having the rights and obligations specified with  respect
to Common Units in the Partnership Agreement.
 
     Conveyance,   Contribution  and  Assumption  Agreement:  Collectively,  the
Conveyance, Contribution and Assumption Agreement, to be dated the Closing Date,
by and among the Operating Partnership, the General Partners and the Partnership
and the Contribution and Assumption Agreement, to be dated the Closing Date,  by
and  among  the  Operating Partnership,  the  General Partners  and  NSSI, which
together provide for, among other things, the principal transaction pursuant  to
which  substantially  all  of  the  assets  of  the  General  Partners  will  be
transferred and substantially all  of their liabilities will  be assumed by  the
Operating Partnership.
 
     Current  Market Price: With respect  to any class of  Units as of any date,
the average of  the daily Closing  Prices (as hereinafter  defined) per Unit  of
such  class  for  the  20  consecutive  Trading  Days  (as  hereinafter defined)
immediately prior to such date. 'Closing Price' for any day means the last  sale
price on such day, regular way, or in case no such sale takes place on such day,
the  average of the  closing bid and asked  prices on such  day, regular way, in
either case  as reported  in the  principal consolidated  transaction  reporting
system  with respect to  securities listed on  the principal national securities
exchange on which the Units of such class are listed or admitted to trading  or,
if the Units of such class are not listed or admitted to trading on any national
securities  exchange, the last quoted  price on such day,  or, if not so quoted,
the average of the high  bid and low asked prices  on such day in the  over-the-
counter  market, as reported by the  National Association of Securities Dealers,
Inc. Automated Quotation System or such other  system then in use, or if on  any
such day the Units of such class are not
 
                                      C-2
 


<PAGE>

<PAGE>
quoted by any such organization, the average of the closing bid and asked prices
on  such day as furnished by a professional  market maker making a market in the
Units of such class selected by the Managing General Partner, or if on any  such
day  no market maker  is making a  market in the  Units of such  class, the fair
value of such Units on  such day as determined reasonably  and in good faith  by
the  Managing General Partner. 'Trading Day' means  a day on which the principal
national securities exchange on which Units of any class are listed or  admitted
to  trading is open for the transaction of  business or, if the Units of a class
are not listed or admitted to trading on any national securities exchange, a day
on which banking institutions in New York City generally are open.
 
     Degree Day: Degree Days measure the amount by which the average of the high
and low temperature on a given day is below 65 degrees Fahrenheit. For  example,
if  the high temperature is 60 degrees and the low temperature is 40 degrees for
a National  Oceanic and  Atmospheric  Administration measurement  location,  the
average  temperature is 50 degrees and the number of Degree Days for that day is
15.
 
     Delaware Act: The Delaware Revised  Uniform Limited Partnership Act, 6  Del
C.  SS17-101, et seq., as  amended, supplemented or restated  from time to time,
and any successor to such statute.
 
     Departing Partner: A former  General Partner from  and after the  effective
date of any withdrawal or removal of such former General Partner pursuant to the
provisions of the Partnership Agreement.
 
     EBITDA:   Operating  income  (loss)   plus  depreciation  and  amortization
(excluding amortization of deferred financing cost). As used in this Prospectus,
EBITDA is not intended to  be construed as an alternative  to net income (as  an
indicator  of operating performance),  or as an  alternative to cash  flow (as a
measure of liquidity or ability to service debt obligations).
 
     General Partners:  The Managing  General Partner  and the  Special  General
Partner  and their  successors or permitted  assigns as general  partners of the
Partnership and the Operating Partnership.
 
     Incentive Distributions: The distributions of Available Cash from Operating
Surplus initially made to the Managing General Partner that are in excess of the
General Partners' aggregate General Partner Interests and are not related to the
Managing General Partner's ownership of Subordinated Units or Common Units.  The
Managing General Partner may transfer its right to receive such distributions to
one or more Persons.
 
     Initial Common Units: The Common Units sold in the Offering.
 
