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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
Securities Exchange Act of 1934
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Date of Earliest Event Reported: July 2, 1996
NATIONAL PROPANE PARTNERS, L.P.
(Exact name of Registrant as specified in its charter)
Delaware 1-11867 42-1453040
(State or other jurisdiction of (Commission File No.) (I.R.S. Employer
incorporation or organization) Identification No.)
Suite 1700, IES Tower 200 1st Street, S.E.
P.O. Box 2067
Cedar Rapids, Iowa 52401-2067
(Address of principal executive offices) (Zip Code)
(319) 365-1550
(Registrant's telephone number, including area code)
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Item 5. Other Events
On July 2, 1996, the initial public offering of 6,190,476 common units
representing limited partner interests in National Propane Partners, L.P. (the
"Partnership") was consummated. In addition, the private placement of $125
million aggregate principal amount of First Mortgage Notes due June 30, 2010
issued by National Propane Corporation and assumed by National Propane, L.P., a
subsidiary partnership of the Partnership, was consummated. On July 22, 1996,
the Partnership issued an additional 111,074 Common Units in connection with the
exercise, in part, of the underwriters' over-allotment option. For additional
information regarding the public offering, see the Partnership's Registration
Statement on Form S-1 (No. 333-2768).
Item 7. Financial Statements and Exhibits
(a) Financial statements of businesses acquired.
Not applicable.
(b) Pro forma financial information.
Not applicable.
(c) Exhibits.
1.1 Purchase Agreement, dated June 26, 1996, among National
Propane Partners, L.P. and the several Underwriters named
therein.
3.1 Amended and Restated Agreement of Limited Partnership of
National Propane Partners, L.P. dated as of July 2, 1996.
3.2 Amended and Restated Agreement of Limited Partnership of
National Propane, L.P. dated as of July 2, 1996.
10.1 Credit Agreement, dated as of June 26, 1996, among National
Propane, L.P., 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.
10.2 Note Purchase Agreement, dated as of June 26, 1996, among
National Propane, L.P. and each of the Purchasers listed in
Schedule A thereto relating to $125 million aggregate
principal amount of 8.54% First Mortgage Notes due June 30,
2010.
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10.3 Conveyance, Contribution and Assumption Agreement, dated as of
July 2, 1996, by and among National Propane, L.P., National
Propane Partners, L.P., National Propane Corporation and
National Propane SGP, Inc.
10.4 Contribution and Assumption Agreement, dated as of July 2,
1996, by and among National Propane, L.P., National Propane
Corporation, National Propane SGP, Inc. and National Sales &
Service, Inc.
10.5 Note, in the principal amount of $40.7 million, issued by
Triarc Companies, Inc. to National Propane, L.P.
10.6 National Propane 1996 Unit Option Plan
10.7 Amendment to Employment Agreement of Ronald D. Paliughi,
dated as of June 10, 1996.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NATIONAL PROPANE PARTNERS, L.P.
By: NATIONAL PROPANE CORPORATION,
AS MANAGING GENERAL PARTNER
By: /s/ RONALD R. ROMINIECKI
_______________________________________
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
Date: August 14, 1996
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STATEMENT OF DIFFERENCES
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The section mark symbol shall be expressed as.... ss.
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6,190,476 Common Units
NATIONAL PROPANE PARTNERS, L.P.
(a Delaware partnership)
Common Units
Representing Limited Partner Interests
PURCHASE AGREEMENT
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JANNEY MONTGOMERY SCOTT INC.
RAUSCHER PIERCE REFSNES, INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
June 26, 1996
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6,190,476 Common Units
NATIONAL PROPANE PARTNERS, L.P.
(a Delaware limited partnership)
Common Units
(representing limited partner interests)
PURCHASE AGREEMENT
June 26, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JANNEY MONTGOMERY SCOTT INC.
RAUSCHER PIERCE REFSNES, INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
National Propane Partners, L.P., a Delaware limited partnership (the
"Partnership"), confirms its agreement with Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated (collectively, "Merrill Lynch"), Donaldson,
Lufkin & Jenrette Securities Corporation ("DLJ"), Janney Montgomery Scott Inc.,
Rauscher Pierce Refsnes, Inc., The Robinson-Humphrey Company, Inc. and each of
the other Underwriters named in Exhibit A hereto (collectively, the
"Underwriters," which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch, DLJ, Janney
Montgomery Scott Inc., Rauscher Pierce Refsnes, Inc. and The Robinson-Humphrey
Company, Inc. are acting as representatives (in such capacity, Merrill Lynch,
DLJ, Janney Montgomery Scott Inc., Rauscher Pierce Refsnes, Inc. and The
Robinson-Humphrey Company, Inc. shall hereinafter be referred to as the
"Representatives"), with respect to the sale by the Partnership and the purchase
by the Underwriters, acting severally and not jointly, of an aggregate of
6,190,476 common units representing limited partner interests in the Partnership
(the "Common Units") in the respective numbers set forth in Exhibit A, and with
respect to the grant by the Partnership to the Underwriters, acting severally
and not jointly, of the option described in Section 2(b) hereof (the
"Over-allotment Option") to purchase all or any part of 928,571 additional
Common Units to cover over-allotments, if any (the "Additional Units"). (The
6,190,476 Common Units are referred to herein as the "Firm Units." The Firm
Units and the Additional Units, if purchased, are collectively referred to
herein as the "Units").
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(Capitalized terms used but not defined herein shall have the meaning
ascribed to them in the Registration Statement and the Prospectus (each as
defined herein)).
It is understood and agreed to by all parties that the Partnership (through
the Operating Partnership (as hereinafter defined)) was formed to acquire and
operate substantially all of the business and assets of National Propane
Corporation. National Propane Corporation will serve as the managing general
partner (the "General Partner") of both the Partnership and National Propane,
L.P., a Delaware limited partnership (the "Operating Partnership"). National
Propane SGP, Inc. will serve as the non-managing general partner (the "Special
General Partner") of both the Partnership and the Operating Partnership. The
Partnership, the Operating Partnership, the General Partner and the Special
General Partner are collectively referred to herein as the "Propane Entities."
Triarc Companies, Inc. is referred to herein as "Triarc."
It is understood by all parties that concurrently with the closing of the
offering of Firm Units contemplated hereby and as conditions to such closing,
(i) the General Partner will issue $125 million in aggregate principal amount of
First Mortgage Notes due 2010 (the "First Mortgage Notes") in a private
placement pursuant to one or more Note Agreements among the General Partner and
each of the purchasers listed on Schedule I thereto (the "Note Agreements"),
(ii) pursuant to a Conveyance, Contribution and Assumption Agreement, among the
General Partner, the Special General Partner, the Partnership and the Operating
Partnership, and a Contribution and Assumption Agreement, among the General
Partner, the Special General Partner, the Operating Partnership and National
Sales & Service, Inc., a subsidiary of the Operating Partnership ("National
Sales") (both agreements are collectively referred to herein as the "Conveyance
Agreements"), the General Partner and the Special General Partner will convey,
directly and indirectly (the "Conveyance"), substantially all of their assets
(other than certain specified assets) (the "Transferred Assets") to the
Operating Partnership as a capital contribution in exchange for limited partner
interests in the Operating Partnership and the assumption by the Operating
Partnership of substantially all of the liabilities of the General Partner and,
to the extent applicable, the Special General Partner (other than, in the case
of both the General Partner and the Special General Partner, income tax
liabilities), including the First Mortgage Notes, all indebtedness outstanding
under the Revolving Credit and Term Loan Agreement, dated as of October 7, 1994,
as amended, among the 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 the Other Existing Indebtedness, (iii) pursuant
to the applicable Conveyance Agreement, the General Partner and the Special
General Partner will convey their limited partner interests in the Operating
Partnership to the Partnership, and in exchange for such contributions (x) the
General Partner (A) will maintain its 1% unsubordinated general partner interest
in the Partnership and (B) will receive 4,533,638 subordinated units
representing subordinated general partner interests in the Partnership (the
"Subordinated Units") and the GP Incentive Distribution Rights (as defined
below) and (y) the Special General Partner will maintain its 1% unsubordinated
general partner interest in the Partnership, (iv) the Operating Partnership will
use the net proceeds from the sale of the First Mortgage Notes conveyed to it in
the Conveyance to repay (A) an aggregate of $57.3 million of indebtedness under
the Existing Credit Facility ($30 million of which is evidenced by the Refunding
Notes (as defined in the Existing Credit Facility)) and (B) $4.9 million of
Other Existing Indebtedness, (v) the Partnership will contribute the net
proceeds from the sale of the Units to the Operating Partnership pursuant to the
applicable Conveyance Agreement, and the Operating Partnership will use such
proceeds to (A) repay all remaining indebtedness under the Existing Credit
Facility, (B) make a loan of $40.7 million to Triarc, such loan to be evidenced
by a note issued by Triarc to the Operating Partnership (the "Triarc Note") and
(C) pay certain accrued management fees and tax sharing payments due to Triarc
and certain other intercompany obligations due to Triarc and (vi) the Operating
Partnership will enter into
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a new $55 million bank credit facility (the ("Bank Credit Facility") pursuant to
a bank credit agreement (the "Bank Credit Agreement"). The transactions referred
to in clauses (i) through (vi) above are collectively referred to herein as the
"Transactions". The Conveyance Agreements, all conveyances, deeds, bills of
sale, assignments and, if executed and delivered, the Agency Agreement (as
defined in the Conveyance Agreements), are collectively referred to herein as
the "Conveyance Documents." The Conveyance Documents, the Note Agreements, the
Bank Credit Agreement and the Triarc Note are collectively referred to herein as
the "Transaction Documents."
Prior to the purchase and public offering of the Firm Units by the several
Underwriters, the Partnership and the Representatives, acting on behalf of the
several Underwriters, shall enter into an agreement substantially in the form of
Exhibit B hereto (the "Pricing Agreement"). The Pricing Agreement may take the
form of an exchange of any standard form of written telecommunication between
the Partnership and the Representatives and shall specify the initial public
offering price, the purchase price with respect to the Firm Units and such other
applicable information as is indicated in Exhibit B hereto. The offering of the
Firm Units will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Partnership has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-2768) covering the
registration of the Units under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations. The information included in such prospectus that was
omitted from such registration statement at the time it became effective but
that is deemed to be part of such registration statement at the time it became
effective pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information." Each prospectus used before such registration statement became
effective, and any prospectus that omitted the Rule 430A Information, that was
used after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, at the
time it became effective and including the Rule 430A Information, is herein
called the "Registration Statement." Any registration statement filed pursuant
to Rule 462(b) of the 1933 Act Regulations is herein referred to as the "Rule
462(b) Registration Statement," and after such filing the term "Registration
Statement" shall include the Rule 462(b) Registration Statement. The term
"Prospectus" means the prsopectus as first filed with the Commission pursuant to
Rule 424(b) of the 1933 Act Regulations (and any amendments or supplements
thereto whether or not filed pursuant to Rule 424(b)) or, if no such filing is
required, the form of final prospectus included in the Registration Statement at
the Effective Date.
SECTION
1. Representations and Warranties.
(a) The General Partner, the Special General Partner, the Partnership, the
Operating Partnership and Triarc (but as to Triarc only with respect to clauses
(i), (v), (x), (xi), (xvii), (xviii), (xix), (xx), (xxiii), (xxiv), (xxv),
(xxix), (xxxiv), (xxxviii), (xxxx), (xxxxiii) and (xxxxiv)) jointly and
severally represent and warrant to each Underwriter as of the date hereof and as
of the date of the Pricing Agreement (such latter date being hereinafter
referred to as the "Representation Date") as follows:
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(i) At the respective times the Registration Statement and any
post-effective amendments thereto become effective and at the Closing Time
(as hereinafter defined), the Registration Statement will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. The preliminary prospectus
at June 11, 1996 complied in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations and the Prospectus at the
Representation Date and at Closing Time and any Date of Delivery referred
to in Section 2, will comply in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations and will not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
the Prospectus made in reliance upon and in conformity with information
furnished to the Partnership in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus.
(ii) Each of the statements made in the Registration Statement and
the Prospectus within the coverage of Rule 175(b) of the 1933 Act
Regulations, including (but not limited to) any statements with respect to
future available cash or future cash distributions of the Partnership, was
made or will be made by the General Partner or the Partnership, as the
case may be, with a reasonable basis and in good faith; provided, however,
that the representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or the
Prospectus made in reliance upon and in conformity with information
furnished to the Partnership in writing by any Underwriter through the
Representatives expressly for use in the Registration Statement or
Prospectus.
(iii) No order preventing or suspending the use of any preliminary
prospectus has been issued by the Commission.
(iv) The accountants who certified the financial statements included
in the Registration Statement and the Prospectus are independent public
accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) The financial statements included in the Registration Statement
and the Prospectus, together with any related schedules and notes, present
fairly in all material respects the financial position of the entities
purported to be shown thereby as of the dates indicated and the results of
their operations and cash flows for the periods specified; except as
otherwise stated in the Registration Statement or the Prospectus said
financial statements have been prepared in conformity with accounting
principles generally accepted in the United States ("GAAP") applied on a
consistent basis throughout the periods involved; the summary and selected
financial data included in the Registration Statement and the Prospectus
have been compiled on a basis consistent with that of the audited and
unaudited historical financial statements and pro forma financial
statements from which they have been derived; the pro forma financial
statements and the related notes thereto included in the Registration
Statement and the Prospectus present fairly in all material respects the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements (including the applicable accounting requirements of Rule 11-02
of Regulation S-X) and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof
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are, in the judgment of the management of the Propane Entities or Triarc,
as applicable, reasonable and the adjustments used therein are, in the
opinion of the judgment of the Propane Entities or Triarc, as applicable,
appropriate to give effect to the transactions and circumstances referred
to therein; and any other financial and statistical information and data
(other than projections to the extent such projections are within the
scope of Section 1(a)(ii) hereof)) included in the Registration Statement
and the Prospectus are, in the judgment of management of the Propane
Entities or Triarc, as applicable, accurate in all material respects and
present in accordance with GAAP (to the extent applicable) and on a basis
consistent with the books and records of the General Partner, the
Partnership and Triarc, the information required to be stated therein.
(vi) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein or contemplated thereby, (A) none of the Propane Entities has
sustained any material loss or interference with its business from fire,
explosion, flood, accident or other calamity, whether or not covered by
insurance, (B) there has been no change, or any development involving a
prospective change, in the partners' capital or capital stock or any
material change in long-term or short-term debt of the Propane Entities,
whether or not arising in the ordinary course of business, (C) there have
been no transactions entered into by the Propane Entities, other than
those in the ordinary course of business, which are material with respect
to the Propane Entities taken as a whole, (D) there has been no dividend
or distribution of any kind declared, paid or made by any of the Propane
Entities on any class of their capital stock or units, as the case may be
and (E) there are no liabilities or obligations of the Propane Entities,
direct or indirect, contingent or matured, which are material to the
Propane Entities taken as a whole, other than those reflected in the
Registration Statement and the Prospectus.
(vii) Each of the Partnership and the Operating Partnership (A) has
been duly formed and is validly existing as a limited partnership in good
standing under the Delaware Revised Uniform Limited Partnership Act (the
"Delaware Act"), with all partnership power and authority to (x) own,
lease and operate the properties it currently owns, leases and operates or
will own, lease and operate upon consummation of the Transactions, and
conduct its business as currently conducted or as it will be conducted
upon consummation of the Transactions, in each case as described in the
Registration Statement and the Prospectus, (y) enter into and perform its
obligations under the Transaction Documents to which it is a party and
consummate the Transactions and (z) enter into and perform its obligations
under this Agreement and the Pricing Agreement and, with respect to the
Partnership, issue and sell the Units as provided herein and therein and
(B) is or at the Closing Time will be, duly qualified or registered as a
foreign limited partnership authorized to do business and in good standing
under the laws of each jurisdiction in which the nature of its business or
its leasing or ownership of property requires such qualification or
registration, except where the failure to qualify or register would not
have a Material Adverse Effect. As used herein, a "Material Adverse
Effect" means (i) any material adverse effect on the business, condition
(financial or other), earnings, assets, liabilities, results of operations
or business prospects of the Propane Entities taken as a whole or (ii) any
event or occurrence which subjects the Propane Entities to a liability or
disability that is material to the Propane Entities taken as a whole.
(viii) The Special General Partner (A) has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
its state of incorporation, with all corporate power and authority to (x)
own the properties it currently owns or will own upon consummation of the
Transactions, and act as non-managing general partner of the Partnership
and the Operating Partnership, in each case
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as described in the Registration Statement and the Prospectus, (y) enter
into and perform its obligations under the Transaction Documents to which
it is a party and consummate the Transactions and (z) enter into and
perform its obligations under this Agreement, and (B) is or at the Closing
Time will be, duly qualified as a foreign corporation authorized to do
business and in good standing under the laws of each jurisdiction in which
the nature of its activities or its ownership of property requires such
qualification, except where the failure to qualify would not have a
Material Adverse Effect.
(ix) National Sales (A) has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its state of
incorporation, with all corporate power and authority to (x) own, lease
and operate the properties it currently owns, leases and operates or will
own, lease and operate upon consummation of the Transactions, and conduct
its business as currently conducted or as it will be conducted upon
consummation of the Transactions, in each case as described in the
Registration Statement and the Prospectus, (y) enter into and perform its
obligations under the Transaction Documents to which it is a party and
consummate the Transactions and (B) is or at the Closing Time will be,
duly qualified as a foreign corporation authorized to do business and in
good standing under the laws of each jurisdiction in which the nature of
its business or its leasing or ownership of property requires such
qualification, except where the failure to qualify would not have a
Material Adverse Effect.
(x) Each of Triarc and the General Partner (A) has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of its state of incorporation, with all corporate power and
authority to (x) own, lease and operate its properties, conduct its
business and, in the case of the General Partner, act as general partner
of the Partnership and the Operating Partnership, in each case as
described in the Registration Statement and the Prospectus, (y) enter into
and perform its obligations under the Transaction Documents to which it is
a party and consummate the Transactions and (z) enter into and perform its
obligations under this Agreement and (B) is duly qualified as a foreign
corporation authorized to do business and in good standing in each
jurisdiction in which the nature of its business or its leasing or
ownership of property requires such qualification, except where the
failure to qualify would not have a Material Adverse Effect.
(xi) All of the shares of issued and outstanding capital stock of
the General Partner have been duly authorized and validly issued and are
fully paid and nonassessable, and, are owned by Triarc, directly or
through subsidiaries of Triarc, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity interest
(collectively, "Encumbrances"), other than Encumbrances in favor of the
Operating Partnership or securing obligations under the Existing Credit
Facility, which Encumbrances securing obligations under the Existing
Credit Facility shall have been released at or prior to Closing Time; at
March 31, 1996, the Partnership would have had on a pro forma basis the
capitalization as set forth in the Prospectus in the column entitled
"Partnership Pro Forma" under the caption "Capitalization."
(xii) The General Partner and the Special General Partner are the
sole general partners of the Partnership, each with, at the Closing Time
and upon consummation of the Transactions (assuming the Underwriters have
not exercised the Over-allotment Option), a 1.0% unsubordinated general
partner interest in the Partnership and, in the case of the General
Partner, the related incentive distribution rights in respect thereof (the
"GP Incentive Distribution Rights") pursuant to the Amended and Restated
Agreement of Limited Partnership of National Propane Partners, L.P., dated
as of July 2, 1996, among
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the General Partner, the Special General Partner and Triarc, as
organizational limited partner (the "Partnership Agreement"); the General
Partner and the Special General Partner are the sole general partners of
the Operating Partnership, each with, at the Closing Time and upon
consummation of the Transactions (assuming the Underwriters have not
exercised the Over-allotment Option), a 1.0101% unsubordinated general
partner interest in the Operating Partnership pursuant to the Amended and
Restated Agreement of Limited Partnership of National Propane, L.P., dated
as of July 2, 1996, among the General Partner, the Special General Partner
and the Partnership (the "Operating Partnership Agreement" and together
with the Partnership Agreement, the "Partnership Agreements"); all such
general partner interests have been duly authorized and have been or at
the Closing Time will be, validly issued to the General Partner and the
Special General Partner, and are or at the Closing Time will be, owned by
the General Partner and the Special General Partner free and clear of all
Encumbrances, except for Encumbrances securing obligations under the Bank
Credit Facility, the Note Agreements and other Parity Debt (as defined in
the Bank Credit Facility); and the GP Incentive Distribution Rights have
been duly authorized and have been or at the Closing Time will be, validly
issued to the General Partner, and are owned by the General Partner, as
applicable, free and clear of all Encumbrances.
(xiii)The Partnership is the sole limited partner of the Operating
Partnership with, at the Closing Time and upon consummation of the
Transactions (assuming the Underwriters have not exercised the
Over-allotment Option), an approximately 97.9798% limited partner interest
in the Operating Partnership; such limited partner interest has been or at
the Closing Time will be, duly authorized and validly issued in accordance
wtih the Operating Partnership Agreement, is fully paid (to the extent
required by the Operating Partnership Agreement) and nonassessable (except
as such nonassessability may be affected by matters described in the
Prospectus under the caption "The Partnership Agreement -- Limited
Liability") and is owned by the Partnership free and clear of all
Encumbrances, except for Encumbrances securing obligations under the Bank
Credit Facility, the Note Agreements and other Parity Debt.
(xiv) All of the shares of issued and outstanding capital stock of
the Special General Partner and National Sales have been duly authorized
and validly issued and are fully paid and nonassessable, and are owned by
the General Partner and the Operating Partnership, respectively, free and
clear of all Encumbrances, except for Encumbrances securing obligations
under the Bank Credit Facility, the Note Agreements and other Parity Debt.
(xv) At the Closing Time and upon consummation of the Transactions
(assuming the Underwriters do not exercise the Over-allotment Option and
the Subordinated Units are not converted into limited partner interests),
the only outstanding limited partner interests of the Partnership will be
6,190,476 Firm Units representing in the aggregate an approximate 56.6%
limited partner interest (the 4,533,638 Subordinated Units held by the
General Partner representing a subordinated general partner interest which
is convertible pursuant to the Partnership Agreement into an approximate
41.4% subordinated limited partner interest); at the Closing Time, the
Firm Units (when issued and delivered by the Partnership against payment
of the consideration set forth herein) and the Subordinated Units (when
issued and delivered pursuant to the Conveyance Agreements and the
Partnership Agreement), evidencing limited partner and subordinated
general partner interests, respectively, will be duly authorized by the
Partnership Agreement, will be validly issued to the Underwriters and the
General Partner, respectively, and in the case of the Firm Units will be
fully paid (to the extent required under the Partnership Agreement) and
nonassessable (except as such nonassessablility may be affected by
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matters described in the Prospectus under the caption "The Partnership
Agreement -- Limited Liability"); at any Date of Delivery, Additional
Units, if any (when issued and delivered by the Partnership against
payment of the consideration set forth herein), will be duly authorized by
the Partnership Agreement, will be validly issued to the Underwriters and
will be fully paid (to the extent required by the Partnership Agreement)
and nonassessable (except as such nonassessability may be affected by
matters described in the Prospectus under the caption "The Partnership
Agreement --Limited Liability"); at the Closing Time, the Firm Units will
be acquired by the Underwriters free and clear of all Encumbrances created
by the Partnership Agreement, and the Subordinated Units will be owned by
the General Partner free and clear of all Encumbrances other than
Encumbrances in favor of the Operating Partnership; and at any Date of
Delivery, the Additional Units issued and delivered on such date will be
acquired by the Underwriters, free and clear of all Encumbrances created
by the Partnership Agreement.
(xvi) Except as described in the Registration Statement and the
Prospectus, there are no preemptive rights or other rights to subscribe
for or to purchase, nor any restriction upon the voting or transfer of,
any partnership interests or shares of capital stock of any of the Propane
Entities pursuant to the provisions of the certificate of incorporation,
bylaws, agreement of limited partnership or other governing documents or
any agreement or other instrument to which any of the Propane Entities is
a party or by which any of them may be bound. Except as described in the
Registration Statement and the Prospectus, neither the filing of the
Registration Statement nor the offering or sale of the Units as
contemplated by this Agreement and the Pricing Agreement gives rise to any
rights for or relating to the registration of any Units or other
securities (debt or equity) of the Partnership. The Units, when issued and
delivered by the Partnership against payment of the consideration set
forth herein, the Subordinated Units, when issued and delivered pursuant
to the Conveyance Agreements and the Partnership Agreement, the
unsubordinated general partner interests in the Partnership and the GP
Incentive Distribution Rights, when issued and delivered pursuant to the
Conveyance Agreements and the Partnership Agreement, will conform in all
material respects to the description thereof contained in the Registration
Statement and the Prospectus. Except as described in the Registration
Statement and Prospectus, there are no outstanding options, warrants, or
other rights calling for the issuance of, and no commitments, plans or
arrangements to issue, any Units or Subordinated Units or any security
convertible into or exercisable or exchangeable for Units or Subordinated
Units.
(xvii)This Agreement has been and the Pricing Agreement will be,
duly authorized, executed and delivered by the Propane Entities and Triarc
and are or will be upon execution thereof, the valid and legally binding
agreements of the Propane Entities and Triarc, enforceable against each of
them in accordance with their terms, except as (A) the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium, or similar laws relating to or
affecting creditors' rights generally and by general equitable principles
(regardless of whether such enforceability is considered in a proceeding
in equity or at law) and (B) rights to indemnity or contribution may be
limited by federal or state securities laws or the public policy
underlying such laws.
(xviiiThe Partnership Agreement is or at Closing Time will be, duly
authorized, executed and delivered by the General Partner, the Special
General Partner and Triarc as the organizational limited partner and will
be a valid and legally binding agreement of the General Partner, the
Special General Partner and Triarc as the organizational limited partner,
enforceable against each of them in accordance with its terms; the
Operating Partnership Agreement is or at Closing Time will be, duly
authorized,
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executed and delivered by the General Partner, the Special General Partner
and the Partnership and will be a valid and legally binding agreement of
the General Partner, the Special General Partner and the Partnership,
enforceable against each of them in accordance with its terms; provided
that, with respect to each agreement described in this paragraph (xviii),
the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium, or similar laws
relating to or affecting creditors' rights generally and by general
equitable principles (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(xix) The Transaction Documents have been or at the Closing Time
will be, duly authorized, executed and delivered by each of the Propane
Entities and Triarc, to the extent they are parties thereto, and are or at
the Closing Time will be, valid and legally binding agreements of such
persons, enforceable against each of such persons in accordance with their
respective terms; provided that, with respect to each agreement described
in this paragraph (xx), the enforceability thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium,
or similar laws relating to or affecting creditors' rights generally and
by general equitable principles (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
(xx) At or prior to Closing Time, all material actions required to
be taken by any of the Propane Entities and Triarc for the authorization,
issuance, sale and delivery of the Units and the Subordinated Units and
the consummation of the transactions contemplated by this Agreement, the
Pricing Agreement and the Transaction Documents shall have been validly
taken.
(xxi) Except with respect to motor vehicles and other property
requiring conveyance of certificated title (as to which the Conveyance
Documents are legally sufficient to compel delivery of certificated
title), the Conveyance Documents will be, as of the Closing Time, legally
sufficient, subject to the limitations contained therein, to transfer or
convey to the Operating Partnership or National Sales all of the
Transferred Assets, except in all cases where the failure to transfer or
convey any of the Transferred Assets would not, singly or in the
aggregate, result in a Material Adverse Effect.
(xxii)The General Partner has, and (except for Excluded Assets (as
defined in the Conveyance Agreements)) upon consummation of the
Transactions and at the Closing Time the Partnership, the Operating
Partnership or National Sales will have, (1) good and marketable title to
the real properties owned by them in fee simple, except as to properties
set forth on Schedule I hereto as to which title will be obtained within
the time frame and in accordance with the terms of the letter agreement
between the Operating Partnership and the other parties to the Bank Credit
Facility, (2) good and valid leasehold interests in the real property
leased by them, other than certain immaterial leased property subject to
the Agency Agreement (as defined in the Conveyance Agreements) and certain
other immaterial leased property as to which the Partnership, the
Operating Partnership or National Sales shall otherwise enjoy undisturbed
possession thereof and (3) good and sufficient title to the personal
property owned by them for the use and operation of such personal property
as it has been used in the past and as it is proposed to be used by such
entities, other than certain immaterial personal property which will be
subject to the Agency Agreement, in each case free and clear of all
Encumbrances except such as (A) are described in the Registration
Statement and the Prospectus, (B) do not materially affect the use made or
proposed to be made of such properties taken as a whole, (C) secure
obligations under the Bank Credit Facility and the Note Agreements, (D)
are set forth in the title policies in respect of certain properties
securing obligations under the Bank Credit Facility and the Note
Agreements or (E) are otherwise
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permitted under the Bank Credit Facility and the Note Agreements; all of
the material leases and subleases entered into in connection with the
business of the General Partner and under which the General Partner holds,
or the Partnership, the Operating Partnership or National Sales will hold,
the properties described in the Registration Statement and the Prospectus
are and upon consummation of the Transactions will be, valid and
subsisting and in full force and effect with such exceptions as do not
materially interfere with the use made or proposed to be made of such
properties taken as a whole; and the General Partner does not have, and
upon consummation of the Transactions and at the Closing Time the
Partnership, the Operating Partnership and National Sales will not have,
any notice of any claim of any sort that has been asserted by anyone
adverse to the rights of or affecting or questioning the rights of the
General Partner, the Partnership, the Operating Partnership or National
Sales, as applicable, to the continued possession of the leased or
subleased premises under any such lease or sublease with such exceptions
as do not materially interfere with the use made or proposed to be made of
such properties taken as a whole. Upon consummation of the Transactions
and after giving effect to the Agency Agreement, the Partnership, the
Operating Partnership and National Sales will succeed in all material
respects to the business, assets, property and operations reflected in the
pro forma financial statements of the Partnership, except as disclosed in
the Prospectus.
(xxiiiNone of the Propane Entities or Triarc is (A) in breach or
violation of the provisions of its certificate of incorporation, bylaws,
agreement of limited partnership or other governing documents, (B) in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other instrument to
which any of such entities is a party or by which any of them may be
bound, or to which any of the property or assets of any of them is subject
(collectively, the "Agreements and Instruments") or (C) in violation of
any applicable law or statute or any rule or regulation or judgment,
order, writ or decree of any court, domestic or foreign, or governmental
agency or body having jurisdiction over them or any of their properties,
except in each case, for such breaches, violations or defaults which would
not, either singly or in the aggregate, have a Material Adverse Effect; to
the knowledge of the Propane Entities and Triarc, no event has occurred
which with notice or lapse of time or both would constitute such a breach,
violation or default.
(xxiv)None of (A) the execution and delivery by the Propane Entities
and Triarc of and the performance of their obligations under this
Agreement, the Pricing Agreement and the issuance and sale of the Units as
contemplated herein or therein or (B) the execution and delivery by the
Propane Entities and Triarc and the performance of their respective
obligations under the Transaction Documents and the consummation of the
Transactions (including the use of the proceeds from the sale of the Units
and the sale of the First Mortgage Notes as described in the Prospectus
under the captions "The Transactions" and "Use of Proceeds"), will (in
each case, whether or not with notice or lapse of time or both) (i) result
in any breach or violation of the provisions of the certificate of
incorporation, bylaws, agreement of limited partnership or other governing
documents of any of the Propane Entities or Triarc, (ii) conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any Encumbrance upon any
property or assets of the Propane Entities or Triarc pursuant to any
Agreements and Instruments, except for (A) Encumbrances described in the
Registration Statement and Prospectus, (B) conflicts, breaches, Repayment
Events or Encumbrances that would not, singly or in the aggregate, have a
Material Adverse Effect or (C) conflicts, breaches, Repayment Events or
Encumbrances under the Existing Credit Facility or arising in connection
with the Other Existing Indebtedness (which Existing Credit Facility and
Other Existing Indebtedness are being repaid in their
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entirety in connection with the Transactions as described in the
Prospectus) or (iii) result in the violation of any applicable law,
statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign,
having jurisdiction over any of the Propane Entities or Triarc or any of
their assets or properties, except where such violations would not, singly
or in the aggregate, have a Material Adverse Effect. As used herein, a
"Repayment Event" means any event or condition which gives the holder of
any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Propane Entities or Triarc.
(xxv) No filing with, permit, consent, approval, license,
registration, qualification, authorization or order or decree
(collectively, the "Consents") of any court, governmental agency or body
or financial institution, is required of any of the Propane Entities or
Triarc in connection with the execution, delivery and performance of this
Agreement, the Pricing Agreement and the Transaction Documents and the
issuance and sale of the Units as contemplated herein and therein, or the
consummation of the Transactions, except such Consents (A) as have already
been or prior to Closing Time will be obtained, (B) as are required under
the 1933 Act, the 1933 Act Regulations, the Securities Exchange Act of
1934 (the "1934 Act"), the rules and regulations of the Commission under
the 1934 Act (the "1934 Act Regulations"), or the securities or "blue sky"
laws of certain jurisdictions, (C) which (1) are of a routine or
administrative nature, (2) are not customarily obtained or made prior to
the consummation of transactions such as those contemplated hereby and by
the Transaction Documents and (3) are expected in the reasonable judgment
of the General Partner to be obtained in the ordinary course of business
subsequent to the consummation of the Transactions and (D) which, if not
obtained, would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(xxvi)No regulation or order has been enacted, adopted or issued by
any governmental agency or body which prevents the issuance of the Units
or the Subordinated Units, or suspends the effectiveness of the
Registration Statement, prevents or suspends the use of any Prospectus or
suspends the sale of the Units in any jurisdiction in which the Units are
qualified pursuant to Section 3(g) hereof; no injunction, restraining
order or order of any nature by a federal or state court of competent
jurisdiction has been issued with respect to the Propane Entities which
would prevent or suspend the issuance or sale of the Units or the
Subordinated Units, as applicable, the effectiveness of the Registration
Statement, or the use of any Prospectus in any jurisdiction in which the
Units are qualified pursuant to Section 3(g).
(xxvii)No labor dispute with the employees of the Propane Entities
exists or, to the knowledge of the Propane Entities, is imminent, in
either case, which could reasonably be expected to have a Material Adverse
Effect, and to the knowledge of the Propane Entities (without independent
inquiry), there is no existing or imminent labor disturbance by the
employees of any of the principal suppliers, manufacturers, customers or
contractors of the Propane Entities which could reasonably be expected to
have a Material Adverse Effect.
(xxiii)There is no action, suit, proceeding, inquiry or investigation
before or by any court or governmental agency or body, domestic or
foreign, now pending or, to the knowledge of the Propane Entities,
threatened against or affecting the Propane Entities, which is required to
be disclosed in the Registration Statement (other than as disclosed
therein), or which might reasonably be expected to result in a Material
Adverse Effect (other than as disclosed in the Registration Statement and
the Prospectus); all pending legal or governmental proceedings to which
any of the Propane Entities is a party or of which
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any of their respective property or assets is the subject are described in
the Registration Statement, other than those proceedings (including
ordinary routine litigation incidental to the business) that could not
reasonably be expected to have a Material Adverse Effect.
(xxix)There are no Agreements and Instruments of the Propane
Entities or Triarc which are required to be described or referred to in
the Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed as exhibits thereto and
the descriptions thereof or references thereto are accurate in all
material respects.
(xxx) The General Partner carries or is covered by, and upon
consummation of the Transactions the Partnership, the Operating
Partnership and National Sales will carry or be covered by insurance in
such amounts and covering such risks as is, in the reasonable judgment of
management of the Propane Entities, adequate for the conduct of their
businesses and the value of their properties. No such entity has received
notice from any insurer or agent of such insurer that substantial capital
improvements or other expenditures will have to be made in order to
continue such insurance; and on the date hereof all such insurance is, and
at the Closing Time and upon consummation of the Transactions will be,
outstanding and duly in force.
(xxxi)The General Partner owns or possesses, or can acquire on
reasonable terms, and upon consummation of the Transactions, the
Partnership, the Operating Partnership and National Sales, as applicable,
will own or possess, or be able to acquire on reasonable terms, the
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names described in the Prospectus as
being owned by them or necessary for the conduct of their respective
businesses (collectively, "patent and proprietary rights"); no such entity
has received or is aware of any notice of any infringement of or conflict
with asserted rights of others with respect to any patent or proprietary
rights, or any facts which would render any patent and proprietary rights
invalid or inadequate to protect the interest of such entities therein,
and which infringement or conflict or invalidity or inadequacy, singly or
in the aggregate, could reasonably be expected to result in a Material
Adverse Effect.
(xxxii) The General Partner possesses, and upon consummation of the
Transactions and at the Closing Time the Partnership, the Operating
Partnership and National Sales, as applicable, will possess, such
certificates, authorities or permits issued by the appropriate state,
federal or foreign regulatory agencies or bodies as are necessary to
conduct the business operated by them except for any of the foregoing the
absence of which would not have a Material Adverse Effect, and no such
entity has received any notice of proceedings relating to the revocation
or modification of any such certificate, authority or permit which, singly
or in the aggregate, could reasonably be expected to have a Material
Adverse Effect.
(xxxiii) The Propane Entities are in compliance with the provisions
of that certain Florida act relating to disclosure of doing business with
Cuba, codified as Section 517.075 of the Florida statutes, and the rules
and regulations thereunder (collectively, the "Cuba Act") or are exempt
therefrom.
(xxxiv)None of the Propane Entities or Triarc is (a) deemed to be a
"gas utility company" within the meaning of Section 2(a)(4) of the Public
Utility Holding Company Act of 1935, as amended
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("PUHCA"), (b) a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" thereof, within the meaning of PUHCA or (c) an
"investment company" or a company "controlled by" an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
(xxxv)Except as set forth in the Registration Statement, the Propane
Entities are in material compliance with all applicable existing federal,
state, local and foreign laws and regulations relating to protection of
human health or the environment or imposing liability or standards of
conduct concerning any Hazardous Material (as hereinafter defined)
("Environmental Laws"), except, in each case, where such noncompliance,
singly or in the aggregate, would not have a Material Adverse Effect. The
term "Hazardous Material" means (A) any "hazardous substance" as defined
by the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended, (B) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act, as amended, (C) any petroleum or
petroleum product, (D) any polychlorinated biphenyl, and (E) any pollutant
or contaminant or hazardous or toxic chemical, material, waste or
substance regulated under or within the meaning of any other Environmental
Law.
(xxxvi) There is no alleged liability, or to the knowledge of the
Propane Entities, circumstance or condition which is reasonably likely to
result in any liability (including, in either case, without limitation,
liability for investigatory costs, cleanup costs, governmental response
costs, natural resources damages, property damages, personal injuries, or
penalties), of the Propane Entities arising out of, based on or resulting
from (A) the presence or release into the environment of any Hazardous
Material at any location, whether or not owned by the Propane Entities or
(B) any violation or alleged violation of any Environmental Law, (x) which
liability is required to be disclosed in the Registration Statement or the
Prospectus (and which is not so disclosed), or (y) (except as described in
the Registration Statement and Prospectus) which liability, singly or in
the aggregate, would have a Material Adverse Effect.
(xxxvii) Each of the Propane Entities is in compliance in all
material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to any
"pension plan" (as defined in ERISA) for which the Propane Entities could
reasonably be expected to have any material liability under Title IV of
ERISA; the Propane Entities have not incurred and, to the knowledge of the
Propane Entities, there is no pending or threatened material liability of
the Propane Entities under (A) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan" or (B) Sections 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the "Code"); and
each "pension plan" for which the Propane Entities would have any material
liability that is intended to be qualified under Section 401(a) of the
Code has been determined by the Internal Revenue Service to be so
qualified in all material respects and to the knowledge of the Propane
Entities nothing has occurred, whether by action or by failure to act,
which would cause the loss of such qualification.
(xxxviii) Each of the Propane Entities and Triarc has filed all
federal income tax returns and all other material tax returns, domestic or
foreign, required to be filed by it through the date hereof and has paid
all federal taxes and assessments shown to be due on such returns and all
other material taxes and assessments, domestic and foreign, in each case
payable by it which have become due, other
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than those not yet delinquent and except for those contested in good faith
and for which adequate reserves have been provided in accordance with
GAAP.
(xxxix) Each of the Propane Entities maintains or causes to be
maintained on its behalf a system of internal accounting controls
sufficient to provide reasonable assurance that (A) transactions are
executed in accordance with management's general and specific
authorizations, (B) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets, (C) access to assets is permitted only
in accordance with management's general or specific authorizations and (D)
the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(xxxx)None of the Propane Entities or Triarc has (A) taken, directly
or indirectly, any action designed to cause or to result in, or that has
constituted or which might reasonably be expected to constitute, the
stabilization or manipulation of the price of the Units, to facilitate the
sale or resale of the Units or (B) since the initial filing of the
Registration Statement, except as contemplated by this Agreement, (i)
sold, bid for, purchased or paid anyone any compensation for soliciting
purchases of, the Units or (ii) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities of
the Partnership.
(xxxxi) None of the Partnership, the Operating Partnership or
National Sales has engaged in any business other than in connection with
its organization and the consummation of the Transactions.
(xxxxii) The Units have been approved for listing on the New York
Stock Exchange ("NYSE"), subject only to official notice of issuance.
(xxxxiii) The issuance and delivery of the Subordinated Units to the
General Partner is exempt from the registration requirements of the 1933
Act and the securities laws of any state having jurisdiction with respect
thereto, and none of the Propane Entities or Triarc has taken or will take
any action that would cause the loss of such exemption.
(xxxxiv) No relationship, direct or indirect, exists between the
Propane Entities, Triarc or any of their affiliates, on the one hand, and
any director, officer, stockholder, customer or supplier of any of them,
on the other hand, which is required by the 1933 Act or by the 1933 Act
Regulations to be described in the Registration Statement or the
Prospectus which is not so described as required.
(xxxxv) At the Closing Time, the General Partner will have
(excluding its interests in the Partnership and the Operating Partnership
and any notes or receivables from or payable to the Partnership and the
Operating Partnership) a net worth of at least $15,000,000. For purposes
of this representation, assets will be valued at fair market value, and
the General Partner's interest in the Partnership and the Operating
Partnership (as general partner, limited partner and creditor) shall not
be taken into account except as an offset to the Partnership's or the
Operating Partnership's liabilities that are taken into account in
computing such net worth.
(b) Any certificate signed by any officer of any of the Propane Entities
or Triarc and delivered to the Representatives or to counsel for the
Underwriters on or after the date hereof in connection with this
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Agreement shall be deemed a representation and warranty by the Propane Entities
or Triarc to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Partnership agrees
to sell to each Underwriter, severally and not jointly, and each Underwriter,
severally and not jointly, agrees to purchase from the Partnership, at the price
per Unit set forth in the Pricing Agreement, the number of Units set forth in
Exhibit A opposite the name of such Underwriter (except as otherwise provided in
the Pricing Agreement), plus any additional number of Units which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(1) If the Partnership has elected not to rely upon Rule 430A under
the 1933 Act Regulations, the initial public offering price and the
purchase price per Firm Unit to be paid by the several Underwriters for
the Firm Units have each been determined and set forth in the Pricing
Agreement, dated the date hereof, and an amendment to the Registration
Statement and the Prospectus will be filed before the Registration
Statement becomes effective.
(2) If the Partnership has elected to rely upon Rule 430A under the
1933 Act Regulations, the initial public offering price and the purchase
price per Firm Unit to be paid by the several Underwriters for the Firm
Units shall be determined by agreement between the Representatives and the
Partnership and, when so determined, shall be set forth in the Pricing
Agreement. In the event that such prices have not been agreed upon and the
Pricing Agreement has not been executed and delivered by all parties
thereto by the close of business on the fourteenth business day following
the date of this Agreement, this Agreement shall terminate forthwith,
without liability of any party to any other party, unless otherwise agreed
to by the Partnership and the Representatives. For purposes of this
Agreement, the term "business day" means a day on which the New York Stock
Exchange is open and trading in securities thereon is permitted.
(b) In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the
Partnership hereby grants an option to the Underwriters, severally and not
jointly, to purchase up to 928,571 Additional Units at the price per Additional
Unit set forth in the Pricing Agreement. The option hereby granted will expire
30 days after (i) the date the Registration Statement becomes effective, if the
Partnership has elected not to rely on Rule 430A under the 1933 Act Regulations,
or (ii) the Representation Date, if the Partnership has elected to rely on Rule
430A under the 1933 Act Regulations, and may be exercised in whole or in part
from time to time only for the purpose of covering over-allotments which may be
made in connection with the offering and distribution of the Firm Units upon
notice by the Representatives to the Partnership setting forth the number of
Additional Units as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Additional Units.
Any such time and date of delivery for the Additional Units (a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined, unless otherwise agreed
by the Representative and the Partnership. If the option is exercised as to all
or any portion of the Additional Units, each of the Underwriters, acting
severally and not jointly, will purchase that proportion of the total number of
Additional Units then being purchased which the number of Firm Units set forth
in Exhibit A opposite the name of such Underwriter bears to the total number of
Firm Units (except as otherwise provided in the Pricing Agreement),
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subject in each case to such adjustments as the Representatives in their
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment of the purchase price for, and delivery of certificates for,
the Firm Units shall be made at the office of Paul, Weiss, Rifkind, Wharton &
Garrison, 1285 Avenue of the Americas, New York, New York 10019, at 10:00 A.M.
on July 2, 1996, or at such other place and time as shall be agreed upon by the
Representatives and the Partnership or unless postponed in accordance with the
provisions of Section 10 (such time and date of payment and delivery being
herein called "Closing Time"). In addition, in the event that any or all of the
Additional Units are purchased by the Underwriters, payment of the purchase
price for, and delivery of certificates for, such Additional Units shall be made
at the above-mentioned offices of Paul, Weiss, Rifkind, Wharton & Garrison, or
at such other place as shall be agreed upon by the Representatives and the
Partnership, on each Date of Delivery as specified in the notice from the
Representatives to the Partnership. Payment shall be made to the Partnership by
same-day funds payable to the order of the Partnership against delivery to the
Underwriters of the Firm Units to be purchased by them. Certificates for the
Firm Units and the Additional Units, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
two business days before the Closing Time or the relevant Date of Delivery, as
the case may be. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt for, and make
payment of the purchase price for, the Firm Units and the Additional Units, if
any, which it has agreed to purchase. Merrill Lynch, individually and not as
representative of the Underwriters, may (but shall not be obligated to) make
payment of the purchase price for, the Firm Units and the Additional Units, if
any, to be purchased by any Underwriter whose funds have not been received by
the Closing Time or the relevant Date of Delivery, as the case may be, but such
payment shall not relieve such Underwriter from its obligations hereunder. The
certificates for the Firm Units and the Additional Units, if any, will be made
available for examination and packaging by the Representatives in New York City
not later than 2:00 P.M. on the last business day prior to the Closing Time or
the relevant Date of Delivery, as the case may be.
SECTION 3. Covenants of the Propane Entities and Triarc. The Propane
Entities and Triarc covenant with each Underwriter as follows, but as to Triarc
only with respect to clause (l) below:
(a) To notify the Representatives promptly, and, if requested by the
Representatives, confirm the notice in writing, (i) of the effectiveness
of the Registration Statement and any amendment thereto (including any
post-effective amendment), (ii) of the receipt of any comments from the
Commission, (iii) of any request by the Commission for any amendment to
the Registration Statement or any amendment or supplement to the
Prospectus or for additional information and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or any Prospectus, or of the suspension by any
state securities commission of the qualification of the Units for offering
or sale in any jurisdiction, or the initiation of any proceedings for such
purposes. To make every reasonable effort to prevent the issuance of any
such stop order or suspension and, if any such stop order or suspension is
issued, to obtain the lifting thereof at the earliest reasonably possible
moment. If necessary, to file (i) an amendment to the Registration
Statement or (ii) a post-effective amendment to the Registration
Statement, if required, pursuant to Rule 430A under the 1933 Act, as soon
as practicable after the execution and delivery of this Agreement and will
use their reasonable best efforts to cause the Registration Statement or
such post-effective amendment to become effective at the earliest possible
time. To prepare and file with the Commission, promptly upon the
Underwriters' reasonable request, any amendment to the Registration
Statement or amendments or supplements to the Prospectus that may be
necessary or advisable in connection with the distribution of the Units by
the several
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Underwriters and to use their reasonable best efforts to cause the same to
become effective as promptly as possible.
(b) To give the Representatives notice of the intention to file or
prepare any amendment to the Registration Statement (including any
post-effective amendment) or any amendment or supplement to the
Prospectus, whether pursuant to the 1933 Act or otherwise (including any
revised Prospectus which the Partnership proposes for use by the
Underwriters in connection with the offering of the Units which differs
from the Prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations),
to furnish the Representatives with copies of any such amendment or
supplement a reasonable amount of time prior to such proposed filing or
use, as the case may be, and not to file any such amendment or supplement
or use any such prospectus to which the Underwriters or counsel for the
Underwriters shall reasonably object in writing within two business days
after being furnished a copy thereof.
(c) To deliver to the Representatives and counsel for the
Underwriters, without charge, photocopies of the signed Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein) and
photocopies of all signed consents and certificates of experts, and to
also deliver to the Representatives such number of conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(without exhibits) as the Underwriters may reasonably request.
(d) To furnish to each Underwriter, without charge, from time to
time during the period when the Prospectus is required to be delivered
(the "Delivery Period") under the 1933 Act or the 1934 Act, such number of
copies of the Prospectus (as amended or supplemented) as such Underwriter
may reasonably request for the purposes contemplated by the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations.
(e) To use reasonable best efforts to comply with the 1933 Act, the
1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, so as to
permit the completion of the distribution of the Units as contemplated by
this Agreement and the Prospectus. If during the Delivery Period any event
shall occur or condition shall exist as a result of which it is necessary,
in the opinion of counsel for the Propane Entities or for the
Underwriters, to amend or supplement the Prospectus in order to make the
Prospectus not misleading in the light of the circumstances existing at
the time it is delivered to a purchaser, or if for any other reason it
shall be necessary to amend or supplement the Prospectus in order to
comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations or any other law, to promptly amend or supplement the
Prospectus (in form and substance reasonably satisfactory to counsel for
the Underwriters and in compliance with the 1933 Act, the 1933 Act
Regulations, the 1934 Act or the 1934 Act Regulations) so that, as so
amended or supplemented, the Prospectus will not include an untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
existing at the time they are delivered to a purchaser, not misleading and
comply with the 1933 Act, the 1933 Act Regulations, the 1934 Act or the
1934 Act Regulations; to promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary
to correct such statement or omission or to make the Registration
Statement or the Prospectus comply with such
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requirements, and to furnish to the Underwriters such number of copies of
such amendment or supplement as the Underwriters may reasonably request.
(f) If, at the time that the Registration Statement becomes
effective, any information shall have been omitted therefrom in reliance
upon Rule 430A of the 1933 Act Regulations, then following the execution
of the Pricing Agreement, to prepare and timely file or transmit for
filing with the Commission in accordance with Rule 430A and Rule 424(b) of
the 1933 Act Regulations, copies of the amended Prospectus, or, if
required by such Rule 430A, a post-effective amendment to the Registration
Statement (including an amended Prospectus), containing all information so
omitted and to use its reasonable best efforts to cause such
post-effective amendment to be declared effective as promptly as
practicable.
(g) To endeavor, in cooperation with the Underwriters, to qualify
the Units for offering and sale under the applicable securities laws of
such states and other jurisdictions of the United States as the
Underwriters may designate, and to maintain such qualifications in effect
for as long as may be required for the distribution of the Units;
provided, however that neither the General Partner, the Special General
Partner nor the Partnership shall be obligated to file any general consent
to service, subject itself (or its partners) to taxation in any such
jurisdiction if it (or its partners) are not so subject, of process or
qualify as foreign corporations or limited partnerships, as the case may
be, in any jurisdiction in which they are not so qualified. In each
jurisdiction in which the Units have been so qualified, to file such
statements and reports as may be required by the laws of such jurisdiction
to continue such qualification in effect for so long as may be reasonably
required in connection with the distribution of the Units. To supply the
Representatives with such information regarding the Propane Entities as is
necessary for the determination of the legality of the Units for
investment under the laws of such jurisdictions as the Representatives may
reasonably request.
(h) To make generally available to the security holders of the
Partnership as soon as practicable, but not later than 105 days after the
close of the period covered thereby, an earnings statement (in form
complying with the provisions of Rule 158 of the 1933 Act Regulations)
which need not be audited covering a twelve month period beginning not
later than the first day of the Partnership's fiscal quarter next
following the "effective date" (as defined in said Rule 158) of the
Registration Statement.
(i) To cause (i) the Partnership to use the net proceeds from the
sale of the Common Units and the Additional Units, if any, (ii) the
General Partner to use the net proceeds from the sale of the First
Mortgage Notes and (iii) the Operating Partnership to apply such net
proceeds contributed to it, in each case, as described in the Prospectus
under the captions "The Transactions" and "Use of Proceeds."
(j) To use reasonable best efforts to effect the listing of the
Units on the NYSE.
(k) In the case of the Propane Entities, not to (i) offer, sell,
contract to sell or otherwise dispose of any Common Units, Subordinated
Units or unsubordinated general partner interests in the Partnership or
any securities convertible into or exchangeable or exercisable for Common
Units, Subordinated Units or unsubordinated general partner interests in
the Partnership (other than in connection with the General Partner Merger
or, in the case of the Partnership, the issuance of Common Units in
connection with Acquisitions or Capital Improvements) or (ii) grant any
options or warrants to
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purchase Common Units, Subordinated Units or unsubordinated general
partner interests in the Partnership or any securities convertible into or
exchangeable or exercisable for Common Units, Subordinated Units or
unsubordinated general partner interests in the Partnership (other than
the grant of options to purchase Common Units or Subordinated Units
pursuant to the National Propane Corporation 1996 Unit Option Plan that
are not exercisable until at least 180 days after the date of the Pricing
Agreement) for a period of 180 days after the date of the Pricing
Agreement without the prior written consent of Merrill Lynch; provided
that the Subordinated Units may be transferred without such consent to an
Affiliate of the General Partner who agrees to be bound by the transfer
restrictions contained in this subsection.
(l) In the case of Triarc, not to (i) offer, sell, contract to sell
or otherwise dispose of any Common Units, Subordinated Units or
unsubordinated general partner interests in the Partnership or any
securities convertible into or exchangeable or exercisable for Common
Units, Subordinated Units or unsubordinated general partner interests in
the Partnership or (ii) grant any options or warrants to purchase Common
Units, Subordinated Units or unsubordinated general partner interests in
the Partnership or any securities convertible into or exchangeable or
exercisable for Common Units, Subordinated Units or unsubordinated general
partner interests in the Partnership for a period of 180 days after the
date of the Pricing Agreement without the prior written consent of Merrill
Lynch; provided that the Subordinated Units may be transferred without
such consent to an Affiliate of the General Partner who agrees to be bound
by the transfer restrictions contained in this subsection.