     Initial Unit Price: An amount per Unit equal to the initial public offering
price  of the Initial Common Units as set  forth on the outside front cover page
of this Prospectus.
 
     Interim Capital Transactions: (a)  Borrowings, refinancings and  refundings
of  indebtedness and  sales of debt  securities (other than  for working capital
purposes and other  than for  items purchased on  open account  in the  ordinary
course  of business) by any member of the Partnership Group, (b) sales of equity
interests by any member of the Partnership Group (including Common Units sold to
the Underwriters pursuant to the exercise of the over-allotment option), and (c)
sales or other voluntary or involuntary dispositions of any assets of any member
of the  Partnership  Group  (other  than (i)  sales  or  other  dispositions  of
inventory  in the ordinary course of  business, (ii) sales or other dispositions
of  other  current  assets,  including,  without  limitation,  receivables   and
accounts,  in the ordinary course of business, (iii) sales or other dispositions
of assets as a  part of normal  retirements or replacements)  or (iv) like  kind
exchanges  of operating assets to the  extent that the operating assets received
are of equal or  greater value, in  each case prior to  the commencement of  the
dissolution and liquidation of the Partnership.
 
     Limited  Partner: Unless the context otherwise requires, any Person holding
a limited  partner  interest  in  the Partnership  and  having  the  rights  and
obligations specified with respect to a Limited Partner (as such term is defined
in the Partnership Agreement).
 
     Managing  General Partner: National Propane  Corporation and its successors
and permitted assigns, as managing general partner of the Partnership.
 
     Minimum Quarterly Distribution: $0.525 per Common Unit with respect to each
quarter or $2.10 per Common Unit  on an annualized basis, subject to  adjustment
as described in 'Cash Distribution Policy -- Distributions from Capital Surplus'
and  ' -- Adjustment  of Minimum Quarterly  Distribution and Target Distribution
Levels.'
 
                                      C-3
 


<PAGE>

<PAGE>
     Operating Expenditures: All Partnership Group expenditures, including,  but
not  limited to,  taxes, reimbursements  of the  General Partners,  debt service
payments and capital expenditures, subject to the following:
 
          (a) Payments (including  prepayments) of principal  of and premium  on
     indebtedness  shall not be  an Operating Expenditure if  the payment is (i)
     required in connection  with the sale  or other disposition  of assets,  or
     (ii)  made in connection with the  refinancing or refunding of indebtedness
     with the  proceeds  from  new  indebtedness or  from  the  sale  of  equity
     interests.  For  purposes of  the  foregoing, at  the  election and  in the
     reasonable discretion  of  the Managing  General  Partner, any  payment  of
     principal  or premium shall be  deemed to be refunded  or refinanced by any
     indebtedness incurred or to be incurred by the Partnership Group within 180
     days before or after such payment to the extent of the principal amount  of
     and premium on such indebtedness.
 
     General  Partner Interests: The 4%  unsubordinated general partner interest
in the  Partnership and  the Operating  Partnership on  a combined  basis.  This
interest   applies  to  all   distributions  and  allocations,   except  if  the
over-allotment option is exercised, this interest will be entitled to a  smaller
percentage of the liquidation proceeds.
 
     (b)  Operating Expenditures shall not include (i) capital expenditures made
for Acquisitions  or  for  Capital Improvements,  (ii)  payment  of  transaction
expenses  relating to  Interim Capital  Transactions, or  (iii) distributions to
partners. Where  capital  expenditures are  made  in part  for  Acquisitions  or
Capital  Improvements  and  in part  for  other purposes,  the  Managing General
Partner's good  faith allocation  between the  amounts paid  for each  shall  be
conclusive.
 
     Operating   Partnership:  National   Propane,  L.P.,   a  Delaware  limited
partnership,  the  Partnership's  subsidiary  operating  partnership,  and   any
successors   thereto  and  any  other   subsidiary  operating  partnerships  and
corporations.
 
     Operating Partnership  Agreement: The  Amended  and Restated  Agreement  of
Limited  Partnership of  the Operating  Partnership (the  form of  which will be
filed as an exhibit to the Registration Statement of which this Prospectus is  a
part), as it may be amended, supplemented or restated from time to time.
 
     Operating  Surplus: At the  close of any fiscal  quarter of the Partnership
prior to liquidation, on a cumulative basis and without duplication:
 
          (a) the sum of (i) $15,400,000, plus all cash and cash equivalents  of
     the  Partnership Group as of the close of business on the Closing Date, and
     (ii) all cash receipts of the Partnership Group for the period beginning on
     the Closing Date and ending  with the last day  of such period, other  than
     cash receipts from Interim Capital Transactions, less
 
          (b)  the sum of (i) Operating Expenditures for the period beginning on
     the Closing Date and ending with the  last day of such period and (ii)  the
     amount  of cash reserves  that is necessary or  advisable in the reasonable
     discretion of  the Managing  General Partner  to provide  funds for  future
     Operating  Expenditures;  provided however,  disbursements  made (including
     contributions to  a member  of the  Partnership Group  or disbursements  on
     behalf  of a member of the Partnership Group) or cash reserves established,
     increased or reduced after the end of any quarter but on or before the date
     on which  the  Partnership makes  its  distribution of  Available  Cash  in
     respect  of such  quarter shall be  deemed to have  been made, established,
     increased or reduced for purposes of determining Operating Surplus,  within
     such  quarter  if the  Managing  General Partner  so  determines. Operating
     Surplus after the liquidation of the Partnership occurs shall equal zero.
 
     Opinion of  Counsel: A  written  opinion of  counsel  (who may  be  regular
counsel  to Triarc,  the Partnership  or the  General Partners  or any  of their
Affiliates) acceptable  to  the  Managing  General  Partner  in  its  reasonable
discretion  to the effect that the taking of a particular action will not result
in the loss of the limited liability of the limited partners of the  Partnership
under  the Delaware Act or cause the Partnership to be treated as an association
taxable as a corporation or otherwise taxed as an entity for federal income  tax
purposes.
 
     Partnership:   National   Propane  Partners,   L.P.,  a   Delaware  limited
partnership, and any successor thereto.
 
     Partnership Agreement:  The  Amended  and  Restated  Agreement  of  Limited
Partnership of the Partnership (the form of which is included in this Prospectus
as Appendix A), as it may be amended,
 
                                      C-4
 


<PAGE>

<PAGE>
supplemented  or  restated  from  time  to  time.  Unless  the  context requires
otherwise, references to the Partnership Agreement constitute references to  the
Partnership   Agreement  of  the  Partnership   and  the  Operating  Partnership
Agreement, collectively.
 
     Partnership Group:  The  Partnership,  the Operating  Partnership  and  any
subsidiary of either such entity, treated as a single consolidated partnership.
 
     Partnership  Interest: An interest in  the Partnership, which shall include
General Partner Interests, Common Units,  Subordinated Units, rights to  receive
Incentive  Distributions or any other equity securities of the Partnership, or a
combination thereof or interest therein as the case may be.
 
     Partnership Loan: The $40.7 million loan from the Operating Partnership  to
Triarc made on the Closing Date.
 
     Partnership  Security:  Means any  class or  series  of Units,  any option,
right, warrant or  appreciation rights relating  thereto, or any  other type  of
equity  interest that  the Partnership may  lawfully issue, or  any unsecured or
secured debt obligation of the Partnership that is convertible into any class or
series of equity interests of the Partnership.
 
     Person:  An  individual  or  a  corporation,  limited  liability   company,
partnership,  joint  venture,  trust,  unincorporated  organization,  government
agency or political subdivision thereof or other entity.
 
     Special General Partner: National Propane SGP, Inc. and its successors  and
permitted assigns, as non-managing general partner of the Partnership.
 