(m) For a period of five years after the Closing Time, to furnish to
the Representatives, as they may reasonably request, copies of (i) any
reports (excluding exhibits) filed by the Partnership with the Commission
on Forms 10-Q and 10-K, (ii) all reports and financial statements
furnished by the Partnership to the principal national securities exchange
or automated quotation system upon which the Units may be listed pursuant
to requirements of or agreements with such exchange and (iii) all other
reports and information furnished to the Partnership's security holders,
promptly as they become available.
(n) In accordance with the Cuba Act and without limitation to the
provisions of Sections 6 and 7 hereof, to indemnify and hold harmless each
Underwriter from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including fees and disbursements of
counsel), as incurred, arising out of any violation by the Propane
Entities of the Cuba Act.
(o) Prior to filing with the Commission any reports on Form SR
pursuant to Rule 463 of the Rules and Regulations, to furnish a copy
thereof to the counsel for the Underwriters and receive and consider its
comments thereon, and to deliver promptly to the Representatives a signed
copy of each report on Form SR filed by it with the Commission.
(p) To cause to be accomplished or obtained as soon as practicable
all consents, recordings and filings necessary to perfect, preserve and
protect the title of the Operating Partnership and National Sales to the
Transferred Assets owned by them as a result of the Transactions.
(q) To cause the Partnership, during the period when the Prospectus
is required to be delivered under the 1933 Act or the 1934 Act, to use
reasonable best efforts to file all documents
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required to be filed with the Commission pursuant to the 1934 Act within
the time periods required by the 1934 Act and the 1934 Act Regulations.
SECTION 4. Payment of Expenses. The Propane Entities will pay all expenses
incident to the performance of their obligations under this Agreement and the
Pricing Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters, the Pricing Agreement, the Prospectus (and any amendments or
supplements thereto) and such other documents as may be required in connection
with the offering, purchase, sale and delivery of the Units, (iii) the
preparation, issuance and delivery of the certificates for the Units to the
Underwriters, including any transfer taxes or duties payable upon the sale of
the Units to the Underwriters, (iv) the fees and disbursements of counsel for
the Propane Entities and Triarc, accountants and other advisors, (v) the
qualification of the Units under securities laws in accordance with the
provisions of Section 3(g) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection therewith and in
connection with the preparation of the Blue Sky memoranda and any supplement
thereto, (vi) the printing and delivery to the Underwriters of copies of the
Blue Sky memoranda and any supplement thereto, (viii) the filing fees incident
to, and the reasonable fees and disbursements of counsel to the Underwriters in
connection with the review by the National Association of Securities Dealers,
Inc. (the "NASD") of the terms of the sale of the Units, (viii) the fees and
expenses incurred in connection with the listing of the Units on the NYSE and
(ix) the performance by the Propane Entities and Triarc of their other
obligations under this Agreement, the Pricing Agreement and the Transaction
Documents.
If this Agreement is terminated by the Underwriters in accordance with the
provisions of Section 5(b), 9(a)(i) or Section 11 hereof, the Propane Entities
shall reimburse the Underwriters for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
Except as expressly provided in this Agreement, all other fees and expenses
incurred by or on behalf of the Underwriters shall be borne by the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations.
(a) The obligations of the several Underwriters hereunder are subject to
the accuracy of the representations and warranties of the Propane Entities and
Triarc herein contained, to the performance in all material respects by the
Propane Entities and Triarc of their obligations hereunder to be performed prior
to the Closing Time, and to the following further conditions:
(i) The Registration Statement shall have become effective not later
than 5:30 P.M. on the date hereof, or with the consent of the
Representatives, at a later time and date, not later, however, than 5:30
P.M. on the first business day following the date hereof, or at such later
time and date as may be approved by a majority in interest of the several
Underwriters; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under
the 1933 Act or proceedings therefor initiated or threatened by the
Commission and no stop order suspending the sale of the Units in any
jurisdiction designated by the Underwriters pursuant to Section 3(g)
hereof shall have been issued and no proceeding for that purpose shall
have been commenced. If the Partnership has elected to rely upon Rule 430A
of the 1933 Act Regulations, the price of the Units and any price-related
information previously omitted from the effective Registration Statement
pursuant to such Rule 430A shall have been transmitted to the Commission
for filing pursuant to Rule 424(b) of the 1933 Act
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Regulations within the prescribed time period and, prior to Closing Time,
the Partnership shall have provided evidence satisfactory to the
Underwriters of such timely filing, or a post-effective amendment
providing such information shall have been promptly filed and declared
effective in accordance with the requirements of Rule 430A of the 1933 Act
Regulations. Any request on the part of the Commission or any state
securities authority in a jurisdiction designated by the Underwriters
pursuant to Section 3(g) for additional information shall have been
complied with to the reasonable satisfaction of counsel to the
Underwriters.
(ii) No Underwriter shall have been advised by the Partnership or
shall have discovered and disclosed to the Partnership that the
Registration Statement, as amended at the time it becomes effective, or
the Prospectus, at the Representation Date or at the Closing Time, or any
amendment or supplement thereto, contains an untrue statement of fact
which is material and is required to be stated therein or is necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
(iii) At Closing Time the Representatives shall have received an
opinion reasonably satisfactory to the Underwriters of Latham & Watkins,
counsel to the Underwriters, covering such matters as are customarily
covered in such opinions.
(iv)
At Closing Time the Representatives shall have received:
(1) The favorable opinion, dated as of Closing Time, of Paul,
Weiss, Rifkind Wharton & Garrison, counsel for the Propane Entities
and Triarc, in form and substance reasonably satisfactory to counsel
for the Underwriters, to the effect that:
A. Each of the Partnership and the Operating Partnership
(A) has been duly formed and is validly existing as a limited
partnership in good standing under the Delaware Act, with all
partnership power and authority to (x) own, lease and operate
the properties it will own upon consummation of the
Transactions, and conduct its business as it will be conducted
upon consummation of the Transactions, in each case as
described in the Registration Statement and the Prospectus,
(y) enter into and perform its obligations under the
Transaction Documents to which it is a party and (z) enter
into and perform its obligations under this Agreement and the
Pricing Agreement and, with respect to the Partnership, issue
and sell the Units as provided herein and therein and (B) to
such counsel's knowledge the State of Iowa is the only
jurisdiction in which the nature of the Partnership's business
requires the Partnership to be duly qualified or registered
and in good standing as a foreign limited partnership.
B. The Special General Partner (A) has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of its state of incorporation, with
all corporate power and authority to (x) own the properties it
will own upon consummation of the Transactions, and act as
non-managing general partner of the Partnership and the
Operating Partnership, in each case as described in the
Registration Statement and the Prospectus, (y) enter into and
perform its obligations
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under the Transaction Documents to which it is a party and (z)
enter into and perform its obligations under this Agreement
and (B) to such counsel's knowledge based upon the nature of
the Special General Partner's business, the Special General
Partner is not required to be duly qualified and in good
standing as a foreign limited partnership in any jurisdiction.
C. National Sales (A) has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of its state of incorporation, with all corporate power
and authority to (x) own, lease and operate the properties it
will own upon consummation of the Transactions, and conduct
its business as it will be conducted upon consummation of the
Transactions, in each case as described in the Registration
Statement and the Prospectus and (y) enter into and perform
its obligations under the Transaction Documents to which it is
a party.
D. Each of the General Partner and Triarc (A) has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of its state of incorporation,
with all corporate power and authority to (x) own, lease and
operate its properties, conduct its business and, in the case
of the General Partner, act as general partner of the
Partnership and the Operating Partnership, in each case as
described in the Registration Statement and the Prospectus,
(y) enter into and perform its obligations under the
Transaction Documents to which it is a party and (z) enter
into and perform its obligations under this Agreement and (B)
in the case of Triarc, based solely on certificates from such
jurisdictions, is duly qualified as a foreign corporation
authorized to do business and in good standing in each
jurisdiction listed on a schedule to such counsel's opinion,
and to such counsel's knowledge such jurisdictions are the
only ones in which the nature of its business or its leasing
or ownership of property requires such qualification, except
where the failure to qualify would not have a Material Adverse
Effect.
E. All of the shares of issued and outstanding capital
stock of the General Partner have been duly authorized and
validly issued and are fully paid and nonassessable, and are
owned of record and to such counsel's knowledge beneficially,
by Triarc, directly or through subsidiaries of Triarc, free
and clear of all Encumbrances (i) in respect of which a
financing statement under the Uniform Commercial Code of the
State of Delaware naming Triarc as a debtor is on file in the
office of the Secretary of State of the State of Delaware or
(ii) otherwise known to such counsel without independent
investigation, except for Encumbrances created by or arising
under the General Corporation Law of the State of Delaware
(the "DGCL") or Encumbrances in favor of the Operating
Partnership and Encumbrances under the Existing Credit
Facility.
F. All of the unsubordinated general partner interests
in the Partnership and the Operating Partnership are owned of
record and to such counsel's knowledge beneficially, by the
General Partner and the Special General Partner, and the GP
Incentive Distribution Rights are owned by the General
Partner, in each case, free and clear of all Encumbrances (i)
in respect of which a financing statement under the
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Uniform Commercial Code of the State of Delaware naming the
General Partner or the Special General Partner, as the case
may be, as a debtor is on file in the office of the Secretary
of State of the State of Delaware or (ii) otherwise known to
such counsel without independent inquiry, except for
Encumbrances created by or arising under the Delaware Act, and
except for Encumbrances securing obligations under the Bank
Credit Facility, the Note Agreements and other Parity Debt
with respect to the unsubordinated general partner interests
held by the General Partner and the Special General Partner.
G. All of the limited partner interests in the Operating
Partnership are owned of record and to such counsel's
knowledge beneficially, by the Partnership free and clear of
all Encumbrances (i) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware
naming the Partnership as debtor is on file in the office of
the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel without independent inquiry,
except for Encumbrances created by or arising under the
Delaware Act, and except for Encumbrances securing obligations
under the Bank Credit Facility, the Note Agreements and other
Parity Debt.
H. All of the shares of issued and outstanding capital
stock of the Special General Partner and National Sales have
been duly authorized and validly issued and are fully paid and
nonassessable, and are owned of record and to such counsel's
knowledge beneficially, by the General Partner and the
Operating Partnership, respectively, free and clear of all
Encumbrances (i) in respect of which a financing statement
under the Uniform Commercial Code of the State of Delaware
naming the General Partner or the Operating Partnership,
respectively, as a debtor is on file in the office of the
Secretary of State of the State of Delaware or (ii) otherwise
known to such counsel without independent inquiry, except for
Encumbrances created by or arising under the DGCL, and except
for Encumbrances securing obligations under the Bank Credit
Facility, the Note Agreements and other Parity Debt.
I. The Units, when issued and delivered by the
Partnership against payment of the consideration set forth
herein, will be acquired by the Underwriters free and clear of
all Encumbrances created by the Partnership Agreement.
J. The Subordinated Units, when issued and delivered
pursuant to the Conveyance Agreements and the Partnership
Agreement, will be owned by the General Partner, free and
clear of all Encumbrances (i) in respect of which a financing
statement under the Uniform Commercial Code of the State of
Delaware naming the General Partner is on file in the office
of the Secretary of State of the State of Delaware or (ii)
otherwise known to such counsel without independent
investigation, except for Encumbrances created by or arising
under the Delaware Act.
K. Except as described in the Registration Statement
and the Prospectus, there are no preemptive rights or other
rights to subscribe for or to purchase, nor any restriction
upon the voting or transfer of, any partnership interests in
the Partnership
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or the Operating Partnership pursuant to the provisions of the
Partnership Agreements or any Agreement or Instrument filed as
an exhibit to the Registration Statement to which any of the
Propane Entities is a party or by which any of them may be
bound. To such counsel's knowledge, except as described in the
Registration Statement and the Prospectus, neither the filing
of the Registration Statement nor the offering or sale of the
Units as contemplated by this Agreement and the Pricing
Agreement gives rise to any rights for or relating to the
registration of any Units or other securities (debt or equity)
of the Partnership. Except as described in the Registration
Statement and the Prospectus, to such counsel's knowledge,
there are no outstanding options, warrants or other rights
calling for the issuance of, and no commitments, plans or
arrangements to issue, any Units or Subordinated Units or any
security convertible into or exercisable or exchangeable for
Units or Subordinated Units.
L. This Agreement and the Pricing Agreement have each
been duly authorized, executed and delivered by the Propane
Entities and Triarc.
M. The Transaction Documents have been, or at Closing
Time will be, duly authorized, executed and delivered by each
of the Propane Entities and Triarc, to the extent they are
parties thereto, and (assuming due authorization, execution
and delivery by each other party thereto), the Transaction
Documents that are governed by the laws of the State of New
York are valid and legally binding agreements of the Propane
Entities and Triarc, to the extent they are parties thereto,
as applicable, enforceable against each of them in accordance
with their respective terms, except that the enforceability of
any such agreement may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium,
or similar laws relating to or affecting creditors' rights
generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in
equity or at law), (ii) public policy, applicable law relating
to fiduciary duties and the judicial imposition of an implied
covenant of good faith and fair dealing and (iii) general
equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
N. None of (A) the execution and delivery by the Propane
Entities and Triarc of and the performance of their
obligations under this Agreement, the Pricing Agreement and
the issuance and sale of the Units as contemplated herein or
therein or (B) the execution and delivery by the Propane
Entities and Triarc and the performance of their obligations
under the Transaction Documents and of the consummation of the
Transactions (including the use of the proceeds from the sale
of the Units and the sale of the First Mortgage Notes as
described in the Prospectus under the captions "The
Transactions" and "Use of Proceeds"), will (in each case,
whether or not with notice or lapse of time or both) (i)
result in any breach or violation of the provisions of the
certificate of incorporation or bylaws of any of the General
Partner, the Special General Partner, National Sales or
Triarc, (ii) conflict with or constitute a breach of, or
default or Repayment Event under, or result in the creation or
imposition of any Encumbrance upon any property or assets of
the Propane Entities or Triarc pursuant to any material
Agreements and Instruments in effect on the date of the
opinion that have been filed as
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exhibits to the Registration Statement, except for (A)
Encumbrances described in the Registration Statement and
Prospectus, (B) conflicts, breaches or Repayment Events under
the Existing Credit Facility and the Other Existing
Indebtedness that is being repaid at the Closing Time, (C)
conflicts, breaches, Repayment Events or Encumbrances that
would not, singly or in the aggregate, have a Material Adverse
Effect or (iii) result in the violation of the DGCL or any
applicable New York State (except with respect to permits and
approvals required in New York State for the operation of the
business of the Propane Entities) or Federal law, statute,
rule or regulation or any judgment, order, writ or decree
known to such counsel of any New York State or Federal
government, government instrumentality or court, having
jurisdiction over any of the Propane Entities or Triarc or any
of their assets or properties, except where such violations
would not, singly or in the aggregate, have a Material Adverse
Effect.
O. No Consent of any New York (except with respect to
permits and approvals required in New York State for the
operation of the business of the Propane Entities) or Federal
court, governmental agency or body or under the DGCL or the
Delaware Act is required of any of the Propane Entities or
Triarc in connection with the execution, delivery and
performance of this Agreement, the Pricing Agreement and the
Transaction Documents and the issuance and sale of the Units
as contemplated herein and therein, except such Consents (A)
as have already been obtained, (B) as are required under the
1933 Act, the 1933 Act Regulations, the 1934 Act, the 1934 Act
Regulations or securities or "blue sky" laws of certain
jurisdictions, (C) which (1) are of a routine or
administrative nature, (2) are not customarily obtained or
made prior to the consummation of transactions such as those
contemplated hereby and by the Transaction Documents and (3)
are expected in the reasonable judgment of the General Partner
to be obtained in the ordinary course of business subsequent
to the consummation of the Transactions and (D) which, if not
obtained, would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect and
(E) as are required under PUHCA.
P. The issuance and delivery of the Subordinated Units
to the General Partner pursuant to the Partnership Agreement
and the Conveyance Agreements is exempt from the registration
requirements of the 1933 Act and the securities laws of any
state having jurisdiction with respect thereto.
Q. To such counsel's knowledge, there is no action,
suit, proceeding, inquiry or investigation before or by any
court or governmental agency or body, domestic or foreign, now
pending or threatened against or affecting the Propane
Entities, which is required to be disclosed in the
Registration Statement (other than as disclosed therein), or
which might reasonably be expected to result in a Material
Adverse Effect (except as disclosed in the Registration
Statement and the Prospectus).
R. To such counsel's knowledge, there are no Agreements
and Instruments of the Propane Entities or Triarc which are
required to be described in the
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Registration Statement or to be filed as exhibits thereto
other than those described therein or filed as exhibits
thereto.
S. To such counsel's knowledge, (A) none of the Propane
Entities or Triarc is in breach or violation of the provisions
of its certificate of incorporation, bylaws, agreement of
limited partnership or other governing documents and (B) no
default by any of the Propane Entities exists in the due
performance or observance of the Bank Credit Facility, the
Purchase Agreement, the Conveyance Agreements and the Triarc
Note, which default could reasonably be expected to have a
Material Adverse Effect.
T. The statements in the Registration Statement and the
Prospectus at the time the Registration Statement becomes
effective and in the Prospectus at the Representation Date and
at Closing Time under the captions "The Transactions", "Cash
Distribution Policy -- Partnership Loan", "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Contingencies" (other than the second paragraph
thereof), "-- Description of Indebtedness", "Business and
Properties -- Government Regulation", "-- Litigation and
Contingent Liabilities" and "--Transfer of the Partnership
Assets", insofar as such statements constitute a summary of
the Transaction Documents or of legal matters or proceedings
referred to therein, fairly and accurately present in all
material respects the information set forth therein with
respect to such documents, legal matters and proceedings.
U. Triarc is not an "investment company" within the
meaning of the Investment Company Act of 1940, as amended, and
the rules and regulations thereunder.
In addition such counsel shall state that the Commission has
advised such counsel that the Registration Statement was declared
effective under the 1933 Act on June 26, 1996; the Prospectus was filed
with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations on
June 27, 1996; and to such counsel's knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission.
In rendering such opinion, counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Propane Entities or Triarc or upon
certificates of public officials and need not express any opinion with
regard to the laws of any jurisdiction other than the federal law of the
United States (except that such counsel need not opine on the Federal
Motor Safety Carrier Act and, except in paragraph U, the 1940 Act and
PUHCA), the law of the State of New York (except that such counsel need
not opine on state and municipal fire safety codes and permits), the DGCL
and the Delaware Act.
(2) The favorable opinion, dated as of Closing Time, of
Andrews & Kurth L.L.P., counsel for the Propane Entities, in form
and substance reasonably satisfactory to counsel for the
Underwriters, to the effect that:
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A. The Partnership Agreement has been duly authorized,
executed and delivered by the General Partner, the Special
General Partner and Triarc, as the organizational limited
partner, and is a valid and legally binding agreement of the
General Partner, the Special General Partner and Triarc, as
the organizational limited partner, enforceable against each
of them in accordance with its terms; the Operating
Partnership Agreement has been duly authorized, executed and
delivered by the General Partner, the Special General Partner
and the Partnership and is a valid and legally binding
agreement of the General Partner, the Special General Partner
and the Partnership, enforceable against each of them in
accordance with its terms; provided that, enforceability of
the Partnership Agreements may be limited by (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium
or similar laws relating to or affecting creditors' rights
generally, (ii) public policy, applicable law relating to
fiduciary duties and the judicial imposition of an implied
covenant of good faith and fair dealing and (iii) general
equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).
B. The General Partner and the Special General Partner
are the sole general partners of the Partnership and the
Operating Partnership, each with, at the Closing Time and upon
consummation of the Transactions (assuming the Underwriters
have not exercised the Over-allotment Option), a 1.0%
unsubordinated general partner interest in the Partnership
pursuant to the Partnership Agreement and a 1.0101%
unsubordinated general partner interest in the Operating
Partnership pursuant to the Operating Partnership Agreement;
all
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such general partner interests and the GP Incentive
Distribution Rights have been duly authorized by the
Partnership Agreements and were validly issued to the General
Partner and the Special General Partner, as the case may be,
in accordance with the Operating Partnership Agreements.
C. The Partnership is the sole limited partner of the
Operating Partnership with, at the Closing Time and upon
consummation of the Transactions (assuming the Underwriters
have not exercised the Over-allotment Option), an
approximately 97.9798% limited partner interest in the
Operating Partnership; such limited partner interest in the
Operating Partnership has been duly authorized by the
Operating Partnership Agreement, was validly issued in
accordance with the Operating Partnership Agreement, and is
fully paid (to the extent required by the Operating
Partnership Agreement) and nonassessable (except as such
nonassessability may be affected by matters described on the
Prospectus under the caption "The Partnership Agreement --
Limited Liability").
D. The 6,190,476 Firm Units to be issued and sold to the
Underwriters by the Partnership and the limited partner
interest represented thereby are duly authorized by the
Partnership Agreement and, when issued and delivered by the
Partnership against payment of the consideration set forth in
the Purchase Agreement, will be validly issued to the
Underwriters in accordance with the Partnership Agreement,
fully paid (to the extent required by the Partnership
Agreement) and nonassessable (except as such nonassessability
may be affected by matters described in the Prospectus under
the caption "The Partnership Agreement -- Limited Liability");
on the date hereof, the Firm Units are the only limited
partner interests of the Partnership.
E. The 4,533,638 Subordinated Units and the GP Incentive
Distribution Rights to be issued to the General Partner
pursuant to the applicable Conveyance Agreement and the
subordinated general partner interests represented thereby are
duly authorized by the Partnership Agreement and, when issued
and delivered pursuant to the terms of the applicable
Conveyance Agreement and the Partnership Agreement, will be
validly issued to the General Partner in accordance with the
Partnership Agreement.
F. None of (A) the execution and delivery by the Propane
Entities and Triarc of and the performance of their
obligations under this Agreement and the Pricing Agreement and
the issuance and sale of the Units as contemplated herein or
therein or (B) the execution and delivery by the Propane
Entities and Triarc and the performance of their obligations
under the Transaction Documents and the consummation of the
Transactions (including the use of the proceeds from the sale
of the Units and the sale of the First Mortgage Notes as
described in the Prospectus under the caption "Use of
Proceeds"), will (in each case, whether or not with notice or
lapse of time or both) (i) result in any breach or violation
of the provisions of the Partnership Agreements or (ii) result
in the violation of the Delaware Act.
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G. No Consent of any Federal court, governmental agency
or body is required pursuant to or under PUHCA in connection
with the execution, delivery and performance of this
Agreement, the Pricing Agreement and the Transaction Documents
and the issuance and sale of the Units as contemplated herein
and therein, except such Consents (A) as have already been
obtained, (B) which (1) are of a routine or administrative
nature, (2) are not customarily obtained or made prior to the
consummation of transactions such as those contemplated hereby
and by the Transaction Documents and (3) are expected in the
reasonable judgment of the General Partner to be obtained in
the ordinary course of business subsequent to the consummation
of the Transactions and (C) which, if not obtained, would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
H. The statements in the Registration Statement and
Prospectus under the captions "Conflicts of Interest and
Fiduciary Responsibility", "Cash Distribution Policy" (other
than (i) the table under the subsection "-- Incentive
Distributions --Hypothetical Annualized Yield" and (ii) the
statements under the subsection "-- Cash Available for
Distribution," as to which such counsel need not express any
opinion), "Description of the Common Units" and "The
Partnership Agreement," insofar as such statements constitute
descriptions of the Partnership Agreements, or refer to
statements of law or legal conclusions, are accurate and
complete in all material respects.
I. None of the Propane Entities is (a) deemed to be a
"gas utility company" within the meaning of Section 2(a)(4) of
PUHCA, (b) a "holding company", within the meaning of PUHCA or
(c) an "investment company" within the meaning of the
Investment Company Act of 1940, as amended, and the rules and
regulations thereunder. Triarc is not (a) deemed to be a "gas
utility company" within the meaning of Section 2(a)(4) of
PUHCA or (b) a "holding company" within the meaning of PUHCA.
J. The Units, when issued and delivered by the
Partnership against payment of the consideration set forth
herein, the Subordinated Units, the unsubordinated general
partner interests in the Partnership and the GP Incentive
Distribution Rights, conform or will conform in all material
respects to the description thereof contained in the
Registration Statement and the Prospectus.
K. The opinion of Andrews & Kurth L.L.P. filed as
Exhibit 8.1 to the Registration Statement is confirmed, and
the Underwriters may rely upon such opinion as if it were
addressed to them.
In rendering such opinion, counsel may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Propane Entities or Triarc or upon
certificates of public officials and need not express any opinion with
regard to the laws of any jurisdiction other than the federal law of the
United States, the Delaware Act and the DGCL.
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(3) The favorable opinion, dated as of Closing Time, of local counsel for the
Propane Entities in the states of Arizona, Arkansas, Colorado Connecticut,
Florida, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota,
Missouri, New Hampshire, New Mexico, New York, Rhode Island, and Wisconsin,
(each, a "State") in form and substance reasonably satisfactory to counsel for
the Underwriters, to the effect that:
A. Each of the Propane Entities and National Sales has
been duly qualified or registered as a foreign corporation or
a foreign limited partnership authorized to do business and in
good standing under the laws of [state] (except that (i) local
counsel need express no such opinion with respect to the
Special General Partner and (ii) only local counsel in Iowa
need express such opinion with respect to the Partnership).
B. The Partnership has all requisite partnership power
and authority under the laws of [state] to own or lease its
properties and to conduct its business in such state; the
Operating Partnership has all requisite partnership power and
authority under the laws of [state] to own or lease its
properties and to conduct its business in such state; and upon
the execution, delivery and performance of their obligations
under the Conveyance Documents, assuming that the Partnership
will not be liable under the laws of the State of Delaware for
the liabilities of the Operating Partnership and that the
Unitholders will not be liable under the laws of the State of
Delaware for the liabilities of the Partnership or the
Operating Partnership, the Partnership will not be liable
under the laws of such state for the liabilities of the
Operating Partnership, and the Unitholders will not be liable
under the laws of such state for the liabilities of the
Partnership or the Operating Partnership.
C. The execution, delivery and performance of the
Conveyance Documents in connection with the Conveyance and
relating to the transfer of the Transferred Assets in [state]
in accordance with the terms thereof will not violate any
statute of such state or, to such counsel's knowledge, any
order, rule or regulation of any agency of such state having
jurisdiction over any of the Propane Entities or any of their
respective properties, except for any such violations which,
individually or in the aggregate, would not have a Material
Adverse Effect.
D. To the extent that the Conveyance Documents executed
in connection with the Conveyance are valid and legally
binding agreements under applicable law as stated therein, and
assuming the due authorization, execution and delivery thereof
by the parties thereto, such Conveyance Documents are valid
and legally binding agreements of the parties thereto under
the laws of [state], enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting the rights of
contracting parties and to general equity principles; each of
the Conveyance Documents executed in connection with, and in
order to give effect to, the Conveyance, is in a form legally
sufficient as between the parties thereto to convey to the
transferee thereunder all of the right, title and interest of
the transferor stated therein in and to the properties located
in such state, as described in the applicable Conveyance
Documents, subject to the conditions, reservations and
limitations contained in the Conveyance
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Documents, except motor vehicles or other property requiring
conveyance of certificated title as to which the applicable
Conveyance Documents are legally sufficient to compel delivery
of such certificated title.
E. Each Conveyance Document executed in connection with,
or to give effect to, the Conveyance (including, without
limitation, the form of the exhibits and schedules thereto) is
in a form legally sufficient for recordation in the
appropriate public offices of [state], to the extent such
recordation is required, and, upon proper recordation of any
such Conveyance Document which is required to be recorded,
will constitute notice to all third parties under the
recordation statutes of each state concerning record title to
the portion of the Transferred Assets described in each of the
applicable Conveyance Documents. Recordation in the office of
the County Clerk for each county in which the Propane Entities
own property is the appropriate public office in such state
for the recordation of deeds and assignments of interests in
real property located in such county.
F. No consent, approval, authorization, order,
registration or qualification of or with any governmental
agency or body of such [state] governing (A) changes in
ownership or control of industrial or other facilities
generally, (B) retail propane sales generally or (C) the
issuance of securities by entities owning retail propane sales
facilities, or, to such counsel's knowledge, based solely upon
their participation as special [state] counsel with respect to
matters relating to the Transactions and without having
conducted an independent investigation, any other governmental
agency or body of such state having jurisdiction over the
Propane Entities or any of their respective properties is
required for the issue and sale of the Units by the
Partnership or for the conveyance of the properties
constituting Transferred Assets located in such state to be
conveyed to the Operating Partnership in connection with the
Conveyance and pursuant to the applicable Conveyance
Documents, except such permits, consents, approvals and
similar authorizations (1) required under the 1933 Act, the
1933 Act Regulations, the 1934 Act, the 1934 Act Regulations
and the securities or "blue sky" laws of certain
jurisdictions, (2) which, if not obtained, would not, singly
or in the aggregate, have a Material Adverse Effect, (3) which
(a) are of a routine or administrative nature, (b) are not
customarily obtained or made prior to the consummation of
transactions such as those contemplated hereby and by the
Transaction Documents and (c) are expected in the reasonable
judgment of the General Partner to be obtained in the ordinary
course of business subsequent to the consummation of the
Transactions or (4) which, if not obtained, would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect.
In rendering such opinion, counsel (i) may rely as to factual
matters upon certificates or written statements from officers or other
appropriate representatives of the Propane Entities and Triarc or upon
certificates of public officials, (ii) need not express any opinion with
regard to the laws of any jurisdiction other than their state of practice
and (iii) may state that they express no opinion with respect to the title
of any of the Propane Entities to any of their respective real or personal
property.
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(4) The favorable opinion, dated as of Closing Time, of Rosen & Read, L.L.P.,
tax counsel for the Propane Entities and Triarc in form and substance reasonably
satisfactory to counsel for the Underwriters, to the effect that the statements
in the Registration Statement and the Prospectus at the time the Registration
Statement became effective and in the Prospectus at the Representation Date and
at Closing Time in the second paragraph under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations
- --Contingencies", insofar as such statements constitute a summary of the legal
matters or proceedings referred to therein, fairly and accurately present in all
material respects the information set forth therein with respect to such legal
matters and proceedings.
In giving the opinions required by subsections (iv)(1) of this Section
5(a), Paul, Weiss, Rifkind, Wharton & Garrison shall additionally state that
such counsel participated in meetings with representatives of the Propane
Entities and Triarc, representatives of the Underwriters and representatives of
Deloitte & Touche L.L.P. at which the contents of the Registration Statement and
related matters were discussed, and although such counsel is not passing upon,
and does not assume responsibility for the accuracy, completeness or fairness
of, any portion of the Registration Statement or the Prospectus, as amended or
supplemented (except to the extent specified in such counsel's opinion), (i)
such counsel is of the opinion that the Registration Statement as of its
effective date, and the Prospectus as of its date and as of the date of such
opinion, complied as to form in all material respects with the requirements of
the 1933 Act and the applicable 1933 Act Regulations, except that such counsel
need express no opinion with respect to the financial statements or other
financial or statistical data contained in the Registration Statement or the
Prospectus and (ii) such counsel has no reason to believe that the Registration
Statement, as of its effective date, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus,
as of its date and at the Closing Time, contains an untrue statement of a
material fact or omits to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, except that such counsel need express no opinion or belief with
respect to the financial statements or other financial or statistical data
contained in the Registration Statement or the Prospectus or the statements
under the captions "Prospectus Summary -- Tax Risks", "-- Summary of Tax
Considerations", "Risk Factors -- Tax Risks", "Cash Distribution Policy" (except
for the subsection " -- Partnership Loan"), "Description of the Common Units",
"The Partnership Agreement", "Tax Considerations", "Investment in the
Partnership by Employee Benefit Plans."
In giving the opinion required by subsection (iv)(2) of this Section
5(a), Andrews & Kurth L.L.P. shall additionally state that such counsel has
participated in meetings with representatives of the Propane Entities and
Triarc, representatives of the Underwriters and representatives of Deloitte &
Touche L.L.P. at which the contents of the Registration Statement and related
matters were discussed, and although such counsel is not passing upon, and does
not assume responsibility for the accuracy, completeness or fairness of, any
portion of the Registration Statement or the Prospectus, as amended or
supplemented (except to the extent specified in such counsel's opinion), such
counsel has no reason to believe that, as of its effective date, the statements
in the Registration Statement under the captions "Prospectus Summary -- Tax
Risks", "-- Summary of Tax Considerations", "Risk Factors -- Tax Risks", "Cash
Distribution Policy" (other than (i) the table under the subsection "--
Incentive Distributions-Hypothetical Annualized Yield", (ii) the statements
under the subsection "-- Cash Available for Distribution", and (iii) the
statements under the subsection "-- Partnership Loan", as to which such counsel
need express no opinion), "Description of Common Units", "Tax Considerations",
"Risk Factors -- "Tax Risks", "The Partnership Agreement" and "Investment in the
Partnership by Employee Benefit Plans" (other than the financial data and other
statistical data included therein, as to which such counsel need express no
opinion) contained an untrue statement of a material fact or omitted to state a
material fact required
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to be stated therein or necessary to make the statements therein not misleading
or that, as of its date or the Closing Time, the statements in the Prospectus
under the captions "Prospectus Summary -- Tax Risks", "-- Summary of Tax
Considerations", "Cash Distribution Policy" (other than (i) the table under the
subsection "-- Incentive Distributions-Hypothetical Annualized Yield", (ii) the
statements under the subsection "-- Cash Available for Distribution", and (iii)
the statements under the subsection "-- Partnership Loan", as to which such
counsel need express no opinion), "Description of Common Units", "Tax
Considerations", "Investment in the Partnership by Employee Benefit Plans" and
"The Partnership Agreement" (other than the financial data and other statistical
data included therein, as to which such counsel need express no opinion)
contained or contains an untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading.
(v) Except as contemplated by the Prospectus, at Closing Date there
shall not have been, since the respective dates as of which information is
given in the Registration Statement and the Prospectus, (i) any material
change in the partners' capital, capital stock, short-term or long-term
debt of any of the Propane Entities, taken as a whole, or Triarc, (ii) any
liabilities or obligations incurred by the Propane Entities or Triarc,
direct or indirect, contingent or matured, which are material to the
Propane Entities, taken as a whole, or Triarc other than such liabilities
or obligations as are reflected in the Registration Statement and the
Prospectus (or any amendment or supplement thereto) or (iii) any other
event or development that may reasonably be expected, either singly or in
the aggregate, to result in a Material Adverse Effect.
(vi) The Representatives shall have received a certificate signed on
behalf of the Partnership and the Operating Partnership by the President,
or a Vice President of the General Partner and by the principal financial
or principal accounting officer of the General Partner, dated as of
Closing Time, to the effect that (i) the representations and warranties of
the Partnership and the Operating Partnership in Section 1 hereof are true
and correct with the same force and effect as though expressly made at and
as of Closing Time (except to the extent any relate to a specific date),
(ii) the Partnership and the Operating Partnership have complied in all
material respects with all agreements and satisfied all conditions on
their part to be performed or satisfied pursuant to the Agreement, the
Pricing Agreement, the Transaction Documents or otherwise at or prior to
Closing Time, (iii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission, (iv) such persons
have carefully examined the Registration Statement and the Prospectus, and
any amendments or supplements thereto, and to such persons' knowledge such
documents do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (v) no event of the type
contemplated in subsection (v) of this Section 5(a) in respect of the
Partnership or the Operating Partnership has occurred.
(vii) The Representatives shall have received a certificate signed
on behalf of the General Partner and the Special General Partner by the
Chairman, the President or a Vice President and the chief financial or
accounting officer of the General Partner and the Special General Partner
to the effect that (i) the representations and warranties of such entity
contained in Section 1 hereof are true and correct with the same force and
effect as though expressly made at and as of Closing Time (except to the
extent any relate to a specific date), (ii) such entity has complied in
all material respects with all agreements and satisfied all conditions on
its part to be performed or satisfied pursuant to the Agreement, the
Pricing Agreement, the Transaction Documents or otherwise at or prior to
Closing Time, (iii) such persons have
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carefully examined the Registration Statement and the Prospectus, and any
amendments or supplements thereto, and to such persons' knowledge, such
documents do not include any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and (iv) no event of the type
contemplated in subsection (v) of this Section 5(a) in respect of such
entity has occurred.
(viii)The Representatives shall have received a certificate signed
on behalf of Triarc by the Chairman, the President or a Vice President and
the chief financial or accounting officer of Triarc to the effect that (i)
the representations, warranties and agreements of Triarc contained in
Section 1 hereof are true and correct with the same force and effect as
though expressly made at and as of Closing Time, (ii) Triarc has complied
in all material respects with all agreements and satisfied all conditions
on its part to be performed or satisfied pursuant to the Agreement, the
Pricing Agreement, the Transaction Documents or otherwise at or prior to
Closing Time (iii) such persons have carefully examined the Registration
Statement and the Prospectus, and any amendments or supplements thereto,
and to such persons' knowledge such documents do not include any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading and (iv) no event of the type contemplated in subsection (v) of
this Section 5(a) in respect of Triarc has occurred.
(ix) At the time of the execution of this Agreement, the
Underwriters shall have received an accountants' "comfort letter" from
Deloitte & Touche, dated such date, in form and substance reasonably
satisfactory to the Underwriters,
(x) At Closing Time the Underwriters shall have received from
Deloitte & Touche a bring-down letter, dated as of Closing Time, to the
effect that Deloitte & Touche, LLP reaffirms the statements made in the
letter furnished pursuant to subsection (ix) of this Section 5(a), except
that the specified date referred to shall be a date not more than five
days prior to Closing Time and, if the Partnership has elected to rely on
Rule 430A of the 1933 Act Regulations, to the further effect that it has
carried out certain specified procedures with respect to certain amounts,
percentages and financial information specified by the Underwriters and
deemed to be a part of the Registration Statement pursuant to Rule
430A(b).
(xi) At the Closing Time the Units shall have been approved for
listing on the NYSE, subject only to official notice of issuance, and the
NASD shall have approved the Underwriters' participation in the
distribution of the Units and such approval shall not have been withdrawn
or limited.
(xii) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Pricing
Agreement, the Transaction Documents, the Registration Statement and
Prospectus and all other legal matters relating to this Agreement and the
Transactions shall be reasonably satisfactory in all material respects to
counsel for the Underwriters, and the Propane Entities and Triarc shall
have furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
(xiii)The Existing Credit Facility shall have been or will be repaid
in its entirety and all obligations thereunder discharged, cancelled or
extinguished substantially contemporaneously with the Closing Time.
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(xiv) The Operating Partnership shall have entered into the Bank
Credit Facility and the Representatives shall have received counterparts,
conformed as executed, thereof.
(xv) Simultaneously with or prior to the sale of the Firm Units at
the Closing Time, the Transactions shall have been consummated and shall
conform in all material respects to the description thereof in the
Registration Statement and the Prospectus.
(xvi) In the event that the Underwriters exercise their option
provided in Section 2(b) hereof to purchase all or any portion of the
Additional Units, the representations and warranties of the Propane
Entities and Triarc contained herein and the statements in any
certificates furnished by the Propane Entities or Triarc hereunder shall
be true and correct as of each Date of Delivery (except to the extent any
relate to a specific date) and, at the relevant Date of Delivery, the
Representatives shall have received:
(1) Certificates, dated such Date of Delivery, of officers of
the Propane Entities and Triarc, as applicable, confirming that the
certifications made in the applicable certificate delivered at the
Closing Time pursuant to Sections 5(a)(vi) through 5(a)(viii) hereof
remain true and correct as of such Date of Delivery.
(2) The favorable opinions of Paul, Weiss, Rifkind, Wharton &
Garrison and Andrews & Kurth L.L.P., counsel for the Propane
Entities and Triarc, in form and substance satisfactory to counsel
for the Underwriters, dated such Date of Delivery, relating to the
Additional Units to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by Sections
5(a)(iv)(1) and 5(a)(iv)(2) hereof.
(3) The favorable opinion of Latham & Watkins, counsel for the
Underwriters, dated such Date of Delivery, relating to the
Additional Units to be purchased on such Date of Delivery.
(4) A letter from Deloitte & Touche LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery,
substantially the same in form and substance as the letter furnished
to the Representatives pursuant to Section 5(a)(ix) hereof, except
that the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date
of Delivery.
(b) If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representatives by notice to the Partnership at any time at or prior to
Closing Time, and such termination shall be without liability of any party to
any other party except as provided in Section 4 and except that Sections 3(n), 6
and 7 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
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(a) The Partnership, the Operating Partnership, the General Partner, the
Special General Partner and Triarc jointly and severally, agree to indemnify and
hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each officer and director of each Underwriter and of any such
controlling person as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto), or the omission or alleged omission therefrom of a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Partnership; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by the Underwriters), reasonably incurred
in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement (A) shall not apply to
any loss, liability, claim, damage or expense to the extent arising out of
any untrue statement or omission or alleged untrue statement or alleged
omission made in reliance upon and in conformity with written information
furnished to the Partnership by any Underwriter through the
Representatives expressly for use in the Registration Statement (or any
amendment thereto) or any preliminary prospectus or the Prospectus (or any
amendment or supplement thereto) and (B) with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or to the
benefit of any person controlling such Underwriter or any officer or
director of such Underwriter or of any such controlling person) on account
of any such loss, claim, damage, liability or expense arising from the
sale of the Units by such Underwriter to any person if the Partnership
shall sustain the burden of proving that the Prospectus or any subsequent
amendment or supplement to such Prospectus (whether or not filed with the
Commission pursuant to Rule 424(b) of the 1933 Act Regulations) shall not
have been delivered or sent to such person within the time required by the
1933 Act or the 1933 Act Regulations and the untrue statement contained in
or omission from such preliminary prospectus was corrected in the
Prospectus, provided that the Partnership has delivered the Prospectus to
the several Underwriters in compliance with Section 3(d) hereof in
reasonably requested quantities and on a timely basis to permit such
delivery or sending.
In making a claim for indemnification under this Section 6 (other
than pursuant to clause (a)(iii) of this Section 6 which shall be subject
to the last four sentences of this paragraph set forth below) or
36
<PAGE>
<PAGE>
contribution under Section 7 by the Propane Entities or Triarc, the
indemnified parties may proceed against either (i) both the Propane
Entities and Triarc or (ii) the Propane Entities only, but may not proceed
solely against Triarc. In the event that the indemnified parties are
entitled to seek indemnity or contribution hereunder against any loss,
liability, claim, damage ad expense incurred with respect to a final
judgment from a trial court then, as a precondition to any indemnified
party obtaining indemnification or contribution from Triarc (but not any
of the Propane Entities), the indemnified parties shall first obtain a
final judgment from a trial court that such indemnified parties are
entitled to indemnity or contribution under this Agreement with respect to
such loss, liability, claim, damage or expense (the "Final Judgment") from
the Propane Entities and Triarc and shall seek to satisfy such Final
Judgment in full from the Propane Entities by making a written demand upon
the Partnership for such satisfaction. Only in the event such Final
Judgment shall remain unsatisfied in whole or in part 45 days following
the date of receipt by the Partnership of such demand shall any
indemnified party have the right to take action to satisfy such Final
Judgment by making demand directly on Triarc (but only if and to the
extent the Propane Entities have not already satisfied such Final
Judgment, whether by settlement, release or otherwise). The indemnified
parties may exercise this right to first seek to obtain payment from the
Propane Entities and thereafter obtain payment from Triarc without regard
to the pursuit by any party of its rights to the appeal of such Final
Judgment. The indemnified parties shall, however, be relieved of their
obligation to first obtain a Final Judgment, to seek to obtain payment
from the Propane Entities with respect to such Final Judgment or, having
sought such payment, to wait such 45 days after failure by the Propane
Entities to immediately satisfy any such Final Judgment if (i) any of the
Propane Entities files a petition for relief under the United States
Bankruptcy Code (the "Bankruptcy Code"), (ii) an order for relief is
entered against any of the Propane Entities in an involuntary case under
the Bankruptcy Code and the continuance in effect of such order for 60
consecutive days, (iii) any of the Propane Entities makes an assignment
for the benefit of its creditors, or (iv) any court orders or approves the
appointment of a receiver or custodian for any of the Propane Entities or
a substantial portion of its assets and the continuance in effect of such
order for 60 consecutive days. The foregoing provisions of this paragraph
are not intended to require any indemnified party to obtain a Final
Judgment against the Propane Entities or Triarc before obtaining
reimbursement of expenses pursuant to clause (a)(iii) of this Section 6.
However, the indemnified parties shall first seek to obtain such
reimbursement in full from the Propane Entities by making a written demand
upon the Partnership for such reimbursement. Only in the event such
expenses shall remain unreimbursed in whole or in part 45 days following
the date of receipt by the Partnership of such demand shall any
indemnified party have the right to receive reimbursement of such expenses
from Triarc by making written demand directly on Triarc (but only if and
to the extent the Propane Entities have not already satisfied the demand
for reimbursement, whether by settlement, release or otherwise). The
indemnified parties shall, however, be relieved of their obligation to
first seek to obtain such reimbursement in full from the Propane Entities
or, having made written demand therefor, to wait such 45 days after
failure by the Propane Entities to immediately reimburse such expenses if
(i) any of the Propane Entities files a petition for relief under the
Bankruptcy Code, (ii) an order for relief is entered against any of the
Propane Entities in an involuntary case under the Bankruptcy Code and the
continuance in effect of such order for 60 consecutive days, (iii) any of
the Propane Entities makes an appointment for the benefit of its
creditors, or (iv) any court orders or approves the appointment of a
receiver or custodian for any of the Propane Entities or a substantial
portion of its assets and the continuance in effect of such order for 60
consecutive days.
(b) Each Underwriter severally, but not jointly, agrees to indemnify and
hold harmless the Propane Entities and Triarc, their respective directors, each
of their officers who signed the Registration Statement, and
37
<PAGE>
<PAGE>
each person, if any, who controls any of the Propane Entities or Triarc within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto) or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Partnership by such Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto) or such preliminary
prospectus or Prospectus (or any amendment or supplement thereto). The parties
hereto severally acknowledge that the only information expressly provided in
writing by the Underwriters for inclusion in the Registration Statement and the
preliminary prospectus and the Prospectus are the statements with respect to
Underwriting discounts and commission on the cover page of the Prospectus, the
last full text paragraph on the cover page of the Prospectus, the legend
concerning stabilization on the inside front cover page of the Prospectus, and
the second and fifth full text paragraphs of the "Underwriting" section of the
Prospectus.
(c) Each indemnified party shall give prompt written notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an indemnifying
party shall not relieve such indemnifying party from any liability which it may
have otherwise than on account of this indemnity agreement except to the extent
the indemnifying party is materially prejudiced thereby. An indemnifying party
may participate at its own expense in the defense of such action if it so elects
within a reasonable time after receipt of such notice. An indemnifying party,
jointly with any other indemnifying parties receiving such notice, may assume
the defense of such action with counsel chosen by it, unless such indemnified
parties reasonably object to such assumption on the ground that such indemnified
party shall have been advised by its counsel that representation of such
indemnified party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of appropriate conduct due to actual or
potential differing interests between them. If an indemnifying party assumes the
defense of such action, the indemnifying parties shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action. In no event shall the indemnifying parties be
liable for the fees and expenses of more than one counsel (in addition to local
counsel) for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is a party and indemnity has been sought hereunder by such
indemnified party (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement includes a release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding. No indemnifying party shall be liable for any settlement of any
such action effected without its prior written consent, but if settled with its
prior written consent, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by reason
of such settlement.
(d) Triarc shall not be responsible for the payment of an amount pursuant
to this Section 6 which exceeds the net proceeds received by the Partnership
from the sale of the Units pursuant to this Agreement and the Pricing Agreement.
(e) If any time an indemnified party shall have requested an indemnifying
party to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(c) hereof effected without its written consent
if (i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii)
38
<PAGE>
<PAGE>
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
SECTION 7. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Propane Entities,
Triarc and the Underwriters shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by a Propane Entity or Triarc and one or more of
the Underwriters, as incurred, in such proportions that the Underwriters are
responsible for that portion represented by the percentage that the underwriting
discount appearing on the cover page of the Prospectus bears to the initial
public offering price appearing thereon and the Propane Entities and Triarc
shall be responsible for the balance on the same basis as the Propane Entities
and Triarc would have been obligated to provide indemnification pursuant to
Section 6; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 7, (a) no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Units underwritten by it and distributed
to the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay pursuant to Section 6 and
(b) Triarc shall not be required to contribute any amount in excess of the
amount by which the net proceeds received by the Partnership from the sale of
the Units pursuant to this Agreement and the Pricing Agreement exceeds the
aggregate amount Triarc has otherwise paid pursuant hereto and to Section 6(a).
For purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
and each officer and director of each Underwriter and of any such controlling
person shall have the same rights to contribution as such Underwriter, and each
director of any of the Propane Entities or Triarc, each officer of any of the
Propane Entities or Triarc who signed the Registration Statement, and each
person, if any, who controls any of the Propane Entities or Triarc within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, and each
officer and director of any such controlling person shall have the same rights
to contribution as the Propane Entities and Triarc.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties, indemnities and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Propane Entities or Triarc submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of any Underwriter or controlling person, or by or on behalf of the
Partnership, and shall survive delivery of and payment for the Units.
SECTION 9. Termination of Agreement.
(a) The Representatives may terminate this Agreement, by notice to the
Partnership, at any time at or prior to Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Prospectus, any Material Adverse Effect,
whether or not arising in the ordinary course of business, or (ii) if there has
occurred any material adverse change in the financial markets in the United
States or elsewhere, any outbreak of hostilities or escalation thereof or other
calamity or crisis, in each case the effect of which on the financial markets of
the United States is such as to make it, in the judgment
39
<PAGE>
<PAGE>
of the Representatives, impracticable to market the Units or to enforce
contracts for the sale of the Units, or (iii) if trading generally on the
American Stock Exchange, the NYSE or the NASDAQ National Market System has been
suspended, or minimum or maximum prices for trading have been fixed, or maximum
ranges for prices have been required, by any of said exchanges or by such system
or by order of the Commission, the NASD or any other governmental authority,
(iv) if a banking moratorium has been declared by either Federal or New York
authorities, or (v) if there has occurred any change or development involving a
prospective change in national or international political, financial or economic
conditions or currency exchange rates or exchange controls which, in the
reasonable opinion of the Representatives, is likely to have a material and
adverse effect on the market for the Units. As used in this Section 9(a), the
term "Prospectus" means the Prospectus in the form first used by the
Underwriters to confirm sales of the Units.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and provided further that Sections 3(n), 6 and 7
shall survive such termination and remain in full force and effect.
SECTION 10. Default by One or More of the Underwriters. If one or more of
the Underwriters shall fail at Closing Time or a Date of Delivery to purchase
the Units which it or they are obligated to purchase under this Agreement and
the Pricing Agreement (the "Defaulted Units"), the Representatives shall have
the right, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Underwriters, or any other underwriters, to purchase all, but
not less than all, of the Defaulted Units in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Units does not exceed 10% of the
number of Units to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase
the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Units exceeds 10% of the number of
Units to be purchased on such date, this Agreement shall terminate without
liability on the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement, either the Representatives or the Partnership shall have the
right to postpone Closing Time or a Date of Delivery for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements. As used herein, the
term "Underwriter" includes any person substituted for an Underwriter under this
Section 10.
SECTION 11. Default by the Partnership. If the Partnership shall fail at
Closing Time to sell and deliver the aggregate principal amount of Units which
it is obligated to sell hereunder, then this Agreement shall terminate.
40
<PAGE>
<PAGE>
The termination of this Agreement pursuant to this Section shall not
relieve the Partnership from liability, if any, in respect of the default
resulting in such termination.
SECTION 12. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at North Tower, World
Financial Center, New York, New York 10281-1209, attention of Theodore D. Sands,
or to such other address designated in a notice so delivered; notices to the
Partnership shall be directed to it at Suite 1700, IES Tower, 200 1st Street,
S.E., P.O. Box 2067, Cedar Rapids, Iowa, 52401-2067, attention of Ronald R.
Rominiecki, Senior Vice President and Chief Financial Officer, or to such other
address designated in a notice so delivered.
SECTION 13. Parties. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon the Underwriters and the Propane
Entities and Triarc and their respective successors. Nothing expressed or
mentioned in this Agreement or the Pricing Agreement is intended or shall be
construed to give any person, firm or corporation, other than the Underwriters,
the Propane Entities and Triarc and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or the Pricing Agreement or any
provision herein or therein contained. This Agreement and the Pricing Agreement
and all conditions and provisions hereof and thereof are intended to be for the
sole and exclusive benefit of the Underwriters, the Propane Entities, Triarc and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Units from an Underwriter
shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT AND THE PRICING
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN SAID
STATE. EXCEPT AS OTHERWISE SET FORTH HEREIN SPECIFIED TIMES OF DAY REFER TO NEW
YORK CITY TIME.
41
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<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Partnership a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters, the Propane Entities and Triarc in
accordance with its terms.
Very truly yours,
NATIONAL PROPANE CORPORATION
By:/s/ Ronald R. Rominiecki
---------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
By:/s/ Stuart I. Rosen
---------------------------------
Name: Stuart I. Rosen
Title:Secretary
NATIONAL PROPANE SGP, INC.
By:/s/ Ronald R. Rominiecki
---------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
By:/s/ Stuart I. Rosen
---------------------------------
Name:Stuart I. Rosen
Title: Secretary
NATIONAL PROPANE PARTNERS, L.P.
By: National Propane Corporation,
its Managing General Partner
By:/s/Ronald R. Rominiecki
---------------------------------
Name:Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
By:/s/ Stuart I. Rosen
---------------------------------
Name:Stuart I. Rosen
Title: Secretary
42
<PAGE>
<PAGE>
NATIONAL PROPANE, L.P.
By: National Propane Corporation,
its Managing General Partner
By:/s/ Ronald R. Rominiecki
---------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
By:/s/ Stuart I. Rosen
---------------------------------
Name: Stuart I. Rosen
Title: Secretary
TRIARC COMPANIES, INC.
By:/s/ Thomas E. Shultz
---------------------------------
Name: Thomas E. Shultz
Title: Vice President and Treasurer
By:/s/ Stuart I. Rosen
---------------------------------
Name: Stuart I. Rosen
Title: Vice President and Secretary
43
<PAGE>
<PAGE>
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JANNEY MONTGOMERY SCOTT INC.
RAUSCHER PIERCE REFSNES, INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ Theodore D. Sands
----------------------------
Name:Theodore D. Sands
Title:Managing Director
For itself and as Representatives of the other
Underwriters named in Exhibit A hereto.
44
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<PAGE>
EXHIBIT A TO PRICING AGREEMENT
Name of Underwriter Number of Firm Units
- ------------------- --------------------
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
45
<PAGE>
<PAGE>
EXHIBIT A TO PRICING AGREEMENT
Name of Underwriter Number of Firm Units
- ------------------- --------------------
The Ohio Company........................................................50,000
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
=========
46
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<PAGE>
EXHIBIT B
6,190,476 Firm Units
NATIONAL PROPANE PARTNERS, L.P.
(a Delaware limited partnership)
Common Units
(representing limited partner interests)
Pricing Agreement
June 26, 1996
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JANNEY MONTGOMERY SCOTT INC.
RAUSCHER PIERCE REFSNES, INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
as Representatives of the several Underwriters
named in the within-mentioned Purchase Agreement
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Dear Ladies and Gentlemen:
Reference is made to the Purchase Agreement dated June 26, 1996 (the
"Purchase Agreement") relating to the purchase by the several Underwriters named
in Exhibit A thereto, for whom Merrill Lynch & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Donaldson, Lufkin & Jenrette Securities
Corporation, Janney Montgomery Scott Inc., Rauscher Pierce Refsnes, Inc. and The
Robinson-Humphrey Company, Inc. are acting as representatives (the
"Representatives"), of the above Units (the "Firm Units"), of National Propane
Partners, L.P., a Delaware limited partnership (the "Partnership").
Pursuant to Section 2 of the Purchase Agreement, the Partnership agrees
with each Underwriter as follows:
EXHIBIT B
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<PAGE>
<PAGE>
1. The initial public offering price per Firm Unit, determined as
provided in said Section 2, shall be $21.00.
2. The purchase price per Firm Unit to be paid by the several
Underwriters shall be $19.635, being an amount equal to the initial public
offering price set forth above less $1.365 per Firm Unit.
3. Incentive Distributions shall be made as follows:
<TABLE>
<CAPTION>
Marginal Percentage
Interest in Distributions
-------------------------
Quarterly
Distribution Hypothetical
Target Annualized General
Amount Yield Unitholders Partners
------ ----- ----------- --------
<S> <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>
48
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<PAGE>
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN SAID STATE.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Partnership a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Partnership in accordance with its
terms.
Very truly yours,
NATIONAL PROPANE PARTNERS, L.P.
By: National Propane Corporation,
its Managing General Partner
By:Ronald R. Rominiecki
------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
By:/s/Stuart I. Rosen
------------------------------
Name: Stuart I. Rosen
Title: Secretary
CONFIRMED AND ACCEPTED, as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION
JANNEY MONTGOMERY SCOTT INC.
RAUSCHER PIERCE REFSNES, INC.
THE ROBINSON-HUMPHREY COMPANY, INC.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:/s/ Theodore D. Sands
----------------------------
Name: Theodore D. Sands
Title: Managing Director
For itself and as Representatives of the other
Underwriters named in Exhibit A hereto.
49
<PAGE>
<PAGE>
[CONFORMED COPY]
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
NATIONAL PROPANE PARTNERS, L.P.
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
ARTICLE I
DEFINITIONS
<S> <C> <C>
1.1 Definitions..................................................................1
1.2 Construction................................................................14
ARTICLE II
ORGANIZATION
2.1 Formation...................................................................14
2.2 Name........................................................................14
2.3 Registered Office; Registered Agent; Principal Office; Other Offices........15
2.4 Purpose and Business........................................................15
2.5 Powers......................................................................15
2.6 Power of Attorney...........................................................15
2.7 Term........................................................................17
2.8 Title to Partnership Assets.................................................17
ARTICLE III
RIGHTS OF LIMITED PARTNERS
3.1 Limitation of Liability.....................................................17
3.2 Management of Business......................................................17
3.3 Outside Activities of the Limited Partners..................................18
3.4 Rights of Limited Partners..................................................18
ARTICLE IV
CERTIFICATES; RECORD HOLDERS; TRANSFER OF
PARTNERSHIP INTERESTS; REDEMPTION OF
PARTNERSHIP INTERESTS
4.1 Certificates................................................................18
4.2 Mutilated, Destroyed, Lost or Stolen Certificates19
4.3 Record Holders..............................................................19
4.4 Transfer Generally..........................................................20
4.5 Registration and Transfer of Units..........................................20
4.6 Transfer of a General Partner's Unsubordinated General Partner Interest.....21
4.7 Merger or Liquidation of the Managing General Partner into Triarc...........21
4.8 Transfer of Incentive Distribution Rights...................................22
4.9 Restrictions on Transfers...................................................22
4.10 Citizenship Certificates; Non-citizen Assignees.............................22
4.11 Redemption of Partnership Interests of Non-citizen Assignees................23
4.12 Exchange by Special General Partner of its Unsubordinated General Partner
Interest and its Interest in the Operating Partnership......................24
ARTICLE V
CAPITAL CONTRIBUTIONS AND ISSUANCE OF
PARTNERSHIP INTERESTS
5.1 Organizational Contributions................................................24
5.2 Contributions by General Partners...........................................24
5.3 Contributions by Initial Limited Partners...................................25
5.4 Interest and Withdrawal.....................................................25
5.5 Capital Accounts............................................................25
5.6 Issuances of Additional Partnership Securities..............................28
5.7 Limitations on Issuance of Additional Partnership Securities................28
5.8 Conversion of Subordinated Units............................................30
5.9 Limited Preemptive Right....................................................31
5.10 Splits and Combination......................................................31
5.11 Fully Paid and Non-Assessable Nature of Limited Partner Partnership
Interests...................................................................32
</TABLE>
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ARTICLE VI
ALLOCATIONS AND DISTRIBUTIONS
<S> <C> <C>
6.1 Allocations for Capital Account Purpose.....................................33
6.2 Allocations for Tax Purpose.................................................38
6.3 Requirement and Characterization of Distributions; Distributions to Record
Holders.....................................................................40
6.4 Distributions of Available Cash from Operating Surplus......................40
6.5 Distributions of Available Cash from Capital Surplus........................41
6.6 Adjustment of Minimum Quarterly Distribution and Target Distribution Levels.42
6.7 Special Provisions Relating to the Holders of Subordinated Units............42
6.8 Entity-Level Taxation.......................................................42
ARTICLE VII
MANAGEMENT AND OPERATION OF BUSINESS
7.1 Management..................................................................43
7.2 Certificate of Limited Partnership..........................................44
7.3 Restrictions on Managing General Partner's Authority........................45
7.4 Reimbursement of the General Partners.......................................45
7.5 Outside Activities..........................................................46
7.6 Loans from the General Partners; Loans or Contributions from the Partnership;
Contracts with Affiliates; Certain Restrictions on the General Partners.....47
7.7 Indemnification.............................................................48
7.8 Liability of Indemnitees....................................................49
7.9 Resolution of Conflicts of Interest.........................................50
7.10 Other Matters Concerning the Managing General Partner.......................51
7.11 Indemnification of National Propane SGP by National Propane Corporation.....51
7.12 Purchase or Sale of Units...................................................52
7.13 Registration Rights of the General Partners and their Affiliates............52
7.14 Reliance by Third Parties...................................................53
ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS
8.1 Records and Accounting......................................................54
8.2 Fiscal Year.................................................................54
8.3 Reports.....................................................................54
ARTICLE IX
TAX MATTERS
9.1 Tax Returns and Information.................................................54
9.2 Tax Elections...............................................................55
9.3 Tax Controversies...........................................................55
9.4 Withholding.................................................................55
ARTICLE X
ADMISSION OF PARTNERS
10.1 Admission of Initial Limited Partners.......................................55
10.2 Admission of Substituted Unitholder.........................................56
10.3 Admission of Successor or Transferee General Partners.......................56
10.4 Admission of Additional Limited Partners....................................56
10.5 Admission of Substituted Holder of Incentive Distribution Rights............57
10.6 Amendment of Agreement and Certificate of Limited Partnership...............57
ARTICLE XI
WITHDRAWAL OR REMOVAL OF PARTNERS
11.1 Withdrawal of the General Partners..........................................57
11.2 Removal of the Managing General Partner.....................................59
11.3 Interest of Departing Partner and Successor General Partner.................59
11.4 Termination of Subordination Period, Conversion of Subordinated Units and
Extinguishment of Cumulative Common Unit Arrearages.........................61
11.5 Withdrawal of Limited Partners..............................................61
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ARTICLE XII
DISSOLUTION AND LIQUIDATION
<S> <C> <C>
12.1 Dissolution.................................................................61
12.2 Continuation of the Business of the Partnership After Dissolution...........61
12.3 Liquidator..................................................................62
12.4 Liquidation.................................................................62
12.5 Cancellation of Certificate of Limited Partnership..........................63
12.6 Return of Contributions.....................................................63
12.7 Waiver of Partition.........................................................63
12.8 Capital Account Restoration.................................................63
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT;
MEETINGS; RECORD DATE
13.1 Amendment to be Adopted Solely by the Managing General Partner..............63
13.2 Amendment Procedures........................................................65
13.3 Amendment Requirements......................................................65
13.4 Special Meetings............................................................65
13.5 Notice of a Meeting.........................................................66
13.6 Record Date.................................................................66
13.7 Adjournment.................................................................66
13.8 Waiver of Notice; Approval of Meeting; Approval of Minutes..................66
13.9 Quorum......................................................................67
13.10 Conduct of a Meeting........................................................67
13.11 Action Without a Meeting....................................................67
13.12 Voting and Other Rights.....................................................68
ARTICLE XIV
MERGER
14.1 Authority...................................................................68
14.2 Procedure for Merger or Consolidation.......................................68
14.3 Approval by Unitholders of Merger or Consolidation..........................69
14.4 Certificate of Merger.......................................................69
14.5 Effect of Merger............................................................69
ARTICLE XV
RIGHT TO ACQUIRE UNITS
15.1 Right to Acquire Units......................................................70
ARTICLE XVI
GENERAL PROVISIONS
16.1 Addresses and Notices.......................................................71
16.2 Further Action..............................................................72
16.3 Binding Effect..............................................................72
16.4 Integration.................................................................72
16.5 Creditors...................................................................72
16.6 Waiver......................................................................72
16.7 Counterparts................................................................72
16.8 Applicable Law..............................................................72
16.9 Invalidity of Provisions....................................................72
16.10 Consent of Partners.........................................................72
</TABLE>
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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 July 2, 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
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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.
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"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
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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).
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"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 Agreement" 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
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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
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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
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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
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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).
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"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
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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.
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"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.
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"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 June 26,
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.
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"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 amended 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
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"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.,
Cedar Rapids, Iowa 52401 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., Cedar Rapids, Iowa 52401 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:
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(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.
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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.
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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
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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
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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)
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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.
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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.
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(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.
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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.
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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.
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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,
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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,
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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.
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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
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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
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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.
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(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.
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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.
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(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:
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(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
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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
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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
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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
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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.
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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;
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(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
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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.
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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
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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
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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
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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
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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
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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.
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(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
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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
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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
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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
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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
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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.
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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.
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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
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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.
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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
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("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
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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.
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(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.
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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.
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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
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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;
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(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
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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.
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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
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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;
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(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.
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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
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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
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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.
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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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
Managing General Partner:
National Propane Corporation
By: /S/ RONALD R. ROMINIECKI
--------------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
Special General Partner:
National Propane SGP, Inc.
By: /S/ RONALD R. ROMINIECKI
--------------------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
Organizational Limited Partner:
Triarc Companies, Inc.
By: /S/ JOHN L. COHLAN
--------------------------------------
Name: John L. Cohlan
Title: Senior Vice President
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: /s/ RONALD R. ROMINIECKI
--------------------------------------
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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.
Dated:_________________________ National Propane Corporation,
as Managing General Partner
Countersigned and Registered by:
______________________________________ By:___________________________
as Transfer Agent and Registrar President
By:___________________________________ By:____________________________
Authorized Signature Secretary
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[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 ................... Custodian ..................
entireties
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.
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FOR VALUE RECEIVED, _____________________________ hereby assigns,
conveys, sells and transfers unto _____________________________________________
_____________________________________ _______________________________________
(Please print or typewrite name (Please insert Social Security or other
and address of Assignee) identifying number of Assignee)
____________________________ 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.
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 (Signature)
BANK OR TRUST COMPANY _________________________________
(Signature)
SIGNATURE(S) GUARANTEED
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.
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Doc#:DS3:320058.1 25-065
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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:________________________________
____________________________________________ ________________________________
Social Security or other identifying number Signature of Assignee
of Assignee
____________________________________________ ________________________________
Purchase Price including commissions, if any Name and Address of Assignee
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
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 _____________________________
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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.
79
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[CONFORMED COPY]
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
NATIONAL PROPANE, L.P.
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
Definitions
1.1 Definitions............................................................1
1.2 Construction..........................................................10
ARTICLE II
Organization
2.1 Formation.............................................................11
2.2 Name..................................................................11
2.3 Registered Office; Registered Agent; Principal Office; Other Offices..11
2.4 Purpose and Business..................................................12
2.5 Powers................................................................12
2.6 Power of Attorney.....................................................12
2.7 Term..................................................................14
2.8 Title to Partnership Assets...........................................14
ARTICLE III
Rights of the Limited Partners
3.1 Limitation of Liability..............................................14
3.2 Management of Business................................................14
3.3 Rights of Limited Partners Relating to the Partnership................15
3.4 Outside Activities of the Limited Partners............................16
ARTICLE IV
Transfer of Partnership Interests
4.1 Transfer Generally....................................................16
4.2 Transfer of a General Partner's Partnership Interest..................16
4.3 Transfer of the Limited Partner's Partnership Interests...............17
4.4 Restrictions on Transfers.............................................17
4.5 Exchange by Special General Partner of its General Partner Partnership
Interest in the Partnership and the
MLP ..................................................................17
i
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ARTICLE V
Contributions and Initial Transfers
5.1 Initial Contributions.................................................18
5.2 Contributions and Initial Transfers by the MLP and the
General Partners .....................................................19
5.3 Additional Capital Contributions......................................19
5.4 Interest and Withdrawal...............................................20
5.5 Capital Accounts......................................................20
5.6 Loans from Partners...................................................23
5.7 Limited Preemptive Rights.............................................23
5.8 Fully Paid and Non-Assessable Nature of Limited Partner
Partnership Interests ................................................23
ARTICLE VI
Allocations and Distributions
6.1 Allocations for Capital Account Purposes..............................23
6.2 Allocations for Tax Purposes..........................................28
6.3 Distributions.........................................................30
ARTICLE VII
Management and Operation of Business
7.1 Management............................................................30
7.2 Certificate of Limited Partnership....................................32
7.3 Restrictions on Managing General Partner's Authority..................32
7.4 Reimbursement of the General Partners.................................33
7.5 Outside Activities....................................................34
7.6 Loans from the General Partners; Loans or Contributions
from the Partnership; Contracts with Affiliates; Certain
Restrictions on the General Partners .................................35
7.7 Indemnification.......................................................37
7.8 Liability of Indemnitees..............................................38
7.9 Resolution of Conflicts of Interest...................................39
7.10 Other Matters Concerning the Managing General Partner.................41
7.11 Indemnification of National Propane SGP, Inc. by National
Propane Corporation ..................................................41
7.12 Reliance by Third Parties.............................................42
ARTICLE VIII
Books, Records, Accounting and Reports
8.1 Records and Accounting................................................42
8.2 Fiscal Year...........................................................43
ii
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ARTICLE IX
Tax Matters
9.1 Preparation of Tax Returns............................................43
9.2 Tax Elections.........................................................43
9.3 Tax Controversies.....................................................43
9.4 Withholding...........................................................44
ARTICLE X
Admission of Partners
10.1 Admission of the General Partners and Limited Partners................44
10.2 Admission of Substituted Limited Partners.............................44
10.3 Admission of Successor or Transferee General Partners.................45
10.4 Admission of Additional Limited Partners..............................45
10.5 Amendment of Agreement and Certificate of Limited Partnership.........45
ARTICLE XI
Withdrawal or Removal of Partners
11.1 Withdrawal of the General Partners....................................46
11.2 Removal of the Managing General Partner...............................48
11.3 Interest of Departing Partner and Successor General Partner...........48
11.4 Withdrawal of the Limited Partner.....................................49
ARTICLE XII
Dissolution and Liquidation
12.1 Dissolution...........................................................49
12.2 Continuation of the Business of the Partnership After Dissolution.....50
12.3 Liquidator............................................................51
12.4 Liquidation...........................................................51
12.5 Cancellation of Certificate of Limited Partnership....................52
12.6 Return of Capital Contributions.......................................52
12.7 Waiver of Partition...................................................52
12.8 Capital Account Restoration...........................................52
iii
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ARTICLE XIII
Amendment of Partnership Agreement
13.1 Amendment to be Adopted Solely by the Managing General Partner........53
13.2 Amendment Procedures..................................................54
ARTICLE XIV
Merger
14.1 Authority.............................................................54
14.2 Procedure for Merger or Consolidation.................................55
14.3 Approval by Limited Partners of Merger or Consolidation...............56
14.4 Certificate of Merger.................................................56
14.5 Effect of Merger......................................................56
ARTICLE XV
General Provisions
15.1 Addresses and Notices.................................................57
15.2 References............................................................57
15.3 Further Action........................................................57
15.4 Binding Effect........................................................57
15.5 Integration...........................................................57
15.6 Creditors.............................................................57
15.7 Waiver................................................................58
15.8 Counterparts..........................................................58
15.9 Applicable Law........................................................58
15.10 Invalidity of Provisions..............................................58
iv
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<PAGE>
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
NATIONAL PROPANE, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
National Propane, L.P. dated as of July 2, 1996, is entered into by and among
National Propane Corporation, a Delaware corporation, as the Managing General
Partner and as a Limited Partner, National Propane SGP, Inc., a Delaware
corporation, as the Special General Partner and as a Limited Partner, and
National Propane Partners, L.P., a Delaware limited partnership, as the initial
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.
"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 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 a general partner interest
or any other specified interest in the Partnership shall be the amount which
such adjusted capital account would be if such general partner interest or other
interest in the Partnership were the only interest in
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the Partnership held by a Partner from and after the date on which such general
partner interest or other interest was first issued.
"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.
"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). Subject to Section 5.5(c), 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, L.P., as it may be amended, supplemented or
restated from time to time.
"Assets" has the meaning assigned to such term in the Contribution and
Assumption Agreement.
"Assumed Liabilities" has the meaning assigned to such term in the
Contribution and Assumption Agreement.
"Audit Committee" means a committee of the Board of Directors of the
Managing General Partner composed entirely of two or more directors who are
neither officers, directors or employees of either of the General Partners or
any Affiliate of either of the General Partners.
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"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, in each case 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 of the MLP
Agreement 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 MLP 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.
"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 Partner's Capital Account
computed as if it had been maintained strictly in accordance with federal income
tax accounting principles.
"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.
"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.
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"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 a
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 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.
"Closing Date" means the first date on which Common Units are sold by the
MLP to the Underwriters pursuant to the provisions of the Underwriting
Agreement.
"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.
"Common Unit" has the meaning assigned to such term in the MLP Agreement.
"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
Contribution, Conveyance and Assumption Agreement, dated, as of the Closing
Date, among the General Partners, the MLP, the Partnership and (ii) the
Contribution and Assumption Agreement, dated as of the Closing Date (the
"Contribution and Assumption Agreement") among the General Partners, the
Partnership and National Sales and Service, Inc., together with the additional
conveyance documents and instruments contemplated or referenced thereunder.
"Curative Allocation" means any allocation of an item of income, gain,
deduction, loss or credit pursuant to the provisions of Section 6.1(d)(ix).
"Delaware Act" means the Delaware Revised Uniform Limited Partnership Act,
6 Del C. ss.17- 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 from and after the
effective date of any withdrawal or removal of such former General Partner
pursuant to Section 11.1 or 11.2.
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"Economic Risk of Loss" has the meaning set forth in Treasury Regulation
Section 1.752-2(a).
"Event of Withdrawal" has the meaning assigned to such term in Section
11.1.
"General Partners" means the Managing General Partner and the Special
General Partner.
"Group Member" means a member of the Partnership Group.
"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 MLP or any Subsidiary, (c) any Person
who is or was a director, officer, employee, agent or trustee of 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 Offering" means the initial offering and sale of Common Units to
the public, as described in the Registration Statement.
"Limited Partner" means any Person that is admitted to the Partnership as
a limited partner pursuant to the terms and conditions of this Agreement; but
the term Limited Partner shall not include any Person from and after the time
such Person withdraws as a Limited Partner from the Partnership.
"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 Partners 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 one or more 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 permitted assignees as Managing General Partner of the
Partnership and any other Person that holds an interest as managing general
partner in the Partnership.
"Merger Agreement" has the meaning assigned to such term in Section 14.1.
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"Minimum Quarterly Distribution" has the meaning assigned to such term in
the MLP Agreement.
"MLP" means National Propane Partners, L.P., a Delaware limited
partnership.
"MLP Agreement" means the Amended and Restated Agreement of Limited
Partnership of the MLP, dated as of July 2, 1996.
"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 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 either assumed by such Partner 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).
"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).
"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
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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).
"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 Partnership in conjunction with the
Initial Offering.
"OLP Subsidiary" means a Subsidiary of the Partnership.
"Opinion of Counsel" means a written opinion of counsel (who may be
regular counsel to Triarc, the Partnership or either of the General Partners or
any of their Affiliates) acceptable to the Managing General Partner in its
reasonable discretion.
"Over-allotment Option" has the meaning assigned to such term in the MLP
Agreement.
"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 and the Limited Partners.
"Partnership" means National Propane, L.P., a Delaware limited
partnership, and any successors thereto.
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"Partnership Group" means the Partnership and the OLP Subsidiaries,
treated as a single consolidated entity.
"Partnership Interest" means the interest of a Partner in the Partnership.
"Partnership Minimum Gain" means that amount determined in accordance with
the principles of Treasury Regulation Section 1.704-2(d).
"Percentage Interest" means the percentage interest in the Partnership
held by each Partner upon completion of the transactions in Section 5.2 and
shall mean (a) as to each of the General Partners (each in its capacity as
General Partner of the Partnership), 1.0101%, and (b) as to the Limited Partner,
97.9798%.
"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.
"Pro Rata" means when modifying the General Partners, apportioned equally
between the General Partners.
"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.
"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 MLP with the Securities and
Exchange Commission under the Securities Act to register the offering and sale
of the Common Units in the Initial Offering.
"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" has the meaning assigned to such term in the MLP
Agreement.
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"Securities Act" means the Securities Act of 1933, as amended,
supplemented or restated from time to time and any successor to such statute.
"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" has the meaning assigned to such term in the MLP
Agreement.
"Subordination Period" has the meaning assigned to such term in the MLP
Agreement.
"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 Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 10.2 in place of and with all the
rights of a Limited Partner and who is shown as a Limited Partner on the books
and records of the Partnership.
"Surviving Business Entity" has the meaning assigned to such term in
Section 14.2(b).
"Transfer" has the meaning assigned to such term in Section 4.1(a).
"Triarc" means Triarc Companies, Inc., a Delaware corporation.
"Triarc Loan" means the $40.7 million loan made on the Closing Date by the
Partnership to Triarc.
"Triarc Merger" has the meaning assigned to such term in Section 4.7 of
the MLP Agreement.
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"Underwriter" means each Person named as an underwriter in Exhibit A to
the Underwriting Agreement that purchases Common Units pursuant thereto.
"Underwriting Agreement" means the Purchase Agreement dated June 26, 1996,
among the Underwriters, the Partnership, the MLP, the Managing General Partner,
the Special General Partner and Triarc, providing for the purchase of Common
Units by such Underwriters.
"Unit" has the meaning assigned to such term in the MLP Agreement.
"Unit Majority" has the meaning assigned to such term in the MLP
Agreement.
"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)).
"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 General Partners and the MLP have previously formed the Partnership as
a limited partnership pursuant to the provisions of the Delaware Act and hereby
amend and restate the amended Agreement of Limited Partnership of National
Propane, L.P. in its entirety. This
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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, L.P." The
Partnership's business may be conducted under any other name or names deemed
necessary or appropriate by the Managing General Partner, including, in its sole
discretion, the name of the Managing General Partner. The words "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.,
Cedar Rapids, Iowa, 52401 or such other place as the Managing General Partner
may from time to time designate by notice to the Limited Partner. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems necessary or appropriate. The
address of the Managing General Partner shall be Suite 1700, IES Tower, 200 1st
Street, S.E., Cedar Rapids, Iowa, 52401 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) acquire, manage and operate the Assets and any similar assets or
properties, and to 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 type of business or activity engaged in by the
Managing General Partner immediately prior to the Closing Date 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,
(b) engage directly in, or 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 may lawfully 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
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agreements relating to such business activity and (c) do anything necessary or
appropriate to the foregoing, including the making of capital contributions or
loans to any Group Member, the MLP or any Subsidiary of the MLP. The Managing
General Partner, the Special General Partner and their Affiliates have no
obligation or duty to the Partnership, 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) The Limited Partners hereby constitute and appoint 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:
(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 Interests; 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
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(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 the approval of the
Limited Partners is required by any provision of this Agreement, the
Managing General Partner or 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 Limited Partners is obtained.
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
the Limited Partners and the transfer of all or any portion of the Limited
Partners' Partnership Interest and shall extend to the Limited Partners' heirs,
successors, assigns and personal representatives. The Limited Partners hereby
agree 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 the
Limited Partners hereby waive, to the maximum extent permitted by law, 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. The Limited Partners 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.
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 individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title
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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, 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 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. 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 the Limited Partners
3.1 Limitation of Liability.
The Limited Partners 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 (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 officer, director,
employee or agent of a Group Member, in its capacity as such, if such Person
shall also be a Limited Partner) shall participate in the operation, management
or control (within the meaning of Section 17-303(a) 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 officer, member of the board of directors, employee or
agent of a Group Member, the MLP or any Subsidiary of the MLP, 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 the Delaware Act) and shall not affect, impair or eliminate the limitations
on the liability of the Limited Partners under this Agreement.
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3.3 Rights of Limited Partners Relating to the Partnership.
(a) In addition to other rights provided by this Agreement or by
applicable law, and except as limited by Section 3.3(b), each of the Limited
Partners shall have the right, for a purpose reasonably related to such Limited
Partner's interest as a limited partner in the Partnership, upon reasonable
demand and at the Limited Partner's own expense:
(i) to obtain true and full 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 it, a current list of the name and
last known business, residence or mailing address of each Partner;
(iv) to have furnished to it, 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 MLP or the Partnership Group,
(B) could damage the MLP or the Partnership Group or (C) that the MLP or 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 3.3).
3.4 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 Person
shall also be a Limited Partner, any Limited Partner shall be entitled to and
may have business interests and engage in business activities in
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addition to those relating to the Partnership, including business interests and
activities in direct competition with the Partnership Group.
ARTICLE IV
Transfer of Partnership Interests
4.1 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
Partner assigns its 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.
4.2 Transfer of a General Partner's Partnership Interest.
Except as provided in Section 4.5, if a General Partner transfers
its partnership interest as a general partner of the MLP to any Person in
accordance with the provisions of the MLP Agreement, such General Partner shall
contemporaneously therewith transfer all, but not less than all, of its
Partnership Interest as a General Partner of the Partnership to such Person, and
the Limited Partners hereby expressly consent to such transfer. Except as set
forth in the immediately preceding sentence and in Section 5.2, a General
Partner may not transfer all or any part of its Partnership Interest as the
General Partner of the Partnership; provided, however, that this provision shall
not preclude or limit a General Partner's ability to mortgage, pledge,
hypothecate or grant a security interest in its Partnership Interest as the
General Partner of the Partnership and shall not apply to any forced sale of any
or all of its Partnership Interest of the Partnership pursuant to the
foreclosure of, or other realization upon, any such encumbrance.
4.3 Transfer of the Limited Partner's Partnership Interests.
Any Limited Partner may transfer all, but not less than all, of its
Partnership Interest as a limited partner of the Partnership in connection with
the merger, consolidation or other combination of any of the Limited Partners
with or into any other Person or the transfer by any of the Limited Partners of
all or substantially all of its assets to another Person, and following any such
transfer such Person may become a Substituted Limited Partner pursuant to
Article X. Except as set forth in the
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immediately preceding sentence and in Section 5.2, or in connection with any
pledge of (or any related foreclosure on) the Limited Partner's Partnership
Interest as a limited partner of the Partnership solely for the purpose of
securing, directly or indirectly, indebtedness of the Partnership or the MLP,
and except for the transfers contemplated by Sections 5.2 and 10.1, a Limited
Partner may not transfer all or any part of its Partnership Interest or withdraw
from the Partnership.
4.4 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 MLP under the laws of
the jurisdiction of its formation or (iii) cause the Partnership or the MLP 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 MLP'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.
4.5 Exchange by Special General Partner of its General Partner
Partnership Interest in the Partnership and the MLP.
If the Managing General Partner has not entered into the Triarc Merger,
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 (as such term is defined in the MLP Agreement) in the MLP
together with an equal portion of its general partnership interest in the
Partnership for Units having rights to distributions of Available Cash from
Operating Surplus (as such terms are defined in the MLP Agreement) 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 MLP
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 MLP would be exchanged into 223,419 Units (or 242,765 Units if the
over-allotment option for the issuance of additional Units 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 5.3 of this
Agreement or Section 5.2 of the MLP Agreement 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 4.5 shall be (x) limited
partner interests and (b) issued as a combination of Subordinated Units and
Common
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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 of the MLP Agreement that are
outstanding immediately before such exchange represent in relation to the total
Subordinated Units initially issued pursuant to Section 5.2 of the MLP
Agreement. Except as otherwise provided in Sections 4.12, 5.5(c)(ii), 6.1(d)(x)
and 6.7(b) of the MLP Agreement, the Special General Partner at the time of such
exchange will have the same rights with respect to its Common Units and
Subordinated Units as the rights possessed by other holders of such Units.
Immediately prior to the exchange of any portion of the Special General
Partners' general partner interest in the Partnership, the interest being
exchanged shall automatically convert into a limited partner interest in the
Partnership. The Managing General Partner shall be required to take all actions
necessary to effectuate such conversion. Upon an exchange by the Special General
Partner of all of its general partnership interest in the Partnership and its
Unsubordinated General Partner Interest in the MLP, the Special General Partner
will no longer be the Special General Partner hereunder and will no longer be
obligated, pursuant to Section 5.3, to make any additional Capital
Contributions.
ARTICLE V
Contributions and Initial Transfers
5.1 Initial Contributions.
In connection with the formation of the Partnership under the Delaware Act
and pursuant to an Agreement of Limited Partnership dated March 15, 1996 and an
Amended Agreement of Limited Partnership dated June 21, 1996, (i) the Managing
General Partner and the Special General Partner each made a Capital Contribution
to the Partnership in the aggregate amount of $20.96 in exchange for a 2.0956%
interest in the Partnership and each has been admitted as a General Partner of
the Partnership, (ii) the MLP made a net Capital Contribution to the Partnership
in the amount of $.01 in exchange for a .0001% interest in the Partnership and
has been admitted as a limited partner of the Partnership and (iii) the General
Partners have contributed an aggregate $958.07 in exchange for a 95.8087%
limited partner interest in the Partnership. The Managing General Partner
received a managing general partner interest and the Special General Partner
received a non-managing general partner interest.
5.2 Contributions and Initial Transfers by the MLP and the General
Partners.
On the Closing Date, pursuant to, and subject to the conditions of, the
Contribution and Conveyance Agreements, the following transactions shall occur
in the following order:
(a) The General Partners shall 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 First
Mortgage Notes and certain other assets of the Managing General Partner). In
exchange, the Partnership shall (A) increase the general partner interests of
the
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Partnership so that each of the General Partners have a 2.2648% general partner
interest in the Partnership, (B) decrease the general partner interests of the
Partnership so that the General Partners have a combined 95.4703% limited
partner interest in the Partnership and (C) assume the Assumed Liabilities.
(b) The General Partners shall thereafter convey all their limited
partner interest in the Partnership to the MLP in exchange for the interests
received pursuant to 5.2 of the MLP Agreement.
(c) After the Partnership has utilized approximately $62.2 million
received in Section 5.2(a) above to repay a portion of the indebtedness assumed
in Section 5.2(a) above, the MLP will contribute the net offering proceeds
(approximately $118.2 million) received from the Underwriters on the sale of
Common Units to the Partnership. As a result of the conveyances set forth in
this Section 5.2(c), the MLP will receive an additional limited partner interest
in the Partnership so that its aggregate limited partner interest in the
Partnership will be 97.9798% and the General Partners will each have a 1.0101%
general partner interest in the Partnership. The Managing General Partner will
continue to hold the managing general partner interest and the Special General
Partner will continue to hold a non-managing general partner interest.
5.3 Additional Capital Contributions.
With the consent of the Managing General Partner, any Limited Partner may,
but shall not be obligated to, make additional Capital Contributions to the
Partnership. Contemporaneously with the making of any Capital Contributions by a
Limited Partner in addition to those provided in Sections 5.1 and 5.2 hereof,
each of the General Partners shall be obligated to make an additional Capital
Contribution to the Partnership in an amount equal to 1.0101 / 98.9899 of the
Net Agreed Value of the additional Capital Contribution then made by such
Limited Partner (other than with respect to additional Capital Contributions by
the Limited Partner of the net proceeds received by the MLP upon the issuance of
Common Units pursuant to the Over-allotment Option). 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.
5.4 Interest and Withdrawal.
No interest shall be paid by the Partnership on Capital Contributions, and
no Partner shall be entitled to withdrawal or return of any part of its Capital
Contributions or to receive any distribution from the Partnership, except as
provided in Articles VI, XI and XII.
5.5 Capital Accounts.
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(a) The Partnership shall maintain for each Partner 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 the 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) of all property owned by any OLP
Subsidiary that is classified as a partnership for federal income tax
purposes.
(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.
(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. 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-
2(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.
(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
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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, cost recovery or amortization deductions shall be determined
using any reasonable method that the Managing 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) 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 Sections 708
and 704 of the Code as amended. Any such deemed contribution and distribution
shall be treated as an actual contribution and distribution 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.
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(d) (i) In accordance with Treasury Regulation Section
1.704-1(b)(2)(iv)(f), on an issuance of additional Partnership Interests
for cash or Contributed Property, 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 Partnership Interests 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, 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 contribution and/or
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 Loans from Partners.
Loans by a Partner to the Partnership shall not constitute Capital
Contributions. If any Partner shall advance funds to the Partnership in excess
of the amounts required hereunder to be contributed by it to the capital of the
Partnership, the making of such excess advances shall not result in any increase
in the amount of the Capital Account of such Partner. The amount of any such
excess advances shall be a debt obligation of the Partnership to such Partner
and shall be payable or
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collectible only out of the Partnership assets in accordance with the terms and
conditions upon which such advances are made.
5.7 Limited Preemptive Rights.
Except as provided in Section 5.3, no Person shall have preemptive,
preferential or other similar rights with respect to (a) additional Capital
Contributions; (b) issuance or sale of any class or series of Partnership
Interests, whether unissued, held in the treasury or hereafter created; (c)
issuance of any obligations, evidences of indebtedness or other securities of
the Partnership convertible into or exchangeable for, or carrying or accompanied
by any rights to receive, purchase or subscribe to, any such Partnership
Interests; (d) issuance of any right of subscription to or right to receive, or
any warrant or option for the purchase of, any such Partnership Interests; or
(e) issuance or sale of any other securities that may be issued or sold by the
Partnership.
5.8 Fully Paid and Non-Assessable Nature of Limited Partner Partnership
Interests.
All Limited Partner Partnership Interests issued pursuant to, and in
accordance with the requirements of, this Article V shall be fully paid and
non-assessable Partnership Interests in the Partnership, except as such
non-assessability may be affected by Section 17-607 of the Delaware Act.
ARTICLE VI
Allocations and Distributions
6.1 Allocations for Capital Account Purposes.
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, Pro Rata, until the
aggregate Net Income allocated to the General Partners pursuant to this
Section 6.1(a)(i) 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)(ii) for all previous taxable years;
(ii) Second, 100% to the General Partners and the Limited
Partners, in accordance with their respective Percentage Interests.
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(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 and the Limited
Partners, in accordance with their respective Percentage Interests;
provided, that Net Losses shall not be allocated pursuant to this Section
6.1(b)(i) to the extent that such allocation would cause a Limited Partner
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, 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 Section 6.4
have been made with respect to the taxable period ending on or before the
Liquidation Date; 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.
(i) If a Net Termination Gain is recognized (or deemed
recognized pursuant to Section 5.5(d)), such Net Termination Gain shall be
allocated between the General Partners and the Limited 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; and
(B) Second, 100% to the General Partners and the Limited
Partners in accordance with their respective Percentage Interests.
(ii) If a Net Termination Loss is recognized (or deemed
recognized pursuant to Section 5.5(d)), such Net Termination Loss shall be
allocated to the Partners in the following manner:
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(A) First, 100% to the General Partners and the Limited
Partners in proportion to, and to the extent of, the positive
balances in their respective Capital Accounts; and
(B) Second, the balance, if any, 100% to the General
Partners, Pro Rata.
(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)(vi)). 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)(iv) and 6.1(d)(v), 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) 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
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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).
(iv) 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)(iv) 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 in this
Section 6.1 have been tentatively made as if this Section 6.1(d)(iv) were
not in this Agreement.
(v) 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 Limited Partners, to revise the prescribed ratio to the
numerically closest ratio that does satisfy such requirements.
(vi) 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.
(vii) 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.
(viii)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
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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.
(ix) 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)(ix)(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)(ix)(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)(ix)(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)(ix)(A) among the Partners in a manner
that is likely to minimize such economic distortions.
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.
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(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 Units of the MLP (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 Units of the MLP (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 of the MLP 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
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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 of the MLP 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 class or classes of
Units of the MLP that would not have a material adverse effect on any Limited
Partner or the holders of any class or classes of Units of the MLP.
(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) The Managing General Partner may adopt such methods of
allocation of income, gain, loss or deduction between a transferor and a
transferee of a Partnership Interest as it determines necessary, to the extent
permitted or required by Section 706 of the Code and the regulations or rulings
promulgated thereunder.
6.3 Distributions.
(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 in accordance with their respective Percentage
Interests. The immediately preceding sentence shall not require any distribution
of cash if and to the extent such distribution would be prohibited by applicable
law or by any loan Agreement, security Agreement, mortgage, debt instrument or
other Agreement or obligation to which the Partnership is a party or by which it
is bound or its assets are subject. All distributions required to be made under
this Agreement shall be made subject to Section 17-607 of the Delaware Act.
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(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.
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)), Limited Partner 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
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of the operations of the Partnership Group, the lending of funds to other
Persons (including the MLP, the General Partners and their Affiliates),
the repayment of obligations of the MLP or any member of the Partnership
Group and the making of capital contributions to 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 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 (including the assets of the
Partnership) 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;
(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; and
(xi) the indemnification of any Person against liabilities and
contingencies to the extent permitted by law.
(b) Notwithstanding any other provision of this Agreement, the MLP
Agreement, the Delaware Act or any applicable law, rule or regulation, each of
the Partners (i) approves, ratifies and confirms the execution, delivery and
performance by the parties thereto of the MLP Agreement, the Underwriting
Agreement, the Conveyance and Contribution Agreement, 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
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matters described in or contemplated by the Registration Statement on behalf of
the Partnership without any further act, approval or vote of the Partners; and
(iii) agrees that the execution, delivery or performance by the Managing General
Partner, the MLP, any Group Member or any Affiliate of any of them, of this
Agreement or any Agreement authorized or permitted under this Agreement, shall
not constitute a breach by the Managing General Partner of any duty that the
Managing General Partner may owe the Partnership or the Limited Partners or 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 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 do 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 to maintain the Partnership as a limited partnership (or a
partnership or other entity 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 do 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 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 the Limited Partner or by other written instrument
executed and delivered by the Limited Partner 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 its
interest as general partner of the Partnership.
(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 without the approval of the Limited Partners; 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
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assets of the Partnership and shall not apply to any forced sale of any or all
of the assets of the Partnership pursuant to the foreclosure of, or other
realization upon, any such encumbrance.
(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
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 MLP Agreement, the General Partners shall not be compensated
for its services as general partners of the MLP or any Group Member.
(b) The General Partners shall be reimbursed on a monthly basis, or
such other reasonable 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 of the General Partner, 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 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) 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 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. Expenses incurred by the Managing General Partner in
connection with any 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 Partnership Interest as a general partner in the Partnership
pursuant to Section 4.2.
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7.5 Outside Activities.
(a) Subject to Section 7.5(f), 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 the MLP or 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 the MLP or any Group
Members, (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 the MLP or 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), 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
the MLP or any Group Member, independently or with others, including business
interests and activities in direct competition with the business and activities
of the MLP or any Group Member, and none of the same shall constitute a breach
of this Agreement or any duty express or implied by law to the MLP or any Group
Member or any Partner or Assignee. Neither the MLP, any Group Member, any
Limited Partner nor any other Person shall have any rights by virtue of this
Agreement, the MLP 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 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 term "Affiliates" when used in Section 7.5(b) and (c) with
respect to the General Partners shall not include the MLP, any Group Member or
any Subsidiary of the Group Member.
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(f) 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 the MLP or any Group Member, and the MLP or any Group Member may borrow from
the General Partners or any of their Affiliates, funds needed or desired by the
MLP or 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 any of 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, General Partners or their Affiliates interest at a rate less than the
rate that would be charged to the Group Member, the General Partners or any of
their Affiliates by unrelated lenders on comparable loans; provided, however,
that notwithstanding anything else herein contained, the 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 Group 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
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between the parties involved (including other transactions that may be
particularly favorable or advantageous to the Partnership 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) Any Group Member 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 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 Sections 5.1 and 5.2, the Conveyance and
Contribution Agreement and any other transactions 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.
(f) The General Partners and their Affiliates will have no
obligation to permit the MLP or 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
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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 MLP). 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.
(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 Partners, 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.
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(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 (i) the right
of any past, present or future Indemnitee to be indemnified by the Partnership,
or (ii) 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 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 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.
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7.9 Resolution of Conflicts of Interest.
(a) Unless otherwise expressly provided in this Agreement or the MLP
Agreement, whenever a potential conflict of interest exists or arises between
one of the General Partners or any of its Affiliates, on the one hand, and the
Partnership, the MLP, 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 MLP
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 its resolution of such conflict of interest to seek Special
Approval of such resolution. 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 Limited Partner or, any Limited Partner
or any Assignee, (ii) it may make such decision in its sole discretion
(regardless of whether there is a
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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 standard
and shall not be subject to any other or different standards imposed by this
Agreement, the MLP 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 shall not constitute a breach of any duty of the General Partner to the
Partnership, the Limited Partner or any limited partner of the Limited Partner.
The Managing General Partner shall have no duty, express or implied, to sell or
otherwise dispose of any asset of the Partnership Group other than in the
ordinary course of business. 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 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) to exceed 2% of
the total amount distributed to all partners or (B) hasten the expiration of the
"Subordination Period" under the MLP Agreement or the conversion of any
Subordinated Units in the MLP into Common Units in the MLP.
(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 Limited Partner hereby authorizes 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.
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(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, the MLP 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, the MLP or any member of the Partnership Group from
National Propane Corporation or National Propane SGP, Inc., any account payable
or other trade payable, or any other liability of any nature whatsoever no
matter how or when arising. The conversion of the Managing General Partner's
Unsubordinated General Partner Interest into a limited partner interest,
pursuant to Section 11.1(d), shall not affect National Propane Corporation's
indemnification obligation to National Propane SGP, Inc.
7.12 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 and in the name of 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 authorized 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 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 or its representatives 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 or its
representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the Managing
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General Partner or its representatives 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 Limited Partners any information required to be provided pursuant
to Section 3.3(a). Any books and records maintained by or on behalf of the
Partnership in the regular course of its business, including 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.
ARTICLE IX
Tax Matters
9.1 Preparation of Tax Returns.
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 the Partners 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 and deductions
and other items shall be on the accrual method of accounting for federal income
tax purposes.
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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 Limited Partners.
(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 Section 6231 of 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 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
(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.
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ARTICLE X
Admission of Partners
10.1 Admission of the General Partners and Limited Partners.
(a) The General Partners were previously admitted as the General
Partners and as Limited Partners and the MLP as a Limited Partner. Upon the
conveyance referred to in Section 5.2(a), the General Partners shall continue as
general partners and limited partners of the Partnership.
(b) Upon the transfer referred to in Section 5.2(b), the MLP shall
become the sole Limited Partner and the General Partners shall cease to be
Limited Partners of the Partnership.
10.2 Admission of Substituted Limited Partners.
Any person that is the successor in interest to a Limited Partner as
described in Section 4.3 shall be admitted to the Partnership as a Limited
Partner upon (a) furnishing to the Managing General Partner (i) acceptance in
form satisfactory to the Managing General Partner of all of the terms and
conditions of this Agreement and (ii) such other documents or instruments as may
be required to effect its admission as a Limited Partner in the Partnership and
(b) obtaining the consent of the Managing General Partner, which consent may be
given or withheld in the Managing General Partner's sole discretion, except that
the Managing General Partner shall give such consent to a person who has become
a successor in interest pursuant to a bona fide pledge and foreclosure as
contemplated by Section 4.3. Such Person shall be admitted to the Partnership as
a Limited Partner immediately prior to the transfer of the Partnership Interest,
and the business of the Partnership shall continue without dissolution.
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 the General Partner's Partnership
Interest as a general partner in the Partnership pursuant to Section 4.2 who is
proposed to be admitted as a successor General Partner shall, subject to
compliance with the terms of Section 11.3, if applicable, 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 the General Partner's Partnership Interest as a general partner in
the Partnership pursuant to Section 4.2; provided, however, that no such
successor shall be admitted to the Partnership and such successor has executed
and delivered such other documents or instruments as may be required to effect
such admission. Any such successor shall, subject to the terms hereof, carry on
the business of the Partnership without dissolution.
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10.4 Admission of Additional Limited Partners.
(a) A Person (other than the General Partners, the MLP or a
Substituted Limited Partner) who makes a Capital Contribution to the Partnership
in accordance with this Agreement (other than the Capital Contributions pursuant
to Section 5.2) 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 General Partner of all of the terms and
conditions of this Agreement, including the granting of the power of attorney
granted in Section 2.6 and (ii) such other documents or instruments as may be
required in the 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
but except as provided in Section 10.1, 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
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.
10.5 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.
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;
(ii) the Managing General Partner transfers all of its rights
as Managing General Partner pursuant to Section 4.2;
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(iii) the Managing General Partner is removed pursuant to
Section 11.2;
(iv) the managing general partner of the MLP withdraws from,
or is removed as the managing general partner of, the MLP.
(v) 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)(v); or (E) seeks, consents to or acquiesces in the
appointment of a trustee (but not a debtor in possession), receiver or
liquidator of the 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 MLP at the time of the events described
in this Section 11.1(a)(v) occur;
(vi) 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; or
(vii) (A) 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; (B) in the event the Managing General Partner is a
partnership, the dissolution and commencement of winding up of the
Managing General Partner; (C) in the event the Managing General Partner is
acting in such capacity by virtue of being a trustee of the trust, the
termination of the trust; (D) in the event the Managing General Partner is
a natural person, his death or adjudication of incompetency; (E) and
otherwise in the event of the termination of the Managing General Partner.
If an Event of Withdrawal specified in Section 11.1(a)(iv) (with respect to
withdrawal), (v), (vi) or (vii) (A), (B), (C) or (E) 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.
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(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 day advance notice of its intention to withdraw
to the Limited Partners; provided, that prior to the effective date of such
withdrawal, all the Limited Partners approve such withdrawal and the Managing
General Partner delivers to the Partnership an Opinion of Counsel ("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, any limited partner of the MLP, or any limited
partner of any Group Member or cause the MLP or the Partnership to be treated as
an association taxable as a corporation or otherwise to be taxed as an entity
for federal income tax purposes; (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 Limited Partners,
such withdrawal to take effect on the date specified in such notice; or (iii) at
any time that the Managing General Partner ceases to be the Managing General
Partner pursuant to Section 11.1(a)(ii), (iii) or (iv). If the Managing General
Partner gives a notice of withdrawal pursuant to Section 11.1(a)(i) or Section
11.1(a)(i) of the MLP Agreement, a majority in interest of the Limited Partners
may, prior to the effective date of such withdrawal or removal, elect a
successor Managing General Partner; provided, however, that such successor shall
be the same Person, if any, that is elected by the limited partners of the MLP
pursuant to Section 11.1 of the MLP Agreement as the successor to the Managing
General Partner in its capacity as Managing General Partner of the MLP. If,
prior to the effective date of the Managing General Partner's withdrawal, a
successor is not selected by the Limited Partners 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 the MLP 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 1.0101% general partner interest 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 the 1.0101% 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 Limited Partners and (iii) the Special General Partner shall
become the Managing General Partner of the Partnership and shall have all
rights, authority and powers given to the Managing General Partner pursuant to
this Agreement.
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11.2 Removal of the Managing General Partner.
The Managing General Partner shall be removed if such Managing General
Partner is removed as a Managing General Partner of the MLP pursuant to Section
11.2 of the MLP Agreement. Such removal shall be effective concurrently with the
effectiveness of the removal of such Managing General Partner as the Managing
General Partner of the MLP pursuant to the terms of the MLP Agreement. If a
successor Managing General Partner is elected in connection with the removal of
such Managing General Partner as a Managing General Partner of the MLP, such
successor Managing General Partner shall, upon admission pursuant to Article X,
automatically become a successor Managing General Partner of the Partnership.
The admission of any such successor Managing General Partner to the Partnership
shall be subject to the provisions of Section 10.3.
11.3 Interest of Departing Partner and Successor General Partner.
(a) The Partnership Interest of a Departing Partner departing as a
result of withdrawal or removal pursuant to Section 11.1 or 11.2 shall (unless
it is otherwise required to be converted into Common Units pursuant to Section
11.3(b) of the MLP Agreement or 11.1(d) of this Agreement) be purchased by the
successor to the Departing Partner for cash in the manner specified in the MLP
Agreement. Such purchase (or conversion into Common Units, as applicable) shall
be a condition to the admission to the Partnership of the successor as the
General Partner. Any successor General Partner shall indemnify the Departing
General Partner as to all debts and liabilities of the Partnership arising on or
after the effective date of the withdrawal or removal of the Departing Partner.
(b) The Departing Partner 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 such Departing
Partner for the benefit of the Partnership.
11.4 Withdrawal of the Limited Partner.
Without the prior written consent of the Managing General Partner, which
may be granted or withheld in its sole discretion, and except as provided in
Section 10.1, no Limited Partner shall have the right to withdraw from the
Partnership.
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ARTICLE XII
Dissolution and Liquidation
12.1 Dissolution.
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 Managing 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:
(a) the expiration of its term as provided in Section 2.7;
(b) 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;
(c) an election to dissolve the Partnership by the Managing General
Partner that is approved by all of the Limited Partners;
(d) entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Delaware Act;
(e) the sale of all or substantially all of the assets and
properties of the Partnership Group; or
(f) the dissolution of the MLP.
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 following a failure of the Limited Partners
to appoint a successor Managing General Partner as provided in 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 pursuant to Section 11.1(a)(iv),
(v) or (vi) of the MLP Agreement, then, to the maximum extent permitted by law,
within 180 days thereafter, all of the Limited Partners 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 a Managing
General Partner a Person
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approved by the majority of the Limited Partners. In addition, upon dissolution
of the Partnership pursuant to Section 12.1(f), if the MLP is reconstituted
pursuant to Section 12.2 of the MLP Agreement, the reconstituted MLP may
(whether or not it is the sole limited partner), within 180 days after such
event of dissolution, as [(a)] Limited Partner, elect to reconstitute the
Partnership in accordance with the immediately preceding sentence. Upon any such
election by the Limited Partners, all Partners shall be bound thereby and shall
be deemed to have approved same. 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 Managing General
Partner shall be purchased by the successor General Partner or converted
into Common Units of the MLP or purchased for cash by the MLP as provided
in the MLP Agreement; 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 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 the Limited
Partners or any limited partner of the MLP and (y) neither the
Partnership, the reconstituted limited partnership nor any Group Member
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 (if other than the Managing General Partner)
shall be entitled to receive such compensation for its services as may be
approved by the Limited Partners. The Liquidator (if other than the Managing
General Partner) 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 the Limited Partners. 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 a majority in interest of the
Limited Partners. 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
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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(a)) 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.
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 all or part of 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 whole
or in part, 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).
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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 Capital 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 any Limited
Partner, 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 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
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, 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;
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(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 MLP will not be treated as an association taxable as a
corporation or otherwise taxed as an entity for federal income tax purposes;
(d) a change that, in the discretion of the Managing General
Partner, (i) does not adversely affect the Limited Partners in any material
respect, (ii) is necessary or advisable to 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), compliance with any of which the
Managing General Partner determines in its discretion to be in the best
interests of the Partnership and the Limited Partners, (iii) 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 or
(iv) is required to conform the provisions of this Agreement with the provisions
of the MLP Agreement as the provisions of the MLP Agreement may be amended,
supplemented or restated from time to time;
(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) any amendment expressly permitted in this Agreement to be made
by the Managing General Partner acting alone (including a conversion of a
general partner interest into a limited partner interest pursuant to Section 4.6
hereof);
(h) an amendment effected, necessitated or contemplated by a Merger
Agreement approved in accordance with Section 14.3;
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(i) 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 in connection with the conduct by the Partnership of
activities permitted by the terms of Section 2.4;
(j) a merger or conveyance pursuant to Section 14.3(d); or
(k) any other amendments substantially similar to the foregoing.
13.2 Amendment Procedures.
Except as provided in Section 13.1, 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 a majority in
interest of the Limited Partners.
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;
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(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 Limited Partners of Merger or Consolidation.
(a) Except as provided in Section 14.3(d), the Managing General
Partner, upon its approval of the Merger Agreement, shall direct that a copy or
a summary of the Merger Agreement be submitted to the Limited Partners for their
approval.
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(b) Except as provided in Section 14.3(d) The Merger Agreement shall
be approved upon receiving the approval of a majority in interest of the Limited
Partners.
(c) After such approval by the Limited Partners, 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 Limited
Partners 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.
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 XIV
shall not be deemed to result in a transfer or assignment of assets or
liabilities from one entity to another.
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ARTICLE XV
General Provisions
15.1 Addresses and Notices.
Any notice, demand, request, report or proxy materials required or
permitted to be given or made to a Partner under this Agreement shall be in
writing and shall be deemed given or made when received by it at the principal
office of the Partnership referred to in Section 2.3.
15.2 References.
Except as specifically provided as otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
15.3 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.
15.4 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.
15.5 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.
15.6 Creditors.
None of the provisions of this Agreement shall be for the benefit of, or
shall be enforceable by, any creditor of the Partnership.
15.7 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.
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15.8 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, independently of the signature of any other
party.
15.9 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.
15.10 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.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
MANAGING GENERAL PARTNER:
NATIONAL PROPANE CORPORATION
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
SPECIAL GENERAL PARTNER:
NATIONAL PROPANE SGP, INC.
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
LIMITED PARTNERS:
NATIONAL PROPANE PARTNERS, L.P.
By: National Propane Corporation,
as Managing General Partner
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
NATIONAL PROPANE CORPORATION
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
NATIONAL PROPANE SGP, INC.
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
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APPENDIX A TO THE AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP OF NATIONAL PROPANE, L.P.
National Propane, L.P., a Delaware limited partnership (the
"Partnership"), and each of its general and limited partners, hereby acknowledge
the pledge and grant of a security interest (the "Security Interest") pursuant
to the Pledge and Security Agreement, dated as of June 26, 1996, among National
Propane Partners, L.P., a Delaware limited partnership (the "Limited Partner"),
National Propane Corporation, a Delaware corporation (the "Managing General
Partner"), and The Bank of New York, as trustee (the "Trustee"), by (i) the
Limited Partner of all of its limited partner interest in the Partnership and
(ii) the Managing General Partner of all of its general partner interest in the
Partnership, in each case including all additional limited partner interests or
general partner interests in the Partnership acquired by either such person at
any time and all dividends, liquidating dividends, stock dividends,
distributions, stock or partnership rights, options, rights to subscribe, cash,
instruments and other property and proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any of the
foregoing. This Appendix A shall constitute registration to the Trustee of the
Security Interest for purposes of Section 8-313(1) of the Uniform Commercial
Code of the State of New York.
Dated: July 2, 1996 Acknowledged:
NATIONAL PROPANE, L.P.
By: National Propane Corporation, its
Managing General Partner
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
NATIONAL PROPANE CORPORATION, as
general partner and limited partner
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
NATIONAL PROPANE SGP, INC., as
general partner and limited partner
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
NATIONAL PROPANE PARTNERS, L.P., as
limited partner
By: National Propane Corporation, as
General Partner
By: /s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President
<PAGE>
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EX-10.1
CONFORMED COPY
================================================================================
CREDIT AGREEMENT
dated as of June 26, 1996
among
NATIONAL PROPANE, L.P.,
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
================================================================================
- 1 -
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TABLE OF CONTENTS
Article Section Page
ARTICLE I DEFINITIONS..................................................... 1
SECTION 1.01. Defined Terms......................................... 1
SECTION 1.02. Terms Generally...................................... 35
SECTION 1.03. Types of Borrowings.................................. 35
ARTICLE II THE CREDITS................................................... 35
SECTION 2.01. Commitment to Make Loans............................. 35
SECTION 2.02. Loans................................................ 36
SECTION 2.03. Notice of Borrowings................................. 38
SECTION 2.04. Notes; Repayment of Loans............................ 39
SECTION 2.05. Fees................................................. 39
SECTION 2.06. Interest on Loans.................................... 41
SECTION 2.07. Default Interest..................................... 42
SECTION 2.08. Alternate Rate of Interest........................... 42
SECTION 2.09. Termination and Reduction of Commitments............. 42
SECTION 2.10. Conversion and Continuation of Tranche B Term
Borrowings ......................................... 44
SECTION 2.11. Mandatory Repayments and Prepayments................. 45
SECTION 2.12. Optional Prepayments................................. 48
SECTION 2.13. Reserve Requirements; Certain Changes in Circumstances 49
SECTION 2.14. Change in Legality................................... 50
SECTION 2.15. Indemnity............................................ 51
SECTION 2.16. Pro Rata Treatment................................... 52
SECTION 2.17. Sharing of Setoffs................................... 52
SECTION 2.18. Payments............................................. 53
SECTION 2.19. Taxes................................................ 53
SECTION 2.20. Assignment of Commitments and Loans Under Certain
Circumstances...................................... 55
SECTION 2.21. Letters of Credit.................................... 56
ARTICLE III REPRESENTATIONS AND WARRANTIES............................... 61
SECTION 3.01. Organization; Powers................................. 61
SECTION 3.02. Authorization........................................ 61
SECTION 3.03. Enforceability....................................... 62
SECTION 3.04. Consents and Governmental Approvals.................. 62
SECTION 3.05. Business; Financial Statements....................... 62
SECTION 3.06. No Material Adverse Change........................... 64
SECTION 3.07. Title to Properties; Possession Under Leases......... 64
SECTION 3.08. Subsidiaries......................................... 65
SECTION 3.09. Litigation; Compliance with Laws..................... 65
SECTION 3.10. Agreements........................................... 65
SECTION 3.11. Federal Reserve Regulations.......................... 66
SECTION 3.12. Investment Company Act; Public Utility Holding Company
Act................................................ 66
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SECTION 3.13. Use of Proceeds...................................... 66
SECTION 3.14. Tax Returns.......................................... 67
SECTION 3.15. No Material Misstatements............................ 67
SECTION 3.16. Employee Benefit Plans............................... 67
SECTION 3.17. Environmental and Safety Matters..................... 69
SECTION 3.18. Security Interests................................... 70
SECTION 3.19. Solvency............................................. 70
SECTION 3.20. Transactions with Affiliates......................... 71
SECTION 3.21. Ownership............................................ 71
SECTION 3.22. Insurance............................................ 71
SECTION 3.23. Labor Relations...................................... 71
SECTION 3.24. Changes, etc......................................... 72
SECTION 3.25. Indebtedness......................................... 72
SECTION 3.26. Transfer of Assets and Business...................... 72
SECTION 3.27. Chief Executive Office............................... 74
SECTION 3.28. Fixed Price Supply Contracts......................... 74
SECTION 3.29. Trading and Inventory Policies....................... 74
ARTICLE IV CONDITIONS OF LENDING......................................... 75
SECTION 4.01. Effectiveness........................................ 75
SECTION 4.02. All Extensions of Credit............................. 82
SECTION 4.03. Tranche B Extensions of Credit....................... 82
ARTICLE V ACCOUNTING; FINANCIAL STATEMENTS; INSPECTION................... 84
SECTION 5.01. Accounting........................................... 84
SECTION 5.02. Financial Statements................................. 84
SECTION 5.03. Inspection........................................... 90
ARTICLE VI BUSINESS AND FINANCIAL COVENANTS.............................. 90
SECTION 6.01. Indebtedness......................................... 90
SECTION 6.02. Liens, etc........................................... 94
SECTION 6.03. Investments, Guaranties, etc......................... 96
SECTION 6.04. Restricted Payments.................................. 97
SECTION 6.05. Transactions with Affiliates......................... 98
SECTION 6.06. Prohibited Stock and Indebtedness.................... 98
SECTION 6.07. Consolidation, Merger, Sale of Assets, etc........... 99
SECTION 6.08. Partnership or Corporate Existence, etc.; Business.. 104
SECTION 6.09. Payment of Taxes and Claims......................... 105
SECTION 6.10. Compliance with ERISA............................... 105
SECTION 6.11. Maintenance of Properties; Insurance................ 106
SECTION 6.12. Operative Agreements; Collateral Documents.......... 106
SECTION 6.13. Chief Executive Office.............................. 107
SECTION 6.14. Recordation......................................... 107
SECTION 6.15. Covenant to Secure Notes Equally.................... 108
SECTION 6.16. Compliance with Laws................................ 108
SECTION 6.17. Further Assurances.................................. 109
SECTION 6.18. Subsidiaries........................................ 110
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SECTION 6.19. Certain Post-Closing Matters........................ 111
SECTION 6.20. Use of Proceeds..................................... 112
SECTION 6.21. Accounting Changes.................................. 112
SECTION 6.22. Certain Real Property............................... 112
SECTION 6.23. Sale and Lease-Back Transactions.................... 113
SECTION 6.24. Acquisitions........................................ 113
SECTION 6.25. Impairment of Security Interests.................... 113
SECTION 6.26. Limitation on Restrictions on Subsidiary Dividends,
etc ............................................... 114
SECTION 6.27. No Other Negative Pledges........................... 114
SECTION 6.28. Sales of Receivables................................ 114
SECTION 6.29. Fixed Price Supply Contracts; Certain Policies...... 114
SECTION 6.30. Certain Operations.................................. 115
SECTION 6.31. Funded Debt to Cash Flow; Net Working Capital....... 115
SECTION 6.32. Independent Corporate Existence..................... 115
SECTION 6.33. Real Estate Leases.................................. 116
ARTICLE VII EVENTS OF DEFAULT........................................... 117
SECTION 7.01. Events of Default................................... 117
SECTION 7.02. Remedies............................................ 121
ARTICLE VIII THE AGENTS AND ISSUING BANK................................ 122
SECTION 8.01. Appointment and Authorization....................... 122
SECTION 8.02. Liability of Agents................................. 122
SECTION 8.03. Action by Agents.................................... 123
SECTION 8.04. Successor Agents.................................... 123
SECTION 8.05. Agent and Affiliate................................. 124
SECTION 8.06. Indemnification..................................... 124
SECTION 8.07. Credit Decision..................................... 124
SECTION 8.08. Trust Agreement..................................... 124
ARTICLE IX MISCELLANEOUS................................................ 125
SECTION 9.01. Notices............................................. 125
SECTION 9.02. Survival of Agreement............................... 125
SECTION 9.03. Binding Effect...................................... 126
SECTION 9.04. Successors and Assigns.............................. 126
SECTION 9.05. Expenses; Indemnity................................. 129
SECTION 9.06. Right of Setoff..................................... 131
SECTION 9.07. Applicable Law...................................... 131
SECTION 9.08. Waivers; Amendment.................................. 132
SECTION 9.09. Interest Rate Limitation............................ 133
SECTION 9.10. Entire Agreement.................................... 133
SECTION 9.11. Severability........................................ 133
SECTION 9.12. Counterparts........................................ 133
SECTION 9.13. Headings............................................ 133
SECTION 9.14. Jurisdiction; Consent to Service of Process;
Waiver of Jury Trial............................... 134
SECTION 9.15. Legend.............................................. 134
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SECTION 9.16 Limitation of Recourse Against National Propane SGP.. 134
Schedules
Schedule 1.01 Restricted Subsidiaries
Schedule 3.02 Required Consents
Schedule 3.07 Real Property
Schedule 3.08 Subsidiaries
Schedule 3.09(a) Litigation
Schedule 3.09(b) Compliance with Laws
Schedule 3.10 Material Contracts
Schedule 3.17 Environmental Matters
Schedule 3.18 Security Interests
Schedule 3.20 Transactions with Affiliates
Schedule 3.23 Labor Relations
Schedule 3.26 Filing Jurisdictions
Schedule 3.28 Fixed Price Supply Contracts
Schedule 4.01(d)(vii)(a) Required Mortgages
Schedule 4.01(d)(vii)(b) Title Insurance Requirements
Schedule 4.01(d)(vii)(c) Real Property in Excess Value of $250,000
Schedule 4.01(d)(vii)(d) Real Property of Value Under $250,000
Schedule 6.01(g) Indebtedness
Schedule 6.02(k) Liens
Schedule 6.19 Required Environmental Remediation
Schedule 6.32 Independent Corporate Existence
Exhibits
Exhibit A Commitments
Exhibit B-1 Form of Tranche A Revolving Credit Note
Exhibit B-2 Form of Tranche B Note
Exhibit C-1 Form of General Partner's Guarantee Agreement
Exhibit C-2 Form of Subsidiaries Guarantee Agreement
Exhibit D-1 Form of Partners Security Agreement
Exhibit D-2 Form of Borrower Security Agreement
Exhibit E Form of Intercompany Note
Exhibit F Form of Agency Account Agreement
Exhibit G-1 Form of Mortgage
Exhibit G-2 Form of Deed of Trust
Exhibit H Form of Assignment and Acceptance
Exhibit I Form of Opinion of Local Counsel to Borrower
Exhibit J Form of Cash Collateral Agreement
Exhibit K Form of Perfection Certificate
Exhibit L Form of Supplemental Agreement
Exhibit M Form of Notice of Borrowing
Exhibit N [intentionally deleted]
Exhibit O Form of Triarc Note
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Exhibit P Form of Trust Agreement
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CREDIT AGREEMENT dated as of June 26, 1996, among NATIONAL PROPANE, L.P.,
a Delaware limited 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.
The Borrower (such term, and all other capitalized terms in this
paragraph, being used as hereinafter defined) has requested the Lenders to
extend credit to the Borrower in the aggregate principal amount of up to
$55,000,000, of which up to $15,000,000 may be extended under Facility A and up
to $40,000,000 may be extended under Facility B. The Lenders are willing to
extend such credit to the Borrower upon the terms and subject to the conditions
set forth herein. Accordingly, the Borrower, the Lenders, the Agents and the
Issuing Bank agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any ABR Revolving Loan or ABR Tranche B Term Loan.
"ABR Revolving Loan" shall mean any Revolving Loan bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"ABR Tranche A Revolving Loan" shall mean any Tranche A Revolving Loan
bearing interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Tranche B Revolving Loan" shall mean any Tranche B Revolving Loan
bearing interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"ABR Tranche B Term Loan" shall mean any Tranche B Term Loan bearing
interest at a rate determined by reference to the Alternate Base Rate in
accordance with the provisions of Article II.
"Adjusted LIBO Rate" shall mean, with respect to any Eurodollar Borrowing
for any Interest Period, the rate, rounded upwards to the nearest 1/100%,
obtained by dividing (a) the LIBO Rate for such Interest Period by (b) an amount
equal to 1 minus the Statutory Reserves, if any; provided, however, that if any
time during such Interest Period the Statutory Reserves
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applicable to such Eurodollar Borrowing changes, the Adjusted LIBO Rate shall
automatically be adjusted to reflect such change, effective as of the date of
such change.
"Administrative Agent" shall mean The First National Bank of Boston, in
its capacity as administrative agent for the Lenders hereunder, and its
successors in such capacity.
"Administrative Questionnaire" shall mean, with respect to each Lender,
the administrative questionnaire in the form submitted to such Lender by the
Administrative Agent and returned to the Administrative Agent duly completed by
such Lender.
"Affiliate", as applied to any Person, shall mean any other Person
directly or indirectly controlling or controlled by or under common control with
such Person, provided that (i) for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether as a general
partner or through the ownership of voting securities or by contract or
otherwise, (ii) as applied to the Borrower, the term "Affiliate" shall include,
without limitation, Triarc, each General Partner and the Public Partnership, and
(iii) neither the Lenders nor any other Person which is an institution shall be
deemed to be an Affiliate of the Borrower solely by reason of ownership of the
Facilities Obligations or other securities issued in exchange for the Facilities
Obligations or by reason of having the benefits of any agreements or covenants
contained in this Agreement or the other Operative Agreements.
"After Acquired Property" shall have the meaning assigned to such term in
Section 6.22.
"Agency Account Agreement" shall mean an agreement among any Lender or
other bank, the Borrower or any Restricted Subsidiary, and the Administrative
Agent in substantially the form attached hereto as Exhibit F.
"Agency Agreement" shall mean an agreement between the Managing General
Partner and the Borrower dated as of the Closing Date in form and substance
satisfactory in all respects to the Agents.
"Agents" shall mean the Administrative Agent and the Syndication Agent.
"Aggregate Cost of Unmortgaged Property" shall have the meaning assigned
to such term in Section 6.22.
"Alternate Base Rate" shall mean, for any day, a rate per annum equal to
the greater of (a) the Federal Funds Effective Rate in effect on such day plus
0.50% and (b) the Prime Rate in effect on such day. If the Administrative Agent
shall have determined (which determination shall be conclusive absent
demonstrable error) that it is unable to ascertain the Federal Funds Effective
Rate for any reason, including the inability or failure of the Administrative
Agent to
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obtain sufficient quotations in accordance with the terms hereof, the Alternate
Base Rate shall be determined without regard to clause (a) of the first sentence
of this definition until the circumstances giving rise to such inability no
longer exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively, without notice to the Borrower.
"Applicable Margin" shall mean (a) with respect to any Eurodollar Tranche
A Revolving Loan, the Applicable Tranche A Eurodollar Margin, (b) with respect
to any ABR Tranche B Revolving Loan or ABR Tranche B Term Loan, the Applicable
Tranche B ABR Margin and (c) with respect to any Eurodollar Tranche B Revolving
Loan or Eurodollar Tranche B Term Loan, the Applicable Tranche B Eurodollar
Margin.
"Applicable Tranche A Eurodollar Margin" shall mean, with respect to any
Tranche A Revolving Loan outstanding on any day, (a) 1.25%, if such day is prior
to the Pricing Adjustment Date; and (b) if such day is on or after the Pricing
Adjustment Date:
(i) 1.000%, if such day falls within a Level I Pricing Period;
(ii) 1.125%, if such day falls within a Level II Pricing Period;
(iii) 1.250%, if such day falls within a Level III Pricing Period;
(iv) 1.375% if such day falls within a Level IV Pricing Period; and
(v) 1.500% if such day falls within a Level V Pricing Period.
"Applicable Tranche B ABR Margin" shall mean, with respect to any Tranche
B Revolving Loan or Tranche B Term Loan outstanding on any day, (a) 0.250% if
such day falls within a Level V Pricing Period and (b) otherwise, 0.000%.
"Applicable Tranche B Eurodollar Margin" shall mean, with respect to any
Tranche B Revolving Loan or Tranche B Term Loan outstanding on any day, (a)
1.50%, if such day is prior to the Pricing Adjustment Date; and (b) if such day
is on or after the Pricing Adjustment Date:
(i) 1.250%, if such day falls within a Level I Pricing Period;
(ii) 1.375%, if such day falls within a Level II Pricing Period;
(iii) 1.50%, if such day falls within a Level III Pricing Period;
(iv) 1.625% if such day falls within a Level IV Pricing Period; and
(v) 1.750% if such day falls within a Level V Pricing Period.
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"Assets" shall mean the assets conveyed to the Borrower pursuant to the
Conveyance Agreements.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee, and accepted by the Administrative
Agent, in the form of Exhibit H or such other form as shall be approved by the
Administrative Agent.
"Audited Financial Statements" shall have the meaning assigned to such
term in Section 3.05(d).
"Available Cash", with respect to any calendar quarter, shall mean (a) the
sum of (i) all cash of the Borrower and the Restricted Subsidiaries on hand at
the end of such quarter and (ii) all additional cash of the Borrower and the
Restricted Subsidiaries on hand through available borrowings under Facility A
made after the end of such quarter and prior to the date of termination
(provided that such borrowings shall in no event exceed available borrowings
under Facility A as of the end of such quarter), less (b) (I) any cash reserves
that the Managing General Partner shall determine to be necessary or appropriate
in its reasonable discretion to (A) provide for the proper conduct of the
business of the Borrower and the Restricted Subsidiaries (including cash
reserves for future capital expenditures) or (B) provide funds for distributions
under Sections 6.4(a)(i), (ii), and (iii) or 6.4(b)(i) of the MLP Agreement in
respect of any one or more of the next four quarters or (C) comply with
applicable law or any loan agreement (including this Agreement and the Note
Agreement), mortgage, security agreement, debt instrument or other agreement or
obligation to which the Borrower or any Restricted Subsidiary is a party or its
assets are subject (including the payment of principal, Make Whole Amount (as
defined in the Note Agreement), Premium Amount (as defined in the Note
Agreement) or premium, if applicable, and interest of the Borrower in respect of
the Mortgage Notes), (II) all funds and the amount of all Cash Equivalents
deposited by the Borrower and the Restricted Subsidiaries with an independent
unrelated trustee in connection with any Defeased Indebtedness (or contemplated
by clause (a) of the definitions thereof) and (III) all amounts which a
Restricted Subsidiary is prohibited from dividending or distributing to the
Borrower; provided that Available Cash shall not include amounts received,
directly or indirectly, from prepayments of the Triarc Note other than amounts
scheduled to have been received on or prior to the date of determination of
Available Cash pursuant to the terms of the Triarc Note; provided further that
Available Cash shall be reduced by, without duplication, (x) in each calendar
quarter a cash reserve equal to at least 50% of the aggregate amount of all
interest payments in respect of all Indebtedness of the Borrower and the
Restricted Subsidiaries upon which interest is due semiannually or less
frequently to be made in the next quarter (assuming, in the case of Indebtedness
incurred under the Facilities and any other Indebtedness bearing interest at
fluctuating interest rates which cannot be determined in advance, that the
interest rate in effect on the last Business Day of the immediately preceding
calendar quarter will remain in effect until such Indebtedness is due to be
paid), (y) with respect to the Mortgage Notes and any other Indebtedness secured
equally and ratably with the Facilities Obligations of which principal is
payable annually, in the third calendar quarter immediately preceding each
calendar quarter in which any scheduled principal payment is due with respect to
such Mortgage Notes and other Indebtedness (a "principal
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payment quarter"), a cash reserve equal to at least 25% of the aggregate amount
of all principal to be paid in respect of such Mortgage Notes and other such
Indebtedness secured equally and ratably with the Mortgage Notes in such
principal payment quarter; in the second calendar quarter immediately preceding
a principal payment quarter, a cash reserve (including the corresponding
reserved amount from the prior quarter) equal to at least 50% of the aggregate
amount of all principal to be paid in respect of such Mortgage Notes and other
such Indebtedness in such principal payment quarter; and in the calendar quarter
immediately preceding a principal payment quarter, a cash reserve (including the
corresponding reserved amount from the prior two quarters) equal to at least 75%
of the aggregate amount of all principal to be paid in respect of such Mortgage
Notes and other such Indebtedness in such principal payment quarter, and (z)
with respect to any Indebtedness secured equally and ratably with the Facilities
Obligations of which principal is payable semiannually, in each calendar quarter
which immediately precedes a quarter in which principal is payable in respect of
such Indebtedness a cash reserve equal to at least 50% of the aggregate amount
of all principal to be paid in respect of such Indebtedness in the next quarter;
provided further that the amount of such reserve specified in clauses (y) and
(z) of this definition 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.
"Average Life" shall mean, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing (i) the sum of the
products of (A) the numbers of years from the date of determination to the dates
of each successive scheduled principal payment of such Indebtedness multiplied
by (B) the amount of such payment by (ii) the sum of all such payments.
"Bankruptcy Law" shall have the meaning assigned to such term in Section
7.01(g).
"Board" shall mean the Board of Governors of the Federal Reserve System of
the United States.
"Borrower" shall mean National Propane, L.P., a Delaware limited
partnership, and its permitted successors, and, for the purposes of calculating
any financial test or financial covenant under this Agreement with respect to
any period prior to the Closing Date, "Borrower" shall mean the Managing General
Partner and its Affiliates (to the extent that any such Affiliate operated a
portion of the Business).
"Borrower Security Agreement" shall mean the Pledge and Security Agreement
among the Borrower, National Propane Corp., the Restricted Subsidiaries (other
than National Sales and Service, Inc.) and the Trustee in the form attached
hereto as Exhibit D-2, as amended from time to time.
"Borrowing" shall mean a group of Loans of a single Class and Type made by
the Lenders on a single date and as to which a single Interest Period is in
effect. For purposes of Section 4.02, a "Borrowing" does not include a
conversion or continuation of the Type of, or
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the duration of the Interest Period applicable to, a previously outstanding
Tranche B Term Borrowing pursuant to Section 2.10.
"Business" shall mean the operation by the Borrower and its Subsidiaries
(and prior to the consummation of the Conveyance Agreements, by the General
Partners and their Affiliates) of the wholesale and retail sale, distribution
and storage of propane gas and related petroleum derivative products, the
leasing of propane storage tanks and the related retail sale of supplies and
equipment, including home appliances, and such other businesses in which the
Borrower and its Restricted Subsidiaries were engaged on the Closing Date as
described in the Registration Statement.
"Business Day" shall mean any day (other than a day which is a Saturday,
Sunday or legal holiday in the States of Massachusetts, Iowa, New York or Texas)
on which banks are open for business in Boston, Massachusetts, Cedar Rapids,
Iowa, New York, New York and Houston, Texas; provided that, when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
applicable interbank market.
"Capital Expenditures" shall mean, for any period, all amounts (whether
paid in cash or accrued as a liability) which would, in accordance with GAAP, be
included on a consolidated statement of cash flows of the Borrower and its
Restricted Subsidiaries for such period as additions to property, plant and
equipment, Capital Lease Obligations or other capital expenditures.
"Capital Lease Obligations" of any Person shall mean the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP (as
opposed to being accounted for as operating lease expenses on an income
statement of such Person under GAAP) and, for the purposes of this Agreement,
the amount of such obligations at any time shall be the capitalized amount
thereof at such time determined in accordance with GAAP.
"Capital Stock" of any Person shall mean any and all shares, partnership
and other interests (general or limited), rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
equity of such Person.
"Cash Collateral Agreement" shall mean the Cash Collateral Agreement among
the Borrower, the Trustee and the Administrative Agent in the form attached
hereto as Exhibit J, as amended from time to time.
"Cash Equivalents" shall mean:
(a) marketable obligations issued or unconditionally guaranteed by
the United States of America, or issued by any agency thereof and backed
by the full faith
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and credit of the United States, in each case maturing within one year from
the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and having as at any date of determination the highest
generic rating obtainable from either Standard & Poor's Ratings Group or
Moody's Investors Service, Inc.;
(c) commercial paper maturing no more than 270 days from the date of
creation thereof and having as at any date of determination one of the two
highest generic ratings obtainable from either Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.;
(d) certificates of deposit maturing one year or less from the date
of acquisition thereof issued by commercial banks incorporated under the
laws of the United States of America or any state thereof or the District
of Columbia or Canada, (I) the commercial paper or other short-term
unsecured debt obligations of which are rated either A-2 or better (or
comparably if the rating system is changed) by Standard & Poor's Ratings
Group or Prime-2 or better (or comparably if the rating system is changed)
by Moody's Investors Service, Inc. or (II) the long-term debt obligations
of which are rated either A- or better (or comparably if the rating system
is changed) by Standard & Poor's Ratings Group or A3 or better (or
comparably if the rating system is changed) by Moody's Investors Service,
Inc. ("Permitted Banks");
(e) bankers' acceptances eligible for rediscount under requirements
of the Board and accepted by Permitted Banks; and
(f) obligations of the type described in clause (a), (b), (c) or (d)
above purchased from a securities dealer designated as a "primary dealer"
by the Federal Reserve Bank of New York or from a Permitted Bank as
counterparty to a written repurchase agreement obligating such
counterparty to repurchase such obligations not later than 14 days after
the purchase thereof and which provides that the obligations which are the
subject thereof are held for the benefit of the Borrower or a Subsidiary
by a custodian which is a Permitted Bank and which is not a counterparty
to the repurchase agreement in question.
"CERCLA" shall mean the Federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended.
"Change in Control" shall mean the occurrence of any of the following
events: (i) the partners of the Borrower shall approve any plan or proposal for
the liquidation or dissolution of the Borrower; (ii) the Managing General
Partner shall cease for any reason to be the managing general partner of the
Borrower or any other Person shall have become the managing general partner of
the Borrower; (iii) the Public Partnership ceases for any reason to
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beneficially own, directly or indirectly, 100% of all classes of Capital Stock
of the Borrower (other than the General Partners' 2.0202% unsubordinated general
partners' interests in the Borrower); (iv) the Managing General Partner shall
cease for any reason to beneficially own the limited partnership interests in
the Public Partnership owned on the Closing Date (unless, after giving effect
thereto, the Managing General Partner shall beneficially own limited partnership
interests of the Public Partnership representing the lesser of (A) at least 25%
of all outstanding partnership interests of the Public Partnership and (B)
3,000,000 subordinated units and/or common units of the Public Partnership
(appropriately adjusted for splits, consolidations, recapitalizations and
similar events)); (v) the Managing General Partner shall cease for any reason to
be the managing general partner of the Public Partnership or any other Person
shall have become the managing general partner of the Public Partnership; (vi)
Triarc shall cease for any reason to beneficially own, directly or indirectly, a
majority of the Capital Stock of the General Partners (on a fully diluted basis)
or shall cease for any reason to beneficially own, directly or indirectly, a
majority of the total voting power of all classes of Capital Stock then
outstanding of the General Partners normally entitled to vote in the election of
directors (except by reason of a merger of Triarc and National Propane Corp. in
which Triarc assumes all the Facilities Obligations of National Propane Corp.);
(vii) any "person" or "group" (within the meaning of Section 13(d) and 14(d) of
the Exchange Act), other than the Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of all
securities that any such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of (A) 50% or more of the total voting power of all classes of
Capital Stock then outstanding of Triarc normally entitled to vote in elections
of directors ("Triarc Voting Stock") or (B) both (I) 30% or more of the Triarc
Voting Stock and (II) a greater percentage of the Triarc Voting Stock than is
then beneficially owned, directly or indirectly, by the Permitted Holders; or
(viii) during any period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors of Triarc (together
with any new directors whose election by such Board or whose nomination for
election by the shareholders of Triarc, as the case may be, was approved by a
vote of a majority of the directors then still in office who were either
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the Board of Directors of Triarc then in office.
"Charges" shall have the meaning assigned to such term in Section 9.09.
"Class" shall have the meaning assigned to such term in Section 1.03.
"Closing" shall mean the time at which this Agreement shall become
effective, as indicated in a certificate from the Lenders to the Borrower to
that effect.
"Closing Date" shall mean the date on which the Closing shall occur.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time.
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"Collateral" shall mean all the collateral pledged or purported to be
pledged pursuant to any of the Collateral Documents.
"Collateral Documents" shall mean the Security Agreements, the Perfection
Certificate, the Agency Account Agreements, the Mortgages, the Guarantee
Agreements, the Trust Agreement, the Cash Collateral Agreement, checking and
deposit account agreements and all other security agreements and other documents
and instruments executed and delivered pursuant to the terms hereof or thereof
(including the certificates of title referred to in Section 4.01(c) of the
Borrower Security Agreement) in order to secure any Facilities Obligations and
Parity Debt or perfect any Lien granted for the benefit of the Lenders and the
holders of Parity Debt pursuant thereto or to guarantee the Borrower's and the
Managing General Partner's obligations hereunder and under the other Loan
Documents.
"Commitment" shall mean, with respect to any Lender, such Lender's Tranche
A Revolving Credit Commitment and Tranche B Commitment.
"Commitment Fees" shall mean the Tranche A Commitment Fees and the Tranche
B Commitment Fees.
"Commodities Inventory" shall mean all inventory consisting of propane gas
and other petroleum derivative products of, and held for sale by, the Borrower
or any Restricted Subsidiary.
"Commodity Hedging Agreement" shall mean any agreement or arrangement
designed solely to protect the Borrower and the Restricted Subsidiaries against
fluctuations in the price of propane with respect to quantities of propane that
the Borrower and the Restricted Subsidiaries reasonably expect to purchase from
suppliers, sell to their customers or need for their inventory during the period
covered by such agreement or arrangement.
"Consolidated Cash Flow" shall mean at any date of determination, for the
Reference Period with respect to such date of determination, (i) the sum of,
without duplication, the amounts for such period, taken as a single accounting
period, (a) Consolidated Net Income and (b) all amounts deducted in the
determination of such Consolidated Net Income for such period in respect of (I)
interest charges (including amortization of debt discount and expense and
imputed interest on Capital Lease Obligations), (II) provisions for all income
taxes and reserves (including reserves for deferred income taxes), (III)
non-cash items, including depreciation and amortization and (IV) all fees, costs
and expenses with respect to the retirement or repayment of Indebtedness of
either of the General Partners existing immediately prior to the Closing, less
(ii) without duplication, any non-cash items added in the determination of such
Consolidated Net Income for such period, less (iii) interest income, including
interest accrued on the Triarc Note, less (iv) all amounts added in the
determination of such Consolidated Net Income attributable to a Restricted
Subsidiary to the extent such Restricted Subsidiary is prohibited from
dividending or distributing such amount to the Borrower. Consolidated Cash Flow
shall be calculated after giving effect, on a pro forma basis for the Reference
Period with respect to any date of determination to, without
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duplication, any asset sales or asset acquisitions (including any asset
acquisition giving rise to the need to make such calculation as a result of the
Borrower or any Restricted Subsidiary (including any Person who becomes a
Restricted Subsidiary as a result of such asset acquisition) incurring, assuming
or otherwise being liable for acquired Indebtedness, but excluding the
acquisition by the Borrower of the Business in the Transactions) occurring
during the period commencing on the first day of such Reference Period to and
including the date of determination, as if such asset sale or asset acquisition
occurred on the first day of such Reference Period. The pro forma calculations
required by this definition will be determined in accordance with GAAP, shall be
certified by a Financial Officer of the Borrower, and shall be calculated in a
manner reasonably satisfactory to the Required Lenders; provided that such
calculations shall assume (x) the historical sales and gross profit margins
associated with any Eligible Propane Acquisition for the period of 12
consecutive months immediately prior to the date of such acquisition, less
estimated post-acquisition loss of sales volume of three percent (3%) and (y)
operating expenses as if such Eligible Propane Acquisition had occurred on the
first day of such period. If the applicable Reference Period for any calculation
of Consolidated Cash Flow shall include a partial period occurring prior to the
Closing Date, then such Consolidated Cash Flow shall be calculated based upon
the actual Consolidated Cash Flow for the portion of the Reference Period
occurring on and after the Closing Date and based upon the following for such
portion of the Reference Period occurring prior to the Closing Date: (1)
Consolidated Cash Flow for the fiscal quarter ended September 30, 1995 shall be
deemed to equal $1,695,000; (2) Consolidated Cash Flow for the fiscal quarter
ended December 31, 1995 shall be deemed to equal $12,896,000; (3) Consolidated
Cash Flow for the fiscal quarter ended March 31, 1996 shall be deemed to equal
$15,848,000; and (4) Consolidated Cash Flow for the fiscal quarter ended June
30, 1996 shall be calculated as the actual amount for such period, plus
$750,000.
"Consolidated Interest Expense" shall mean as of any date of
determination, the total amount of interest expense of the Borrower and the
Restricted Subsidiaries, determined in accordance with GAAP on a consolidated
basis, during the Reference Period with respect to such date of determination,
including amortization of debt discount and expense and imputed interest on
actual payments under Capital Lease Obligations; provided that Consolidated
Interest Expense for any such Reference Period ending on the last day of the
first, second or third full fiscal quarter of the Borrower after the Closing
Date shall be calculated as the product of (a) Consolidated Interest Expense for
such one, two or three fiscal quarters after the Closing Date and (b) a
fraction, the numerator of which is 4 and the denominator of which is the number
of such full fiscal quarters after the Closing Date. Consolidated Interest
Expense shall be calculated (i) after giving effect, on a pro forma basis for
the applicable Reference Period most recently completed at least 45 days (except
that, in connection with any calculation required pursuant to Section 6.04, for
the applicable period most recently completed) prior to such date of
determination to, without duplication, any incurrence or assumption of
Indebtedness (and the concurrent repayment of any other Indebtedness) occurring
during the period commencing on the first day of such Reference Period to and
including the date of determination, as if such incurrence or assumption of
Indebtedness (and the concurrent repayment of any other Indebtedness) occurred
on the first day of the Reference Period, provided that such Indebtedness was
incurred to finance an Eligible Propane
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Acquisition or was pre-existing Indebtedness of a Person acquired in an Eligible
Propane Acquisition, and (ii) based on the assumption, in the case of
Indebtedness incurred under the Facilities and any other Indebtedness bearing
interest at fluctuating interest rates which cannot be determined in advance,
that the interest rate in effect on the last Business Day of the immediately
preceding calendar quarter had been in effect during the entire Reference
Period.
"Consolidated Net Income" shall mean, with reference to any period, the
net income (or deficit) of the Borrower and the Restricted Subsidiaries for such
period (taken as a cumulative whole), after deducting all operating expenses,
provisions for all taxes and reserves (including reserves for deferred income
taxes) and all other proper deductions, all determined in accordance with GAAP
on a consolidated basis, after eliminating all intercompany transactions and
after deducting portions of income properly attributable to minority interests,
if any, in the stock and surplus of Restricted Subsidiaries, provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or consolidated with
the Borrower or a Restricted Subsidiary, (b) the income (or deficit) of any
Person (other than a Restricted Subsidiary) in which the Borrower or any
Restricted Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Borrower or such Restricted
Subsidiary in the form of dividends or similar distributions, (c) the
undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary, (d) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period, (e) any aggregate net
gain (but not any aggregate net loss) during such period arising from the sale,
exchange or other disposition of capital assets (such term to include all fixed
assets, whether tangible or intangible, all inventory sold in conjunction with
the disposition of fixed assets, and all securities), (f) any write-up of any
asset, (g) any net gain from the collection of the proceeds of life insurance
policies, (h) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of the Borrower or any
Restricted Subsidiary, (i) any net income or gain (but not any net loss) during
such period from any change in accounting, from any discontinued operations or
the disposition thereof, from any extraordinary events or from any prior period
adjustments, (j) any deferred credit representing the excess of equity in any
Restricted Subsidiary at the date of acquisition over the cost of the investment
in such Restricted Subsidiary and (k) in the case of a successor to the Borrower
by consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets.
"Consolidated Net Worth" shall mean, as to the Borrower, the amount by
which (i) the total assets of the Borrower and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Borrower and the Restricted
Subsidiaries prepared in accordance with GAAP as of the date of determination
exceeds (ii) total liabilities of the Borrower and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Borrower and the Restricted
Subsidiaries prepared in accordance with GAAP as of the date of determination on
a consolidated basis, in each case after eliminating all intercompany
transactions; and as to any
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other Person, the amount by which (i) the total assets of such Person and its
Subsidiaries appearing on a consolidated balance sheet of such Person and its
Subsidiaries prepared in accordance with GAAP as of the date of determination
(after eliminating all amounts properly attributable to minority interests in
the stock and surplus, if any, of its Subsidiaries) exceeds (ii) total
liabilities of such Person and its Subsidiaries appearing on a consolidated
balance sheet of such Person and its Subsidiaries prepared in accordance with
GAAP as of the date of determination on a consolidated basis, in each case after
eliminating all intercompany transactions.
"Consolidated Pro Forma Debt Service" shall mean, as of any date of
determination, the total amount payable by the Borrower and the Restricted
Subsidiaries on a consolidated basis, during the four consecutive calendar
quarters next succeeding the date of determination, in respect of scheduled
principal payments and all cash interest charges with respect to Indebtedness of
the Borrower and the Restricted Subsidiaries outstanding on such date of
determination, after giving effect to any Indebtedness proposed to be incurred
on such date, to the concurrent repayment of any other Indebtedness and to the
concurrent satisfaction of the conditions for any other Indebtedness to become
Defeased Indebtedness, and (a) including actual payments under Capital Lease
Obligations, (b) assuming, in the case of Indebtedness (other than Indebtedness
incurred under the Facilities) bearing interest at fluctuating interest rates
which cannot be determined in advance, that the rate in effect on such date will
remain in effect throughout such period, (c) assuming in the case of
Indebtedness incurred under the Facilities, that (i) the interest payments
payable during such four consecutive calendar quarters next succeeding the date
of determination will equal the actual interest payments associated with the
Facilities during the most recent four fiscal quarters, (ii) except for the
12-month period immediately prior to the termination or final maturity thereof
(unless extended, renewed or replaced), no principal payments will be made under
Facility A and (iii) principal payments relating to the Facility B will become
due based on the assumption that the conversion to the fixed amortization
schedule pursuant to Sections 2.01(c) and 2.02(g) is effected on the dates set
forth therein, (d) treating the principal amount of all Indebtedness outstanding
as of such date of determination under a revolving credit or similar agreement
(other than the Facilities) as maturing and becoming due and payable on the
scheduled maturity date or dates thereof (including the maturity of any payment
required by any commitment reduction or similar amortization provision), without
regard to any provision permitting such maturity date to be extended and (e)
including any other repayments of Indebtedness due within twelve months from
such date of determination.
"Control" shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ownership of voting securities, by contract or otherwise,
and "Controlling" and "Controlled" shall have meanings correlative thereto.
"Conveyance Agreements" shall mean (a) the Contribution and Assumption
Agreement, dated as of the Closing Date, among the General Partners, the
Borrower and National Sales and Services, Inc., (b) the Contribution, Conveyance
and Assumption Agreement dated as of the Closing Date, among the Public
Partnership, the General Partners and the Borrower, and
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(c) each of the individual conveyances, assignments and bills of sale delivered
to the Borrower pursuant to the agreements referred to in the foregoing clauses
(a) and (b).
"Current Assets" shall mean, as of any date, all assets which would, in
accordance with GAAP, be included on a consolidated balance sheet of the
Borrower and the Restricted Subsidiaries as of such date as current assets.
"Current Liabilities" shall mean, as of any date, without duplication, (a)
all liabilities which would, in accordance with GAAP, be included on a
consolidated balance sheet of the Borrower and the Restricted Subsidiaries as of
such date as current liabilities and (b) all Indebtedness as of such date in
respect of the Tranche A Revolving Loans and Tranche A Letters of Credit.
"Current Value" shall have the meaning assigned to such term in Section
6.22.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Defeased Indebtedness" shall mean Indebtedness with respect to which the
Borrower or a Restricted Subsidiary has:
(a) deposited irrevocably in trust with an independent, unrelated
trustee for the holders of such Indebtedness money or Cash Equivalents of
the type referred to in paragraph (a) of the definition thereof for the
payment of principal and interest on the Indebtedness being defeased to
maturity or redemption, as the case may be; and
(b) delivered to such trustee and the Agents a certificate from a
nationally recognized firm of independent accountants expressing their
opinion that the payments of principal and interest when due and without
reinvestment on the deposited Cash Equivalents plus any deposited money
without investment will provide cash at such times and in such amounts as
will be sufficient to pay principal and interest when due on all such
Indebtedness to maturity or redemption, as the case may be.
"Disqualified Stock" of any Person shall mean any Capital Stock of such
Person which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable or exercisable at the option of the
holder), upon the happening of any event or otherwise (a) matures or is
mandatorily redeemable or subject to any mandatory repurchase requirement,
pursuant to a sinking fund obligation or otherwise, (b) is convertible into or
exchangeable or exercisable, at the option of the holder, for Indebtedness or
Disqualified Stock or (c) is redeemable or subject to any mandatory repurchase
requirement at the option of the holder thereof, in whole or in part, in each
case on or prior to the first anniversary of the Tranche B Maturity Date.
"dollars" or "$" shall mean lawful money of the United States of America.
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"Eligible Propane Acquisitions" shall mean acquisitions by the Borrower or
any Restricted Subsidiary of controlling stock or all or any part of the assets
of Persons primarily engaged in the distribution of propane and, incidental
thereto, propane appliances, within the continental United States of America. A
Person shall be "primarily engaged" in the distribution of propane and propane
appliances within the continental United States of America in the event that at
least eighty-five (85%) of its annual gross revenue is derived from such
distribution activities.
"Environmental Laws" shall mean all applicable Federal, state, local and
foreign laws, rules or regulations relating to pollution or protection of
employee and public health and safety or the environment, including laws
relating to (a) emissions, discharges, releases or threatened releases of any
Hazardous Material into the environment (including air, surface water, ground
water or land) or (b) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may be amended from time to time.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Eurodollar Revolving Loan or Eurodollar
Tranche B Term Loan.
"Eurodollar Revolving Loan" shall mean any Revolving Loan bearing interest
at a rate determined by reference to the Adjusted LIBO Rate in accordance with
the provisions of Article II.
"Eurodollar Tranche A Revolving Loan" shall mean any Tranche A Revolving
Loan bearing interest at a rate determined by reference to the Adjusted LIBO
Rate in accordance with the provisions of Article II.
"Eurodollar Tranche B Revolving Loan" shall mean any Tranche B Revolving
Loan bearing interest at a rate determined by reference to the Adjusted LIBO
Rate in accordance with the provisions of Article II.
"Eurodollar Tranche B Term Borrowing" shall mean a Borrowing comprised of
Eurodollar Tranche B Term Loans.
"Eurodollar Tranche B Term Loan" shall mean any Tranche B Term Loan
bearing interest at a rate determined by reference to the Adjusted LIBO Rate in
accordance with the provisions of Article II.
"Event of Default" shall have the meaning assigned to such term in Article
VII.
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"Excess Proceeds" shall have the meaning assigned to such term in
Section 6.07(c)(iii)(B).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Existing Unmortgaged Property" shall have the meaning assigned to such
term in Section 6.22.
"Facilities" shall mean Facility A and Facility B.
"Facilities Obligations" shall mean (a) the Borrower's obligations in
respect of the due and punctual payment of principal of and interest on the
Loans and all unreimbursed amounts drawn under the Letters of Credit, when and
as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (b) all Fees, expenses, indemnities and expense
reimbursement obligations of the Borrower under this Agreement or any other Loan
Document, (c) all obligations of the Borrower to any Agent or Lender (or
Affiliate of a Lender) under any Interest Rate Agreement with respect to
Indebtedness under the Loan Documents, (d) all other obligations, monetary or
otherwise, of the Borrower or any other Loan Party under any Loan Document to
which it is a party, in each case, whether now owing or hereafter existing and
(e) all cash management fees and other similar miscellaneous administrative
costs, charges and expenses payable to any Lender by the Borrower or any
Restricted Subsidiary (whether or not pursuant to the terms of the Loan
Documents).
"Facility A" shall mean the Tranche A Revolving Loans and the Tranche A
Letters of Credit provided or participated in by the Lenders to the Borrower
pursuant to this Agreement and the other Loan Documents.
"Facility B" shall mean the Tranche B Revolving Loans, the Tranche B
Letters of Credit and the Tranche B Term Loans provided or participated in by
the Lenders to the Borrower pursuant to this Agreement and the other Loan
Documents.
"Federal Funds Effective Rate" shall mean, for any day, the rate equal to
the weighted average (rounded upwards to the nearest 1/100 of 1%) of the rates
on overnight federal funds transactions with members of the Federal Reserve
System arranged by federal funds brokers, (a) as such weighted average is
published for such day (or, if such day is not a Business Day, for the
immediately preceding Business Day) by the Federal Reserve Bank of New York or
(b) if such rate is not so published for such Business Day, as determined by the
Administrative Agent using any reasonable means of determination. Each
determination by the Administrative Agent of the Federal Funds Effective Rate
shall, in the absence of demonstrable error, be conclusive.
"Fees" shall mean the Commitment Fees, the other fees payable pursuant to
Section 2.05 and the Letter of Credit Fees.
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"Financial Officer" shall mean, as to any corporation, the chief financial
officer or principal accounting officer of such corporation and, as to any
partnership, an officer of its managing general partner who would qualify as a
Financial Officer of such general partner hereunder.
"Fitch" shall mean Fitch Investor Services and its successors.
"Funded Debt", as applied to any Person, shall mean all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures more than one year from the date of the initial
creation thereof (including any current installment thereof due within one year
of the date of determination); provided that Funded Debt shall include any
Indebtedness which does not otherwise come within the foregoing definition but
which is directly or indirectly renewable or extendible at the option of the
debtor to a date one year or more (including an option of the debtor under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of one year or more) from the date of the initial creation
thereof.
"GAAP" shall mean generally accepted accounting principles in effect in
the United States from time to time.
"General Partners" shall mean National Propane Corp. and National Propane
SGP.
"General Partner's Guarantee Agreement" shall mean the Guarantee Agreement
between National Propane Corp. and the Trustee in the form attached hereto as
Exhibit C-1, as amended from time to time.
"Governmental Authority" shall mean any Federal, state, local or foreign
governmental department, commission, board, bureau, authority, agency, court,
instrumentality or judicial or regulatory body or entity.
"Growth-Related Capital Expenditures" shall mean, with respect to any
Person, all capital expenditures by such Person made to improve or enhance the
existing capital assets or to increase the customer base of such Person or to
acquire or construct new capital assets, but excluding (a) capital expenditures
made to maintain, up to the level thereof that existed at the time of such
expenditure, the operating capacity of the capital assets of such Person as such
assets existed at the time of such expenditure and (b) Eligible Propane
Acquisitions.
"Guaranty", as applied to any Person, shall mean any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease (other than operating leases in accordance with GAAP under
which the Borrower or a Restricted Subsidiary is the lessee), dividend or other
obligation of another, including any such obligation directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business) or discounted or sold with recourse by such Person, or in
respect of which such Person is otherwise directly or indirectly liable or any
other obligation under any contract which, in economic effect, is substantially
equivalent to a guaranty, including any
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such obligation of a partnership in which such Person is a general partner or of
a joint venture in which such Person is a joint venturer, and any such
obligation in effect guaranteed by such Person through any agreement (contingent
or otherwise) to purchase, repurchase or otherwise acquire such obligation or
any security therefor, or to provide funds for the payment or discharge of such
obligation (whether in the form of loans, advances, stock purchases, capital
contributions or otherwise), or to maintain the solvency or any balance sheet or
other financial condition of the obligor of such obligation, or to make payment
for any products, materials or supplies or for any transportation or services
regardless of the non-delivery or nonfurnishing thereof, in any such case if the
purpose or intent of such agreement is to provide assurance that such obligation
will be paid or discharged, or that any agreements relating thereto will be
complied with, or that the holders of such obligation will be protected against
loss in respect thereof.
"Guarantee Agreements" shall mean the General Partner's Guarantee
Agreement and the Subsidiaries Guarantee Agreement.
"Hazardous Materials" shall mean any toxic or hazardous substance or
waste, gasoline or petroleum (including crude oil or any fraction thereof) or
petroleum products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos or asbestos-containing materials, pollutants, contaminants,
radioactivity, and any other materials or substances of any kind, whether or not
any such substance is defined as hazardous under any Environmental Law, that is
regulated pursuant to any Environmental Law or that could give rise to liability
under any Environmental Law.
"Hedging Agreement" shall mean any interest rate swap, collar, cap or
similar interest rate arrangement designed solely to protect the Borrower
against fluctuations in interest rates on Indebtedness outstanding or committed
under the Facilities.
"Incur" shall have the meaning assigned to such term in Section 6.01.
"Indebtedness", as applied to any Person, shall mean the following
(without duplication):
(a) any indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed;
(b) any indebtedness, whether or not for borrowed money, with
respect to which such Person has become directly or indirectly liable and
which represents the deferred purchase price (or a portion thereof) or has
been incurred to finance the purchase price (or a portion thereof) of any
property or service or business acquired by such Person, whether by
purchase, consolidation, merger or otherwise;
(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the
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acquisition or property, assets or businesses, and all obligations upon
which interest charges are customarily paid;
(d) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even though the
rights and remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of such property);
(e) any Capital Lease Obligations to the extent such obligations
would, in accordance with GAAP, appear on a balance sheet of such Person;
(f) any indebtedness, whether or not for borrowed money, secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien in respect of property
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, provided that the amount of
such Indebtedness if not so assumed shall in no event be deemed to be
greater than the fair market value from time to time (as determined in
good faith by such Person) of the property subject to such Lien;
(g) all Disqualified Stock of such Person valued at the greater of
its voluntary or involuntary maximum fixed repurchase price plus accrued
dividends;
(h) any Preferred Stock of any Restricted Subsidiary of such Person
valued at the sum of the liquidation preference thereof or any mandatory
redemption payment obligations in respect thereof plus, in either case,
accrued dividends thereon;
(i) any indebtedness of the character referred to in clause (a)
through (h) of this definition deemed to be extinguished under GAAP but
for which such Person remains legally liable;
(j) all liabilities of such Person in respect of letters of credit
(including Letters of Credit) or instruments serving a similar function
issued or accepted for its account by banks and other financial
institutions (whether or not representing obligations for borrowed money);
(k) all obligations of such Person in respect of Interest Rate
Agreements; and
(l) any indebtedness of any other Person of the character referred
to in clause (a) through (j) of this definition with respect to which the
Person whose Indebtedness is being determined has become liable by way of
a Guaranty.
Notwithstanding the foregoing, in determining the Indebtedness of the Borrower
and the Restricted Subsidiaries, there shall be excluded all undrawn commercial
letters of credit (not
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yet due and payable), trade accounts payable, accrued interest and other accrued
expenses and customer credit balances arising in the ordinary course of business
on ordinary terms. The Indebtedness of any Person shall include the Indebtedness
of any partnership in which such Person is a general partner unless such
Indebtedness is non-recourse to such Person and its assets.
"Indemnified Party" shall have the meaning assigned to such term in
Section 9.05(b).
"Intercompany Notes" shall mean the promissory notes of the Subsidiaries
issued to the Borrower as contemplated by Sections 4.01(d)(ii) and 6.01(c),
substantially in the form attached hereto as Exhibit E or such other form as may
be satisfactory to the Administrative Agent, representing all Indebtedness of
the Subsidiaries to the Borrower outstanding at any time.
"Interest Payment Date" shall mean, with respect to any Loan, the last day
of the Interest Period applicable to the Borrowing of which such Loan is a part
and, in the case of any Eurodollar Borrowing with an Interest Period of more
than three months' duration, each day that would have been an Interest Payment
Date had successive Interest Periods of three months' duration been applicable
to such Borrowing and, in addition, in the case of any Eurodollar Borrowing, the
date of any refinancing or conversion of such Borrowing with or to a Borrowing
of a different Type.
"Interest Period" shall mean (a) as to any Eurodollar Borrowing, the
period commencing on the date of such Borrowing (including a conversion or
continuation of the Type of, or the duration of the Interest Period applicable
to, a previously outstanding Tranche B Term Borrowing pursuant to Section 2.10)
and ending on the numerically corresponding day (or, if there is no numerically
corresponding day, on the last day) in the calendar month that is 1, 2, 3 or 6
months thereafter, as the Borrower may elect, and (b) as to any ABR Borrowing,
the period commencing on the date of such Borrowing (including a conversion or
continuation of the Type of, or the duration of the Interest Period applicable
to, a previously outstanding Tranche B Term Borrowing pursuant to Section 2.10)
and ending on the earliest of (i) the next succeeding March 31, June 30,
September 30 or December 31 and (ii) with respect to any Tranche A Revolving
Loan, Tranche B Revolving Loan or Tranche B Term Loan, the Tranche A Maturity
Date, the Tranche B Conversion Date or the Tranche B Maturity Date,
respectively; provided that if any Interest Period would end on a day other than
a Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless, in the case of a Eurodollar Borrowing only, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day. Interest
shall accrue from and including the first day of an Interest Period to, but
excluding, the last day of such Interest Period.
"Interest Rate Agreement" shall mean any interest rate swap, collar, cap,
foreign currency exchange agreement or other arrangement requiring payments
contingent upon interest or exchange rates, including all Hedging Agreements and
Commodities Hedging Agreements.
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"Investment", as applied to any Person, shall mean any direct or indirect
purchase or other acquisition by such Person of stock or other securities of any
other Person, or any direct or indirect loan, advance or capital contribution by
such Person to any other Person, and any other item which would be classified as
an "investment" on a balance sheet of such Person prepared in accordance with
GAAP, including any direct or indirect contribution by such Person of property
or assets to a joint venture, partnership or other business entity in which such
Person retains an interest. For the purposes of Section 6.03, the amount
involved in Investments made during any period shall be the aggregate cost to
the Borrower of all such Investments made during such period, determined in
accordance with GAAP, but without regard to unrealized increases or decreases in
value, or write-ups, write-downs or write-offs, of such investments and without
regard to the existence of any undistributed earnings or accrued interest with
respect thereto accrued after the respective dates on which such Investments
were made, less any net return of capital realized during such period upon the
sale, repayment or other liquidation of such Investment (determined in
accordance with GAAP, but without regard to any amounts received during such
period as earnings (in the form of dividends not constituting a return of
capital, interest or otherwise) on such Investment) or as loans from any Person
in whom such Investments have been made.
"Investment Grade" shall mean BBB- or higher by Fitch, Baa3 or higher by
Moody's or BBB- or higher by S&P.
"Issuing Bank" shall mean, as to any Letter of Credit, The First National
Bank of Boston or Bank of America NT & SA, in its capacity as the issuer of such
Letter of Credit, and its successors in such capacity.
"Legal Requirement" shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule or regulation (or published official
interpretation by any Governmental Authority of any of the foregoing) of any
Governmental Authority.
"Lender" shall mean each financial institution listed on the signature
pages hereof, each assignee which becomes a Lender pursuant to Section 9.04(b),
and their respective successors.
"Letters of Credit" shall mean any and all Tranche A Letters of Credit and
Tranche B Letters of Credit.
"Letter of Credit Disbursement" shall mean a payment or disbursement made
by the Issuing Bank pursuant to a Letter of Credit.
"Letter of Credit Exposure" shall mean at any time the sum of (i) the
Tranche A Letter of Credit Exposure and (ii) the Tranche B Letter of Credit
Exposure. The Letter of Credit Exposure of any Lender at any time shall mean the
sum of its Tranche A Letter of Credit Exposure and Tranche B Letter of Credit
Exposure at such time.
"Letter of Credit Fees" shall mean the Tranche A Letter of Credit Fees and
Tranche B Letter of Credit Fees.
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"Level I Pricing Period" shall mean, subject to Section 2.06(e), any
period on or after the Pricing Adjustment Date during which the Leverage Ratio
is less than 3.50:1.00 and no Event of Default has occurred and is continuing.
"Level II Pricing Period" shall mean, subject to Section 2.06(e), any
period on or after the Pricing Adjustment Date during which the Leverage Ratio
is greater than or equal to 3.50:1.00 but less than 3.75:1.00 and no Event of
Default has occurred and is continuing.
"Level III Pricing Period" shall mean, subject to Section 2.06(e), any
period on or after the Pricing Adjustment Date during which the Leverage Ratio
is greater than or equal to 3.75:1.00 but less than 4.00:1.00 and no Event of
Default has occurred and is continuing.
"Level IV Pricing Period" shall mean, subject to Section 2.06(e), any
period on or after the Pricing Adjustment Date during which the Leverage Ratio
is greater than or equal to 4.00:1.00 but less than 4.50 and no Event of Default
has occurred and is continuing.
"Level V Pricing Period" shall mean, subject to Section 2.06(e), any
period on or after the Pricing Adjustment Date which is not a Level I Pricing
Period, Level II Pricing Period, Level III Pricing Period or Level IV Pricing
Period.
"Leverage Ratio" as of any date shall mean the ratio of (a) Total Funded
Debt as of the last day of the Reference Period with respect to such date to (b)
Consolidated Cash Flow for such Reference Period.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for any
Interest Period, the rate per annum (rounded upwards, if necessary to the
nearest 1/16 of 1%) reported, at 11:00 a.m. (London time) on the date two
Business Days prior to the first day of such Interest Period, on Telerate Access
Service Page 3750 (British Bankers Association Settlement Rate) as the London
interbank offered rate for Dollar deposits having a term comparable to the
duration of such Interest Period and in an amount equal to or greater than
$1,000,000.
"Lien", as to any Person, shall mean any mortgage, lien (statutory or
otherwise), pledge, reservation, right of entry, encroachment, easement, right
of way, restrictive covenant, license, charge, security interest or other
encumbrance in or on, or any interest or title of any vendor, lessor, lender or
other secured party to or of such Person under any conditional sale or other
title retention agreement or Capital Lease Obligation with respect to, any
property or asset owned or held by such Person, or the signing or filing of a
financing statement with respect to any of the foregoing which names such Person
as debtor, or the signing of any security agreement with respect to any of the
foregoing authorizing any other party as the secured party thereunder to file
any financing statement or any other agreement to give or grant any of the
foregoing. For the purposes of this Agreement, a Person shall be deemed to be
the owner of any asset which it has placed in trust for the benefit of the
holders of Indebtedness of such Person and such trust shall be deemed to be a
Lien if such Person remains legally liable therefor, notwithstanding that such
Indebtedness is or may be deemed to
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be extinguished under GAAP (unless such Indebtedness is Defeased Indebtedness
and the only assets subject to such trust are those necessary to comply with the
conditions to defeasance specified in the definition of Defeased Indebtedness).
"Loan Documents" shall mean (a) this Agreement, (b) the Notes, (c) the
Letters of Credit, (d) the Intercompany Notes, (e) the Collateral Documents, (f)
any Interest Rate Agreements entered into by the Borrower with any Agent or
Lender (or any Affiliate thereof), (g) any Supplemental Agreements and (h) any
side letter agreement entered into by the Borrower and the Lenders in
anticipation of the Closing relating to matters to be performed after the
Closing and certain other matters.
"Loan Parties" shall mean the Public Partnership, the Managing General
Partner, the Borrower and the Restricted Subsidiaries.
"Loans" shall mean any or all of the Tranche A Revolving Loans, the
Tranche B Revolving Loans and the Tranche B Term Loans.
"Make Whole Amount" shall have the meaning set forth in the Note Agreement
as in effect on the Closing Date.
"Managing General Partner" shall mean National Propane Corp. except that
(a) if National Propane SGP has succeeded as managing general partner of the
Borrower under the Partnership Agreement, "Managing General Partner" shall mean
National Propane SGP and (b) if Triarc is the surviving corporation in a merger
with National Propane Corp., "Managing General Partner" shall mean Triarc.
"Margin Stock" shall have the meaning assigned to such term under
Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and the Restricted Subsidiaries, taken as a whole, or the Business, (b)
the ability of the Borrower, the Managing General Partner or any Restricted
Subsidiary to perform its obligations under this Agreement or any other
Operative Agreement or (c) the validity, enforceability, perfection or priority
of this Agreement or any other Operative Agreement or of the rights or remedies
of any Lender or the Trustee.
"Maximum Consolidated Pro Forma Debt Service" shall mean, as of any date
of determination, the highest total amount payable by the Borrower and the
Restricted Subsidiaries on a consolidated basis, during any period of four
consecutive fiscal quarters, commencing with the fiscal quarter in which such
date of determination occurs and ending on the maturity date of the Mortgage
Notes, in respect of scheduled principal payments and all cash interest charges
with respect to all Indebtedness of the Borrower and the Restricted Subsidiaries
outstanding or to be outstanding, after giving effect to any Indebtedness
proposed to be incurred on such date, to the concurrent repayment of any other
Indebtedness, and to the concurrent satisfaction of the conditions for any other
Indebtedness to become Defeased
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Indebtedness, and (a) including actual payments under Capital Lease Obligations,
(b) assuming, in the case of Indebtedness (other than Indebtedness incurred
under the Facilities) bearing interest at fluctuating interest rates which
cannot be determined in advance, that the rate in effect on such date will
remain in effect throughout such period, (c) assuming in the case of
Indebtedness incurred under the Facilities, that (i) the interest payments
payable during such four consecutive calendar quarters next succeeding the date
of determination will equal the actual interest payments associated with the
Facilities during the most recent four fiscal quarters, (ii) except for the
12-month period immediately prior to the termination or final maturity thereof
(unless extended or renewed), no principal payments will be made under the
Facility A and (iii) principal payments relating to Facility B will become due
based on the assumption that the conversion to the fixed amortization schedule
pursuant to Sections 2.01(c) and 2.02(g) is effected on the dates set forth
therein, (d) treating the principal amount of all Indebtedness outstanding as of
such date of determination under a revolving credit or similar agreement (other
than the Facilities) as maturing and becoming due and payable on the scheduled
maturity date or dates thereof (including the maturity of any payment required
by any commitment reduction or similar amortization provision), without regard
to any provision permitting such maturity date to be extended and (e) including
any other repayments of Indebtedness due within twelve months from such date of
determination.
"Material Contracts" shall have the meaning assigned to such term in
Section 3.10(a).
"Maximum Rate" shall have the meaning assigned to such term in Section
9.09.
"MLP Agreement" shall mean the Amended and Restated Agreement of Limited
Partnership of the Public Partnership.
"Moody's" shall mean Moody's Investor Services and its successors.
"Mortgage" shall mean each mortgage, assignment of rents, security
agreement and fixture filing, and each deed of trust, assignment of rents and
fixture filing, or similar instrument creating and evidencing a lien on a real
property and other property and rights incidental thereto, which shall be
substantially in the forms of Exhibit G-1 and Exhibit G-2 (with any conforming
changes therein required to accommodate a Restricted Subsidiary as a mortgagor),
containing such schedules and including such exhibits as shall not be
inconsistent with the provisions of Section 4.01(d) or shall be necessary to
conform such instrument to applicable local law and which shall be dated the
date of delivery thereof and made by the owner of the real property described
therein for the benefit of the Trustee, as mortgagee (or beneficiary), assignee
and secured party for the benefit of the Secured Parties, as the same may be
amended from time to time.
"Mortgage Notes" shall mean the mortgage notes of the Borrower in the
aggregate principal amount of $125,000,000 issued pursuant to the Note
Agreement.
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"Mortgaged Properties" shall mean the real properties identified on
Schedule 4.01(d)(vii) and each other real property subjected to a Mortgage under
Section 6.22 or otherwise.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"National Propane Corp." shall mean National Propane Corporation, a
Delaware corporation.
"National Propane Group" shall mean the Loan Parties and, insofar as
Triarc has at any time directly operated or owned any portion of the Business
(other than solely by owning the Capital Stock of National Propane Corp. or
National Propane SGP or any Subsidiary of either of them), Triarc.
"National Propane SGP" shall mean National Propane SGP, Inc., a Delaware
corporation.
"Net Working Capital" as of any date shall mean (a) Current Assets as of
such date, minus (ii) Current Liabilities as of such date.
"Non-Excluded Taxes" shall have the meaning assigned to such term in
Section 2.19.
"Note Agreement" shall mean, collectively, the Note Purchase Agreements
dated as of June 26, 1996, among the General Partners, the Borrower and the
investors named therein.
"Noteholders" shall mean the owners and holders of the Mortgage Notes.
"Notes" shall mean the Tranche A Revolving Credit Notes and the Tranche B
Notes.
"Obsolete Assets" shall mean assets, property or equipment that have been
determined by the Borrower in good faith to no longer be necessary or useful in
the operation or business of the Borrower or any Restricted Subsidiary.
"Officers' Certificate" shall mean, as to any corporation, a certificate
executed on its behalf by the Chairman of the Board of Directors (if an officer)
or its President or one of its Vice Presidents and its Treasurer, or Controller,
or one of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner hereunder.
"Operative Agreements" shall mean this Agreement, the Note Agreement, the
Notes, the Mortgage Notes, the Collateral Documents, the General Partner's
Guarantee Agreement, the Subsidiaries Guarantee Agreement, the Underwriting
Agreement, the Triarc Note, the
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Conveyance Agreements, the Agency Agreement, the MLP Agreement and the
Partnership Agreement.
"Parity Debt" shall mean Indebtedness of the Borrower incurred in
accordance with Sections 6.01(a), 6.01(b), 6.01(i) and 6.01(k) (but only to the
extent such Indebtedness under Section 6.01(k) is incurred to any Lender or
Affiliate of a Lender with respect to Indebtedness under the Loan Documents) and
secured by the lien of the Collateral Documents in accordance with Section
6.02(g) or 6.02(h).
"Partners Security Agreement" shall mean the Pledge and Security Agreement
among the Public Partnership, National Propane Corp. and the Trustee in the form
attached hereto as Exhibit D-1, as amended from time to time.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of the Borrower, as in effect on the Closing Date, and as
the same may from time to time be amended, modified or supplemented in
accordance with the terms thereof and Section 6.12 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA or any successor thereto.
"Perfection Certificate" shall mean a certificate from the Borrower
substantially in the form of Exhibit K.
"Permitted Encumbrances" shall mean the encumbrances and exceptions to
title to the Assets (a) described in exhibits to the Collateral Documents or
otherwise expressly permitted by the Mortgages or (b) existing on the date of
Closing as permitted by all applicable provisions hereof with respect to real
property owned or leased by the Borrower and not subject to a Lien of a
Mortgage.
"Permitted Exceptions" shall have the meaning set forth in Section 3.02.
"Permitted Holders" shall mean (a) Nelson Peltz, (b) Peter W. May, (c) DWG
Acquisition Group, L.P. so long as Nelson Peltz and Peter W. May (i) are the
general partners thereof and Control DWG Acquisition Group, L.P. or (ii)
together beneficially own, directly or indirectly, a majority of the Capital
Stock (on a fully diluted basis) of DWG Acquisition Group, L.P. and a majority
of the total voting power of all classes of Capital Stock then outstanding of
the general partner of DWG Acquisition Group, L.P. that are normally entitled to
vote in the election of directors thereof and (d) any other Affiliate of Nelson
Peltz and Peter W. May, so long as either (i) in the case of any Affiliate that
is a corporation, limited liability company or limited partnership, Nelson Peltz
and Peter W. May together beneficially own, directly or indirectly, a majority
of the Capital Stock (on a fully diluted basis) and a majority of the total
voting power of all classes of Capital Stock then outstanding of such Affiliate
(or the managing member or managing general partner thereof if such Affiliate is
a limited liability company or a limited partnership, as the case may be) that
are normally entitled to
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vote in the election of directors of such Affiliate or (ii) such Affiliate is
reasonably satisfactory to the Required Lenders.
"Permitted Insurers" shall mean insurers with ratings of A or better
according to Best's Insurance Reports (or a comparable rating agency for
insurance companies located outside of the United States and Canada) and with
assets of no less than $500 million.
"Permitted Maximum Ratio" on any date of determination shall mean (a) if
such date is on or prior to June 30, 1997, 4.50:1.00 and (b) if such date is
after June 30, 1997, 4.25:1.00.
"Person" shall mean any natural Person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
government (or any agency or political subdivision thereof) or other entity.
"Plan" shall mean an "employee pension benefit plan" (as defined in
Section 3 (2) of ERISA) which is or has been established or maintained, or to
which contributions are or have been made, by either General Partner, the
Borrower or any Related Person of the Borrower or the General Partners or to
which either General Partner, the Borrower or any Related Person of the Borrower
or the General Partners is or has been obligated to contribute, or an employee
pension benefit plan as to which either General Partner, the Borrower or any
Related Person of the Borrower or either General Partner could be treated as a
contributory sponsor under Section 4069 or Section 4212 of ERISA if such plan
were terminated.
"Preferred Stock", as applied to the Capital Stock of any Person, shall
mean Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution of such
corporation, over shares of Capital Stock of any other class of such Person.
"Pricing Adjustment Date" shall mean the date which is five Business Days
after the delivery by the Borrower to the Administrative Agent of the financial
statements required by Section 5.02(a) for the quarter ended June 30, 1996.
"Prime Rate" shall mean the rate of interest per annum adopted from time
to time by the Administrative Agent as its Base Rate (which may not be the
lowest rate at which the Administrative Agent makes loans to borrowers) in
effect at its principal office in Boston, Massachusetts. Each change in the
Prime Rate shall be effective on the date such change is adopted, without notice
to the Borrower.
"Public Partnership" shall mean National Propane Partners, L.P., a
Delaware limited partnership.
"Rating Agency" shall mean Fitch, Moody's and S&P.
"RCRA" shall mean the Federal Resource Conservation and Recovery Act, as
amended.
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"Reference Period" with respect to any date of determination shall mean
the period of four consecutive fiscal quarters of the Borrower most recently
completed at least 45 days prior to such date, except that (a) solely for
purposes of Section 6.31 (but not for purposes of determining the Applicable
Margin, calculating the Leverage Ratio as required by Sections 4.03(g), 6.01,
6.03, 6.07 and 6.24 hereof, calculating the ratio of Consolidated Cash Flow to
Consolidated Interest Expense as required by Section 6.04 or any other purpose
(other than determining compliance with Section 6.31 as required by Section
6.04)), the "Reference Period" with respect to any date of determination shall
have the meaning set forth in the last sentence of Section 6.31(a), (b) for
purposes of determining compliance with Section 6.31 as required by Section 6.04
(but not for purposes of calculating the ratio of Consolidated Cash Flow to
Consolidated Interest Expense as required by Section 6.04), the "Reference
Period" with respect to any date of determination shall have the meaning set
forth in the last sentence of Section 6.31(a) for the applicable period
immediately preceding, or ending on, such date of determination, (c) for
purposes of calculating the ratio of Consolidated Cash Flow to Consolidated
Interest Expense as required by Section 6.04, the Reference Period shall mean
the period of four consecutive fiscal quarters of the Borrower most recently
completed prior to the date of determination and (d) for purposes of calculating
Consolidated Interest Expense for the period ending on the last day of the
first, second or third fiscal quarter after the Closing Date, "Reference Period"
shall be subject to the provisions set forth in the definition of Consolidated
Interest Expense.
"Register" shall have the meaning assigned to such term in Section
9.04(d).
"Registration Statement" shall mean the Registration Statement on Form S-1
under the Securities Act of 1933, as amended, of the Public Partnership
(Registration Number 333-2768), as initially filed with the SEC on March 26,
1996, as amended by Amendment No. 1 thereto filed with the SEC on May 14, 1996,
Amendment No. 2 thereto filed with the SEC on May 31, 1996, and Amendment No. 3
thereto filed with the Securities and Exchange Commission on June 11, 1996.
"Regulation G" shall mean Regulation G of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation U" shall mean Regulation U of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Regulation X" shall mean Regulation X of the Board as from time to time
in effect and all official rulings and interpretations thereunder or thereof.
"Related Person" shall mean, with respect to any Person any trade or
business, whether or not incorporated, which, as of any date of determination,
would be treated as a single employer together with such Person under Section
414 of the Code.
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"Reportable Event" shall mean any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the 30-day notice period
is waived under applicable PBGC regulations.
"Required Consents" shall have the meaning set forth in Section 3.02.
"Required Lenders" shall mean, at any time, Lenders holding Loans and
participations in Letters of Credit, and having Commitments, representing in the
aggregate at least 66-2/3% of the sum at such time of (a) the aggregate
principal amount of the Loans outstanding, (b) the aggregate amount of the
Letter of Credit Exposure and (c) the aggregate amount of unused Commitments.
"Responsible Officer" shall mean, with respect to any Person, the
Chairman, the President, any Executive Vice President or Senior Vice President,
the Chief Financial Officer, the Treasurer and the Secretary of such Person, and
any other employee of such Person who is responsible for compliance with or
performance of any obligation under this Agreement, the Loan Documents or the
other Operative Agreements, and with respect to a Person which is a partnership,
any such employee of its managing general partner.
"Restricted Payment" shall mean (a) any payment, dividend or other
distribution, direct or indirect, in respect of any Capital Stock of the
Borrower or any Restricted Subsidiary, except a distribution payable solely in
additional Capital Stock of the Borrower (other than Disqualified Stock), (b)
any payment, direct or indirect, on account of the redemption, retirement,
purchase or other acquisition of any Capital Stock of the Borrower or any
Restricted Subsidiary now or hereafter outstanding, except to the extent that
the consideration therefor consists of Capital Stock of the Borrower (other than
Disqualified Stock) and (c) except for any prepayment of Parity Debt
contemplated by Section 2.11 and the Collateral Documents, any principal payment
on, or redemption, repurchase, defeasance or other acquisition, or retirement
for value, prior to any scheduled repayment or maturity, of (i) any Indebtedness
subordinated in right of payment to the Facilities Obligations or (ii) any
Mortgage Notes or other Parity Debt; provided that payments by the Borrower or a
Restricted Subsidiary of the Borrower made in accordance with all applicable
provisions of this Agreement to the Managing General Partner or any of its
Affiliates for services rendered to or on behalf of the Borrower or any
Restricted Subsidiary of the Borrower or expenses incurred in connection with
the operation of the business of the Borrower or any Restricted Subsidiary of
the Borrower (including, without limitation, reimbursement of expenses incurred
under any employee benefit plan, including plans providing for the issuance of
Units or options to acquire Units in the Public Partnership) shall not be deemed
to be Restricted Payments; provided further that any prepayment made at the
option of the Borrower on the Mortgage Notes shall not constitute a Restricted
Payment, so long as the following conditions are satisfied: (A) concurrently
with such prepayment, (I) the Borrower shall reduce the outstanding Commitments,
if any, pursuant to Section 2.09(b) by an amount which bears the same proportion
to the total Commitments as the principal amount and premium prepaid on the
Mortgage Notes bears to the aggregate principal amount of Mortgage Notes prior
to such prepayment (such proportion, the "prepayment percentage") and (II) the
Borrower shall prepay
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outstanding Loans pursuant to Section 2.12 and reduce the Letter of Credit
Exposure as contemplated by Section 2.21(k) (by depositing cash collateral with
the Administrative Agent to be held pursuant to the Cash Collateral Agreement)
by an aggregate amount equal to the prepayment percentage of the aggregate
principal amount of outstanding Loans and the Letter of Credit Exposure; and (B)
of the amounts applied pursuant to the foregoing clause (A), (I) all Tranche B
Revolving Credit Commitments shall be terminated before any Tranche A Revolving
Credit Commitments are reduced, (II) all Tranche B Loans shall be repaid in full
and the Tranche B Letter of Credit Exposure shall be eliminated before any
Tranche A Revolving Loans are repaid or any Tranche A Letter of Credit Exposure
is reduced, (III) all outstanding Tranche B Loans shall be repaid in full before
any Tranche B Letter of Credit Exposure is reduced and (IV) all outstanding
Tranche A Revolving Loans shall be repaid in full before any Tranche A Letter of
Credit Exposure is reduced.
"Restricted Subsidiary" shall mean any Wholly Owned Subsidiary of the
Borrower (a) organized under the laws of the United States of America or any
state thereof or the District of Columbia, (b) none of the capital stock or
ownership interests of which is owned by Unrestricted Subsidiaries, (c)
substantially all of the operating assets of which are located in, and
substantially all of the business of which is conducted within the United States
of America and which business consists of the wholesale and retail sale,
distribution and storage of propane gas and related petroleum derivative
products, the leasing of propane storage tanks and/or the related retail sale of
supplies and equipment, including home appliances and the provision of related
services, and (d) designated by the Borrower as a Restricted Subsidiary in
Schedule 1.01 or at a subsequent date; provided, however, that (i) to the extent
a newly formed or acquired Wholly Owned Subsidiary satisfying the requirements
of the foregoing clauses (a), (b) and (c) is not declared either a Restricted
Subsidiary or an Unrestricted Subsidiary within 90 days of its formation or
acquisition, such Wholly Owned Subsidiary shall be deemed a Restricted
Subsidiary and (ii) a Restricted Subsidiary may be designated as an Unrestricted
Subsidiary in accordance with the provisions of Section 6.18.
"Revolving Credit Borrowing" shall mean a Borrowing consisting of
Revolving Loans.
"Revolving Credit Commitment" shall mean any and all Tranche A Revolving
Credit Commitments and Tranche B Revolving Credit Commitments.
"Revolving Loans" shall mean any and all Tranche A Revolving Loans and
Tranche B Revolving Loans.
"Rollover Borrowing" shall mean (a) a Revolving Credit Borrowing of any
Class in which previously outstanding Revolving Loans of such Class are
refinanced with new Loans of such Class as contemplated by Section 2.02(g), so
long as such refinancing does not result in any increase in the aggregate
outstanding principal amount of Loans of such Class and (b) a Tranche B Term
Borrowing made on the Tranche B Conversion Date in which previously outstanding
Tranche B Revolving Loans are refinanced with Tranche B Term Loans as
contemplated by Section 2.11(b).
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"S&P" shall mean Standard & Poor's Ratings Group and its successors.
"SEC" shall mean the Securities and Exchange Commission or any successor
thereto.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative Agent
and the Syndication Agent, in their capacities as such under each Loan Document,
(c) each Agent or Lender with which the Borrower enters into an Interest Rate
Agreement, in its capacity as a party to such agreement, (d) the beneficiaries
of each indemnification obligation undertaken by the Borrower or any of the Loan
Parties under any Loan Document, (e) the holders of any Parity Debt and (f) the
successors and assigns of the foregoing.
"Security Agreements" shall mean the Partners Security Agreement, the
Borrower Security Agreement and the Triarc Note.
"Single Employer Plan" shall mean any Plan which is covered by Title IV of
ERISA, but which is not a Multiemployer Plan.
"Solvent" shall have the meaning assigned to such term in Section 3.19.
"Specified Events" shall mean the events, conditions and occurrences
referred to in Sections 4.03(g), 6.01, 6.03, 6.07 and 6.24 hereof for which such
Sections contemplate pro forma adjustments in connection with calculations of
the Leverage Ratio. All such adjustments shall be made reasonably and in good
faith by the Borrower and subject to the reasonable satisfaction of the Agents.
"Statutory Reserves" shall mean the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by the Board and any other banking authority to which any Lender is
subject for (a) "Eurocurrency liabilities" as specified in Regulation D of the
Board, (b) any other category of liabilities that includes eurodollar deposits
by reference to which the LIBO Rate for any Eurodollar Borrowing is determined,
(c) the principal amount of or interest on any portion of any Eurodollar
Borrowing or (d) any other category of extensions of credit, or other assets,
that is based upon the LIBO Rate by a non-United States office of any of the
Lenders to United States residents, in each case without the benefits of credits
for prorations, exceptions or offsets that may be available to a Lender.
"Sub-investment Grade Rating" on any date shall mean a rating for the
Mortgage Notes in effect on such date by Fitch of lower than Investment Grade
or, if Fitch is no longer making publicly available a rating for the Mortgage
Notes, then (a) a failure for there to be at least one other Rating Agency
making publicly available a rating for the Mortgage Notes of Investment Grade on
such date or (b) a rating for the Mortgage Notes in effect on such date by any
Rating Agency (other than Fitch) of lower than Investment Grade. For purposes of
the foregoing, if the Borrower shall, directly or indirectly, cause any Rating
Agency to cease publishing a rating for the Mortgage Notes, such Rating Agency
shall be deemed to have issued a rating for the
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Mortgage Notes of lower than Investment Grade until such time as such Rating
Agency shall have issued a new rating, which is of Investment Grade.
"Subsidiaries Guarantee Agreement" shall mean the Guarantee Agreement
among the Restricted Subsidiaries (other than National Sales and Services, Inc.)
and the Trustee in the form attached hereto as Exhibit C-2, as amended from time
to time.
"Subsidiary" of any Person shall mean any corporation, association,
partnership, limited liability company, joint venture or other business entity
at least a majority (by number of votes) of the stock of any class or classes
(or equivalent interests) of which is at the time owned by such Person or by one
or more Subsidiaries of such Person or by such Person and one or more
Subsidiaries of such Person, if the holders of the stock of such class or
classes (or equivalent interests) (a) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or Persons performing similar functions) of such business entity, even though
the right so to vote has been suspended by the happening of such a contingency,
or (b) are at the time entitled, as such holders, to vote for the election of
the majority of the directors (or Persons performing similar functions) of such
business entity, whether or not the right so to vote exists by reason of the
happening of a contingency. Unless the context clearly indicates otherwise, the
term "Subsidiary" refers to a Subsidiary of the Borrower.
"Supplemental Agreement" shall mean an agreement between a Restricted
Subsidiary, the Administrative Agent and the Trustee in the form attached hereto
as Exhibit L, as amended from time to time.
"Syndication Agent" shall mean Bank of America NT & SA, in its capacity as
syndication agent hereunder.
"Title Company" shall mean Chicago Title Insurance Company or such other
title insurance company as shall be satisfactory to the Agents.
"Total Funded Debt" as of any date shall mean (a) all Funded Debt of the
Borrower and its Restricted Subsidiaries as of such date, including Indebtedness
in respect of the Mortgage Notes, Tranche B Revolving Loans, Tranche B Term
Loans and Tranche B Letters of Credit, but excluding Indebtedness in respect of
the Tranche A Revolving Loans and Tranche A Letters of Credit, minus (b) Net
Working Capital of the Borrower and its Restricted Subsidiaries as of such date
(or, if such Net Working Capital is negative, plus the amount thereof); provided
that if such Net Working Capital is positive, it shall not exceed $10,000,000
for purposes of the foregoing calculation.
"Tranche A Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(a).
"Tranche A Letters of Credit" shall mean any and all standby letters of
credit issued pursuant to Section 2.21(a).
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"Tranche A Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Issuing Bank pursuant to a Tranche A Letter of Credit.
"Tranche A Letter of Credit Exposure" shall mean at any time the sum of
(i) the aggregate undrawn amount of all outstanding Tranche A Letters of Credit,
plus (ii) the aggregate amount of all Tranche A Letter of Credit Disbursements
not yet reimbursed by the Borrower as provided in Section 2.21, minus (iii) the
aggregate principal amount of cash collateral in respect of outstanding Tranche
A Letters of Credit deposited by the Borrower with the Administrative Agent and
held pursuant to the Cash Collateral Agreement. The Tranche A Letter of Credit
Exposure of any Lender at any time shall mean its pro rata share (based on the
percentage of the aggregate Tranche A Revolving Credit Commitments represented
by such Lender's Tranche A Revolving Credit Commitment) of the aggregate Tranche
A Letter of Credit Exposure at such time.
"Tranche A Letter of Credit Fees" shall mean the fees payable to the
Issuing Bank and the Lenders in respect of Tranche A Letters of Credit pursuant
to Section 2.21(f).
"Tranche A Maturity Date" shall mean June 30, 1999.
"Tranche A Rating Premium" shall mean, (a) with respect to any Tranche A
Revolving Loan outstanding on any day on which there is a Sub-investment Grade
Rating:
(i) 0.125%, if such day falls within a Level I Pricing Period, Level
II Pricing Period or Level III Pricing Period;
(ii) 0.250%, if such day falls within a Level IV Pricing Period; and
(iii) 0.500%, if such day falls within a Level V Pricing Period; and
(b) with respect to the commitment fee accruing pursuant to Section
2.05(a) on any day on which there is a Sub-investment Grade Rating, (i) 0.00%,
if such day falls within a Level I Pricing Period and (ii) 0.125%, if such day
falls within a Level II Pricing Period, Level III Pricing Period, Level IV
Pricing Period or a Level V Pricing Period.
"Tranche A Revolving Credit Availability Period" shall mean the period
from and including the Closing Date to but excluding the earlier of (a) the date
five Business Days prior to the Tranche A Maturity Date and (b) the termination
of the Tranche A Revolving Credit Commitments of the Lenders in accordance with
the terms hereof.
"Tranche A Revolving Credit Borrowing" shall mean a Borrowing comprised of
Tranche A Revolving Loans.
"Tranche A Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Tranche A Revolving Loans
hereunder as set forth in Section 2.01(a), in the amount set forth in Exhibit A
or in an assignment in accordance with
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Section 9.04, as the same may be reduced from time to time pursuant to Section
2.09 or changed from time to time pursuant to an assignment in accordance with
Section 9.04. The aggregate amount of the Lenders' collective Tranche A
Revolving Credit Commitments as of the Closing Date shall equal $15,000,000.
"Tranche A Revolving Credit Note" shall mean a promissory note of the
Borrower, substantially in the form of Exhibit B-1, evidencing Tranche A
Revolving Loans, and any substitutions or replacements therefor.
"Tranche A Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.01(a). Each Tranche A Revolving
Loan shall be a Eurodollar Revolving Loan or an ABR Revolving Loan.
"Tranche B Commitment" shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche B Revolving Loans hereunder as set
forth in Section 2.01(b), as the same may be reduced from time to time pursuant
to Section 2.09 or changed from time to time pursuant to an assignment in
accordance with Section 9.04, and to make a Tranche B Term Loan hereunder as set
forth in Section 2.01(c).
"Tranche B Commitment Fee" shall have the meaning assigned to such term in
Section 2.05(b).
"Tranche B Conversion Date" shall mean June 30, 1998.
"Tranche B Letters of Credit" shall mean any and all standby letters of
credit issued pursuant to Section 2.21(b).
"Tranche B Letter of Credit Disbursement" shall mean a payment or
disbursement made by the Issuing Bank pursuant to a Tranche B Letter of Credit.
"Tranche B Letter of Credit Exposure" shall mean at any time the sum of
(i) the aggregate undrawn amount of all outstanding Tranche B Letters of Credit,
plus (ii) the aggregate amount of all Tranche B Letter of Credit Disbursements
not yet reimbursed by the Borrower as provided in Section 2.21, minus (iii) the
aggregate principal amount of cash collateral in respect of Tranche B Letters of
Credit deposited by the Borrower with the Administrative Agent and held pursuant
to the Cash Collateral Agreement. The Tranche B Letter of Credit Exposure of any
Lender at any time shall mean its pro rata share (based on the percentage of the
aggregate Tranche B Revolving Credit Commitments represented by such Lender's
Tranche B Revolving Credit Commitment) of the aggregate Tranche B Letter of
Credit Exposure at such time.
"Tranche B Letter of Credit Fees" shall mean the fees payable to the
Issuing Bank and the Lenders in respect of Tranche B Letters of Credit pursuant
to Section 2.21(f).
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"Tranche B Loans" shall mean the Tranche B Revolving Loans and the Tranche
B Term Loans.
"Tranche B Maturity Date" shall mean June 30, 2001.
"Tranche B Note" shall mean a promissory note of the Borrower,
substantially in the form of Exhibit B-2, evidencing Tranche B Revolving Loans
and (after the Tranche B Conversion Date) Tranche B Term Loans, and any
substitutions or replacements therefor.
"Tranche B Rating Premium" shall mean, (a) with respect to any Tranche B
Revolving Loan or Tranche B Term Loan outstanding on any day on which there is a
Sub-investment Grade Rating:
(i) 0.250%, if such day falls within a Level I Pricing Period, Level
II Pricing Period, Level III Pricing Period or Level IV Pricing Period;
and
(ii) 0.750%, if such day falls within a Level V Pricing Period; and
(b) with respect to the commitment fee accruing pursuant to Section
2.05(b) on any day on which there is a Sub-investment Grade Rating, 0.125%.
"Tranche B Repayment Date" shall have the meaning assigned to such term in
Section 2.11(c).
"Tranche B Revolving Credit Availability Period" shall mean the period
from and including the Closing Date to but excluding the earlier of (a) the date
five Business Days prior to the Tranche B Conversion Date and (b) the
termination of the Tranche B Revolving Credit Commitments of the Lenders in
accordance with the terms hereof.
"Tranche B Revolving Credit Borrowing" shall mean a Borrowing comprised of
Tranche B Revolving Loans.
"Tranche B Revolving Credit Commitment" shall mean, with respect to each
Lender, the commitment of such Lender to make Tranche B Revolving Loans
hereunder as set forth in Section 2.01(b), in the amount set forth in Exhibit A
or in an assignment in accordance with Section 9.04, as the same may be reduced
from time to time pursuant to Section 2.09 or changed from time to time pursuant
to an assignment in accordance with Section 9.04. The aggregate amount of the
Lenders' collective Tranche B Revolving Credit Commitment as of the Closing Date
shall equal $40,000,000.
"Tranche B Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.01(b). Each Tranche B Revolving
Loan shall be a Eurodollar Revolving Loan or an ABR Revolving Loan.
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"Tranche B Term Borrowing" shall mean a Borrowing comprised of Tranche B
Term Loans.
"Tranche B Term Loan Commitment" shall mean, with respect to each Lender,
the commitment of such Lender to make a Tranche B Term Loan hereunder as set
forth in Section 2.01(c).
"Tranche B Term Loans" shall have the meaning assigned to such term in
Section 2.01(c). Each Tranche B Term Loan shall be a Eurodollar Term Loan or an
ABR Term Loan.
"Transactions" shall mean the transactions described or referred to under
the caption "The Transactions" in the Registration Statement.
"Triarc" shall mean Triarc Companies, Inc., a Delaware corporation.
"Triarc Note" shall mean the promissory note dated as of the Closing Date
made by Triarc in favor of the Borrower, in the form of Exhibit O hereto, which
note is secured pursuant to its terms by a pledge by Triarc to the Borrower of,
among other things, all of the Capital Stock of National Propane Corp. directly
owned by Triarc, as such note may from time to time be amended, modified or
supplemented as expressly permitted by Section 6.12 or, if such amendment,
modification or supplement is not expressly permitted by Section 6.12, then as
permitted by the Required Lenders.
"Trust Agreement" shall mean the Intercreditor and Trust Agreement, dated
as of June 26, 1996, among the Borrower, the Public Partnership, National
Propane Corp., the Restricted Subsidiaries, the Trustee, the Lenders and the
Noteholders, substantially in the form attached hereto as Exhibit P, as amended
from time to time.
"Trustee" shall mean The Bank of New York, as Trustee under the Trust
Agreement, and its successors and assigns thereunder.
"Type" shall have the meaning assigned to such term in Section 1.03.
"Underwriters" shall mean the underwriters named in the Underwriting
Agreement.
"Underwriting Agreement" shall mean the Purchase Agreement among the
Public Partnership, the General Partners, the Borrower and the Underwriters,
relating to securities of the Public Partnership registered under the
Registration Statement.
"Units" shall mean the units to be issued and sold by the Public
Partnership pursuant to the Underwriting Agreement, representing preference
limited partnership interests in the Public Partnership.
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"Unrestricted Subsidiary" shall mean any Wholly Owned Subsidiary other
than a Restricted Subsidiary which is organized under the laws of the United
States of America or any state thereof or the District of Columbia and
substantially all of the operating assets of which are located in, and
substantially all of the business of which is conducted within the United States
of America and which business consists principally of the distribution of
propane gas or related supplies and equipment.
"Wholly Owned", as applied to any Subsidiary, shall mean a Subsidiary all
the outstanding Capital Stock (other than directors' qualifying shares, if
required by law) of which is at the time owned by the Borrower or by one or more
Wholly Owned Subsidiaries or by the Borrower and one or more Wholly Owned
Subsidiaries.
"Work Letters" shall have the meaning assigned to such term in Section
2.05(c).
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. Unless otherwise expressly provided
herein, all terms of an accounting or financial nature used herein shall be
interpreted in accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of (a) making any calculation contemplated by the
provisions of Article II and (b) determining compliance with any covenant set
forth in Article VI, such terms shall be construed in accordance with GAAP as in
effect on the date of this Agreement applied on a basis consistent with the
application used in preparing the Audited Financial Statements. As used herein,
the "knowledge" of the Borrower includes the knowledge of all Responsible
Officers of each and every Loan Party. Unless otherwise expressly provided
herein, the word "day" means a calendar day.
SECTION 1.03. Types of Borrowings. The term "Borrowing" refers to the
portion of the aggregate principal amount of Loans of any Class outstanding
hereunder which bears interest of a specific Type and for a specific Interest
Period pursuant to a notice of Borrowing pursuant to Section 2.03. Each Lender's
ratable share of each Borrowing is referred to herein as a separate "Loan".
Borrowings, Loans, Letters of Credit and certain related terms hereunder may be
distinguished by "Class" and by "Type". The "Class" of a Loan or of a Commitment
to make such a Loan or of a Borrowing comprising such Loans refers to whether
such Loan is a Tranche A Revolving Loan, a Tranche B Revolving Loan or a Tranche
B Term Loan, each of which constitutes a Class. The "Class" of a Letter of
Credit refers to whether such Letter of Credit is a Tranche A Letter of Credit
or a Tranche B Letter of Credit, each of which constitutes a Class. The "Type"
of a Loan refers to whether such Loan is an ABR Loan or a Eurodollar Loan.
Borrowings and Loans may (but need not) be identified both by Class and Type
(e.g., a "Eurodollar Tranche A Revolving Loan" is a Loan which is both a Tranche
A Revolving Loan and a Eurodollar Loan).
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ARTICLE II
THE CREDITS
SECTION 2.01. Commitment to Make Loans. (a) Subject to the terms and
conditions and relying upon the representations and warranties herein set forth,
each Lender agrees, severally and not jointly, to make Tranche A Revolving Loans
to the Borrower, at any time and from time to time during the Tranche A
Revolving Credit Availability Period, in an aggregate principal amount at any
time outstanding not to exceed the excess, if any, of (i) such Lender's Tranche
A Revolving Credit Commitment over (ii) its Tranche A Letter of Credit Exposure
at such time.
(b) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make Tranche B Revolving Loans to the Borrower, at any time
and from time to time during the Tranche B Revolving Credit Availability Period,
in an aggregate principal amount at any time outstanding not to exceed the
excess, if any, of (i) such Lender's Tranche B Revolving Credit Commitment over
(ii) its Tranche B Letter of Credit Exposure at such time.
(c) Subject to the terms and conditions and relying upon the
representations and warranties herein set forth, each Lender agrees, severally
and not jointly, to make a single loan to the Borrower (each such loan, a
"Tranche B Term Loan") on the Tranche B Conversion Date in a principal amount
not to exceed the lesser of (i) the excess, if any, of (A) such Lender's Tranche
B Revolving Credit Commitment immediately prior to such date over (B) its
Tranche B Letter of Credit Exposure immediately prior to such date and (ii) the
aggregate outstanding principal amount of such Lender's Tranche B Revolving
Loans immediately prior to such date.
(d) The Borrower may borrow, pay or prepay and reborrow Tranche A
Revolving Loans during the Tranche A Revolving Credit Availability Period,
within the limits set forth in Section 2.01(a) and upon the other terms and
subject to the other conditions and limitations set forth herein. The Borrower
may borrow, pay or prepay and reborrow Tranche B Revolving Loans during the
Tranche B Revolving Credit Availability Period, within the limits set forth in
Section 2.01(b) and upon the other terms and subject to the other conditions and
limitations set forth herein. Amounts paid or prepaid in respect of Tranche B
Term Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a Borrowing
consisting of Loans made by the Lenders ratably in accordance with their
respective Tranche A Revolving Credit Commitments, Tranche B Revolving Credit
Commitments or Tranche B Term Loan Commitments, as the case may be; provided,
however, that the failure of any Lender to make any Loan shall not in itself
relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). The
Loans
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comprising each Borrowing shall be in an aggregate principal amount which is (i)
an integral multiple of $100,000 and not less than $500,000 in the case of
Eurodollar Loans and (ii) an integral multiple of $100,000 in the case of ABR
Loans (or, in the case of ABR Loans, an aggregate principal amount equal to the
remaining balance of the Tranche A Revolving Credit Commitments, Tranche B
Revolving Credit Commitments or Tranche B Term Loan Commitments, as the case may
be).
(b) A particular Borrowing of any Class shall consist solely of ABR Loans
or Eurodollar Loans of such Class, as the Borrower may request pursuant to
Section 2.03. Each Lender may at its option fulfill its Commitment with respect
to any Eurodollar Loan by causing any domestic or foreign branch or Affiliate of
such Lender to make such Loan; provided that any exercise of such option shall
not result in any increased cost to the Borrower for withholding pursuant to
Section 2.19, and shall not affect the obligation of the Borrower to repay such
Loan in accordance with the terms of this Agreement and the applicable Note.
Borrowings of more than one Type and Eurodollar Loans bearing interest for more
than one specific Interest Period may be outstanding at the same time; provided,
however, that the Borrower shall not be entitled to request any Borrowing which,
if made, would result in an aggregate of more than eight separate Eurodollar
Loans of any Lender being outstanding hereunder at any one time. For purposes of
the foregoing, Loans having different Interest Periods, regardless of whether
they commence on the same date, shall be considered separate Loans.
(c) Subject to Section 2.02(g), each Lender shall make a Loan in the
amount of its pro rata portion, as determined under Section 2.16, of each
Borrowing hereunder on the proposed date thereof by wire transfer of immediately
available funds to the Administrative Agent in Boston, Massachusetts, not later
than 12:00 Noon, Boston time, and the Administrative Agent shall by 2:00 p.m.,
Boston time, credit the amounts so received to the general deposit account of
the Borrower with the Administrative Agent or, if a Borrowing shall not occur on
such date because any condition precedent herein specified shall not have been
met, return the amounts so received to the respective Lenders.
(d) If the Administrative Agent has not received from the Borrower the
payment required by Section 2.21(g) by 12:30 p.m., Boston time, on the date on
which the Issuing Bank has notified the Borrower and the Administrative Agent
that payment of a draft presented under any Letter of Credit of any Class will
be made, as provided in Section 2.21(g), the Administrative Agent will promptly
notify the Issuing Bank and each Lender of the Letter of Credit Disbursement of
such Class and, in the case of each Lender, its pro rata share (based on the
percentage of the aggregate Revolving Credit Commitments of the applicable Class
represented by such Lender's Revolving Credit Commitment of such Class) of such
Letter of Credit Disbursement. Not later than 2:00 p.m., Boston time, on such
date, each Lender shall make available its pro rata share, as so determined, of
such Letter of Credit Disbursement, in Federal or other funds immediately
available in Boston, to the Administrative Agent at its address set forth in
Section 9.01, and the Administrative Agent will promptly make such funds
available to the Issuing Bank. The Administrative Agent will promptly remit to
each Lender that shall have made such funds available its pro rata share, as so
determined, of any amounts
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subsequently received by the Administrative Agent from the Borrower in respect
of such Letter of Credit Disbursement.
(e) Unless the Administrative Agent shall have received notice from a
Lender prior to the date of any Borrowing, or prior to the time of any required
payment by such Lender in respect of a Letter of Credit Disbursement, that such
Lender will not make available to the Administrative Agent such Lender's pro
rata portion of such Borrowing or payment, the Administrative Agent may assume
that such Lender has made such portion available to the Administrative Agent on
the date of such Borrowing or payment in accordance with Section 2.02(c) or (d),
as applicable, and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower or Issuing Bank, as applicable, on
such date a corresponding amount. If and to the extent that such Lender shall
not have made such portion available to the Administrative Agent, and the
Administrative Agent shall have made such amount available to the Borrower, such
Lender and the Borrower severally agree to repay to the Administrative Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower or the
Issuing Bank (or, if the Administrative Agent and the Issuing Bank are the same
Person, from the date of such payment in respect of a Letter of Credit
Disbursement), as applicable, until the date such amount is repaid to the
Administrative Agent at, (i) in the case of the Borrower, the interest rate
applicable thereto pursuant to Section 2.06 or 2.21(g), as applicable, and (ii)
in the case of such Lender, the Federal Funds Effective Rate. If such Lender
shall repay to the Administrative Agent such corresponding amount in respect of
a Borrowing, such amount shall constitute such Lender's Loan as part of such
Borrowing for purposes of this Agreement.
(f) Notwithstanding any other provision of this Agreement, the Borrower
shall not be entitled to request (i) any Tranche A Revolving Credit Borrowing if
the Interest Period requested with respect thereto would end after the Tranche A
Maturity Date or (ii) any Tranche B Revolving Credit Borrowing if the Interest
Period requested with respect thereto would end after the Tranche B Conversion
Date. Any Revolving Credit Borrowing which cannot be refinanced as a Eurodollar
Borrowing by reason of the preceding sentence shall be automatically converted
at the end of the Interest Period in effect for such Borrowing into an ABR
Revolving Credit Borrowing. Further, and notwithstanding any other provision of
this Agreement to the contrary, the Borrower shall not be entitled to request,
nor shall any Lender be required to make, any Eurodollar Loan during the
existence of a Default or an Event of Default unless the Required Lenders
otherwise agree.
(g) The Borrower may refinance (i) all or any part of any Revolving Credit
Borrowing of either Class with a Revolving Credit Borrowing of the same Class
and of the same or a different Type and (ii) all or any part of any Tranche B
Revolving Credit Borrowing outstanding on the Tranche B Conversion Date with a
Tranche B Term Borrowing of the same or a different Type, in each case upon the
terms and subject to the conditions and limitations set forth in this Agreement,
but without being required to comply with the conditions set forth in Section
4.02 or 4.03 with respect to any Rollover Borrowing, except as expressly
provided therein. Any Revolving Credit Borrowing or part thereof so refinanced
shall be deemed to be
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repaid or prepaid in accordance with Section 2.04 or 2.12, as applicable, with
the proceeds of such new Revolving Credit Borrowing or Tranche B Term Borrowing,
as applicable; and the proceeds of such new Revolving Credit Borrowing or
Tranche B Term Borrowing, as applicable (to the extent they do not exceed the
principal amount of the Revolving Credit Borrowing being refinanced), shall not
be paid by the Lenders to the Administrative Agent or by the Administrative
Agent to the Borrower pursuant to Section 2.02(c).
SECTION 2.03. Notice of Borrowings. The Borrower shall give the
Administrative Agent written or telecopy notice in the form of Exhibit M hereto
(or telephone notice promptly confirmed in writing or by telecopy in the form of
Exhibit M hereto) (a) in the case of a Eurodollar Borrowing, not later than
10:00 a.m., Boston time, two Business Days before a proposed borrowing and (b)
in the case of an ABR Borrowing, not later than 11:00 a.m., Boston time, on the
Business Day of the proposed borrowing; provided that no Notice of Borrowing
shall be required with respect to an ABR Borrowing of any Class which does not
increase the aggregate outstanding principal amount of all previously existing
ABR Borrowings of such Class. Such notice shall be irrevocable and shall in each
case refer to this Agreement and specify (i) the applicable Class and Type of
such Borrowing; (ii) the date of such Borrowing (which shall be a Business Day)
and the amount thereof; and (iii) if such Borrowing is to be a Eurodollar
Borrowing, the Interest Period with respect thereto. If no election as to the
Type of Borrowing is specified in any such notice, then the requested Borrowing
shall be an ABR Borrowing. If no Interest Period with respect to any Eurodollar
Borrowing is specified in any such notice, then the Borrower shall be deemed to
have selected an Interest Period of one month's duration. If the Borrower shall
not have given notice, in accordance with this Section 2.03, of its election to
refinance a Revolving Credit Borrowing prior to the end of the Interest Period
in effect for such Borrowing, then the Borrower shall (unless such Borrowing is
repaid at the end of such Interest Period) be deemed to have given notice of an
election to refinance such Borrowing with an ABR Borrowing. The Administrative
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.03 and of each Lender's pro rata portion of the requested Borrowing.
SECTION 2.04. Notes; Repayment of Loans. The Tranche A Revolving Loans and
Tranche B Loans made by each Lender shall be evidenced by a Tranche A Revolving
Credit Note or a Tranche B Note, as applicable, duly executed and delivered on
behalf of the Borrower, dated the Closing Date, in substantially the form
attached hereto as Exhibit B-1 or B-2, as applicable, with the blanks
appropriately filled, payable to the order of such Lender in a principal amount
equal to such Lender's Tranche A Revolving Credit Commitment (in the case of its
Tranche A Revolving Credit Note) and Tranche B Revolving Credit Commitment (in
the case of its Tranche B Note). The outstanding principal balance of each Loan,
as evidenced by the applicable Note, shall be payable (a) in the case of a
Tranche A Revolving Loan, on the last day of the Interest Period applicable to
such Loan and on the Tranche A Maturity Date, (b) in the case of a Tranche B
Revolving Loan, on the last day of the Interest Period applicable to such Loan
and on the Tranche B Conversion Date and (c) in the case of a Tranche B Term
Loan, as provided in Section 2.11. Each Note shall bear interest from the date
of the first Borrowing hereunder on the outstanding principal balance thereof as
set forth in Section 2.06. Each Lender shall, and is hereby authorized by the
Borrower to, endorse on
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the schedule attached to each Note delivered to such Lender (or on a
continuation of such schedule attached to such Note and made a part thereof), or
otherwise to record in such Lender's internal records, an appropriate notation
evidencing the date and amount of each applicable Loan from such Lender, each
payment and prepayment of principal of any such Loan, each payment of interest
on any such Loan and the other information provided for on such schedule;
provided, however, that the failure of any Lender to make such a notation or any
error therein shall not affect the obligation of the Borrower to repay the Loans
made by such Lender in accordance with the terms of this Agreement and the
applicable Notes.
SECTION 2.05. Fees. (a) The Borrower shall pay to the Administrative Agent
for the account of each Lender, on the last day of March, June, September and
December in each year, and on the last day of the Tranche A Revolving Credit
Availability Period, a commitment fee (a "Tranche A Commitment Fee") on the
average daily unused amount of the Tranche A Revolving Credit Commitment of such
Lender during the preceding quarter (or shorter period commencing with the date
of this Agreement or ending with the last day of the Tranche A Revolving Credit
Availability Period), equal to (i) during the period prior to the Pricing
Adjustment Date, 0.375% per annum and (ii) during the period commencing on the
Pricing Adjustment Date, (A) during any Level I Pricing Period or Level II
Pricing Period, 0.25% per annum, (B) during any Level III Pricing Period, 0.375%
per annum, (C) during any Level IV Pricing Period or Level V Pricing Period,
0.50% per annum and, (D) during any period when there is a Sub-investment Grade
Rating, the Tranche A Rating Premium. The "unused amount" of the Tranche A
Revolving Credit Commitment of a Lender on any date means the amount of such
Lender's Tranche A Revolving Credit Commitment on such date, less the sum of its
outstanding Tranche A Revolving Loans on such date and its Tranche A Letter of
Credit Exposure on such date. All Tranche A Commitment Fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days. The
Tranche A Commitment Fee due to each Lender shall commence to accrue from the
date of this Agreement and shall cease to accrue on the last day of the Tranche
A Revolving Credit Availability Period.
(b) The Borrower shall pay to the Administrative Agent for the account of
each Lender, on the last day of March, June, September and December in each
year, and on the last day of the Tranche B Revolving Credit Availability Period,
a commitment fee (a "Tranche B Commitment Fee") on the average daily unused
amount of the Tranche B Revolving Credit Commitment of such Lender during the
preceding calendar quarter (or shorter period commencing with the date of this
Agreement or ending with the last day of the Tranche B Revolving Credit
Availability Period), equal to (i) during the period prior to the Pricing
Adjustment Date, 0.50% per annum and (ii) during the period commencing on the
Pricing Adjustment Date, (A) during any Level I Pricing Period, 0.25% per annum,
(B) during any Level II Pricing Period, 0.375% per annum, (C) during any Level
III Pricing Period, Level IV Pricing Period or Level V Pricing Period, 0.50% per
annum and, (D) during any period when there is a Sub-investment Grade Rating,
the Tranche B Rating Premium. The "unused amount" of the Tranche B Revolving
Credit Commitment of a Lender on any date means the amount of such Lender's
Tranche B Revolving Credit Commitment on such date, less the sum of its
outstanding Tranche B Revolving Loans on such date and its Tranche B Letter of
Credit
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Exposure on such date. All Tranche B Commitment Fees shall be computed on the
basis of the actual number of days elapsed in a year of 360 days. The Tranche B
Commitment Fee due to each Lender shall commence to accrue from the date of this
Agreement and shall cease to accrue on the last day of the Tranche A Revolving
Credit Availability Period.
(c) The Borrower agrees to pay to (i) the Administrative Agent, for its
own account, the annual administration fee and all other fees and expenses
provided for in the letter agreement dated May 17, 1996 from the Administrative
Agent to National Propane Corp., and accepted by National Propane Corp. on May
22, 1996, and (ii) the Syndication Agent and Bank of America NT & SA, for the
account of each, all fees and expenses provided for in the letter agreement from
Bank of America NT & SA to National Propane Corp., and accepted by National
Propane Corp. (the letter agreements referred to in the foregoing clauses (i)
and (ii) being referred to herein jointly as the "Work Letters"). The first
payment of the annual administration fee will be due on the Closing Date and
each payment of such annual administration fee thereafter will be due in advance
on each anniversary of the Closing Date. Such fees shall be in addition to
reimbursement of the Agents' reasonable out-of-pocket expenses.
(d) All Fees shall be paid on the dates due, in immediately available
funds. Once paid, none of the Fees shall be refundable under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to Section 2.07, each Tranche
A Revolving Loan comprising an ABR Borrowing shall bear interest for each day
from the date such Loan is made until it becomes due (computed on the basis of
the actual number of days elapsed over a year of 360 days) at a rate per annum
equal to the Alternate Base Rate, plus, during any period when there is a
Sub-investment Grade Rating, the Tranche A Rating Premium.
(b) Subject to Section 2.07, each Tranche B Revolving Loan or Tranche B
Term Loan comprising an ABR Borrowing shall bear interest for each day from the
date such Loan is made until it becomes due (computed on the basis of the actual
number of days elapsed over a year of 360 days) at a rate per annum equal to the
Alternate Base Rate, plus the Applicable Tranche B ABR Margin, plus, during any
period when there is a Sub-investment Grade Rating, the Tranche B Rating
Premium.
(c) Subject to Section 2.07, each Tranche A Revolving Loan comprising a
Eurodollar Borrowing shall bear interest for each day from the date such Loan is
made until it becomes due (computed on the basis of the actual number of days
elapsed over a year of 360 days) at a rate per annum equal to the Adjusted LIBO
Rate for the Interest Period in effect for such Borrowing, plus the Applicable
Tranche A Eurodollar Margin, plus, during any period when there is a
Sub-investment Grade Rating, the Tranche A Rating Premium.
(d) Subject to Section 2.07, each Tranche B Revolving Loan or Tranche B
Term Loan comprising a Eurodollar Borrowing shall bear interest for each day
from the date such Loan is made until it becomes due (computed on the basis of
the actual number of days elapsed
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over a year of 360 days) at a rate per annum equal to the Adjusted LIBO Rate for
the Interest Period in effect for such Borrowing, plus the Applicable Tranche B
Eurodollar Margin, plus, during any period when there is a Sub-investment Grade
Rating, the Tranche B Rating Premium.
(e) Any change in any Applicable Margin, the Tranche A Rating Premium or
the Tranche B Rating Premium required hereunder shall be deemed to occur five
Business Days after the date the Borrower delivers its financial statements
required by Section 5.02(a) or (b), as the case may be, in respect of its most
recent fiscal quarter and the certificate required by Section 5.02(c); provided
that if the Borrower fails to deliver such financial statements and certificate
on or before the date such statements and certificate are required to be
delivered pursuant to Section 5.02(a) or (b), as the case may be, and Section
5.02(c), the Applicable Margin, the Tranche A Rating Premium and the Tranche B
Rating Premium for the period from such required date until the date such
statements and certificate are actually delivered shall be calculated as if a
Level V Pricing Period were in effect, and after the date such statements and
certificate are actually delivered the Applicable Margin, the Tranche A Rating
Premium and the Tranche B Rating Premium shall be determined as otherwise
provided for herein.
(f) Interest on each Loan shall be payable on the Interest Payment Dates
applicable to such Loan, except as otherwise provided in this Agreement. The
applicable Alternate Base Rate or Adjusted LIBO Rate for each Interest Period or
day within an Interest Period, as the case may be, shall be determined by the
Administrative Agent, and such determination shall be conclusive absent
demonstrable error.
SECTION 2.07. Default Interest. If and for so long as any Event of Default
or Default shall have occurred and be continuing, interest shall accrue on the
principal amount of the Loans, and to the extent permitted by law, on the
outstanding amount of all other Facilities Obligations (except as expressly
provided in clause (ii) below), during the period from (and including) the date
of such Event of Default or Default to (but not including) the date such Event
of Default or Default is cured (after as well as before judgment) at the sum of
(a) (i) in the case of principal or interest on any Loan of any Class, the rate
per annum (computed on the basis of the actual number of days elapsed over a
year of 360 days) applicable to ABR Loans of such Class pursuant to Section 2.06
plus 1.00% or (ii) in the case of any other amount (other than the Tranche A
Commitment Fees, the Tranche B Commitment Fees and fees described in clauses (b)
and (e) of the definition of Facilities Obligations), a rate per annum (computed
on the basis of the actual number of days elapsed over a year of 360 days) equal
to the rate applicable to ABR Tranche A Revolving Loans pursuant to Section 2.06
plus 1.00%, and (b) if such Event of Default or Default is caused by a failure
to pay principal of or interest on any Loan or any other amount due under this
Agreement or any other Loan Document, by acceleration or otherwise, 1.00% on
such overdue amount. The Borrower shall pay all such accrued but unpaid interest
from time to time upon demand.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a
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Eurodollar Borrowing the Administrative Agent shall have determined that dollar
deposits in the principal amounts of the Loans comprising such Borrowing are not
generally available in the applicable interbank market, or that the rates at
which such dollar deposits are being offered will not adequately and fairly
reflect the cost to any Lender of making or maintaining its Eurodollar Loan
during such Interest Period, or that reasonable means do not exist for
ascertaining the Adjusted LIBO Rate, the Administrative Agent shall, as soon as
practicable thereafter, give written or telecopy notice of such determination to
the Borrower and the Lenders. In the event of any such determination, any
request by the Borrower for a Eurodollar Borrowing pursuant to Section 2.03 or
2.10 shall, until the Administrative Agent shall have advised the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
be deemed to be a request for an ABR Borrowing. Each determination by the
Administrative Agent hereunder shall be conclusive absent demonstrable error.
SECTION 2.09. Termination and Reduction of Commitments. (a) The Tranche A
Revolving Credit Commitments shall be automatically terminated at 5:00 p.m.,
Boston time, on (i) August 31, 1996, if the Closing hereunder in accordance with
Article IV has not occurred by such date and (ii) otherwise, the Tranche A
Maturity Date. The Tranche B Revolving Credit Commitments shall be automatically
terminated at 5:00 p.m., Boston time, on (i) August 31, 1996, if the Closing
hereunder in accordance with Article IV has not occurred by such date and (ii)
otherwise, the Tranche B Conversion Date.
(b) Upon at least three Business Days' prior irrevocable written or
telecopy notice to the Administrative Agent, the Borrower may at any time in
whole permanently terminate, or from time to time in part permanently reduce,
the Tranche A Revolving Credit Commitments and/or the Tranche B Revolving Credit
Commitments; provided, however, that (i) each partial reduction of the Revolving
Credit Commitments of any Class shall be in a minimum aggregate principal amount
which is an integral multiple of $100,000 and not less than $500,000 and (ii)
the Tranche A Revolving Credit Commitments may not be so terminated in whole or
in part unless and until (A) the Tranche B Revolving Credit Commitments have
been terminated in whole, (B) the Tranche B Revolving Loans and Tranche B Term
Loans, together with interest, fees and all other obligations in respect
thereof, have been paid in full, (C) all Tranche B Letters of Credit (other than
any such Letters of Credit for which the Borrower has deposited with the
Administrative Agent pursuant to the Cash Collateral Agreement an amount in cash
equal to 100% of the undrawn amount of such Letters of Credit as provided in
Section 2.21(k)) have been cancelled or have expired and (D) all Tranche B
Letter of Credit Disbursements have been reimbursed in full.
(c) In the event, and on each occasion, that the Borrower is required to
prepay or repay Tranche A Revolving Loans and/or to provide cash collateral for
Tranche A Letters of Credit as provided in Section 2.11(e) or (f) and Section
2.11(h), then on the date of such required action, the Tranche A Revolving
Credit Commitments shall be automatically and permanently reduced by an amount
equal to the sum of such required payment and cash collateral. In the event, and
on each occasion, that the Borrower is required to prepay or repay Tranche B
Revolving Loans and/or to provide cash collateral for Tranche B Letters of
Credit as provided in Section 2.11(e) or (f) and Section 2.11(h), then on the
date of such
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required action, the Tranche B Revolving Credit Commitments shall be
automatically and permanently reduced by an amount equal to the sum of such
required payment and cash collateral. In addition, in the event that the amount
of any Excess Proceeds referred to in paragraph (e) or (f) of Section 2.11 which
is allocable to the Facilities Obligations exceeds the amount of all outstanding
Loans and Letter of Credit Exposure, the Commitments shall be further reduced by
such excess, by reduction, first to the Tranche B Revolving Credit Commitments
(if prior to the Tranche B Conversion Date) and, second, to the Tranche A
Revolving Credit Commitments. For purposes of applying the requirements of this
Section 2.09(c), the amount of any Excess Proceeds referred to in paragraph (e)
or (f) of Section 2.11 which is allocable to the Facilities Obligations shall be
calculated as if the definition set forth in the last sentence of Section
2.11(e) included, in addition, the maximum aggregate amount of the unused
Tranche B Revolving Credit Commitments.
(d) The Tranche A Revolving Credit Commitments and Tranche B Revolving
Credit Commitments shall be automatically terminated upon the occurrence of a
Change in Control.
(e) Each reduction in the Revolving Credit Commitments of any Class shall
be made ratably among the Lenders in accordance with their respective Revolving
Credit Commitments of such Class. The Borrower shall pay to the Administrative
Agent for the account of the Lenders, on the date of each termination or
reduction of the Revolving Credit Commitments of any Class, the Commitment Fees
on the amount of the Revolving Credit Commitments of such Class so terminated or
reduced accrued to the date of such termination or reduction.
SECTION 2.10. Conversion and Continuation of Tranche B Term Borrowings.
The Borrower shall have the right at any time upon prior irrevocable notice to
the Administrative Agent (a) not later than 11:00 a.m., Boston time, on the
Business Day of conversion, to convert any Eurodollar Tranche B Term Borrowing
into an ABR Tranche B Term Borrowing, (b) not later than 11:00 a.m., Boston
time, two Business Days prior to conversion or continuation, to convert any ABR
Tranche B Term Borrowing into a Eurodollar Tranche B Term Borrowing or to
continue any Eurodollar Tranche B Term Borrowing as a Eurodollar Tranche B Term
Borrowing for an additional Interest Period and (c) not later than 11:00 a.m.,
Boston time, two Business Days prior to conversion, to convert the Interest
Period with respect to any Eurodollar Tranche B Term Borrowing to another
permissible Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata among the
Lenders in accordance with the respective principal amounts of the Tranche
B Term Loans comprising the converted or continued Tranche B Term
Borrowing;
(ii) the aggregate principal amount of such Tranche B Term Borrowing
converted into or continued as (A) a Eurodollar Tranche B Term Borrowing,
shall be an integral multiple of $100,000 and not less than $500,000 or
(B) an ABR Tranche B
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Term Borrowing, shall be the lesser of (I) the remaining outstanding
principal amount of such Borrowing and (II) an integral multiple of
$100,000;
(iii) each conversion or continuation shall be effected by each
Lender by applying the proceeds of the new Tranche B Term Loan of such
Lender resulting from such conversion or continuation to the Tranche B
Term Loan (or portion thereof) of such Lender being converted or
continued; accrued interest on a Eurodollar Tranche B Term Loan (or
portion thereof) being converted or continued shall be paid by the
Borrower at the time of conversion;
(iv) if any Eurodollar Tranche B Term Borrowing is converted or
continued at a time other than the end of the Interest Period applicable
thereto, the Borrower shall pay, upon demand, any amounts due to the
Lenders pursuant to Section 2.15;
(v) any portion of a Tranche B Term Borrowing maturing or required
to be repaid in less than one month may not be converted into or continued
as a Eurodollar Tranche B Term Borrowing;
(vi) unless the Required Lenders otherwise agree, during the
existence of a Default or an Event of Default, the Borrower shall not be
entitled to elect to have any Tranche B Term Borrowing converted into or
continued as a Eurodollar Tranche B Term Borrowing;
(vii) any portion of a Tranche B Term Borrowing which cannot be
converted into or continued as a Eurodollar Tranche B Term Borrowing by
reason of clause (v) or (vi) above shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Tranche B Term Borrowing;
(viii) no Interest Period may be selected for any Eurodollar Tranche
B Term Borrowing that would end later than a Tranche B Repayment Date
occurring on or after the first day of such Interest Period if, after
giving effect to such selection, the aggregate outstanding amount of (A)
Eurodollar Tranche B Term Borrowings with Interest Periods ending on or
prior to such Tranche B Repayment Date and (B) the ABR Tranche B Term
Borrowings would not be at least equal to the principal amount of Tranche
B Term Borrowings to be paid on such Tranche B Repayment Date.
Each notice pursuant to this Section 2.10 shall be irrevocable and shall
refer to this Agreement and specify (I) the principal amount, the Type and, in
the case of a Eurodollar Tranche B Term Borrowing, the Interest Period of the
Tranche B Term Borrowing that the Borrower requests be converted or continued,
(II) whether such Tranche B Term Borrowing is to be converted to or continued as
a Eurodollar Tranche B Term Borrowing or an ABR Tranche B Term Borrowing, (III)
if such notice requests a conversion, the date of such conversion (which shall
be a Business Day) and (IV) if such Tranche B Term Borrowing is to be converted
to or continued as a Eurodollar Tranche B Term Borrowing, the Interest Period
with respect thereto. If no Interest Period is specified in any such notice with
respect to any
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conversion to or continuation as a Eurodollar Tranche B Term Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the other Lenders of any notice
given pursuant to this Section 2.10 and of each Lender's pro rata portion of any
converted or continued Tranche B Term Borrowing. If the Borrower shall not have
given notice in accordance with this Section 2.10 to continue any Tranche B Term
Borrowing into a subsequent Interest Period (and shall not otherwise have given
notice in accordance with this Section 2.10 to convert such Tranche B Term
Borrowing), such Tranche B Term Borrowing shall, at the end of the Interest
Period applicable thereto (unless repaid pursuant to the terms hereof),
automatically be continued into a new Interest Period as an ABR Tranche B Term
Borrowing.
SECTION 2.11. Mandatory Repayments and Prepayments. (a) On the Tranche A
Maturity Date, all Tranche A Revolving Credit Borrowings shall be due and
payable to the extent not previously paid.
(b) On the Tranche B Conversion Date, all Tranche B Revolving Credit
Borrowings shall be due and payable to the extent not previously paid (and shall
be refinanced with Tranche B Term Loans).
(c) Subject to adjustment as provided in Section 2.11(h) and Section
2.12(b), the Borrower shall repay the Tranche B Term Loans and reduce the
Tranche B Letter of Credit Exposure in 12 quarterly installments (each of which
shall be equal to one-twelfth of the sum of the aggregate principal amount of
the Tranche B Term Loans and the Tranche B Letter of Credit Exposure on the
Tranche B Conversion Date), commencing on September 30, 1998, and continuing on
the last day of every third calendar month thereafter through June 30, 2001 (the
due date of each such installment being called a "Tranche B Repayment Date").
All payments under this paragraph (c) shall be applied (I) first, to repay any
outstanding Tranche B Term Loans and (II) second, after the Tranche B Term Loans
have been paid in full, to reduce the Tranche B Letter of Credit Exposure. Any
such payments so applied to reduce the Tranche B Letter of Credit Exposure shall
be deposited with the Administrative Agent pursuant to the Cash Collateral
Agreement as provided in Section 2.21(k).
(d) During each year, the Borrower will cause a period of at least 30
consecutive days to occur, at any time between March 1 and August 31 of such
year, during which no Tranche A Revolving Credit Borrowings shall be
outstanding.
(e) If at any time the Borrower or any of the Restricted Subsidiaries
disposes of property or any property shall be damaged, destroyed or taken in
eminent domain or there shall be title insurance proceeds with respect to such
property, in any such case, with the result that there are Excess Proceeds, and
the Borrower does not apply such Excess Proceeds in the manner described in
Section 6.07(c)(iii)(B)(I), the Borrower shall prepay, upon notice as provided
in paragraph (g) of this Section 2.11 (which notice shall be given not later
than 360 days after the date of such sale of property), a principal amount of
the outstanding Facilities Obligations equal to the amount of such remaining
Excess Proceeds allocable to the Facilities Obligations, determined by
allocating such remaining Excess Proceeds pro rata among the
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Lenders and the holders of Parity Debt, if any, outstanding on the date such
prepayment is to be made, according to the aggregate then unpaid principal
amounts of the Facilities Obligations and Parity Debt (and the Make Whole Amount
on the principal amount of the Mortgage Notes to be prepaid). For purposes of
this Section 2.11, the "aggregate then unpaid principal amount of the Facilities
Obligations" shall equal the sum of (i) the aggregate principal amount of the
outstanding Loans, (ii) the Letter of Credit Exposure and (iii) the maximum
aggregate amount of the unused Tranche A Revolving Credit Commitments.
(f) In the event that damage, destruction or a taking shall occur in
respect of all or a portion of the properties subject to any of the Collateral
Documents, or there shall be proceeds under title insurance policies with
respect to any real property, all Net Insurance Proceeds (as defined in the
Mortgage), self-insurance amounts, Net Awards (as defined in the Mortgage) or
title insurance proceeds which, as of any date, shall not theretofore have been
applied to the cost of Restoration (as defined in the Mortgage) shall be deemed
to be proceeds of property disposed of voluntarily, shall be subject to the
provisions of Section 6.07(c) and, if subdivision (iii)(B)(II) of Section
6.07(c) is applicable thereto, shall be subject to the prepayment provisions of
paragraph (e) of this Section 2.11; provided that, if any such event or
circumstances (individually or together with all other related events and
circumstances) shall result in proceeds of more than $25,000,000 in the
aggregate, the Borrower shall not apply such proceeds to replacement or other
assets or undertake any Restoration without the prior written consent of the
Required Lenders.
(g) The Borrower will give the Administrative Agent irrevocable written
notice of each prepayment under paragraph (e) or (f) of this Section 2.11 not
less than 10 days and not more than 30 days prior to the date fixed for such
prepayment, in each case specifying such prepayment date, the aggregate
principal amount of the Facilities Obligations to be prepaid, the principal
amount of each issue of Parity Debt to be prepaid and the paragraph under which
such prepayment is to be made. Each Lender shall receive, on the date scheduled
for any such prepayment, a certificate of a Financial Officer of the Borrower
certifying that the applicable conditions of this Section 2.11 have been
fulfilled and specifying the particulars of such fulfillment. Such certificate
shall set forth the principal amount of the Facilities Obligations being prepaid
and specify how such amount was determined, and certify that such amount has
been computed in accordance with this Section 2.11.
(h) All mandatory prepayments of the Facilities Obligations under
paragraphs (e) and (f) of this Section 2.11 shall be applied (i) first, to pay
or prepay any outstanding Tranche B Revolving Loans or Tranche B Term Loans and,
to the extent that the remaining amount of such prepayment is greater than the
aggregate principal amount of outstanding Tranche B Loans, to reduce the Tranche
B Letter of Credit Exposure as provided in Section 2.21(k) and (ii) second, to
pay or prepay any outstanding Tranche A Revolving Loans and, to the extent that
the remaining amount of such prepayment is greater than the aggregate principal
amount of outstanding Tranche A Revolving Loans, to reduce the Tranche A Letter
of Credit Exposure as provided in Section 2.21(k). All such mandatory
prepayments so applied on or after the Tranche B Conversion Date shall be
applied to reduce the amount of scheduled payments due under Section 2.11(c)
after the date of such prepayment in the inverse order of maturity
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(without affecting the requirement that such prepayments be applied first to pay
all outstanding Tranche B Term Loans and only thereafter to reduce the Tranche B
Letter of Credit Exposure). Subject to the foregoing provisions, any such
mandatory prepayment of Loans of any Class shall be applied to prepay all ABR
Loans of such Class before any Eurodollar Loans of such Class are prepaid. Any
such payments under paragraphs (e) and (f) of this Section 2.11 so applied to
reduce the Letter of Credit Exposure shall be deposited with the Trustee and
applied as provided in the Trust Agreement.
(i) In the event and on each occasion that the sum of (i) the aggregate
outstanding principal amount of the Tranche A Revolving Loans and (ii) the
Tranche A Letter of Credit Exposure exceeds the aggregate amount of the Tranche
A Revolving Credit Commitments at such time, the Borrower shall immediately
prepay Tranche A Revolving Loans (and, to the extent that the amount of such
excess is greater than the aggregate principal amount of outstanding Tranche A
Revolving Loans, reduce the Tranche A Letter of Credit Exposure by making a
deposit with the Administrative Agent pursuant to the Cash Collateral Agreement
as provided in Section 2.21(k)) in an aggregate principal amount equal to such
excess.
(j) In the event and on each occasion that the sum of (i) the aggregate
outstanding principal amount of the Tranche B Revolving Loans and (ii) the
Tranche B Letter of Credit Exposure exceeds the aggregate amount of the Tranche
B Revolving Credit Commitments at such time, the Borrower shall immediately
prepay Tranche B Revolving Loans (and, to the extent that the amount of such
excess is greater than the aggregate principal amount of outstanding Tranche B
Revolving Loans, reduce the Tranche B Letter of Credit Exposure by making a
deposit with the Administrative Agent pursuant to the Cash Collateral Agreement
as provided in Section 2.21(k)) in an aggregate principal amount equal to such
excess.
(k) In the event that a Change of Control occurs, (i) the Borrower shall
immediately prepay all the Tranche A Revolving Loans (and, to the extent that
the amount of such excess is greater than the aggregate principal amount of
outstanding Tranche A Revolving Loans), reduce the Tranche A Letter of Credit
Exposure by making a deposit with the Administrative Agent pursuant to the Cash
Collateral Agreement as provided in Section 2.21(k)) in an aggregate principal
amount equal to such excess and (ii) the Borrower shall immediately prepay all
the Tranche B Revolving Loans (and, to the extent that the amount of such excess
is greater than the aggregate principal amount of outstanding Tranche A
Revolving Loans), reduce the Tranche B Letter of Credit Exposure by making a
deposit with the Administrative Agent pursuant to the Cash Collateral Agreement
as provided in Section 2.21(k)) in an aggregate principal amount equal to such
excess.
(l) Each payment of Borrowings pursuant to this Section 2.11 shall be
accompanied by accrued interest on the principal amount paid to but excluding
the date of payment. The repayments and prepayments of the Loans required by the
respective subsections of this Section 2.11 and the optional prepayments
permitted by Section 2.12 are separate and cumulative, so that any one such
repayment or prepayment shall reduce any other repayment or prepayment only as
and to the extent expressly specified herein. All payments under this
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Section 2.11 shall be subject to Section 2.15, but otherwise shall be without
premium or penalty.
SECTION 2.12. Optional Prepayments. (a) Subject to Section 2.12(b), the
Borrower shall have the right at any time and from time to time to prepay any
Borrowing or payment due under Section 2.11(c), in whole or in part, upon prior
written or telecopy notice (or telephone notice promptly confirmed by written or
telecopy notice) to the Administrative Agent (i) in the case of any prepayment
of amounts payable under Section 2.11(c), not later than 11:00 a.m., Boston
time, two Business Days in advance of the proposed prepayment, (ii) in the case
of any prepayment of Eurodollar Revolving Loans, not later than 11:00 a.m.,
Boston time, two Business Days in advance of the proposed prepayment and (iii)
in the case of any prepayment of ABR Revolving Loans, not later than 11:00 a.m.,
Boston time, on the Business Day of the proposed prepayment; provided, however,
that (A) each partial prepayment of ABR Loans shall be in a minimum amount of
$100,000 and each partial prepayment of Eurodollar Loans shall be in an amount
which is an integral multiple of $100,000 and not less than $500,000 and (B) a
partial prepayment of a Eurodollar Borrowing under this Section 2.12(a) shall
not be made that would result in the remaining aggregate outstanding principal
amount thereof being less than $500,000. Each notice of prepayment of any
Borrowing or payment due under Section 2.11(c) shall specify the prepayment
date, the Class, the Type and the Interest Period of the Borrowing to be prepaid
(in the case of a Eurodollar Borrowing), and the principal amount thereof to be
prepaid, shall be irrevocable and shall commit the Borrower to prepay such
Borrowing or payment by the amount stated therein on the date stated therein
unless revoked by written notice to the Administrative Agent on or before the
date set for prepayment. If the Borrower elects to revoke any such prepayment
commitment, the Borrower shall pay to the Administrative Agent,
contemporaneously with sending such notice of revocation, any and all costs and
expenses incurred by the Administrative Agent and the Lenders in preparing for
such prepayment, including, without limitation, costs for which the Lenders are
indemnified under Section 2.15.
(b) All prepayments under this Section 2.12 shall be subject to Section
2.15 but otherwise shall be without premium or penalty. All prepayments under
this Section 2.12 shall be accompanied by accrued interest on the principal
amount being prepaid to, but excluding, the date of payment. All prepayments
under this Section 2.12 of amounts payable under Section 2.11(c) shall be
applied to reduce the amount of scheduled payments of amounts due under Section
2.11(c) after the date of such prepayment on a pro rata basis (without affecting
the requirement that such prepayments be applied first to pay all outstanding
Tranche B Term Loans and only thereafter to provide cash collateral in respect
of Tranche B Letters of Credit). Subject to the foregoing provisions, any
optional prepayment of Loans of any Class pursuant to Section 2.12(a) shall be
applied to prepay all ABR Loans of such Class before any Eurodollar Loans of
such Class are prepaid.
SECTION 2.13. Reserve Requirements; Certain Changes in Circumstances. (a)
Notwithstanding any other provision herein, if after the date of this Agreement
any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or
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not having the force of law) shall change the basis of taxation of payments to
any Lender of the principal of or interest on any Eurodollar Loan made by such
Lender or any Fees or other amounts payable hereunder (in each case other than
changes in respect of (A) taxes, including franchise, capital or branch profits
taxes imposed on the overall net income of such Lender or (B) any taxes imposed
on such Lender by any jurisdiction other than the United States of America or
any political subdivision thereof), or shall impose, modify or deem applicable
any reserve, special deposit or similar requirement against assets of, deposits
with or for the account of or credit extended by such Lender (except any such
reserve requirement which is reflected in the Adjusted LIBO Rate) or shall
impose on such Lender or the applicable interbank market any other condition
affecting this Agreement or Eurodollar Loans made by such Lender, and the result
of any of the foregoing shall be to increase the cost to such Lender of making
or maintaining any Eurodollar Loan or to reduce the amount of any sum received
or receivable by such Lender hereunder or under the Notes (whether of principal,
interest or otherwise) or Letters of Credit by an amount deemed by such Lender
to be material, then from time to time the Borrower shall pay to such Lender
within 15 days after demand such additional amount or amounts as will compensate
such Lender for such additional costs incurred or reduction suffered (after such
Lender shall have allocated all such amounts fairly and equitably among all of
its customers of any class generally affected thereby).
(b) If any Lender shall have reasonably determined in good faith that the
adoption after the date hereof of any law, rule, regulation, agreement or
guideline regarding capital adequacy, or any change in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
of any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement,
the Letters of Credit or the Loans made by such Lender pursuant hereto to a
level below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender or such Lender's
holding company to be material, then from time to time the Borrower shall pay to
such Lender within 15 days after demand such additional amount or amounts as
will compensate such Lender or such Lender's holding company for any such
reduction suffered (after such Lender shall have allocated all such amounts
fairly and equitably among all of its customers of any class generally affected
thereby).
(c) A certificate of each Lender setting forth such amount or amounts
(with the calculations thereof in reasonable detail) as shall be necessary to
compensate such Lender or its holding company as specified in paragraph (a) or
(b) above, as the case may be, shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the amount
shown as due on any such certificate delivered by it within 15 days after its
receipt of the same.
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(d) No Lender shall be entitled to compensation under this Section 2.13
for any costs incurred or reductions suffered with respect to any date unless
such Lender shall have notified the Borrower that it will demand compensation
for such costs or reductions not more than 120 days after such Lender obtains
actual knowledge thereof; provided, however, that if any Lender fails to give
such notice within 120 days after it obtains actual notice of such an event,
such Lender shall, with respect to any amounts otherwise payable pursuant to
this Section 2.13 in respect of any costs resulting from such event, only be
entitled to payment under this Section 2.13 for costs incurred from and after
the date that such Lender does give such notice; and provided further, that each
Lender will, if requested by the Borrower, use reasonable efforts (subject to
overall policy consideration of such Lender) to designate a different lending
office for the Loans of such Lender affected by such event if such designation
will avoid the need for, or reduce the amount of, such additional amounts that
would otherwise be payable pursuant to this Section 2.13, provided that such
designation will not, in the sole opinion of such Lender, be disadvantageous to
such Lender. The Borrower agrees to pay all expenses incurred by any Lender in
utilizing another lending office of such Lender as requested by the Borrower
pursuant to this Section 2.13. The protection of this Section 2.13 shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, guideline or other change,
condition or circumstances which shall have occurred or been imposed.
SECTION 2.14. Change in Legality. (a) Notwithstanding any other provision
herein, if any change in any law or regulation or in the interpretation thereof
by any Governmental Authority charged with the administration or interpretation
thereof shall make it unlawful for any Lender to make or maintain any Eurodollar
Loan or to give effect to its obligations as contemplated hereby with respect to
any Eurodollar Loan, then, by written or telecopy notice to the Borrower and to
the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made by
such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request
for an ABR Loan unless such declaration shall be subsequently withdrawn;
and
(ii) require that all outstanding Eurodollar Loans made by it be
converted to ABR Loans, in which event all such Eurodollar Loans shall be
automatically converted to ABR Loans as of the effective date of such
notice as provided in Section 2.14(b).
In the event that any Lender shall exercise its rights under clause (i) or (ii)
above, all payments and prepayments of principal which would otherwise have been
applied to repay the Eurodollar Loans that would have been made by such Lender
or the converted Eurodollar Loans of such Lender shall instead be applied to
repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the Borrower by any
Lender shall be effective as to each Eurodollar Loan, if lawful, on the last day
of the Interest Period
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currently applicable to such Eurodollar Loan; in all other cases such notice
shall be effective on the date of receipt by the Borrower.
(c) Each Lender agrees that, upon the occurrence of any event giving rise
to the operation of Section 2.14 with respect to such Lender, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Lender) to designate another lending office for any Loans
affected by such event; provided that such designation is made on terms such
that the Lender and its lending office, in such Lender's reasonable judgment,
shall suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of this
Section 2.14. The Borrower agrees to pay all expenses incurred by any Lender in
utilizing another lending office of such Lender as requested by the Borrower
pursuant to this Section 2.14. Nothing in this Section 2.14 shall affect or
postpone any of the obligations of the Borrower or the rights of any Lender
elsewhere herein.
SECTION 2.15. Indemnity. The Borrower shall indemnify each Lender against
any loss or expense which such Lender may sustain or incur as a consequence of
(a) any failure by the Borrower to fulfill on the date of any borrowing
hereunder the applicable conditions set forth in Article IV, (b) any failure by
the Borrower to borrow or to refinance, convert or continue any Loan hereunder
after irrevocable notice of such borrowing, refinancing, conver sion or
continuation has been given pursuant to Section 2.03 or 2.10, (c) any payment,
prepayment or conversion of a Eurodollar Loan required by any other provision of
this Agreement or otherwise made or deemed made on a date other than the last
day of the Interest Period applicable thereto (provided that the foregoing shall
not constitute a waiver of the Borrower's rights against any Lender which is in
breach of its obligation to lend hereunder), (d) any default in payment or
prepayment of the principal amount of any Loan or any part thereof or interest
accrued thereon, as and when due and payable (at the due date thereof, whether
by scheduled maturity, acceleration, notice of prepayment or otherwise) or (e)
the occurrence of any Event of Default, including, in each such case, any loss
or reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall include an amount equal to the excess, if any, as
reasonably determined by such Lender, of (i) its cost of obtaining the funds for
the Loan being paid, prepaid, converted or not borrowed, refinanced, converted
or continued or not paid or prepaid (assumed to be the Adjusted LIBO Rate
applicable thereto) for the period from the date of such payment, prepayment,
conversion or failure to borrow, refinance, convert or continue or failure to
pay or prepay to the last day of the Interest Period for such Loan (or, in the
case of a failure to borrow, refinance, convert or continue, the Interest Period
for such Loan which would have commenced on the date of such failure) over (ii)
the amount of interest (as reasonably determined by such Lender) that would be
realized by such Lender in reemploying the funds so paid, prepaid, converted or
not borrowed, refinanced, converted or continued for such period or Interest
Period, as the case may be (based upon the purchase of debt securities
customarily issued by the Treasury of the United States of America which have a
maturity date approximating the last Business Day of such Interest Period). A
certificate of any Lender setting forth any amount or amounts which such Lender
is entitled to receive
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pursuant to this Section 2.15 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same.
SECTION 2.16. Pro Rata Treatment. Except as required under Section 2.13 or
2.14, each Borrowing, each payment or prepayment of principal of any Borrowing,
each payment of interest on the Loans, each payment of the Commitment Fees, each
reduction of the Commitments, each payment in respect of participations in
Letter of Credit Disbursements and each refinancing of any Borrowing with,
conversion of any Borrowing to, or continuation of any Borrowing as a Borrowing
of any Type shall be allocated pro rata among the Lenders in accordance with
their respective Commitments of the applicable Class (or, if such Commitments
shall have expired or been terminated, in accordance with the respective
principal amounts of their outstanding Loans of the applicable Class). Each
Lender agrees that in computing such Lender's portion of any Borrowing to be
made hereunder, the Administrative Agent may, in its discretion, round each
Lender's percentage of such Borrowing, computed in accordance with Exhibit A, to
the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim against
the Borrower, or pursuant to a secured claim under Section 506 of Title 11 of
the United States Code or other security or interest arising from, or in lieu
of, such secured claim, received by such Lender under any applicable bankruptcy,
insolvency or other similar law or otherwise (except pursuant to Section 2.20),
or by any other means, obtain payment (voluntary or involuntary) in respect of
any Loan or Loans as a result of which the unpaid principal portion of its Loans
of any Class shall be proportionately less than the unpaid principal portion of
the Loans of such Class of any other Lender, it shall be deemed simultaneously
to have purchased from such other Lender at face value, and shall promptly pay
to such other Lender the purchase price for, a participation in such Loans of
such other Lender, so that the aggregate unpaid principal amount of the Loans
and participations in Loans of any Class held by each Lender shall be in the
same proportion to the aggregate unpaid principal amount of all Loans of such
Class then outstanding as the principal amount of its Loans of such Class prior
to such exercise of banker's lien, setoff or counterclaim or other event was to
the principal amount of all Loans of such Class outstanding prior to such
exercise of banker's lien, setoff or counterclaim or other event; provided,
however, that, if any such purchase or purchases or adjustments shall be made
pursuant to this Section 2.17 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustment restored without interest (unless the party from which such recovery
is made is obligated by law to pay interest on the amount recovered, in which
case each of the Lenders shall be responsible for its pro rata share of such
interest). The Borrower expressly consents to the foregoing arrangements
(provided such set-off is permitted under Section 9.06) and agrees that any
Lender holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such
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Lender by reason thereof as fully as if such Lender had made a Loan directly to
the Borrower in the amount of such participation.
SECTION 2.18. Payments. (a) The Borrower shall make each payment
(including principal of or interest on any Borrowing or any Fees or other
amounts) hereunder or under any other Loan Document not later than 12:00 (noon),
Boston time, on the date when due in dollars to the Administrative Agent at its
offices at 100 Federal Street, Boston, Massachusetts 02110, in immediately
available funds, it being understood that written, telex or telecopy notice by
the Borrower to the Administrative Agent to make such a payment from the funds
in the Borrower's account at the Administrative Agent's office shall constitute
the making of such payment to the extent of such funds held in such account, so
long as such notice is received prior to such time and such payment is not
prohibited by law. Any such payment received after such time on any date shall
be deemed made on the next Business Day.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day, and
such extension of time shall in such case be included in the computation of
interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) All payments made by the Borrower under this
Agreement, the Notes and the Letters of Credit shall be made free and clear of,
and without deduction or withholding for or on account of, any present or future
stamp, documentary, excise, property or other taxes, levies, imposts, duties,
charges, assessments, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental Authority,
excluding income taxes, gross receipts taxes (excluding sales taxes), and
franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent, the Syndication Agent or any Lender as a result of a
present or former connection between the Administrative Agent, the Syndication
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from the Administrative Agent,
the Syndication Agent or such Lender having executed, delivered or performed its
obligations or received a payment under, or enforced, this Agreement, the Notes
or any Letters of Credit). If any such non-excluded taxes, levies, imposts,
duties, charges, fees deductions or withholdings ("Non-Excluded Taxes") are
required to be withheld from any amounts payable to the Administrative Agent,
the Syndication Agent or any Lender hereunder or under the Notes or any Letters
of Credit, then the Borrower shall withhold such Non-Excluded Taxes and the
amounts so payable to the Administrative Agent, the Syndication Agent or such
Lender shall be increased to the extent necessary to yield to the Administrative
Agent, the Syndication Agent or such Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement, the Notes and any Letters of Credit,
provided, however, that the Borrower shall not be required to increase any such
amounts payable to any Lender that is not incorporated or organized under the
laws of the United States of America or a state thereof if such Lender fails to
comply with the requirements of Section 2.19(b). Whenever any Non-
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Excluded Taxes are payable by the Borrower, as promptly as possible thereafter
the Borrower shall send to the Administrative Agent for its own account or for
the account of the Syndication Agent or such other Lender, as the case may be, a
certified copy of an original official receipt received by the Borrower showing
payment thereof. If the Borrower fails to pay any Non-Excluded Taxes after
notice from the Administrative Agent or any Lender when due to the appropriate
taxing authority or fails to remit to the Administrative Agent the required
receipts or other required documentary evidence, the Borrower shall indemnify
the Administrative Agent, the Syndication Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by the
Administrative Agent, the Syndication Agent or any Lender as a result of any
such failure.
(b) Each Lender that is not incorporated or organized under the laws of
the United States of America or a state thereof shall:
(i) deliver to the Borrower and the Administrative Agent (A) two
duly completed copies of United States Internal Revenue Service Form 1001
or 4224, or successor applicable form, as the case may be, and (B) an
Internal Revenue Service Form W-8 or W-9, or successor applicable form, as
the case may be;
(ii) deliver to the Borrower and the Administrative Agent two
further copies of any such form or certification on or before the date
that any such form or certification expires or becomes obsolete or after
the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and completing such
forms or certifications as may reasonably be requested by the Borrower or
the Administrative Agent;
unless in any such case a change (including any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender so advises the Borrower and the Administrative
Agent. Such Lender shall certify (x) in the case of a Form 1001 or 4224, that it
is entitled to receive payments under this Agreement and the Notes without
deduction or withholding of any United States Federal income taxes and (y) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
participant pursuant to Section 9.04 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this Section 2.19, provided that, in the case of a
participant, such participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.
(c) The provisions of this Section 2.19 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby and the repayment of any of
the Loans.
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(d) Any Agent or Lender claiming any indemnity payment or additional
amounts payable pursuant to this Section 2.19 shall use reasonable efforts
(consistent with legal and regulatory restrictions) to file any certificate or
document reasonably requested in writing by the Borrower or to change the
jurisdiction of its applicable lending office if the making of such a filing or
change would avoid the need for or reduce the amount of any such indemnity
payment or additional amounts that may thereafter accrue and would not, in the
sole determination of such Agent or Lender, be otherwise disadvantageous to such
Lender.
(e) Nothing contained in this Section 2.19 shall require any Agent or
Lender to make available any of its tax returns (or any other information that
it deems to be confidential or proprietary).
(f) No Lender shall be entitled to claim any indemnity payment or
additional amount payable pursuant to this Section 2.19 with respect to any tax
unless such Lender shall have notified the Borrower that it will demand
compensation for such payment or amount not more than 120 days after the date on
which such Lender becomes aware of the costs or reductions giving rise to such
claim. Failure on the part of any Lender to demand any indemnity payment or any
such additional amount with respect to any period shall not constitute a waiver
of such Lender's right to demand compensation with respect to any other period.
SECTION 2.20. Assignment of Commitments and Loans Under Certain
Circumstances. In the event that any Lender shall have delivered a notice or
certificate pursuant to Section 2.13 or 2.14, or the Borrower shall be required
to pay additional amounts to any Lender under Section 2.19, the Borrower shall
have the right, at its own expense, upon notice to such Lender and the
Administrative Agent, to require such Lender to transfer and assign without
recourse (in accordance with and subject to the provisions set forth in Section
9.04, including clause (i) of the proviso to Section 9.04(b)) all its interests,
rights and obligations under this Agreement to another financial institution
designated by the Borrower which shall assume such obligations; provided that
(i) no such assignment shall conflict with any law, rule, regulation or order of
any Governmental Authority and (ii) the Borrower shall pay, or cause the
assignee to pay, to the affected Lender in immediately available funds on the
date of such assignment the entire amount of principal of and interest accrued
to the date of payment on the Loans and participations in Letter of Credit
Disbursements made by it hereunder and all other amounts accrued for its account
or owed to it hereunder; provided further that if prior to any such assignment
the circumstances or event that resulted in such Lender's notice or certificate
under Section 2.13 or 2.14 or demand for additional amounts under Section 2.19,
as the case may be, shall cease to exist or become inapplicable for any reason
or if such Lender shall waive its rights in respect of such circumstances or
event under Section 2.13, 2.14 or 2.19, as the case may be, then such Lender
shall not thereafter be required to make any such assignment hereunder.
SECTION 2.21. Letters of Credit. (a) The Borrower may request the issuance
of Tranche A Letters of Credit, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, for the account of the Borrower, at
any time and from time to time during
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the Tranche A Revolving Credit Availability Period; provided that any Tranche A
Letter of Credit shall be issued only if, and each request by the Borrower for
the issuance of any Tranche A Letter of Credit shall be deemed a representation
and warranty of the Borrower that, immediately following the issuance of such
Letter of Credit, (i) the sum of (A) the Tranche A Letter of Credit Exposure and
(B) the aggregate principal amount of outstanding Tranche A Revolving Loans
shall not exceed the aggregate amount of the Tranche A Revolving Credit
Commitments at such time and (ii) the Tranche A Letter of Credit Exposure shall
not exceed $7,500,000. Each Tranche A Letter of Credit shall expire at the close
of business on the earlier of (I) the last day of the Tranche A Revolving Credit
Availability Period and (II) the first anniversary of the date of issuance of
such Tranche A Letter of Credit, unless such Tranche A Letter of Credit expires
by its terms on an earlier date. Each Letter of Credit shall provide for
payments of drawings in dollars.
(b) The Borrower may request the issuance of Tranche B Letters of Credit,
in a form reasonably acceptable to the Administrative Agent and the Issuing
Bank, for the account of the Borrower, at any time and from time to time during
the Tranche B Revolving Credit Availability Period; provided that any Tranche B
Letter of Credit shall be issued only if, and each request by the Borrower for
the issuance of any Tranche B Letter of Credit shall be deemed a representation
and warranty by the Borrower that, immediately following the issuance of such
Letter of Credit, the sum of (i) the Tranche B Letter of Credit Exposure and
(ii) the aggregate principal amount of outstanding Tranche B Revolving Loans
shall not exceed the aggregate amount of the Tranche B Revolving Credit
Commitments at such time. Each Tranche B Letter of Credit shall expire no later
than the close of business on the Tranche B Maturity Date. Each Letter of Credit
shall provide for payments of drawings in dollars.
(c) Each issuance of any Letter of Credit shall be made on at least two
Business Days' prior irrevocable written or telecopy notice (or such shorter
notice as shall be acceptable to the Issuing Bank) from the Borrower to the
Administrative Agent and the Issuing Bank specifying, on the Issuing Bank's
standard form or on such other form as is acceptable to the Issuing Bank, the
date of issuance, the date on which such Letter of Credit is to expire, the
amount of such Letter of Credit, the name and address of the beneficiary of such
Letter of Credit, whether such Letter of Credit is a Tranche A Letter of Credit
or a Tranche B Letter of Credit, and such other information as may be necessary
or desirable to complete such Letter of Credit. The Issuing Bank will give the
Administrative Agent prompt notice of the issuance and amount of such Letter of
Credit and the expiration date of such Letter of Credit (and the Administrative
Agent shall give prompt notice thereof to each Lender). The Issuing Bank also
will give the Administrative Agent (i) daily notice of the amount available to
be drawn under each outstanding Letter of Credit and (ii) a quarterly summary
indicating, on a daily basis during such quarter, the issuance of any Letter of
Credit and the amount thereof, the expiration of any Letter of Credit and the
amount thereof and the payment on any draft presented under any Letter of
Credit. The Administrative Agent will promptly provide the Lenders with copies
of each such quarterly summary.
(d) By the issuance of a Letter of Credit and without any further action
on the part of the Issuing Bank, the Administrative Agent or the Lenders in
respect thereof, the Issuing
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Bank hereby grants to each Lender, and each Lender hereby acquires from the
Issuing Bank, effective upon the issuance of such Letter of Credit, a
participation in such Letter of Credit equal to (i) in the case of any such
Tranche A Letter of Credit, such Lender's pro rata share (based on the
percentage of the aggregate Tranche A Revolving Credit Commitments represented
by such Lender's Tranche A Revolving Credit Commitment) of the aggregate amount
available to be drawn under such Tranche A Letter of Credit and (ii) in the case
of any such Tranche B Letter of Credit, such Lender's pro rata share (based on
the percentage of the aggregate Tranche B Revolving Credit Commitments
represented by such Lender's Tranche B Revolving Credit Commitment) of the
aggregate amount available to be drawn under such Tranche B Letter of Credit. In
consideration and in furtherance of the foregoing, each Lender hereby absolutely
and unconditionally agrees to pay to the Administrative Agent, on behalf of the
Issuing Bank, in accordance with Section 2.02(d), (A) such Lender's pro rata
share (based on the percentage of the aggregate Tranche A Revolving Credit
Commitments represented by such Lender's Tranche A Revolving Credit Commitment)
of each Tranche A Letter of Credit Disbursement made by the Issuing Bank and not
reimbursed by the Borrower when due in accordance with Section 2.21(g) and (B)
such Lender's pro rata share (based on the percentage of the aggregate Tranche B
Revolving Credit Commitments represented by such Lender's Tranche B Revolving
Credit Commitment) of each Tranche B Letter of Credit Disbursement made by the
Issuing Bank and not reimbursed by the Borrower when due in accordance with
Section 2.21(g); provided that the Lenders shall not be obligated to make any
such payment with respect to any wrongful Letter of Credit Disbursement made as
a result of the gross negligence or wilful misconduct of the Issuing Bank.
(e) Each Lender acknowledges and agrees that its obligation to acquire
participations pursuant to Section 2.21(d) in respect of Letters of Credit is
absolute and unconditional and shall not be affected by any circumstance
whatsoever, including the occurrence and continuance of a Default or Event of
Default, and that each such payment shall be made without any offset, abatement,
withholding or reduction whatsoever (subject only to the proviso set forth in
Section 2.21(d)).
(f) During the Tranche A Revolving Credit Availability Period, the
Borrower shall pay to the Administrative Agent, on the last day of March, June,
September and December in each year and on the date on which the Tranche A
Revolving Credit Commitments shall be terminated as provided herein, (i) for the
account of the Lenders, ratably in proportion to their Tranche A Revolving
Credit Commitments, a fee on the average daily aggregate amount available to be
drawn under all outstanding Tranche A Letters of Credit, if any, during the
preceding quarter (or shorter period commencing with the date of this Agreement)
at a rate per annum equal to the Applicable Tranche A Eurodollar Margin from
time to time in effect during such period pursuant to Section 2.06, plus, during
any period when there is a Sub-investment Grade Rating, the Tranche A Rating
Premium, and (ii) for the account of the Issuing Bank, a fee on the average
daily aggregate amount available to be drawn under all outstanding Tranche A
Letters of Credit, if any, during the preceding quarter (or shorter period
commencing with the date of this Agreement) at a rate per annum equal to 0.125%.
During the Tranche B Revolving Credit Availability Period, the Borrower shall
pay to the Administrative Agent, on the last day of March, June, September and
December in each year
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and on the date on which the Tranche B Revolving Credit Commitments shall be
terminated as provided herein, (i) for the account of the Lenders, ratably in
proportion to their Tranche B Revolving Credit Commitments, a fee on the average
daily aggregate amount available to be drawn under all outstanding Tranche B
Letters of Credit, if any, during the preceding quarter (or shorter period
commencing with the date of this Agreement) at a rate per annum equal to the
Applicable Tranche B Eurodollar Margin from time to time in effect during such
period pursuant to Section 2.06, plus, during any period when there is a
Sub-investment Grade Rating, the Tranche B Rating Premium, and (ii) for the
account of the Issuing Bank, a fee on the average daily aggregate amount
available to be drawn under all outstanding Tranche B Letters of Credit, if any,
during the preceding quarter (or shorter period commencing with the date of this
Agreement) at a rate per annum equal to 0.125%. Such fees shall be computed on
the basis of the actual number of days elapsed in a year of 360 days. Such fees
shall accrue from and including the date of this Agreement to but excluding the
last day of the Tranche A Revolving Credit Availability Period or the Tranche B
Maturity Date, as applicable. In addition to the foregoing, the Borrower shall
pay directly to the Issuing Bank, for its account, payable within 15 days after
demand therefor by the Issuing Bank, the Issuing Bank's customary processing and
documentation fees in connection with the issuance or amendment of or payment on
any Letter of Credit.
(g) The Borrower hereby agrees to reimburse the Issuing Bank for any
payment or disbursement made by the Issuing Bank under any Letter of Credit, by
making payment in immediately available funds to the Administrative Agent within
three Business Days after receipt of notice of such payment or disbursement, in
an amount equal to the amount of such payment or disbursement, plus interest on
the amount so paid or disbursed by the Issuing Bank, to the extent not
reimbursed prior to 3:00 p.m. (Boston time) on the date of such payment or
disbursement, from and including the date paid or disbursed to but excluding the
date the Issuing Bank is reimbursed by the Borrower therefor, at a rate per
annum equal to (i) in the case of amounts due in respect of Tranche A Letters of
Credit, the rate applicable to ABR Tranche A Revolving Loans during such period
pursuant to Section 2.06 and (ii) in the case of amounts due in respect of
Tranche B Letters of Credit, the rate applicable to ABR Tranche B Revolving
Loans during such period pursuant to Section 2.06. If the Borrower shall fail to
pay any amount required to be paid by it under this Section 2.21(g) when due,
such unpaid amount shall bear interest as provided in Section 2.07. The Issuing
Bank shall give the Borrower prompt notice of each drawing under any Letter of
Credit, provided that the failure to give any such notice shall in no way
affect, impair or diminish the Borrower's obligations hereunder. The
Administrative Agent shall promptly pay any such amounts received by it to the
Issuing Bank.
(h) The Borrower's obligation to reimburse Letter of Credit Disbursements
as provided in Section 2.21(g) shall be absolute, unconditional and irrevocable
and shall be performed strictly in accordance with the terms of this Agreement
under any and all circumstances whatsoever, and irrespective of:
(i) any lack of validity or enforceability of any Letter of Credit
or any other Loan Document;
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(ii) the existence of any claim, setoff, defense or other right
which the Borrower, any Subsidiary or any other Person may at any time
have against the beneficiary under any Letter of Credit, the Issuing Bank,
any Agent, any Lender or any other Person in connection with this
Agreement, any other Loan Document or any other related or unrelated
agreement or transaction;
(iii) any draft or other document presented under a Letter of Credit
proving to be forged, fraudulent, invalid or insufficient in any respect
or failing to comply with the Uniform Customs and Practices for
Documentary Credits, as in effect from time to time, or any statement
therein being untrue or inaccurate in any respect;
(iv) payment by the Issuing Bank under a Letter of Credit against
presentation of a draft or other document which does not comply with the
terms of such Letter of Credit; provided that such payment was not
wrongfully made as a result of the gross negligence or wilful misconduct
of the Issuing Bank; and
(v) any other act or omission or delay of any kind or any other
circumstance or event whatsoever, whether or not similar to any of the
foregoing and whether or not foreseeable, that might, but for the
provisions of this Section 2.21(h), constitute a legal or equitable
discharge of the Borrower's obligations hereunder.
(i) It is expressly understood and agreed that, for purposes of
determining whether a wrongful payment under a Letter of Credit resulted from
the Issuing Bank's gross negligence or wilful misconduct, (i) the Issuing Bank's
acceptance of documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary, (ii) the Issuing Bank's exclusive reliance on the
documents presented to it under such Letter of Credit as to any and all matters
set forth therein, including the amount of any draft presented under such Letter
of Credit, whether or not the amount due to the beneficiary thereunder equals
the amount of such draft and whether or not any document presented pursuant to
such Letter of Credit proves to be insufficient in any respect (so long as such
document on its face appears to be in order), and whether or not any other
statement or any other document presented pursuant to such Letter of Credit
proves to be forged or invalid or any statement therein proves to be inaccurate
or untrue in any respect whatsoever and (iii) any noncompliance in any
immaterial respect of the documents presented under such Letter of Credit with
the terms thereof shall, in each case, be deemed not to constitute wilful
misconduct or gross negligence of the Issuing Bank. It is further understood and
agreed that, notwithstanding the proviso to clause (iv) of Section 2.21(h), the
Borrower's obligation hereunder to reimburse Letter of Credit Disbursements will
not be excused by the gross negligence or wilful misconduct of the Issuing Bank
to the extent that such Letter of Credit Disbursement actually discharged a
liability of, or otherwise benefited, or was recovered by, the Borrower;
provided that the foregoing shall not be construed to excuse the Issuing Bank
from liability to the Borrower to the extent of any direct damages suffered by
the Borrower that are caused by the Issuing Bank's gross negligence or wilful
misconduct in determining whether drafts and other documents presented under a
Letter of Credit comply with the terms thereof.
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(j) The Issuing Bank shall, promptly following its receipt thereof,
examine all documents purporting to represent a demand for payment under a
Letter of Credit, including as to compliance with the Uniform Customs and
Practices for Documentary Credits, as then in effect. The Issuing Bank shall as
promptly as possible give telephonic notification, confirmed by telex or
telecopy, to the Administrative Agent and the Borrower of such demand for
payment and whether the Issuing Bank has made or will make a Letter of Credit
Disbursement thereunder, provided that the failure to give such notice shall not
relieve the Borrower of its obligation to reimburse any such Letter of Credit
Disbursement in accordance with this Section 2.21. The Administrative Agent
shall promptly give each Lender notice thereof.
(k) In the event that the Borrower is required or elects pursuant to the
terms of this Agreement (other than Sections 2.11(h) and 7.01) to provide cash
collateral in respect of the Letter of Credit Exposure of any Class, the
Borrower shall deposit in an account with the Administrative Agent an amount in
cash equal to the Letter of Credit Exposure of such Class (or such lesser amount
as shall be required or elected hereunder). Any such deposit shall be held by
the Administrative Agent in accordance with the Cash Collateral Agreement. In
the event that the Borrower is required pursuant to the terms of Section 2.11(h)
or Section 7.01 of this Agreement to provide cash Collateral in respect of the
Letter of Credit Exposure of any Class, the Borrower shall deposit such cash
collateral in an account with the Trustee pursuant to the Trust Agreement. Such
deposit shall be held by the Trustee in accordance with the Trust Agreement. Any
such deposit to be held by the Administrative Agent or the Trustee, as provided
herein, shall be accompanied by notice from the Borrower, in form satisfactory
to the Administrative Agent or the Trustee, as the case may be, setting forth
the basis for such deposit, identifying in reasonable detail the Letters of
Credit to which such deposit relates, and setting forth any other information
related to such deposit reasonably requested by the Administrative Agent or the
Trustee, as the case may be. The Borrower shall promptly provide the
Administrative Agent with a copy of any such notice to the Trustee and shall
promptly provide the Trustee with a copy of any such notice to the Borrower.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders that:
SECTION 3.01. Organization; Powers. Each of the Borrower and the Loan
Parties (a) is a limited partnership (in the case of the Borrower and the Public
Partnership) or a corporation (in the case of the other Loan Parties) duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is duly qualified or registered to do business and
is in good standing as a foreign limited partnership (in the case of the
Borrower and the Public Partnership) or corporation (in the case of the other
Loan Parties) in all jurisdictions in which, after giving effect to the
conveyance to the Borrower of the Assets, the nature of their
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respective activities or the character of the properties they own, lease or use
makes such qualification or registration necessary and in which the failure so
to qualify or to be so regis tered would have a Material Adverse Effect (and the
only such jurisdictions are, (i) in the case of the Borrower, Arkansas, Arizona,
California, Colorado, Connecticut, Florida, Georgia, Idaho, Iowa, Illinois,
Indiana, Massachusetts, Maine, Michigan, Minnesota, Missouri, New Hampshire, New
Mexico, New York, South Carolina, Texas, Vermont, Rhode Island and Wisconsin and
(ii) in the case of the Public Partnership, Iowa), and (d) has the partnership
or corporate power and authority to execute, deliver and perform its obligations
under each of the Loan Documents and each other agreement or instrument
contemplated thereby to which it is or will be a party, to consummate the
Transactions and, in the case of the Borrower, to obtain extensions of credit
hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
each of the Borrower and the Loan Parties of each of the Loan Documents to which
it is or will be a party, the consummation of the Transactions and, in the case
of the Borrower, the extensions of credit hereunder (a) have been duly
authorized by all requisite partnership or corporate action and (b) will not (i)
upon obtaining the consents listed on Schedule 3.02, other than any of such
listed consents which are not necessary to make the representations in this
Article III true as of the Closing Date (the "Required Consents"), violate (A)
any provision of law, statute, rule or regulation, (B) any provision of the
agreement of limited partnership, articles of incorporation or other
constitutive documents or by-laws of the Borrower and the other Loan Parties,
(C) any order of any Governmental Authority or (D) any provision of any
indenture, agreement or other instrument to which the Borrower or any of the
other Loan Parties is a party or by which any of them or any of their property
is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default or give
rise to increased, additional, accelerated or guaranteed rights of any Person
under any such indenture, agreement or other instrument or (iii) except for the
Liens of the Collateral Documents and of the Triarc Note and the restrictions
pursuant to the terms of the MLP Agreement and the Partnership Agreement, result
in the creation or imposition of any Lien upon or with respect to any property
or assets now owned or hereafter acquired by the Borrower or any of the other
Loan Parties, other than, in the case of clauses (i)(A), (i)(D) and (ii), where
as a result thereof, individually or in the aggregate, there would not occur a
Material Adverse Effect (the "Permitted Exceptions").
SECTION 3.03. Enforceability. This Agreement has been duly executed and
delivered by the Borrower and constitutes, and each other Loan Document and
Operative Agreement when executed and delivered by the Borrower or any of the
other Loan Parties will constitute, the legal, valid and binding obligation of
such party enforceable against such party in accordance with its terms, except
as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors and general principles of
equity (regardless of whether such enforcement is considered at law or in
equity).
SECTION 3.04. Consents and Governmental Approvals. As of the Closing Date,
all the Required Consents will have been made or obtained and will be in full
force and effect.
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No other consent or approval of, registration or filing with or any other action
by (a) any Governmental Authority, (b) any creditor or holder of any Capital
Stock of the Borrower, any of the other Loan Parties or any Affiliate thereof or
(c) any other Person is or will be required with respect to any Loan Party in
connection with the Transactions, the Facilities or the performance by the
Borrower or any of the other Loan Parties of the Loan Documents to which it is
or will be a party, in each case except such as have been made or obtained and
are in full force and effect, except for consents, approvals, registrations and
filings or other actions (other than the Required Consents) related to transfers
made pursuant to the Conveyance Agreements (i) which are not required at such
time and are routine or administrative in nature and are obtained or given in
the ordinary course of business within 90 days after the Closing Date or (ii) in
the case of clauses (b) and (c), which if not obtained or given, would not,
individually or in the aggregate, have a Material Adverse Effect.
SECTION 3.05. Business; Financial Statements. (a) Prior to the Closing
Date, the Borrower has not engaged in any business or activities, except for
activities related to its formation, organization and prospective operations,
and will not have any significant assets or liabilities prior to its acquisition
of the Assets and assumption of liabilities, as contemplated by this Agreement
and the Registration Statement. As of the Closing Date, the Business (as
conducted by the National Propane Group) does not include and, to the knowledge
of the Borrower, has never included (whether conducted by the National Propane
Group or any of its predecessors) the sale, distribution or storage of any
petroleum derivative product (other than propane gas and other than storage of
diesel fuel used for vehicles of the National Propane Group).
(b) The Borrower has delivered to the Agents complete and correct copies
of the Registration Statement filed with the SEC. The pro forma consolidated
financial statements of the Public Partnership set forth in the Registration
Statement comply in all material respects with the applicable accounting
requirements of the Securities Act, and the published rules and regulations
thereunder and, in the opinion of the Borrower, the assumptions on which the pro
forma adjustments to such pro forma consolidated financial statements of the
Public Partner ship are based provide a reasonable basis for presenting the
significant effects of the trans actions contemplated by such pro forma
consolidated financial statements and such pro forma adjustments give
appropriate effect to such assumptions and are properly applied in such pro
forma consolidated financial statements. The financial statements and schedules
included in the Registration Statement (other than with respect to pro forma
matters) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods specified and present fairly in all material
respects the financial position of the corporation or partnership to which they
relate as of the respective dates specified and the results of their operations
and cash flows for the respective periods specified. The financial data included
under the caption "Selected Historical and Pro Forma Consolidated Financial and
Operating Data" for National Propane Corp. and for the Public Partnership in the
Registration Statement fairly present in all material respects, on the basis
stated in the Registration Statement, the information set forth therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The historical aspects of the
financial data included under the caption "Capitalization" in the Registration
Statement fairly present, on the
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basis stated in the Registration Statement, the information set forth therein
and have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement; the pro forma aspects of such
financial data included under the caption "Capitalization" have been prepared in
all material respects in accordance with all applicable rules and guidelines of
the SEC with respect to pro forma financial information; and the assumptions on
which the pro forma adjustments to the pro forma aspects of the financial data
included under the caption "Capitalization" are based provide a reasonable basis
for presenting all of the significant effects of the Transactions and such pro
forma adjustments give appropriate effect to such assumptions and are properly
applied in such pro forma financial data.
(c) The Borrower has delivered to the Agents the unaudited pro forma
balance sheet of the Borrower as of March 31, 1996. Such balance sheet presents
fairly in all material respects the pro forma financial condition of the
Borrower as of that date in accordance with GAAP.
(d) The Borrower has heretofore furnished to the Lenders (i) the balance
sheet of the Public Partnership as of March 31, 1996 and (ii) the consolidated
balance sheets of National Propane Corp. and its Subsidiaries as of December 31,
1994 and 1995 and the related consolidated statements of operations and cash
flows for each of the years in the three-year period ended December 31, 1995, in
each case audited by and accompanied by the opinion of Deloitte & Touche, LLP,
independent public accountants (the financial statements referred to in clauses
(i) and (ii) above, collectively, the "Audited Financial Statements"). The
Audited Financial Statements present fairly in all material respects in
accordance with GAAP the consolidated financial position and the consolidated
results of operations and cash flows of National Propane Corp. and its
Subsidiaries as of such dates and for such periods. The balance sheets and the
notes thereto included in the Audited Financial Statements disclose all material
liabilities, actual or contingent, of National Propane Corp. and its
Subsidiaries as of the dates thereof. The unaudited pro forma balance sheet of
the Borrower referred to in paragraph (c) above, including the footnotes
thereto, discloses all material liabilities, actual or contingent, of the
Borrower as of the Closing Date. The Audited Financial Statements were prepared
in accordance with GAAP applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto).
SECTION 3.06. No Material Adverse Change. Since March 31, 1996, there has
occurred no material adverse change in the business, operations, property or
condition (financial or otherwise) of the National Propane Group. Since the
Closing Date, there has occurred no condition, event or other occurrence that,
individually or in the aggregate, has had, and there exists no condition, event
or other occurrence, that, individually or in the aggregate, could reasonably be
expected to have, a Material Adverse Effect.
SECTION 3.07. Title to Properties; Possession Under Leases. (a) Except for
Excluded Assets (as defined in the Conveyance Agreements) and leased property
and personal property covered by the Agency Agreement, immediately upon
consummation of the Transactions on the Closing Date, (i) the Borrower and the
Restricted Subsidiaries will own
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fee simple title to, or hold valid leasehold interests (which may be
month-to-month tenancies) in, all the properties and assets used in the
operation of the Business other than immaterial leased properties in respect of
which the Borrower enjoys undisturbed possession and (ii) the interests of the
Borrower and the Restricted Subsidiaries in all such leased properties and
assets shall be the same as the interests of the National Propane Group therein
prior to the Closing Date. Each of the Borrower and the Restricted Subsidiaries
has good and marketable title to, or valid leasehold interests in, all its
material properties and assets, free and clear of Liens, except for Permitted
Encumbrances and Liens permitted by Section 6.02.
(b) Schedule 3.07 sets forth, as of the Closing Date, a true, complete and
correct list of (i) all real property owned by the Borrower and the
Subsidiaries; (ii) all real property leased by the Borrower or any Subsidiary
(including month-to-month leases and immaterial leased properties in respect of
which the Borrower enjoys undisturbed possession); and (iii) the location and
use of each such property. All real property interests listed on Schedule
4.01(d)(vii)(a) are owned, leased (including month-to-month leases) or otherwise
used in the operation of the Business as of the Closing Date. As of the Closing
Date, the aggregate fair market value of the owned real property listed on
Schedule 4.01(d)(vii)(a) is 80% or more of the aggregate fair market value of
the owned real property used in the operation of the Business, as such fair
market value has been determined pursuant to the appraisals delivered pursuant
to Section 4.01(v). As of the Closing Date, the collective net operating
revenues of the real property interests listed on Schedule 4.01(d)(vii)(a) are
77% or more of the collective net operating revenues of the real property
interests used in the operation of the Business. Schedule 4.01(d)(vii)(c)
constitutes a true, complete and accurate list of all real property interests
that are owned in fee simple by the Borrower and that individually have a fair
market value in excess of $250,000. Schedule 4.01(d)(vii)(d) constitutes a true,
complete and accurate list of all other real property interests owned in fee
simple by the Borrower other than real property interests that, individually and
in the aggregate, are not material to the operation of the Business or any
material individual location of the Business. Except for leasehold interests in
real property that are encumbered by a Mortgage at Closing, as of the Closing
Date, no leasehold interest in real property that is held by the Borrower or any
Subsidiary is material to the Business or any material individual location of
the Business.
(c) Each of the Borrower and the Subsidiaries has complied with all
obligations under all material leases to which it is a party and all such leases
are in full force and effect. Each of the Borrower and the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases.
SECTION 3.08. Subsidiaries. Schedule 3.08 sets forth as of the Closing
Date a list of all the Subsidiaries, the respective jurisdictions of
organization thereof and the percentage ownership interest, direct or indirect,
of the Borrower therein.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as set forth in
Schedule 3.09(a), there are no actions, suits or proceedings at law or in equity
or by or before any Governmental Authority now pending or, to the knowledge of
the Borrower, threatened against or affecting the Borrower, any other Loan Party
or any business, property or rights of
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the Borrower or any other Loan Party (i) which involve any Loan Document or the
Transactions or (ii) as to which there is a reasonable possibility of an adverse
determination which could be reasonably expected to result, individually or in
the aggregate, in a Material Adverse Effect.
(b) Neither the Borrower nor any other Loan Party is in violation of any
law, rule or regulation, or in default with respect to any judgment, writ,
injunction or decree, of any Governmental Authority, where such violation or
default could be reasonably expected to result, individually or in the
aggregate, in a Material Adverse Effect. Except as set forth in Schedule
3.09(b), neither the Borrower nor any other Loan Party has received any written
communication during the three years prior to the Closing Date from any
Governmental Authority that alleges that the Borrower or any other Loan Party or
the Business is not in compliance in any material respect with any law, rule or
regulation or any judgment, writ, injunction or decree.
SECTION 3.10. Agreements. Neither the Borrower nor any of the other Loan
Parties is a party to any agreement or instrument or subject to any corporate
restriction that has resulted or could reasonably be expected to result,
individually or in the aggregate, in a Material Adverse Effect. Each indenture
or other agreement or instrument evidencing Indebtedness and each other material
agreement, contract, lease, license, commitment or other instrument to which the
Borrower or any of the Loan Parties is a party or by which it or any of its
properties or assets are or may be bound as of the Closing Date, after giving
effect to the Transactions, is listed on Schedule 3.10 hereto (collectively with
any agreements listed on Schedule 3.20, the "Material Contracts").
(b) As of the Closing Date, after giving effect to the Transactions, each
Material Contract will be in all material respects valid, binding and in full
force and effect and will be enforceable by the Borrower or the Loan Party which
is a party thereto in accordance with its terms. Except as set forth in Schedule
3.10, as of the Closing Date, after giving effect to the Transactions, each of
the Borrower and the Loan Parties will have performed in all material respects
all obligations required to be performed by it to date under the Material
Contracts and it will not be (with or without the lapse of time or the giving of
notice, or both) in breach or default in any material respect thereunder and, to
the knowledge of the Borrower, no other party to any of the Material Contracts
will be (with or without the lapse of time or the giving of notice, or both) in
breach or default in any material respect thereunder. As of the Closing Date,
after giving effect to the Transactions, neither the Borrower nor any of the
Loan Parties, nor, to the knowledge of the Borrower, any other party to any
Material Contract, will have given notice of termination of, or taken any action
inconsistent with the continuation of, any Material Contract. As of the Closing
Date, none of such other parties will have any presently exercisable right to
terminate any Material Contract.
SECTION 3.11. Federal Reserve Regulations. (a) Neither the Borrower nor
any of the other Loan Parties is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
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(b) No part of the proceeds of any Loan and no Letter of Credit will be
used, whether directly or indirectly, and whether immediately, incidentally or
ultimately, for any purpose which entails a violation of, or which is
inconsistent with, the provisions of the regulations of the Board, including
Regulation G, U and X.
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act.
Neither the Borrower nor any of the other Loan Parties is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940, (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935 or (c) subject to
regulation as a "public utility" or a "public service corporation" or the
equivalent under any Federal or state law.
SECTION 3.13. Use of Proceeds. (a) The proceeds of all Tranche A Revolving
Loans will be used solely for working capital. The Tranche A Letters of Credit
will be issued solely to support various payment obligations of the Borrower and
the Restricted Subsidiaries incurred in the ordinary course of business.
(b) The proceeds of all Tranche B Revolving Loans will be used solely (i)
to fund the purchase price of any Eligible Propane Acquisitions by the Borrower
or any Restricted Subsidiary (provided, in the case of an acquisition of Capital
Stock, that the Person so acquired becomes a Restricted Subsidiary) and (ii) to
fund Growth-Related Capital Expenditures of up to $5,000,000 per fiscal year.
The Tranche B Letters of Credit will be issued solely to support obligations of
the Borrower incurred in connection with such acquisitions and Growth-Related
Capital Expenditures.
(c) The proceeds of all Tranche B Term Loans will be used solely to
refinance Tranche B Revolving Loans outstanding on the Tranche B Conversion
Date.
(d) The proceeds of the sale of the Units by the Public Partnership will
be used by the Public Partnership and the Borrower as contemplated by the
Registration Statement. In particular, the proceeds of the sale of any Units
subject to the Underwriters' over-allotment option will be contributed by the
Public Partnership to the capital of the Borrower for no additional
consideration. Of the proceeds of the sale of the Mortgage Notes, approximately
$59,300,000 will be paid by National Propane Corp. as dividends to Triarc, a
portion will be used to pay transaction costs and expenses and approximately
$62,200,000 will be contributed by National Propane Corp. to the Borrower under
the Conveyance Agreements and will be used by the Borrower to repay in full
certain indebtedness assumed by the Borrower under the Conveyance Agreements
(including, without limitation, the Refunding Notes (as defined in the
Registration Statement)). As of the Closing Date, the Borrower will have Net
Working Capital of at least $7,000,000.
SECTION 3.14. Tax Returns. As of the Closing Date, each of the Borrower
and its Affiliates (other than shareholders of Triarc) has, and, at all times
thereafter, each of the Borrower and the other Loan Parties will have filed all
tax returns required by law to be filed by it (or properly filed for extensions
of time for the filing thereof) and paid all taxes,
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assessments and other governmental charges levied upon it or any of its
properties, assets, income or franchises which are due and payable, other than
(a) those which are not past due or are presently being contested in good faith
by appropriate proceedings diligently conducted for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP have been made and
(b) in the case of any such Person other than the Borrower and the Restricted
Subsidiaries, those which could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect. The Borrower is a limited
partnership that is treated as a pass-through entity for U.S. Federal income tax
purposes. The Borrower is a limited partnership not subject to taxation with
respect to its income or gross receipts under applicable state laws, except in
states where such taxation would not, individually or in the aggregate, have a
Material Adverse Effect.
SECTION 3.15. No Material Misstatements. (a) No written information,
report, financial statement, exhibit or schedule furnished by or on behalf of
the Borrower, any Restricted Subsidiary, the General Partners or any of their
Affiliates (as amended, updated or revised by any subsequent delivery made prior
to the Closing) to any Agent or Lender in connection with the negotiation of any
Loan Document or included therein or delivered pursuant thereto contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which they
were made not misleading (other than statements made regarding general economic
conditions relating to national or local economies and except for projections
made and delivered in good faith and on the basis of reasonable assumptions).
There is no fact actually known to the Borrower which has or in the future would
(so far as the Borrower or the Managing General Partner can now reasonably
foresee) have a Material Adverse Effect which has not been set forth in this
Agreement (including the schedules hereto) or the Registration Statement. The
Agents and the Lenders shall be entitled to rely on the statements and
disclosures set forth in the Registration Statement.
(b) All representations and warranties of the Borrower and the General
Partners set forth in the Note Agreement were true and correct in all material
respects on and as of the date of such agreement and will be true and correct in
all material respects on and as of the Closing Date with the same effect as
though made on and as of the Closing Date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties were true and correct in all material
respects on and as of such earlier date).
SECTION 3.16. Employee Benefit Plans. (a) None of the General Partners,
the Borrower, any Subsidiary of the Borrower or any Related Person of either of
the General Partners or the Borrower (other than Triarc and any Subsidiaries of
Triarc (except for the General Partners and any Subsidiary of either of the
General Partners that is a Related Person of the Borrower)) is obligated to
contribute to, and none of the General Partners, the Borrower or any Related
Person of the Borrower has any liability or obligation with respect to, any Plan
that is subject to Section 302 or Title IV of ERISA or Section 412 of the Code
(other than a Multiemployer Plan). None of the Borrower, any Subsidiary of the
Borrower nor any Related Person of the Borrower has any liability or obligation
to provide any amount or type of
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compensation or benefit in respect of any employee or former employee of the
Business which relates to periods, services performed or benefits or amounts
accrued prior to the transfer of the Business or the Assets pursuant to the
Operative Agreements and the transactions contemplated thereby (other than
pursuant to a Multiemployer Plan), continuation coverage provided pursuant to
Section 4980B of the Code or Section 601, et seq., of ERISA, or any liability or
obligation for contributions pursuant to a Plan not yet required to be paid.
None of the General Partners, the Borrower, any Subsidiary of the Borrower or
any Related Person has incurred any material liability under or pursuant to
Title I or Title IV of ERISA with respect to any Plan and no event or condition
exists or has occurred as a result of which such a liability would reasonably be
expected to be incurred. None of the General Partners, the Borrower, any
Subsidiary or any Related Person of the Borrower has engaged in any transaction,
including the transactions contemplated hereunder, which could subject the
Borrower or any Related Person to a material liability pursuant to Section
4069(a) or 4212(c) of ERISA. There has been no reportable event (within the
meaning of Section 4043(b) of ERISA other than one for which the applicable
notice requirements have been waived by PBGC regulations) or any other event or
condition with respect to any Plan which presents a risk of the termination of,
or the appointment of a trustee to administer, any such Plan (other than events
with respect to Multi-Employer Plans that could not reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect) by the
PBGC. No prohibited transaction (within the meaning of Section 406(a) of ERISA
or Section 4975 of the Code) exists or has occurred with respect to any Plan
which has subjected or could reasonably be expected to subject either of the
General Partners, the Borrower or any Subsidiary of the Borrower to a material
liability under Section 502(i) or 502(l) of ERISA or Section 4975 of the Code.
No material liability to the PBGC (other than liability for premiums not yet
due) has been or is expected to be incurred with regard to any Plan by either of
the General Partners, the Borrower, any Subsidiary of the Borrower or any
Related Person of the Borrower. None of the General Partners, the Borrower, any
Subsidiary of the Borrower or any Related Person of the Borrower contributes or
is obligated to contribute or has ever contributed or been obligated to
contribute to any single employer plan that has at least two contributing
sponsors not under common control (other than the National Propane Corporation
401(k) Plan). Timely payment has been made of all amounts which the General
Partners, the Borrower, any Subsidiary of the Borrower or any Related Person of
the Borrower is required under applicable law, the terms of each Plan or any
collective bargaining agreement to have paid as contributions to each such Plan
except to the extent that failure to do so would not, individually or in the
aggregate, have a Material Adverse Effect. To the knowledge of the Borrower and
the General Partners, no Multiemployer Plan has been terminated or presents a
material risk of termination, is insolvent or is in reorganization within the
meaning of Section 4241 or 4245 of ERISA and the transactions contemplated
hereby will not result in withdrawals from any Multiemployer Plans that,
individually or in the aggregate, would have a Material Adverse Effect. None of
the General Partners, the Borrower or any Subsidiary of the Borrower has any
obligation to provide any material amount of post-employment welfare benefits or
coverage (other than continuation coverage provided pursuant to Section 4980B of
the Code or Section 601, et seq., of ERISA).
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SECTION 3.17. Environmental and Safety Matters. (a) Except as disclosed in
Schedule 3.17, each of the Borrower, the Restricted Subsidiaries and the General
Partners is, and after giving effect to the transfer to the Borrower of the
Assets will be, in compliance with all Environmental Laws applicable to it or to
the Business or Assets except where such noncompliance would not have a Material
Adverse Effect. Each of the Borrower and the Restricted Subsidiaries has timely
and properly applied for renewal of all environmental permits or licenses that
have expired or are about to expire and are necessary for the conduct of the
Business as now conducted and as proposed to be conducted, except where the
failure to timely and properly reapply would not have a Material Adverse Effect.
Schedule 3.17 lists, as of the Closing Date, (i) all notices from Federal, state
or local environmental agencies to the Borrower, any Restricted Subsidiary,
either of the General Partners or any Affiliate thereof citing environmental
violations affecting the Business or Assets that have not been finally resolved
and disposed of, and no such violation, whether or not notice regarding such
violation is listed on Schedule 3.17, could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect and (ii) all current
reports filed by the Borrower, each Restricted Subsidiary or either of the
General Partners with any Federal, state or local environmental agency having
jurisdiction over the Assets which disclose the release or threatened release of
a Hazardous Material or noncompliance with an Environmental Law. True and
complete copies of all current reports filed by the Borrower, each Restricted
Subsidiary or either of the General Partners prior to the Closing with any
Federal, state or local environmental agency having jurisdiction over the
Assets, have been made available to the Lenders. Notwithstanding any such
notice, except for matters the consequences of which will not have a Material
Adverse Effect, (y) the Business and Assets are currently being operated in all
material respects within the limits set forth in such environmental permits or
licenses and (z) any current noncompliance with such permits or licenses will
not result in any liability or penalty to the Borrower, any Restricted
Subsidiary or either General Partner or in the revocation, loss or termination
of any such environmental permits or licenses.
(b) Except as disclosed in Schedule 3.17, all facilities located on the
real property included in the Assets which are subject to regulation by RCRA are
and have been operated in compliance with RCRA, except where such noncompliance
would not have a Material Adverse Effect and none of the Borrower, any
Restricted Subsidiary or the General Partners has received, or, to the knowledge
of the Borrower, been threatened with, a notice of violation of RCRA regarding
such facilities.
(c) Except as disclosed in Schedule 3.17, no Hazardous Materials are or
have been located or present at any of the real property included in the Assets
or any previously owned properties in violation of any Environmental Law, which
violation will have a Material Adverse Effect, or in such circumstances as to
give rise to liability, which liability will have a Material Adverse Effect, and
with respect to such real property there has not occurred (i) any release or
threatened release of any such hazardous substance, (ii) any discharge or
threatened discharge of any substance into ground, surface, or navigable waters
which violates any Environmental Law or (iii) any assertion of any lien pursuant
to Environmental Laws resulting from any use, spill, discharge or clean-up of
any hazardous or toxic substance or waste, which occurrence referred to in
clause (i), (ii) or (iii) above will have a Material Adverse Effect.
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(d) Except as disclosed in Schedule 3.17, the Borrower has not received
notice that it has been identified as a potentially responsible party under
CERCLA or any comparable state, local or foreign law nor has the Borrower
received any notification that any Hazardous Materials that it has used,
generated, stored, treated, handled, transported or disposed of or arranged for
transport for disposal or treatment of, or arranged for disposal or treatment
of, has been found at any site at which any Governmental Authority or private
party is conducting or plans to conduct a remedial investigation or other action
pursuant to any Environmental Law.
(e) For purposes of this Section 3.17, the "Assets" include all assets and
properties covered by the Agency Agreement.
SECTION 3.18. Security Interests. The Trustee for the benefit of the
Secured Parties will at all times have the Liens provided for in the Collateral
Documents and, subject to the filing by the Trustee of continuation statements
to the extent required by the Uniform Commercial Code, the recordations,
publications, registrations and filings contemplated by Section 6.14 with
respect to motor vehicles and rolling stock and the execution and delivery of
Agency Account Agreements for certain bank accounts (which shall be accomplished
in accordance with all applicable terms of this Agreement and the Collateral
Documents), the Collateral Documents will at all times constitute a valid and
continuing lien of record and first priority perfected security interest in all
the Collateral referred to therein. No filings or recordings are required in
order to perfect the security interests created under the Collateral Documents,
except for filings or recordings listed on Schedule 3.18. All such Uniform
Commercial Code filings will have been made on or prior to the Closing Date.
Such other listed filings and recordings will have been made on or prior to the
Closing Date in order that, on the Closing Date, when taken together with all
Mortgages recorded at or prior to the Closing Date that constitute first
priority perfected liens on the real property interests they purport to
encumber, such filings will constitute and evidence first priority perfected
security interests in and Liens on Assets representing more than 80% of the
aggregate fair market value of all the Assets and all assets and properties
covered by the Agency Agreement.
SECTION 3.19. Solvency. Upon the making of the initial Loan or the
issuance of the initial Letter of Credit hereunder and the concurrent or prior
consummation of the Transactions, each of the Managing General Partner, the
Borrower and the Restricted Subsidiaries will be Solvent. "Solvent" means, with
respect to any Person, that (a) the sum of the assets of such Person, both at a
fair valuation and at present fair saleable value, will exceed the liabilities
of such Person, (b) such Person will have sufficient capital with which to
conduct its business as presently conducted and as proposed to be conducted and
(c) such Person has not incurred debts, and does not intend to incur debts,
beyond its ability to pay such debts as they mature. For purposes of the
foregoing definition, "debts" means any liabilities on claims, and "claim" means
(i) a right to payment, whether or not such right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (ii) a right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
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secured or unsecured. With respect to any contingent liabilities, such
liabilities shall be computed at the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can reasonably
be expected to become an actual or matured liability.
SECTION 3.20. Transactions with Affiliates. Except as set forth in
Schedule 3.20 and except for agreements and arrangements among the Borrower and
Restricted Subsidiaries or among Restricted Subsidiaries, as of the Closing
Date, neither the Borrower nor any of the Subsidiaries is a party to, and none
of the properties and assets of the Borrower or any of the Subsidiaries is
subject to or bound by, any agreement or arrangement with, and neither the
Borrower nor any of the Subsidiaries is engaged in any transaction with, (a) any
Affiliate of the Borrower or any of the Subsidiaries or (b) any Affiliate of
Triarc.
SECTION 3.21. Ownership. The only general partners of the Borrower are the
General Partners and the only general partners of the Public Partnership are the
General Partners. Upon the consummation of the Closing, the National Propane
Corp. will own a 1.0101% general partner interest in the Borrower and National
Propane SGP will own a 1.0101% general partner interest in the Borrower. The
only limited partner of the Borrower is the Public Partnership. Upon the
consummation of the Closing, the Public Partnership will own a 97.9798% limited
partner interest in the Borrower acquired as provided in the Registration
Statement. Assuming that the Underwriter's overallotment option is not
exercised, upon consummation of the Closing, the General Partners will each own
an unsubordinated 1.0% general partner interest in the Public Partnership and
the Managing General Partner will own a 41.4% subordinated general partner
interest in the Public Partnership (40.6% on a combined basis). Assuming that
the Underwriter's overallotment option is exercised, upon consummation of the
Closing, the General Partners will each own an unsubordinated 1.0% general
partner interest in the Public Partnership and the Managing General Partner will
own a 39% subordinated general partner interest in the Public Partnership
(37.50% on a combined basis).
SECTION 3.22. Insurance. The Borrower and the Subsidiaries maintain with
Permitted Insurers policies of fire and other all risk perils available on a
commercially reasonable basis, liability, business interruption and other forms
of insurance in such amounts, with such deductibles and against such risks and
losses as are reasonable for the business and assets of the Borrower and the
Subsidiaries. All such policies are in full force and effect, all premiums due
and payable thereon have been paid (other than retroactive or retrospective
premium adjustments that are not yet, but may be, required to be paid with
respect to any period ending prior to the Closing Date under comprehensive
general liability and workmen's compensation insurance policies), and no notice
of cancellation or termination has been received with respect to any such policy
which has not been replaced on substantially similar terms prior to the date of
such cancellation. The activities and operations of the Borrower and the
Subsidiaries have been conducted in a manner so as to conform in all material
respects to all applicable provisions of such insurance policies.
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SECTION 3.23. Labor Relations. Neither the Borrower nor any of the
Subsidiaries is engaged in unfair labor practice that could reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect.
There is (a) no material unfair labor practice complaint pending against the
Borrower or any of the Subsidiaries or affecting the Business for which the
Borrower or any of the Subsidiaries has received actual notice or, to the
knowledge of the Borrower, threatened against any of them, before the National
Labor Relations Board, (b) no material grievance or arbitration proceeding
arising out of or under any collective bargaining agreement pending against the
Borrower or any of the Subsidiaries or affecting the Business or, to the
knowledge of the Borrower, threatened against any of them, (c) no strike, labor
dispute, slowdown or stoppage pending against the Borrower or any of the
Subsidiaries or, to the knowledge of the Borrower, threatened against the
Borrower or any of the Subsidiaries, (d) to the knowledge of the Borrower, no
union representation question existing with respect to the employees of the
Borrower or any of the Subsidiaries which could reasonably be expected to have a
Material Adverse Effect and (e) except as set forth in Schedule 3.23, to the
knowledge of the Borrower, no union organizing activities are taking place which
could reasonably be expected to have a Material Adverse Effect.
SECTION 3.24. Changes, etc. Except as contemplated by this Agreement, the
other Loan Documents or the Registration Statement, subsequent to the respective
dates as of which information is given in the Registration Statement and prior
to or on the Closing Date, the Borrower and the other Loan Parties have not
incurred any material liabilities or obligations, direct or contingent, or
entered into any material transaction not in the ordinary course of business,
and no events have occurred which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, and there has not been
any Restricted Payment of any kind declared, paid or made by the Borrower or
either of the General Partners (other than (a) intercompany transfers from
National Propane Corp. to Triarc in the ordinary course of business and of the
nature of such transfers historically made by National Propane Corp. to Triarc
prior to the initial filing of the Registration Statement and (b) distributions
being made as part of the Transactions as described in the Registration
Statement).
SECTION 3.25. Indebtedness. Other than the Indebtedness represented by the
Mortgage Notes, Indebtedness set forth on Schedule 6.01(g) or Indebtedness
incurred hereunder, none of the Borrower, the General Partners and the
Subsidiaries will have any secured or unsecured Indebtedness outstanding as of
the Closing Date. As of the Closing Date, no instrument or agreement to which
the Borrower, any of the Subsidiaries or either General Partner is a party or by
which the Borrower, any of the Subsidiaries or either General Partner is bound
or which is applicable to the Borrower, any of the Subsidiaries or either
General Partner (other than this Agreement, the Note Agreement and, in the case
of the General Partners, Section 7.5(a) of the MLP Agreement and the Partnership
Agreement) con tains any restrictions on the incurrence by the Borrower, any of
the Subsidiaries or either General Partner of additional Indebtedness.
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SECTION 3.26. Transfer of Assets and Business. (a) The Borrower and its
Subsidiaries will at the Closing, after giving effect to the transfer of the
Assets on or prior to the Closing Date as described in the Registration
Statement, be in possession of and operating in compliance in all material
respects with all franchises, grants, authorizations, approvals, licenses,
permits, easements, rights-of-way, consents, certificates and orders required to
own, lease or use its properties (including to own, lease or use the Assets and
to assume certain liabilities relating to the Assets as described in the
Registration Statement and the Operative Agreements) and to permit the conduct
of the Business as now conducted and proposed to be conducted, except for those
franchises, grants, authorizations, approvals, licenses, permits, easements,
rights-of-way, consents, certificates and orders (i) which are not required at
this time and are routine or administrative in nature and are expected in the
reasonable judgment of the Borrower to be obtained or given in the ordinary
course of business after the date of the Closing or (ii) which are included in
the Permitted Exceptions.
(b) Upon the consummation of the Closing (and after giving effect to any
releases of Liens obtained at the Closing), the Borrower will have (i) good and
marketable title to the portion of the Assets constituting real property owned
in fee simple by the Borrower, (ii) good and valid leasehold interests (which
shall be deemed to include month-to-month leases) in the portion of the Assets
constituting real property leased by the Borrower other than certain leased
property covered by the Agency Agreement and other material leased properties in
respect of which the Borrower enjoys undisturbed possession and (iii) good and
sufficient title to or leasehold interests in the portion of the Assets
constituting personal property other than certain personal property covered by
the Agency Agreement, in each case subject to no Liens except for Permitted
Encumbrances and other Liens permitted under Section 6.02. The Assets are all of
the assets and properties necessary to enable the Borrower to conduct the
Business in the same manner as previously conducted by the National Propane
Group and include all options to purchase or rights of first refusal granted to
or for the General Partners with respect to any of the Assets leased by either
of the General Partners. The Assets constituting an interest in real property to
be conveyed to the Borrower pursuant to the Conveyance Agreements are located in
the counties and states listed in Schedule 3.26. Upon consummation of the
Closing (and receipt of all Required Consents on or prior to the Closing) and
the execution and delivery of the Agency Agreement, the Borrower will have the
same possessory and other rights in the Assets, and as are necessary for the
operation of the Business, as the General Partners had prior to the consummation
of the Transactions. All leases (including month-to-month leases) that are
Assets are valid and subsisting and are in full force and effect other than
immaterial leased properties in respect of which the Borrower currently enjoys
undisturbed possession. Except to perfect and to protect security interests
permitted under Section 6.02, (A) at the time of the Closing, no presently
effective financing statement under the Uniform Commercial Code which names the
Borrower, any Restricted Subsidiary, Triarc or either of the General Partners as
debtor, which individually or in the aggregate relates to any part of the
Assets, any other assets pledged pursuant to any Collateral Document or any
assets covered by the Agency Agreement (other than financing statements in favor
of The Bank of New York for which executed termination statements will be
delivered at Closing or financing statements in respect of Indebtedness
permitted under Section 6.01(g) and secured by Liens permitted under Section
6.02(k)(iii)), will be on file in any jurisdiction and (B) at the
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time of the Closing, none of the Borrower, Triarc or either of the General
Partners will have signed any presently effective financing statement or any
presently effective security agreement, which relates to any part of the Assets,
any other assets pledged pursuant to any Collateral Document or any assets
covered by the Agency Agreement, authorizing any secured party thereunder to
file any such financing statement, except for financing statements to be
executed and filed in connection with the Closing or financing statements in
respect of Indebtedness permitted under Section 6.01(g) and secured by Liens
permitted under Section 6.02(k)(iii).
(c) Upon the consummation of the Closing, (i) the General Partners will
have transferred to the Borrower beneficial and (except in the case of motor
vehicles covered by certificates of title where the certificates of title will
have been duly executed in favor of the Borrower, the Lien of the Trustee will
have been duly provided for thereon and such certificates of title will have
been delivered to the Borrower and/or the Trustee, but will not have yet been
submitted to the appropriate governmental agency for reissuance) record
ownership of all properties (including trademarks, tradenames and other
intellectual property used in the Business), easements and licenses comprising
the Assets, (ii) the Conveyance Agreements and the Collateral Documents (other
than the Trust Agreement), or proper notices, statements or other instruments in
respect thereof, will have been duly recorded, published, registered and filed
as required by Section 4.01(d), (iii) the Triarc Note or proper notices,
statements or other instruments in respect thereof, covering all of the assets
covered by such Triarc Note, shall have been duly executed, and all other
actions reasonably deemed necessary by the Administrative Agent shall have been
duly performed or taken, in such manner as is required by applicable law to
establish, perfect, preserve and protect the rights and first priority Liens
purported to be granted by such Triarc Note to the Borrower and its respective
successors and assigns and (iv) the Security Agreements (other than the Triarc
Note) and proper notices, statements or other instruments in respect thereof,
covering all the Assets covered by the Security Agreements (except as expressly
contemplated by the terms thereof and of Section 3.18) shall have been duly
executed, and all other actions reasonably deemed necessary by the
Administrative Agent shall have been duly performed or taken, in such manner as
is required by applicable law to establish, perfect, preserve and protect the
rights and first priority Liens purported to be granted by the Security
Agreements to the Trustee with respect to the Assets for the benefit of the
Lenders and their respective successors and assigns. Upon consummation of the
Closing, the Borrower will hold all right, title and interest in and to the
trade name "National Propane" and all other trademarks and trade names used in
the Business as are held by Triarc and its Affiliates on the date of this
Agreement and will hold exclusive right, title and interest in and to all
customer lists used in the Business.
SECTION 3.27. Chief Executive Office. The chief executive office of the
Borrower and the Managing General Partner and the office where each maintains
its records relating to the transactions contemplated by the Operative
Agreements are located at Suite 1700, IES Tower, 200 1st Street, P.O. Box 2067,
Cedar Rapids, Iowa 52401-2067.
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SECTION 3.28. Fixed Price Supply Contracts. None of the Borrower and the
Restricted Subsidiaries is a party to any contract for the purchase or supply by
such parties of propane or other product except where (a) the purchase price is
set with reference to a spot index or indices substantially contemporaneously
with the delivery of such product or (b) delivery of such propane or other
product is to be made no more than one year after the purchase price is agreed
to. All such contracts referred to in the foregoing clause (b) which are in
effect on the Closing Date are set forth in Schedule 3.28.
SECTION 3.29. Trading and Inventory Policies. As of the Closing Date, the
Borrower maintains a trading policy to the effect that neither it nor any of the
Restricted Subsidiaries will trade any commodities (except that the Borrower may
enter into Commodity Hedging Agreements in the ordinary course of business and
consistent with customary industry practices). As of the Closing Date, the
Borrower maintains a supply inventory position policy to the effect that neither
it nor any of the Restricted Subsidiaries will hold on hand, as of any date,
more Commodities Inventory (other than Commodities Inventory subject to a
Commodities Hedging Agreement reasonably acceptable to the Required Lenders),
than will be sold in the normal course of business during any 60-day period. As
of the Closing Date, the Borrower and the Restricted Subsidiaries are in
compliance with such policies.
ARTICLE IV
CONDITIONS OF LENDING
SECTION 4.01. Effectiveness. This Agreement shall become effective when
all of the conditions precedent set forth in this Section 4.01 shall have been
satisfied:
(a) Each Lender shall have received counterparts hereof signed by each of
the parties hereto.
(b) Each Lender shall have received duly executed Notes, dated the Closing
Date, complying with the provisions of Section 2.04.
(c) Each Lender shall have received counterparts of the General Partner's
Guarantee Agreement duly executed by each of the General Partners and the
Subsidiaries Guarantee Agreement duly executed by the Restricted Subsidiaries.
(d) The Trustee on behalf of the Secured Parties shall have a security
interest in the Collateral of the type and priority described in each Collateral
Document, perfected to the extent contemplated by Section 3.18 and each Lender
shall have received:
(i) counterparts of (A) the Partners Security Agreement, duly
executed by each of the Managing General Partner and the Public
Partnership, accompanied by undated assignments executed in blank, blank
stock powers and certificates representing all of the Capital Stock of
National Propane SGP, Inc. owned, directly or indirectly, by
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National Propane Corp. as of the Closing Date, which shall constitute 100%
of the Capital Stock of National Propane SGP, Inc., (B) the Triarc Note
(duly executed by Triarc and duly endorsed by the Borrower in a manner
satisfactory to the Administrative Agent), accompanied by undated
assignments executed in blank, blank stock powers and certificates
representing all of the Capital Stock of National Propane Corp. owned
directly by Triarc as of the Closing Date, which shall constitute at least
75.7% of the Capital Stock of National Propane Corp., (C) the Borrower
Security Agreement, duly executed by the Borrower, National Propane Corp.
and the Restricted Subsidiaries (other than National Sales and Service,
Inc.), and (D) a duly completed and executed Perfection Certificate from
the Borrower;
(ii) certificates representing all outstanding Capital Stock of the
Subsidiaries (or, in the case of any foreign Subsidiary, 65% of its
outstanding Capital Stock), accompanied by undated stock powers endorsed
in blank, and Intercompany Notes, duly executed by the Subsidiaries,
accompanied by undated assignments executed in blank;
(iii) counterparts of the Cash Collateral Agreement;
(iv) an acknowledgement copy, or other evidence satisfactory to each
Lender, of the proper filing, registration or recordation of each document
(including each Uniform Commercial Code financing statement) required by
law or reasonably requested by the Lenders to be filed, registered or
recorded, in each jurisdiction where the Borrower, any Restricted
Subsidiary or any other Loan Party owns any Assets or conducts any portion
of the Business and in which such filing, registration or recordation is
so required or requested, in order to create in favor of the Trustee for
the benefit of the Secured Parties a valid, legal and perfected security
interest in or lien on the Collateral (other than motor vehicles and
rolling stock) that is the subject of the Security Agreements;
(v) certified copies of Requests for Information (form UCC-11), or
equivalent reports from Prentice-Hall Financial Services or other
independent search service satisfactory to the Lenders, listing (A) any
judgment naming any member of the National Propane Group as judgment
debtor, (B) any tax lien that names any member of the National Propane
Group as a delinquent taxpayer in any of the jurisdictions referred to in
clause (iii) above and (C) any Uniform Commercial Code financing statement
that names any member of the National Propane Group as debtor or seller
filed in any of the jurisdictions referred to in clause (iv) above;
(vi) appropriate duly executed termination statements (Form UCC-3)
signed by all persons disclosed as secured parties in the jurisdictions
referred to in clause (iv) above in form for filing under the Uniform
Commercial Code of such jurisdictions;
(vii) counterparts of each Mortgage covering the real property
interests listed on Schedules 4.01(d)(vii)(a), (c) and (d), duly executed
by National Propane Corp. and
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the Borrower or the Subsidiary that is to be a party thereto, and such
other documents relating to the Mortgaged Properties as may be requested
by the Lenders, including such appraisals with respect to the Mortgaged
Properties as are required to be obtained in order to comply with
applicable laws, including banking laws, regulations and guidelines
applicable to any Lender, such landlord waivers, subordination agreements,
estoppel certificates and other customary closing documents as shall be
reasonably requested by the Lenders (other than (A) any such subordination
agreements, estoppel certificates and other closing documents as are
immaterial in the judgment of the Required Lenders and (B) landlord lien
waivers that are not required pursuant to Section 6.33) and such legal
opinions as are required to be furnished pursuant to the terms of the
Mortgages or reasonably requested by the Lenders;
(viii) counterparts of the Trust Agreement;
(ix) counterparts of the Conveyance Agreements in form and substance
satisfactory in all respects to the Agents;
(x) counterparts of the Agency Agreement in form and substance
satisfactory in all respects to the Agents (including satisfaction as to
the assets and properties covered by the Agency Agreement); and
(xi) counterparts of each Agency Account Agreement covering all
"clearing" or "sweep" accounts of the Borrower, duly executed by the
parties thereto.
(e) The Trustee shall have received:
(i) a mortgagee's policy of title insurance, including mechanic's
lien coverage, with respect to all of the properties and facilities listed
on Schedule 4.01(d)(vii)(b), issued by a Title Company or Companies
authorized to issue title insurance in the states in which such properties
or facilities are located and satisfactory in form and substance to the
Lenders with provisions for coinsurance or reinsurance, if any,
satisfactory to the Lenders, dated the Closing Date and satisfactory in
substance and form to the Lenders, insuring the interest of the Trustee
under the Collateral Documents as valid first liens on the Mortgaged
Properties, free of Liens (other than Liens permitted by Section 6.02) or
other exceptions to title not approved and accepted by the Lenders, such
policies to be in an amount at least equal to the amounts set forth
opposite each of the individual properties and facilities so identified on
Schedule 4.01(d)(vii)(b); and
(ii) Except as otherwise noted on Schedule 4.01(d)(vii)(b), the
Trustee shall have received copies of "As-Built" ALTA surveys with respect
to all of the properties and facilities listed on Schedule
4.01(d)(vii)(b), certified to the Trustee and the Title Company or
Companies, and reasonably satisfactory to the Lenders.
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(f) The Lenders shall have received opinions of (i) Paul, Weiss, Rifkind,
Wharton & Garrison, special counsel to the Borrower, in form and substance
reasonably acceptable to the Lenders, (ii) Andrews & Kurth, special tax counsel
to the Borrower, in form and substance reasonably acceptable to the Lenders and
(iii) local counsel to the Borrower satisfactory to the Lenders in each
jurisdiction in which a Mortgage is recorded as contemplated by Section
4.01(d)(vii), substantially in the form of Exhibit I hereto or otherwise in form
and substance satisfactory to the Lenders, and (iv) Emmett, Marvin & Martin,
LLP, counsel to the Trustee, in form and substance reasonably satisfactory to
the Lenders, and covering such additional matters relating to the transactions
contemplated hereby as the Lenders may reasonably request, each such opinion to
be dated the Closing Date and addressed to the Lenders. In addition, the Lenders
shall have received copies of each of the opinions delivered pursuant to the
Underwriting Agreement (other than the opinion of counsel to the Underwriters)
and the Note Agreement, accompanied by letters, dated the Closing Date and
addressed to the Lenders (unless such opinions are addressed to the Lenders or
expressly include such reliance provision), from the counsel rendering such
opinions, including Andrews & Kurth L.L.P., counsel to the Borrower, stating
that the Lenders are entitled to rely on such opinions as if they were addressed
to the Lenders.
(g) The Lenders shall have received:
(i) a certificate, dated the Closing Date and signed by a Financial
Officer of each of the Loan Parties, confirming compliance with the
conditions precedent set forth in paragraphs (j), (l), (n), (p), (w), (x),
(y), (z) and (aa) of this Section 4.01;
(ii) a copy of the partnership agreement, certificate of
incorporation or other constitutive documents, including all amendments
thereto, of each of the Loan Parties, certified as of a recent date by the
Secretary of State of the State of its organization, and a certificate as
to the good standing of each such party as of a recent date, from such
Secretary of State;
(iii) a certificate of the Secretary or Assistant Secretary of each
of the Loan Parties and National Propane SGP dated the Closing Date and
certifying (A) that attached thereto is a true and complete copy of the
by-laws of such party (or, in the case of the Borrower and the Public
Partnership, of the General Partners) as in effect on the Closing Date and
at all times since a date prior to the date of the resolutions described
in clause (B) below, (B) that attached thereto is a true and complete copy
of resolutions duly adopted by the Board of Directors of such Loan Party
(or, in the case of the Borrower and the Public Partnership, of the
General Partners) authorizing the execution, delivery and performance of
the Loan Documents to which such Loan Party is or will be a party, the
consummation of the Transactions (with respect to each Loan Party and
National Propane SGP) and, in the case of the Borrower, the extensions of
credit hereunder, and that such resolutions have not been modified,
rescinded or amended and are in full force and effect, (C) that the
certificate of incorporation or other constitutive documents of such Loan
Party and National Propane SGP (or, in the case of the Borrower and the
Public Partnership, of the General Partners) have not been
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amended since the date of the last amendment thereto shown on the
certificate of good standing furnished pursuant to clause (ii) above, (D)
in the case of the certificate of the Managing General Partner, that the
Registration Statement at the time it became effective did not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
contained therein not misleading and (E) as to the incumbency and specimen
signature of each officer executing any Loan Document or any other
document delivered in connection herewith on behalf of such Loan Party and
National Propane SGP (or, in the case of the Borrower and the Public
Partnership, of the General Partners);
(iv) a certificate of another officer as to the incumbency and
specimen signature of the Secretary or Assistant Secretary executing the
certificate pursuant to clause (iii) above;
(v) a true and complete copy of the Note Agreement, the Registration
Statement and the Underwriting Agreement; and
(vi) such other documents, opinions, certificates and agreements in
connection with the Transactions and the Facilities, in form and substance
satisfactory to the Lenders, as they or their counsel shall reasonably
request, including counterpart originals or certified copies of all the
other Operative Agreements.
(h) Each Lender shall have completed, and shall be reasonably satisfied in
all respects with the results of, its due diligence investigation of (i) the
Transactions, (ii) the business, assets, condition (financial and otherwise),
liabilities (actual and contingent) and prospects of the Borrower, (iii)
litigation, tax, accounting, labor, health and safety, environmental, insurance,
pension and other employee benefit matters and (iv) real estate leases, material
contracts, debt agreements, property ownership, and contingent liabilities of
the Borrower and the Subsidiaries.
(i) Each Lender shall be reasonably satisfied with (i) the structure and
all other aspects of the Transactions as they affect the Borrower, including all
legal, tax and accounting matters relating to the Transactions and the terms of
all agreements and instruments to be entered into in connection with the
Transactions, including any tax sharing agreements affecting the Borrower, (ii)
the amount, terms and conditions (including maturity, amortization, interest
rates and fees, covenants, events of default, redemption and other provisions)
of the Mortgage Notes and (iii) the ownership structure of the Borrower, the
Public Partnership and the General Partners after giving effect to the
Transactions.
(j) There shall not have occurred or become known any material adverse
change with respect to the business, assets, operations, properties, condition
(financial or otherwise) or liabilities (actual or contingent) of the Borrower
from that shown in the information and projections reviewed by the Lenders prior
to the date of this Agreement.
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(k) All components of the Transactions shall be consummated in accordance
with applicable laws and regulations, on terms satisfactory in all material
respects to each Lender, and contemporaneously with the effectiveness of the
Facilities.
(l) The Borrower shall have paid all Fees and other amounts due and
payable to any Agent or Lender on or prior to the Closing Date, including
reimbursement or payment of all out-of-pocket expenses required to be reimbursed
or paid by the Borrower under the Work Letters with the Managing General Partner
executed prior to the date hereof or under any Loan Document (to the extent
invoices or statements therefor have been received).
(m) In the case of each Lender, each other Lender, the Administrative
Agent, each Issuing Bank and the Syndication Agent shall have simultaneously
executed and delivered this Agreement.
(n) After giving effect to the Transactions, (i) the Borrower and the
Subsidiaries shall have no indebtedness or other liabilities to third parties
(including affiliates), whether accrued, absolute, contingent or threatened, and
whether due or to become due, except in respect of (A) the Facilities, (B) the
Mortgage Notes, (C) as set forth on Schedule 6.01(g), (D) accounts payable and
other liabilities disclosed on the unaudited pro forma balance sheet referred to
in Section 3.05(c) and satisfactory in all respects to the Lenders and (E)
liabilities (other than indebtedness for borrowed money) incurred in the
ordinary course of business since March 31, 1996 (none of which other
liabilities, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect), (ii) any existing credit facilities of the
National Propane Group shall have been permanently terminated and (iii) except
for Liens permitted by Section 6.02, any liens on or claims or encumbrances
affecting any assets or properties of the Borrower and the Subsidiaries or any
other Collateral (including the Capital Stock of the Borrower) shall have been
released in a manner reasonably satisfactory to the Administrative Agent.
(o) The Lenders shall be reasonably satisfied with all legal matters and
documentation incident to the Facilities and all corporate and other proceedings
taken or to be taken in connection therewith.
(p) The Underwriting Agreement and the Note Agreement shall have been
executed and delivered by the parties thereto; such agreements shall not have
been amended or modified, nor any material provision thereof waived by any party
thereto, except such as shall be reasonably satisfactory to the Lenders; all
conditions precedent to the obligations of the Underwriters and the purchases of
Mortgage Notes set forth therein shall have been satisfied (without giving
effect to any waiver thereof, except such as shall be reasonably satisfactory to
the Lenders); simultaneously with the effectiveness of the Facilities, there
shall occur the consummation of the closing under such agreements; and the
aggregate net cash proceeds from the sale of the Units shall be at least
$115,000,000 and from the sale of the Mortgage Notes shall be at least
$115,000,000 and no more than $125,000,000. Prior to the Closing, the Mortgage
Notes shall have received a rating of at least BBB from Fitch, which rating
remains in effect as of the Closing.
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(q) The Lenders shall have received (i) financial statements and other
financial information satisfactory in all respects to the Lenders, including
historical, pro forma and projected information and (ii) a statement of sources
and uses of funds in connection with the Transactions.
(r) The Lenders shall have received such information as the Lenders may
request as to the aging and concentration of the accounts receivable of the
Borrower and the Subsidiaries and as to their inventory, and shall have
completed and be reasonably satisfied with their review thereof.
(s) The Lenders shall be reasonably satisfied with the amount and scope of
the insurance coverage of the Borrower and the Subsidiaries and the identity of
the insurers providing such coverage, and shall have received (i) a satisfactory
report from the Borrower's independent insurance broker, Kaye Insurance
Associates, Inc. together with any other evidence reasonably requested by the
Agents, demonstrating that the insurance required by Section 6.11 and by the
terms of the other Loan Documents is in effect and (ii) insurance certificates
on Accord Form 27, demonstrating that such insurance is in effect.
(t) The Lenders shall be satisfied in all material respects with all
agreements and transactions between any of the Borrower and the Subsidiaries, on
the one hand, and any of their Affiliates, on the other hand.
(u) Environmental Strategies Corporation shall have conducted
environmental reviews and audits of the properties of the Borrower and the
Subsidiaries listed on Schedule 4.01(d)(vii)(c), in form and substance
satisfactory to the Lenders, and the Lenders shall be satisfied with the amount
and nature of any environmental exposures to which any of the Borrower and the
Subsidiaries may be subject and the plans of the Borrower with respect thereto.
(v) The Lenders shall have received true and complete copies of an
appraisal report of Valuation Research setting forth their appraisal of the
Assets and the contents of such report shall be reasonably satisfactory to the
Lenders.
(w) All Required Consents and all other governmental, regulatory,
shareholder and third party consents, approvals, filings, registrations and
other actions required in order to consummate the Transactions or the Facilities
shall have been obtained or made, as applicable, except for the Permitted
Exceptions, and shall remain in full force and effect, in each case without the
imposition of any condition or restriction which is, in the judgment of the
Lenders, materially adverse to the Borrower or any of the Subsidiaries.
(x) There shall not be any pending proceeding requesting an injunction or
restraining order with respect to the Transactions or the Facilities or
challenging the validity or enforceability of the Transactions or the
Facilities.
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(y) The representations and warranties set forth in Article III hereof and
the representations and warranties of the Borrower and the other Loan Parties
set forth in the other Loan Documents shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though made on
and as of the Closing Date, except to the extent such representations and
warranties expressly relate to an earlier date (in which case such
representations and warranties shall be true and correct in all material
respects on and as of such earlier date).
(z) Upon consummation of the Transactions on the Closing Date, no Default
or Event of Default shall have occurred and be continuing.
(aa) Prior to the Closing, the Conveyance Agreements and the Collateral
Documents (other than the Trust Agreement), or proper notices, statements or
other instruments in respect thereof, covering all or substantially all of the
Assets covered by the Conveyance Agreements and Collateral Documents (other than
as relate to motor vehicles and rolling stock), shall have been duly recorded,
published, registered and filed, and all other actions deemed necessary by the
Lenders shall have been duly performed or taken, in such manner and in such
places as is required by applicable law (i) to convey to the Borrower record and
beneficial ownership of the Assets purported to be conveyed by such Conveyance
Agreements and (ii) to establish, perfect, preserve and protect the rights and
first priority liens and security interests purported to be granted by each of
the Collateral Documents to the Trustee with respect to the Assets (other than
motor vehicles, rolling stock and certain bank accounts) for the benefit of the
Lenders and their respective successors and assigns, and all taxes, fees and
other charges then due in connection with the execution, delivery, recording,
publishing, registration and filing of such documents or instruments and the
establishment of the Facilities shall have been paid in full.
SECTION 4.02. All Extensions of Credit. The obligations of the Lenders to
make Loans hereunder, and the obligation of the Issuing Bank to issue Letters of
Credit hereunder, are subject to the satisfaction of the conditions precedent
set forth in this Section 4.02 on the date of each Borrowing and on the date of
issuance of each Letter of Credit:
(a) The Administrative Agent shall have received a notice of such
Borrowing to the extent required by Section 2.03 or a notice requesting the
issuance of a Letter of Credit as required by Section 2.21(c), as applicable.
(b) The representations and warranties set forth in Article III hereof and
the representations and warranties of the Borrower and the other Loan Parties
set forth in the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Borrowing (other than any Rollover
Borrowing) or the date of the issuance of such Letter of Credit with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall be true and correct in all
material respects on and as of such earlier date).
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(c) At the time of and immediately after such Borrowing or the issuance of
such Letter of Credit, the aggregate outstanding principal amount of the Loans
of each Class and the Letter of Credit Exposure of each Class will not exceed
the limitations set forth in Sections 2.01, 2.21 and 6.01(e), respectively.
(d) At the time of and immediately after such Borrowing (other than a
Rollover Borrowing) or the issuance of such Letter of Credit, no Default or
Event of Default shall have occurred and be continuing.
Each Borrowing hereunder and each request for the issuance of a Letter of Credit
hereunder shall be deemed to constitute a representation and warranty by the
Borrower on the date of such Borrowing or issuance as to the matters specified
in paragraphs (b), (c) and (d) of this Section 4.02, except that no
representation or warranty will be deemed made by the Borrower as to the matters
specified in paragraphs (b) and (d) of this Section 4.02 as to any Rollover
Borrowing. For purposes of Section 4.02, the "issuance" of a Letter of Credit
shall include any extension, renewal or amendment of a Letter of Credit.
SECTION 4.03. Tranche B Extensions of Credit. The obligations of the
Lenders to make Tranche B Revolving Loans hereunder, and the obligation of the
Issuing Bank to issue Tranche B Letters of Credit hereunder, are subject to the
satisfaction of the conditions precedent set forth in this Section 4.03 and the
additional conditions precedent set forth under Section 4.02 on the date of each
Tranche B Revolving Credit Borrowing (other than a Rollover Borrowing) and on
the date of issuance of each Tranche B Letter of Credit:
(a) At the time of and immediately after any Tranche B Revolving Credit
Borrowing made and/or any Tranche B Letter of Credit issued in connection with
any Eligible Propane Acquisition, (i) the ratio of (A) the sum (I) of the
principal amount of such Borrowing and (II) the face amount of such Letter of
Credit to (B) the cash flow of such acquired business for the then most recent
period of four fiscal quarters, calculated on the same basis, including pro
forma adjustments, as provided for an acquired business or asset in the
definition of Consolidated Cash Flow, shall be no greater than 8.00:1.00 and
(ii) the Borrower shall have prepared and furnished to the Agents prior to such
Borrowing or issuance pro forma financial statements demonstrating the
fulfillment of such condition to the satisfaction of the Agents.
(b) If Capital Stock is being purchased with proceeds from such Tranche B
Revolving Credit Borrowing, the Agents and the Trustee shall have received
counterparts of a Supplemental Agreement duly executed by the issuer of such
Capital Stock (and all terms of such Supplemental Agreement shall have been
satisfied).
(c) In the case of any Tranche B Revolving Credit Borrowing (or series of
related Tranche B Revolving Credit Borrowings) in a principal amount, and/or any
Tranche B Letter of Credit (or series of related Tranche B Letters of Credit)
having a face amount, in excess of $1,500,000 to be used for Growth-Related
Capital Expenditures, the Agents shall have received (A) all financial
information reasonably requested by the Agents in connection with such
Growth-Related Capital Expenditures, (B) a statement of sources and uses of
funds in
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connection with such Growth-Related Capital Expenditures, and (C) a statement
that such expenditures are Growth-Related Capital Expenditures, and not
expenditures for maintenance of existing capital assets, in each case certified
by a Financial Officer of the Borrower.
(d) All components of the Eligible Propane Acquisition or Growth-Related
Capital Expenditure financed with such Tranche B Revolving Credit Borrowing or
Tranche B Letter of Credit shall be consummated in all material respects in
accordance with applicable laws and regulations.
(e) All governmental, regulatory, shareholder and third party consents,
approvals, filings, registrations and other actions required in order to
consummate the Eligible Propane Acquisition or Growth-Related Capital
Expenditure financed with such Tranche B Revolving Credit Borrowing or Tranche B
Letter of Credit (other than any such actions the absence of which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect) shall have been obtained in all material respects or made and
shall remain in full force and effect, without the imposition of any condition
or restriction which is, materially adverse to the Borrower or any of the
Subsidiaries.
(f) There shall not be any pending proceeding requesting an injunction or
restraining order with respect to the Eligible Propane Acquisition or
Growth-Related Capital Expenditure financed with such Tranche B Revolving Credit
Borrowing or Tranche B Letter of Credit or challenging the validity or
enforceability of such acquisition or Growth-Related Capital Expenditure.
(g) On the date of the making of such Tranche B Revolving Credit Borrowing
or the issuance of such Tranche B Letter of Credit, (i) after giving effect to
such Borrowing or issuance and the Eligible Propane Acquisition or
Growth-Related Capital Expenditure for which such Borrowing or Letter of Credit
is being used (and any other such Borrowings, issuances, acquisitions,
expenditures or other Specified Events which have occurred since the first day
of the applicable Reference Period) (A) no Default or Event of Default shall
have occurred and be continuing and (B) the Leverage Ratio as of the last day of
the Reference Period with respect to the date of such Borrowing or issuance,
calculated on a pro forma basis as if such Borrowing or issuance, related
Eligible Propane Acquisition or Growth-Related Capital Expenditure and other
Specified Events had occurred on the first day of such Reference Period, shall
be no greater than the Permitted Maximum Ratio on the date of such Borrowing or
issuance and (ii) the Borrower shall have prepared and furnished to the Agents
prior to such Borrowing or issuance pro forma financial statements demonstrating
the fulfillment of such condition in reasonable detail.
(h) The Agents shall have received an Officers' Certificate, dated the
date of such Tranche B Revolving Credit Borrowing or issuance of such Tranche B
Letter of Credit, to the effect that the use of proceeds of such Borrowing or
such Letter of Credit complies with Section 3.13(b), specifying the basis for
such conclusion in reasonable detail.
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Each Tranche B Revolving Credit Borrowing hereunder (other than a Rollover
Borrowing) and each request for the issuance of a Tranche B Letter of Credit
hereunder shall be deemed to constitute a representation and warranty by the
Borrower on the date of such Borrowing or issuance as to the matters specified
in paragraphs (a), (d), (e), (f), (g) and (h) of this Section 4.03. For purposes
of this Section 4.03, the "issuance" of a Tranche B Letter of Credit shall
include any extension, renewal or amendment of a Tranche B Letter of Credit.
ARTICLE V
ACCOUNTING; FINANCIAL STATEMENTS; INSPECTION
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect or any Facilities Obligations shall be unpaid,
and until the Commitments have been terminated and the Loans, together with
interest, Fees and all other Facilities Obligations have been paid in full, all
Letters of Credit have been cancelled or have expired and all Letter of Credit
Disbursements have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing:
SECTION 5.01. Accounting. The Borrower will maintain, and will cause each
Restricted Subsidiary to maintain, a system of accounting established and
administered in accordance with GAAP, and will accrue, and will cause each
Restricted Subsidiary to accrue, all such liabilities as shall be required by
GAAP.
SECTION 5.02. Financial Statements. The Borrower will deliver to the
Lenders:
(a) as soon as practicable, but in any event within 60 days after the end
of each of the first three quarterly fiscal periods in each fiscal year of the
Borrower, (i) consolidated (and (A) if the Restricted Subsidiaries or a
Restricted Subsidiary constitute (or constitutes, as the case may be) a
Substantial Portion, then as to the Restricted Subsidiaries or (B) if the
Restricted Subsidiaries do not or a Restricted Subsidiary does not constitute a
Substantial Portion, but one or more Restricted Subsidiaries have outstanding
Indebtedness owing to Persons other than the Borrower or any Restricted
Subsidiary and other than pursuant to any Collateral Documents, then as to such
Restricted Subsidiaries, consolidating) balance sheets of the Borrower and the
Restricted Subsidiaries as at the end of such period and the related
consolidated (and, as to statements of income and cash flows, if applicable and
as appropriate, consolidating) statements of income, surplus or partners'
capital, cash flows and stockholders' equity of the Borrower and the Restricted
Subsidiaries for such period and (in the case of the second and third quarterly
periods) for the period from the beginning of the current fiscal year to the end
of such quarterly period, setting forth in each case (except in the case of
financial statements with respect to the fiscal year of the Borrower beginning
January 1, 1996 or if consolidating balance sheets of the Restricted
Subsidiaries were not required to be delivered pursuant to this subdivision (a)
for the previous corresponding period) in comparative form the consolidated and,
where applicable and as appropriate, consolidating figures for the corresponding
periods of the previous fiscal year, all in reasonable detail and certified by
the
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principal financial officer of the Managing General Partner as presenting
fairly, in all material respects, the information contained therein (subject to
changes resulting from normal year-end adjustments), in accordance with GAAP
applied on a basis consistent with prior fiscal periods; provided that, for
purposes of this Section 5.02, "Substantial Portion" shall mean that either (x)
either (1) the book value of the assets of the Restricted Subsidiaries exceeds
10% of the book value of the consolidated assets of the Borrower and the
Restricted Subsidiaries or (2) the Restricted Subsidiaries account for more than
10% of the Consolidated Net Income of the Borrower and its Restricted
Subsidiaries, in each case in respect of the four fiscal quarters ended as of
the date of the applicable financial statement or (y) either (A) the book value
of the assets of any Restricted Subsidiary exceeds 5% of the book value of the
consolidated assets of the Borrower and the Restricted Subsidiaries, or (B) any
Restricted Subsidiary accounts for more than 5% of the Consolidated Net Income
of the Borrower and its Restricted Subsidiaries, in each case in respect of the
four fiscal quarters ended as of the date of the applicable financial statement
and (ii) copies of the Public Partnership's Quarterly Report on Form 10-Q
prepared in compliance with the requirements therefor and filed with the SEC;
(b) as soon as practicable, but in any event within 120 days after the end
of each fiscal year of the Borrower ending after the date of this Agreement, (i)
consolidated (and (A) if the Restricted Subsidiaries or a Restricted Subsidiary
constitute (or constitutes, as the case may be) a Substantial Portion, then as
to the Restricted Subsidiaries or (B) if the Restricted Subsidiaries do not or a
Restricted Subsidiary does not constitute a Substantial Portion, but one or more
Restricted Subsidiaries have outstanding Indebtedness owing to Persons other
than the Borrower or any Restricted Subsidiary and other than pursuant to any
Collateral Documents, then as to the Restricted Subsidiaries, consolidating)
balance sheets of the Borrower and the Restricted Subsidiaries and the
consolidated balance sheet of each of the General Partners as at the end of such
year and the related consolidated (and, as to statements of income and cash
flows, if applicable and as appropriate, consolidating) statements of income,
partners' capital, cash flows and stockholders' equity of the Borrower and the
Restricted Subsidiaries and the consolidated statements of income, surplus, cash
flow and stockholders' equity of each of the General Partners for such fiscal
year, setting forth in each case (except in the case of the financial statements
with respect to the fiscal year of the Borrower beginning January 1, 1996 or if
consolidating balance sheet of the Restricted Subsidiaries were not required to
be delivered pursuant to this Section 5.02(b) for the preceding corresponding
period) in com parative form the consolidated and, where applicable and as
appropriate, consolidating figures for the previous fiscal year, all in
reasonable detail, and (ii) copies of the Public Partnership's Annual Report on
Form 10-K prepared in compliance with the requirements therefor and filed with
the SEC, and (1) in the case of such consolidated financial statements of the
Borrower, accompanied by a report thereon of Deloitte & Touche LLP or other
independent public accountants of recognized national standing selected by the
Borrower, which report shall state that such consolidated financial statements
present fairly in all material respects the financial position of the Borrower
and the Restricted Subsidiaries as at the dates indicated and the results of
their operations and cash flows for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years and that the audit by such
accountants in connection with such consolidated financial statements has been
made in accordance with GAAP and (2) in the case of such consolidated financial
statements of the General Partners and such consolidating
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financial statements of the Borrower, certified by the principal financial
officer of the General Partners, as presenting fairly in all material respects
the information contained therein, in accordance with GAAP applied on a basis
consistent with prior fiscal periods;
(c) together with each delivery of financial statements pursuant to
paragraphs (a) and (b) of this Section 5.02, an Officers' Certificate of the
Borrower in the form of Exhibit N hereto (i) stating that the signers have
reviewed the terms of this Agreement and the other Loan Documents, and have
made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Borrower and the Restricted
Subsidiaries during the accounting period covered by such financial statements
and that the signers do not have knowledge of the existence and continuance as
at the date of such Officers' Certificate of any condition or event which
constitutes an Event of Default or Default or, if any such condition or event
exists, specifying the nature and period of existence thereof and what action
the Borrower has taken or is taking or proposes to take with respect thereto,
(ii) stating whether, since the date of the most recent financial statements
previously delivered, there has been any material change in GAAP applied in the
preparation of the Borrower's financial statements and, if so, describing such
change, (iii) specifying the amount available at the end of such accounting
period for Restricted Payments in compliance with Section 6.04 and showing in
reasonable detail all calculations required in arriving at such amount, (iv)
demonstrating in reasonable detail, if applicable, compliance during and at the
end of such accounting period with the restrictions contained in Sections
6.01(b), (d), (f) and (h), the last paragraph of Sections 6.01, 6.02(i),
6.03(b)(iv), 6.07(c)(iii), 6.30 and 6.31, (v) if not specified in the related
financial statements being delivered pursuant to paragraphs (a) and (b) above,
specifying the aggregate amount of interest paid or accrued by the Borrower and
the Restricted Subsidiaries, and the aggregate amount of depreciation, depletion
and amortization charged on the books of the Borrower and the Restricted
Subsidiaries, during the fiscal period covered by such financial statements and
(vi) describing in reasonable detail the number and nature of the parcels of
real property, or rights thereto or interests therein, caused to be released by
the Borrower from the liens of the Security Documents pursuant to the Trust
Agreement and in the case of the fee owned property, the sales price of the fee
owned property caused to be released by the Borrower during such accounting
period;
(d) together with each delivery of consolidated financial statements
pursuant to paragraph (b) of this Section 5.02, a written statement by the
independent public accountants giving the report thereon (i) stating that in
connection with their audit examination, the terms of this Agreement and the
other Loan Agreements were reviewed to the extent considered necessary for the
purpose of expression of an opinion on the consolidated financial statements and
for making the statement contained in clause (ii) of this paragraph (d) (it
being understood that no special audit procedures in addition to those required
by generally accepted auditing standards then in effect in the United States
shall be required) and (ii) stating whether, in the course of their audit
examination, they obtained knowledge (and whether, as of the date of such
written statement, they have knowledge) of the existence and continuance of any
condition or event which constitutes an Event of Default or Default insofar as
such Event of Default or Default relates to accounting or financial matters,
and, if so, specifying the nature and period of existence thereof;
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(e) promptly upon their becoming publicly available, copies of all (i)
financial statements, reports, notices and proxy statements sent or made
available by the Borrower, either of the General Partners or the Public
Partnership to all of its security holders in compliance with the Exchange Act
or any comparable Federal or state laws relating to the disclosure by any Person
of information to its security holders, (ii) all regular and periodic reports
and all registration statements and prospectuses filed by the Borrower, either
of the General Partners or the Public Partnership with any securities exchange
or with the SEC (other than Registration Statements on Form S-8), and (iii) all
press releases and other statements made available by the Borrower, either of
the General Partners or the Public Partnership to the public concerning material
developments in the business of the Borrower, either of the General Partners or
the Public Partnership, as the case may be;
(f) promptly, but in any event (i) within five days after any Responsible
Officer of the Borrower knows or (ii) within 10 days after any Responsible
Officer of the Borrower should (in the course of the normal performance of his
or her duties) know that (x) any condition or event which constitutes an Event
of Default or Default has occurred or exists, or is expected to occur or exist,
(y) any Lender has given any notice or taken any other action with respect to a
claimed Event of Default or Default or (z) any Person has given any notice to
the Borrower, either of the General Partners or any Restricted Subsidiary or
taken any other action with respect to a claimed default or event or condition
of the type referred to in Section 7.01(f), an Officers' Certificate of the
Borrower describing the same and the period of existence thereof and what action
the Borrower has taken, is taking and proposes to take with respect thereto;
(g) promptly, but in any event (i) within five days after any Responsible
Officer of the Borrower knows or (ii) within 10 days after any Responsible
Officer of the Borrower should (in the course of the normal performance of his
or her duties) know of (x) the occurrence of an adverse development with respect
to any litigation or proceeding (including those regarding environmental
matters) involving the Borrower, any of its Subsidiaries or either General
Partner which in the reasonable judgment of the Borrower presents a reasonable
likelihood of having a Material Adverse Effect or (y) the commencement of any
litigation or proceeding (including those regarding environmental matters)
involving the Borrower, any of its Subsidiaries or either General Partner which
in the reasonable judgment of the Borrower presents a reasonable likelihood of
having a Material Adverse Effect, a written notice of such Responsible Officer
describing in reasonable detail such commencement of, or adverse development
with respect to, such litigation or proceeding;
(h) promptly, but in any event (i) within five days after any Responsible
Officer of the Borrower knows or (ii) within 10 days after any Responsible
Officer of the Borrower should (in the course of the normal performance of his
or her duties) know that any of the events or conditions specified below with
respect to any Plan has occurred or exists, or is expected to occur or exist, a
statement setting forth details respecting such event or condition and the
action, if any, that the Borrower or any Related Person of the Borrower has
taken, is taking and proposes to take or cause to be taken with respect thereto
(and a copy of any notice
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or report filed with or given to or communication received from the PBGC, the
IRS or the Department of Labor with respect to such event or condition):
(i) any reportable event, as defined in Section 4043(b) of ERISA and
the regulations issued thereunder;
(ii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan;
(iii) a substantial cessation of operations within the meaning of
Section 4062(e) of ERISA under circumstances which could result in the
treatment of the Borrower or any Related Person of the Borrower as a
substantial employer under a "multiple employer plan" or the application
of the provisions of Section 4062, 4063 or 4064 of ERISA to the Borrower
or any Related Person of the Borrower;
(iv) the taking of any steps by the PBGC or the institution by the
PBGC of proceedings under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan, or the receipt by
the Borrower or any Related Person of the Borrower of a notice from a
Multiemployer Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan;
(v) the complete or partial withdrawal by the Borrower or any
Related Person of the Borrower under Section 4063, 4203 or 4205 of ERISA
from a Plan which is a "multiple employer plan" or a Multiemployer Plan,
or the receipt by the Borrower or any Related Person of the Borrower of
notice from a Multiemployer Plan regarding any alleged withdrawal or that
it intends to impose withdrawal liability on the Borrower or any Related
Person of the Borrower or that it is in reorganization or is insolvent
within the meaning of Section 4241 or 4245 of ERISA or that it intends to
terminate under Section 4041A of ERISA or from a "multiple employer plan"
that it intends to terminate;
(vi) the taking of any steps concerning the threat or the
institution of a proceeding against the Borrower or any Related Person of
the Borrower to enforce Section 515 of ERISA;
(vii) the occurrence or existence of any event or series of events
which could result in a liability to the Borrower or any Related Person of
the Borrower pursuant to Section 4069(a) or 4212(c) of ERISA;
(viii) the failure to make a contribution to any Plan, which failure,
either alone or when taken together with any other such failure, is
sufficient to result in the imposition of a lien on any property of the
Borrower or any Related Person of the Borrower pursuant to Section 302(f)
of ERISA or Section 412(n) of the Code or could result in the imposition
of a material tax or material penalty pursuant to Section 4971 of the Code
on the Borrower or any Related Person of the Borrower;
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(ix) the amendment of any Plan in a manner which would be treated as
a termination of such Plan under Section 4041(e) of ERISA or require the
Borrower or any Related Person of the Borrower to provide security to such
Plan pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code;
or
(x) the incurrence of liability in connection with the occurrence of
a "prohibited transaction" (within the meaning of Section 406 of ERISA or
Section 4975 of the Code);
(i) promptly, but in any event within five days, after an officer of any
of the Borrower, any Subsidiary or either of the General Partners receives any
notice or request from any Person (other than any agent, attorney or similar
party employed by the Borrower or either of the General Partners) for
information, or if the Borrower, any Subsidiary or either of the General
Partners by an officer provides any notice or information to any such Person
(other than an Affiliate or any agent, attorney or similar party employed by the
Borrower or either of the General Partners), concerning the presence or release
of any hazardous substance (as defined in CERCLA) or hazardous waste (as defined
in RCRA) or other contaminants (as defined by any applicable Federal, state,
local or foreign laws) within, on, from, relating to or affecting any property
owned, leased, or subleased by the Borrower or any Subsidiary, other than
notices or requests received or filings made in the normal course of business
which do not pertain to a violation by or potential liability of the Borrower or
any Subsidiary under an Environmental Law, copies of each such notice, request
or information;
(j) if requested by any Lender, reports as of the last day of such month
as to the aging and concentration of the accounts receivable of the Borrower and
its Restricted Subsidiary and as to their inventory, in substantially the form
of the reports delivered pursuant to Section 4.01(r);
(k) as soon as available, and in any event no later than 60 days after the
end of each fiscal year of the Borrower, quarterly financial projections for the
next fiscal year, including all material assumptions to such projections;
(l) within 15 days of receipt, any management letter issued or provided by
the auditors of the Borrower or any Restricted Subsidiary; and
(m) promptly, from time to time, such other information regarding the
operations, business affairs and financial condition of the Borrower, any other
Loan Party or (to the extent such information relates to environmental matters
or any material litigation or proceeding) any Unrestricted Subsidiary, or in any
event compliance with the terms of any Loan Document, and such reports submitted
to the Borrower, as any Lender may reasonably request.
SECTION 5.03. Inspection. The Borrower will permit, or cause the General
Partners to permit, any authorized representatives designated by the Lenders
upon prior written notice and during normal business hours to visit and inspect
any of the properties of the Borrower, any Restricted Subsidiary and (to the
extent relating to environmental or litigation matters) any
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Unrestricted Subsidiary, and in any event any properties of either of the
General Partners or of either of the General Partners' subsidiaries relating to
the Business, including the books of account of the Borrower, the Restricted
Subsidiaries, such Unrestricted Subsidiaries, the General Partners and the
General Partners' subsidiaries, and to make copies and take extracts therefrom,
and to discuss its and their affairs, finances and accounts with its and their
senior officers and (with reasonable notice) independent public accountants (and
by this provision each of the Borrower and the General Partners authorizes such
accountants to discuss with such representatives the affairs, finances and
accounts of the Borrower, any Restricted Subsidiary, such Unrestricted
Subsidiaries, the General Partners or any of such subsidiaries of either of the
General Partners, as the case may be, all at such times and as often as
reasonably may be requested), provided that the Borrower will bear the expense
for the foregoing if an Event of Default or Default has occurred and is
continuing. Without limitation of the foregoing, the Agents shall have the
right, upon written notice and during normal business hours, to conduct an audit
of the accounts receivable and inventory of the Borrower and its Restricted
Subsidiaries from time to time. The Borrower shall pay the reasonable
out-of-pocket expenses of the Agents for up to two such audits in any 12-month
period and for any additional audit conducted during the continuance of, or
occasioned by, an Event of Default.
ARTICLE VI
BUSINESS AND FINANCIAL COVENANTS
The Borrower covenants and agrees with each Lender that so long as this
Agreement shall remain in effect or any Facilities Obligations shall be unpaid,
and until the Commitments have been terminated and the Loans, together with
interest, Fees and all other Facilities Obligations have been paid in full, all
Letters of Credit have been cancelled or have expired and all Letter of Credit
Disbursements have been reimbursed in full, unless the Required Lenders shall
otherwise consent in writing:
SECTION 6.01. Indebtedness. The Borrower will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume,
guarantee or otherwise become or remain directly or indirectly liable with
respect to (collectively, "Incur"), any Indebtedness, except that:
(a) the Borrower may become and remain liable with respect to the
Indebtedness evidenced by the Mortgage Notes;
(b) the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to Indebtedness incurred by the Borrower and the Restricted
Subsidiaries to finance the making of expenditures for the improvement or repair
of or additions to the Assets, or to renew, refund, refinance or replace any
such Indebtedness; provided that (i) the aggre gate principal amount of
Indebtedness incurred under this Section 6.01(b) and outstanding at any time
shall not exceed an amount equal to the sum of (A) the net cash proceeds
received by the Borrower from the General Partners or from the Public
Partnership as a capital
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contribution, in each case for the sole purpose of financing such expenditures,
and (B) the fair market value (based on a 30-day trailing average closing
trading price per unit) of Units contributed to the Borrower by the Public
Partnership or issued directly to a third party selling such asset or making
such repair or addition by the Public Partnership for the sole purpose of
financing such expenditures, only to the extent, however, that such Units are
used to pay, substantially concurrently with the date of contribution or
issuance, a portion of the purchase price or cost of such improvements, repairs
or additions and (ii) if such Indebtedness is to be secured under the Collateral
Documents as provided in Section 6.02(h), the agreement or instrument pursuant
to which such Indebtedness is incurred (A) contains no financial or busi ness
covenants that are more restrictive on the Borrower or its Subsidiaries than or
that are in addition to those contained in Section 10 of the Note Agreement
(unless prior to or simultaneously with the incurrence of such Indebtedness,
this Agreement and the other Loan Documents are amended to provide the benefits
of such more restrictive covenants to the Secured Parties thereunder) and (B)
specifies no events of default (other than with respect to the payment of
principal and interest on such Indebtedness or the accuracy of representations
and warranties made in connection with such agreement or instrument) which are
capable of occurring prior to the occurrence of the Events of Default specified
in Article VII hereof (unless prior to or simultaneously with the incurrence of
such Indebtedness, this Agreement and the other Loan Documents are amended to
provide, and continue in effect during the period during which such other
Indebtedness is outstanding, the benefits of such more restrictive covenants to
the Secured Parties thereunder);
(c) any Restricted Subsidiary may become and remain liable with respect to
unsecured Indebtedness of such Restricted Subsidiary owing to the Borrower or to
another Restricted Subsidiary; provided that such Indebtedness is evidenced by
an Intercompany Note pledged to the Trustee pursuant to the Borrower Security
Agreement; and provided, further, that the aggregate principal amount of all
such Indebtedness of National Sales and Service, Inc. shall not exceed
$2,000,000 at any time outstanding;
(d) the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to unsecured Indebtedness owing to the Managing General
Partner or the Public Partnership or any Affiliate (other than National Propane
SGP) of any of the foregoing; provided that (i) the aggregate principal amount
of such Indebtedness of the Borrower and the Restricted Subsidiaries outstanding
at any time shall not be in excess of $20,000,000, (ii) such Indebtedness is
created and is outstanding under an agreement or instrument pursuant to which
such Indebtedness is subordinated to the Indebtedness secured under the
Collateral Documents at least to the extent provided in the subordination
provisions set forth in Exhibit E, (iii) with respect to Indebtedness owing to
the Managing General Partner or the Public Partnership, such Indebtedness is
evidenced by a promissory note, in the form of Exhibit E or such other form that
is in form and substance satisfactory to the Required Lenders, which is pledged
to the Trustee pursuant to the Partners Security Agreement and (iv) with respect
to any Indebtedness owing to any other Affiliate (other than National Propane
SGP, such Indebtedness is evidenced by a promissory note, which is in the form
of Exhibit E or is satisfactory in form and substance to the Required Lenders,
provided such note is pledged to the Trustee pursuant to a security agreement
that is in form and substance reasonably satisfactory to the Agents;
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(e) the Borrower may become and remain liable with respect to Indebtedness
incurred under this Agreement and the other Loan Documents, including any
amendment hereof increasing the aggregate amount of credit which may be extended
hereunder, provided that such amendment is entered into in accordance with
Section 9.08;
(f) the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to unsecured Indebtedness, in addition to that otherwise
permitted by the foregoing paragraphs of this Section 6.01, if on the date the
Borrower becomes liable with respect to any such additional Indebtedness and
immediately after giving effect thereto and to the substantially concurrent
repayment of any other Indebtedness (i) the ratio of Consolidated Cash Flow to
Consolidated Pro Forma Debt Service is greater than 2.50 to 1.00 and (ii) the
ratio of Consolidated Cash Flow to Maximum Consolidated Pro Forma Debt Service
is greater than 1.25 to 1.00; provided that, in addition to the foregoing, after
giving effect to any such additional Indebtedness (on a pro forma basis as if
the incurrence of such Indebtedness had occurred on the first day of the
applicable Reference Period), no condition or event shall exist which
constitutes an Event of Default or Default;
(g) the Borrower may become and remain liable with respect to the
Indebtedness referred to in Schedule 6.01(g); provided that the aggregate
principal amount of such Indebtedness at any time outstanding shall not exceed
$1,500,000;
(h) the Borrower and any Restricted Subsidiary (x) may become and remain
liable with respect to pre-existing Indebtedness relating to any Person,
business or assets acquired by the Borrower or such Restricted Subsidiary and
(y) may become and remain liable with respect to Indebtedness to finance the
acquisition of any Person, business or assets; provided that (i) after giving
effect to such acquisition and such Indebtedness (and any other such
acquisitions which have occurred and related Indebtedness which has been assumed
and any other Specified Events which have occurred since the first day of the
applicable Reference Period) (A) no condition or event shall exist which
constitutes an Event of Default or Default and (B) the Leverage Ratio as of the
last day of the Reference Period with respect to the date on which such
acquisition is consummated, calculated on a pro forma basis as if such
acquisition and the incurrence of such Indebtedness and any other such Specified
Events had occurred on the first day of such Reference Period, shall be no
greater than the Permitted Maximum Ratio on such date of consummation, (ii) in
the case of Indebtedness under clause (x), such Indebtedness was not incurred in
anticipation of the acquisition of such Person, business or assets, (iii) the
acquisition of such Person, business or assets is permitted by all other
applicable provisions of the Loan Documents, including Sections 6.03 and 6.24
and (iv) the aggregate principal amount of all such Indebtedness outstanding at
any time shall not exceed $10,000,000; provided further, that any Indebtedness
incurred pursuant to this Section 6.01(h), (A) may not be refinanced in any
manner except with Tranche B Revolving Loans, (B) any Liens securing such
Indebtedness shall encumber only the assets being acquired and (C) the sum of
(I) the aggregate principal amount of such Indebtedness outstanding at any time
and (II) the aggregate principal amount of Tranche B Loans outstanding at such
time shall not exceed the excess, if any, of the amount of Tranche B Revolving
Credit Commitments at such time over the Tranche B Letter of Credit Exposure at
such time;
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(i) so long as no Event of Default or Default has occurred and is
continuing, the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to Indebtedness secured under the Collateral Documents which
is incurred for any extension, renewal, refunding or replacement of the Mortgage
Notes; provided that (i) the principal amount of such Indebtedness shall not
exceed the principal amount of such Indebtedness being extended, renewed,
refunded or replaced together with any accrued interest and Make Whole Amount
with respect thereto, (ii) the Leverage Ratio as of the last day of the
Reference Period with respect to the date on which such Indebtedness is
incurred, calculated on a pro forma basis as if such incurrence (and any other
Specified Events which have occurred since the first day of such Reference
Period) had occurred on the first day of such Reference Period, shall be no
greater than the Permitted Maximum Ratio on such date of incurrence, (iii) such
Indebtedness is incurred pursuant to an agreement or instrument which complies
with the requirements set forth in clause (ii) of the proviso to Section
6.01(b), (iv) such Indebtedness shall not mature prior to the stated maturity of
the Mortgage Notes, (v) such Indebtedness shall have an Average Life equal to or
greater than the remaining Average Life of the Mortgage Notes, (vi) the spread
over the U.S. Government Notes with a comparable maturity reflected in the yield
on such Indebtedness upon issuance is no greater than that reflected in the
yield on the Mortgage Notes upon issuance and (vii) after giving effect to the
incurrence of any such Indebtedness under this Section 6.01(i), no condition or
event shall exist which constitutes an Event of Default or Default;
(j) so long as no Event of Default or Default has occurred and is
continuing, the Borrower and the Restricted Subsidiaries may become and remain
liable with respect to unsecured Indebtedness incurred for any extension,
renewal, refunding or replacement of Indebtedness permitted pursuant to
subdivisions (a), (b) or (f) of this Section 6.01; provided that (i) the
principal amount of such unsecured Indebtedness to be incurred shall not exceed
the principal amount of such Indebtedness being extended, renewed, refunded or
replaced together with any accrued interest or other premium with respect
thereto, and, in the case of the Mortgage Notes, Make Whole Amount with respect
thereto and any costs and expenses related to such extension, renewal, refunding
or replacement, (ii) the Leverage Ratio as of the last day of the Reference
Period with respect to the date on which such Indebtedness is incurred,
calculated on a pro forma basis as if such incurrence (and any other Specified
Events which have occurred since the first day of such Reference Period) had
occurred on the first day of such Reference Period, shall be no greater than the
Permitted Maximum Ratio on such date of incurrence, (iii) such unsecured
Indebtedness to be incurred shall not mature prior to the stated maturity of
such Indebtedness being extended, renewed, refunded or replaced and (iv) such
unsecured Indebtedness to be incurred shall have an Average Life equal to or
greater than the remaining Average Life of such Indebtedness being extended,
renewed, refunded or replaced;
(k) the Borrower may create and become liable with respect to any Hedging
Agreements and Commodity Hedging Agreements; and
(l) any Restricted Subsidiary may become and remain liable with respect to
Indebtedness evidenced by the Collateral Documents.
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Notwithstanding the foregoing, (I) the aggregate principal amount of all
Indebtedness of all Restricted Subsidiaries at any time outstanding (other than
Indebtedness permitted by Section 6.01(l)) shall not exceed $10,000,000 and (II)
neither the Borrower nor any of the Restricted Subsidiaries shall, directly or
indirectly, Incur any Indebtedness to be used directly or indirectly to refund
or replace Facility A in whole or in part, except that foregoing shall not
prohibit the Borrower from refunding or replacing Facility A on or after the
Tranche A Maturity Date if the Borrower has offered to extend Facility A for one
year on terms at least as favorable to the Lenders as those herein set forth and
the Lenders are not willing to do so; provided that the Borrower shall not offer
any more favorable terms and conditions to any other prospective lender without
first offering them to the Lenders. For the purpose of this Section 6.01, any
Person becoming a Restricted Subsidiary after the date of this Agreement shall
be deemed to have become liable with respect to all of its then outstanding
Indebtedness at the time it becomes a Restricted Subsidiary, and any Person
extending, renewing or refunding any Indebtedness shall be deemed to have become
liable with respect to such Indebtedness at the time of such extension, renewal
or refunding. The Borrower or any Restricted Subsidiary shall be deemed to have
become liable with respect to any Indebtedness securing any real property
acquired by the Borrower or such Restricted Subsidiary, as the case may be, at
the time of such acquisition.
SECTION 6.02. Liens, etc. The Borrower will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any property or asset (including
any document or instrument in respect of goods or accounts receivable) of the
Borrower or any Restricted Subsidiary, whether now owned or held or hereafter
acquired, or any income or profits therefrom (whether or not provision is made
for the equal and ratable securing of the Facilities Obligations in accordance
with the provisions of Section 6.15), except:
(a) Liens for taxes, assessments or other governmental charges the payment
of which is not at the time required by Section 6.09;
(b) Liens of landlords and carriers, vendors, warehousemen, mechanics,
materialmen, repairmen and other like Liens incurred in the ordinary course of
business for sums not yet due or the payment of which is not at the time
required by Section 6.09, in each case not incurred or made in connection with
the borrowing of money, the obtaining of advances or credit or the payment of
the deferred purchase price of property;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits made
in the ordinary course of business (i) in connection with workers' compensation,
unemployment insurance and other types of social security or (ii) to secure (or
to obtain letters of credit that secure) the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, performance bonds, purchase,
construction or sales contracts and other similar obligations, in each case not
incurred or made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of property;
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(d) any attachment or judgment Lien, unless the judgment it secures shall
not, within 60 days after the entry thereof, have been discharged or execution
thereof stayed pending appeal, or shall not have been discharged within 60 days
after expiration of any such stay;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each case are
granted, entered into or created in the ordinary course of the business of the
Borrower or any Restricted Subsidiary and which do not interfere in any material
respect with the ordinary conduct of the business of the Borrower or any
Restricted Subsidiary;
(f) Liens on property or assets of any Restricted Subsidiary securing
Indebtedness of such Restricted Subsidiary owing to the Borrower or any other
Restricted Subsidiary;
(g) Liens created by any of the Collateral Documents securing the
Facilities Obligations, the Mortgage Notes and any other Indebtedness incurred
in accordance with Sections 6.01(i) and 6.01(k) (but only to the extent such
Indebtedness incurred under Section 6.01(k) is incurred to any Lender or
Affiliate of a Lender with respect to Indebtedness under the Loan Documents);
(h) Liens created by any of the Collateral Documents securing Indebtedness
incurred in accordance with Section 6.01(b); provided that (i) such Liens are
effected through an amendment to the Collateral Documents to the extent
necessary to provide the holders of such Indebtedness equal and ratable security
in the property and assets subject to the Collateral Documents with the Secured
Parties, (ii) the Collateral Documents are amended to the extent necessary to
extend the Lien thereof to any property or assets acquired or otherwise financed
with the proceeds of such Indebtedness, (iii) the Borrower has delivered to the
Trustee an Officers' Certificate demonstrating that the principal amount of such
Indebtedness does not exceed the lesser of the cost to the Borrower of such
property or assets and the fair market value of such property or assets (as
determined in good faith by the Managing General Partner) and to the effect that
the amendments to the Collateral Documents required by this Section 6.02(h) and
the filing and recordation of such amendments and related supplements will not
have a Material Adverse Effect and that such incurrence of Indebtedness pursuant
to Section 6.01(b) complies in all respects with the requirements of such
Section and (iv) the Borrower has delivered to the Trustee an opinion of counsel
reasonably satisfactory to the Trustee to the effect that the Lien of the
Collateral Documents has attached and is perfected with respect to such
additional property and assets;
(i) Liens existing on any property of a newly-acquired Restricted
Subsidiary at the time of acquisition or existing or created upon any property
acquired by the Borrower or any Restricted Subsidiary; provided that (i) any
such Lien shall be confined solely to the item or items of property so acquired
and, if required by the terms of the instrument originally creating such Lien,
other property which is an improvement to or is acquired for specific use in
connection with such acquired property, (ii) the Indebtedness secured by any
such Lien is permitted under Section 6.01(h), (iii) the principal amount of the
Indebtedness secured by any
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such Lien shall not exceed, at any time, an amount equal to the lesser of (A)
the cost of such property to the Borrower or such Restricted Subsidiary, as the
case may be, and (B) the fair market value of such property (as determined in
good faith by the Managing General Partner) at the time of such acquisition by
the Borrower or such Restricted Subsidiary and (iv) the aggregate principal
amount of all Indebtedness secured by any such Liens shall at no time exceed
$10,000,000;
(j) Liens in amounts not exceeding $100,000 incurred, required or provided
for under state law in connection with self-insurance arrangements; and
(k) (i) Liens arising from or constituting encumbrances or exceptions to
title to the Assets expressly permitted by the Collateral Documents, (ii) Liens
contemplated by any Commodity Hedging Agreement that are confined solely to the
commodities that are the subject of such agreement and (iii) Liens that are
existing on the Assets at the time of consummation of the Transactions and are
listed on Schedule 6.02(k).
SECTION 6.03. Investments, Guaranties, etc. The Borrower will not, and
will not permit any Restricted Subsidiary to, directly or indirectly (a) make or
own any Investment in any Person or (b) create or become liable with respect to
any Guaranty, except:
(i) the Borrower or any Restricted Subsidiary may make and own
Investments in Cash Equivalents;
(ii) the Borrower and any Restricted Subsidiary may make and own any
Investment in Capital Stock of any Person which simultaneously with the
consummation thereof becomes a Restricted Subsidiary; provided that (A)
after giving effect to such Investment (and any other such Investments or
other Specified Events which have occurred since the first day of the
applicable Reference Period), (I) no condition or event shall exist which
constitutes an Event of Default or Default and (II) the Leverage Ratio as
of the last day of the Reference Period with respect to the date on which
such Investment is consummated, calculated on a pro forma basis as if such
Investments and other Specified Events had occurred on the first day of
such Reference Period, shall be no greater than the Permitted Maximum
Ratio on such consummation date and (B) the Borrower shall have prepared
and furnished to the Agents prior to the consummation of such Investment
pro forma financial statements, a pro forma business plan and pro forma
projections covering the balance of the term of the Facilities
demonstrating to the reasonable satisfaction of the Agents that the
Leverage Ratio reflecting such pro forma adjustments will not exceed the
Permitted Maximum Ratio at such time or during such period;
(iii) (A) any Restricted Subsidiary may make and permit to be
outstanding Investments in the Borrower and may create or become liable
with respect to any Guarantee in respect of obligations secured under the
Collateral Documents and (B) the Borrower may make and own loans evidenced
by the Intercompany Notes, to the extent such Intercompany Notes are
permitted under Section 6.01(c);
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(iv) the Borrower or any Restricted Subsidiary may make and own
Invest ments in the Capital Stock of, or contributions to capital in the
ordinary course of business of, any Unrestricted Subsidiary if immediately
after giving effect to the making of any such Investment, (A) the
aggregate amount of all such Investments made and outstanding pursuant to
this paragraph (iv) shall not at any time exceed $10,000,000 and (B) the
aggregate amount of all Investments made and outstanding pursuant to this
paragraph (iv) as at the end of any fiscal year of the Borrower shall not
exceed by more than $5,000,000 the amount of such Investments outstanding
as of the end of the immediately preceding fiscal year of the Borrower, in
each case, net of cash distributions received from all Unrestricted
Subsidiaries since the date hereof;
(v) the Borrower or any Restricted Subsidiary may make and own
Investments (A) constituting trade credits or advances to any Person
incurred in the ordinary course of business, (B) arising out of loans and
advances to employees for travel, entertainment, relocation and other
similar business related expenses, in each case incurred in the ordinary
course of business or (C) acquired by reason of the exercise of customary
creditors' rights upon default or pursuant to the bankruptcy, insolvency
or reorganization of a debtor;
(vi) the Borrower or any Restricted Subsidiary may create or become
liable with respect to any Guaranty constituting an obligation, warranty
or indemnity, not guaranteeing Indebtedness of any Person, which is
undertaken or made in the ordinary course of business; and
(vii) the Borrower or any Restricted Subsidiary may create and
become liable with respect to Hedging Agreements and Commodity Hedging
Agreements.
SECTION 6.04. Restricted Payments. The Borrower will not directly or
indirectly declare, order, pay, make or set apart any sum for any Restricted
Payment, except that the Borrower may make, pay or set apart once during each
calendar quarter a cash distribution on its partnership interests if (a) such
Restricted Payment is in an amount not exceeding Available Cash for the
immediately preceding calendar quarter determined as of the last day of such
calendar quarter or thereafter up to the date of declaration of such Restricted
Payment, (b) prior to and immediately after giving effect to any such proposed
action, (i) after giving effect to any Indebtedness incurred since the first day
of the Reference Period with respect to such date of declaration and any other
Specified Events on a pro forma basis as if such incurrence or other events had
occurred on the first day of such Reference Period, the covenant set forth in
Section 6.31 shall not be violated on such date of declaration, and (ii) no
other condition or event shall or would exist which constitutes or would
constitute an Event of Default or Default, (c) the ratio of Consolidated Cash
Flow to Consolidated Interest Expense for the Reference Period with respect to
the date of such payment is greater than 1.75 to 1.00 and (d) the Borrower shall
have delivered to the Lenders, not later than the date such Restricted Payment
is declared (which declaration date shall be at least 10 days prior to the date
such Restricted Payment is made) an Officers' Certificate to the effect that
such Restricted Payment is permitted under this Section 6.04 and showing in
reasonable detail all calculations
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required in arriving at such conclusion, including the calculation of the
aggregate amount available at the end of the preceding quarter for payment of
cash distributions in compliance with this Section 6.04. The Borrower will not,
in any event, directly or indirectly declare, order, pay or make any Restricted
Payment except for cash distributions payable to the holders of its Capital
Stock. The Borrower will not permit any Restricted Subsidiary to declare, order,
pay or make any Restricted Payment or to set apart any sum or property for any
such purpose (except for Restricted Payments made solely to the Borrower or any
other Restricted Subsidiary).
SECTION 6.05. Transactions with Affiliates. (a) Except for the
transactions or conduct effected pursuant to the Operative Agreements as in
effect on the Closing Date or any other transactions or conduct described in or
contemplated by the Registration Statement, the Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly, engage in any
transaction with any Affiliate of the Borrower, including the purchase, sale or
exchange of assets or the rendering of any service, to the Borrower's or such
Restricted Subsidiary's business except upon fair and reasonable terms that are
no less favorable to the Borrower or such Restricted Subsidiary, as the case may
be, than those which might be obtained in an arm's-length transaction at the
time such transaction is agreed upon from Persons which are not such an
Affiliate; provided that the foregoing limitations and restrictions shall not
apply to any transaction between the Borrower and any Restricted Subsidiary or
between Restricted Subsidiaries.
(b) The Borrower will not pay, and will not permit any Restricted
Subsidiary to pay, any management fee or other compensation in connection with
the management of the Borrower by the General Partners (or any of their
Affiliates); provided that, (i) the Borrower may reimburse the Managing General
Partner at cost for all direct and indirect expenses incurred by the Managing
General Partner on behalf of the Borrower, including the cost of compensation
and employee benefit plans properly allocable to the Borrower and all other
expenses necessary or appropriate to the conduct of the business of, and
allocable to, the Borrower, (ii) the Managing General Partner and its Affiliates
(including Triarc) may provide administrative services on behalf of the Borrower
and will be reimbursed at cost for all expenses incurred in connection therewith
and (iii) subject to Section 6.05(a), the Managing General Partner and its
Affiliates (including Triarc) may provide other services to the Borrower, for
which the Borrower may be charged reasonable fees by the Managing General
Partner.
SECTION 6.06. Prohibited Stock and Indebtedness. The Borrower will not:
(a) directly or indirectly sell, assign, pledge or otherwise dispose of
any Indebtedness or Capital Stock of (or warrants, rights or options to acquire
Capital Stock of) any Restricted Subsidiary, except (i) to a Restricted
Subsidiary and (ii) in the case of the sale of all the Capital Stock of a
Restricted Subsidiary as an entirety, as permitted under Section 6.07;
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(b) permit any Restricted Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Indebtedness of (i) the Borrower or
(ii) any other Restricted Subsidiary, or any Capital Stock of (or warrants,
rights or options to acquire Capital Stock of) any other Restricted Subsidiary,
except (A) to, in the case of clause (i), the Borrower or, in all other cases, a
Restricted Subsidiary and (B) in the case of the sale of all the Capital Stock
of a Restricted Subsidiary as an entirety, as permitted under Section 6.07;
(c) permit any Restricted Subsidiary to have outstanding any Preferred
Stock (other than Preferred Stock owned by the Borrower or any other Restricted
Subsidiary); or
(d) permit any Restricted Subsidiary directly or indirectly to issue or
sell (including in connection with a merger or consolidation of a Restricted
Subsidiary otherwise permitted by Section 6.07(a)) any of its Capital Stock (or
warrants, rights or options to acquire its Capital Stock) except to the Borrower
or a Restricted Subsidiary;
provided that, any Restricted Subsidiary may sell, assign or otherwise dispose
of Indebtedness of the Borrower if, assuming such Indebtedness were incurred
immediately after such sale, assignment or disposition, such Indebtedness would
be permitted under Section 6.01 (and, if such Indebtedness is secured, such Lien
would be permitted pursuant to Section 6.02).
SECTION 6.07. Consolidation, Merger, Sale of Assets, etc. The Borrower
will not, and will not permit any Restricted Subsidiary to, directly or
indirectly:
(a) consolidate with or merge into any other Person or permit any other
Person to consolidate with or merge into it; provided that:
(i) any Restricted Subsidiary may consolidate with or merge into the
Borrower or a Restricted Subsidiary if, in the case of a consolidation
with or merger into the Borrower, the Borrower shall be the surviving
Person and if, immediately after giving effect to such transaction, no
condition or event shall exist which constitutes a Default or an Event of
Default; and
(ii) any Person (other than a Restricted Subsidiary) may consolidate
with or merge into the Borrower or a Restricted Subsidiary if the Borrower
or such Restricted Subsidiary, as the case may be, shall be the surviving
Person and if, immediately after giving effect to such transaction, (A)
the Borrower (I) shall not have a Consolidated Net Worth (determined in
accordance with GAAP applied on a basis consistent with the financial
statements of the Borrower most recently delivered pursuant to Section
5.02(b) (but without giving effect to any write-up in assets or amounts
attributable to goodwill pursuant to purchase accounting methods) of less
than the Consolidated Net Worth of the Borrower immediately prior to the
effectiveness of