     Subordination  Period: The Subordination Period  will generally extend from
the closing of this Offering until the first day of any quarter beginning  after
June  30, 2001  in respect  of which  (i) distributions  of Available  Cash from
Operating Surplus on the Common Units and the Subordinated Units with respect to
each of the  three consecutive four-quarter  periods immediately preceding  such
date equaled or exceeded the sum of the Minimum Quarterly Distribution on all of
the  outstanding Common Units  and Subordinated Units  during such periods, (ii)
the Adjusted Operating Surplus  generated during each  of the three  consecutive
four-quarter periods immediately preceding such date equaled or exceeded the sum
of the Minimum Quarterly Distribution on all of the outstanding Common Units and
Subordinated Units and the related distribution on the General Partner Interests
in  the  Partnership during  such periods,  and (iii)  there are  no outstanding
Common Unit Arrearages. A  portion of the Subordinated  Units will convert  into
Common  Units  on  the first  day  after  the record  date  established  for the
distribution in respect  of any quarter  ending on  or after (a)  June 30,  1999
(with  respect to  1,133,410 Subordinated  Units, plus  25% of  all Subordinated
Units issued  upon  conversion  of all  or  a  portion of  the  Special  General
Partner's  General  Partner Interest)  and (b)  June 30,  2000 (with  respect to
1,133,410 Subordinated Units,  plus 25%  of all Subordinated  Units issued  upon
conversion  of all or a portion of the Special General Partner's General Partner
Interest), in  respect  of  which  (i)  distributions  of  Available  Cash  from
Operating Surplus on the Common Units and the Subordinated Units with respect to
each  of the three  consecutive four-quarter periods  immediately preceding such
date equaled or exceeded the sum of the Minimum Quarterly distribution on all of
the outstanding Common Units  and Subordinated Units  during such periods,  (ii)
the  Adjusted Operating  Surplus generated  during each  of the  two consecutive
four-quarter periods immediately preceding such date equaled or exceeded the sum
of the Minimum Quarterly Distribution on all of the outstanding Common Units and
Subordinated Units and the related distribution on the General Partner  Interest
in  the  Partnership during  such periods,  and (iii)  there are  no outstanding
Common Unit  Arrearages; provided,  however, that  the early  conversion of  the
second  tranche of  Subordinated Units  may not  occur until  at least  one year
following the early conversion  of the first tranche  of Subordinated Units.  In
addition,  if the Managing General Partner is  removed as general partner of the
Partnership other than for Cause (i)  the Subordination Period will end and  all
outstanding  Subordinated Units will immediately convert  into Common Units on a
one-for-one basis, (ii) any existing Common Unit Arrearages will be extinguished
and (iii) the  General Partners  will have the  right to  convert their  general
partner interests (and the right to receive Incentive Distributions) into Common
Units or to receive cash in exchange for such interests.
 
     Subordinated Unit: A Unit representing a fractional part of the Partnership
Interests of all partners of the Partnership and assignees of any such partner's
interest  and  having  the  rights and  obligations  specified  with  respect to
Subordinated Units in the Partnership Agreement.
 
                                      C-5
 


<PAGE>

<PAGE>
     Target Distribution  Levels: See  'Cash  Distribution Policy  --  Incentive
Distributions -- Hypothetical Annualized Yield.'
 
     Transfer  Application: An application for transfer of Units in the form set
forth on the back of a certificate,  substantially in the form included in  this
Prospectus  as Appendix  B or in  a form substantially  to the same  effect in a
separate instrument.
 
     Unitholders: Holders of the Common Units and the Subordinated Units.
 
     Unit Majority: During the Subordination Period, at least a majority of  the
outstanding  Common Units,  voting as a  class, and  at least a  majority of the
outstanding Subordinated Units, voting  as a class and,  thereafter, at least  a
majority of the outstanding Units voting as a class.
 
     Units: The Common Units and the Subordinated Units, collectively, but shall
not include rights to receive Incentive Distributions.
 
     Unrecovered  Capital: At any time, with respect to a Unit, the Initial Unit
Price, less  the sum  of all  distributions theretofore  made in  respect of  an
Initial  Common Unit constituting Capital Surplus  and any distributions of cash
(or the net agreed value  of any distributions in  kind) in connection with  the
dissolution  and liquidation of  the Partnership theretofore  made in respect of
such Unit, adjusted as the Managing General Partner determines to be appropriate
to give effect to any distribution, subdivision or combination of such Units.
 
                                      C-6






<PAGE>

<PAGE>



[Photograph of three storage tanks at one of the Partnership's facilities and a
close-up photograph of a National Propane propane delivery truck.]








<PAGE>

<PAGE>
____________________________________         ___________________________________
 
     NO  DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR  MAKE ANY  REPRESENTATIONS NOT  CONTAINED IN  THIS PROSPECTUS  IN
CONNECTION  WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE PARTNERSHIP OR THE UNDERWRITERS.  THIS PROSPECTUS DOES NOT CONSTITUTE  AN
OFFER  TO SELL, OR  A SOLICITATION OF AN  OFFER TO BUY, THE  COMMON UNITS IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH  OFFER
OR  SOLICITATION.  NEITHER THE  DELIVERY OF  THIS PROSPECTUS  NOR ANY  SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE  HAS
NOT  BEEN ANY CHANGE IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS
OF THE PARTNERSHIP SINCE THE DATE HEREOF.
                            ------------------------
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
                                                                                                                         PAGE
                                                                                                                      ----------
<S>                                                                                                                   <C>
Prospectus Summary...................................................................................................     6
Risk Factors.........................................................................................................     35
The Transactions.....................................................................................................     50
Use of Proceeds......................................................................................................     51
Capitalization.......................................................................................................     52
Dilution.............................................................................................................     53
Cash Distribution Policy.............................................................................................     54
Certain Information Regarding Triarc.................................................................................     66
Selected Historical and Pro Forma Consolidated Financial and Operating Data..........................................     73
Management's Discussion and Analysis of Financial Condition and Results of Operations................................     75
Business and Properties..............................................................................................     88
Management...........................................................................................................    101
Security Ownership of Certain Beneficial Owners and Management.......................................................    111
Certain Relationships and Related Transactions.......................................................................    112
Conflicts of Interest and Fiduciary Responsibility...................................................................    113
Description of the Common Units......................................................................................    119
The Partnership Agreement............................................................................................    121
Units Eligible for Future Sale.......................................................................................    132
Tax Considerations...................................................................................................    133
Investment in the Partnership by Employee Benefit Plans..............................................................    150
Underwriting.........................................................................................................    151
Legal Matters........................................................................................................    153
Experts..............................................................................................................    153
Additional Information...............................................................................................    154
Index to Financial Statements........................................................................................    F-1
Form of Amended and Restated Agreement of Limited Partnership of National Propane Partners, L.P. .................... Appendix A
Form of Application for Transfer of Common Units..................................................................... Appendix B
Glossary of Certain Terms............................................................................................ Appendix C
</TABLE>
 
     UNTIL JULY 21, 1996 ALL DEALERS EFFECTING TRANSACTIONS IN THE COMMON UNITS,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER  A
PROSPECTUS.  THIS  DELIVERY  REQUIREMENT IS  IN  ADDITION TO  THE  OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT  TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                             6,190,476 COMMON UNITS
 
                                NATIONAL PROPANE
                                 PARTNERS, L.P.
 
                                  REPRESENTING
                           LIMITED PARTNER INTERESTS
 
                         ------------------------------
                                   PROSPECTUS
                         ------------------------------
 
                              MERRILL LYNCH & CO.
 
                          DONALDSON, LUFKIN & JENRETTE
                               SECURITIES CORPORATION
 
                          JANNEY MONTGOMERY SCOTT INC. 

                         RAUSCHER PIERCE REFSNES, INC. 

                             THE ROBINSON-HUMPHREY
                                 COMPANY, INC.
 
                                 JUNE 26, 1996
 
____________________________________         ___________________________________


                              STATEMENT OF DIFFERENCES
                 The trademark symbol shall be expressed as 'tm'



<PAGE>





© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission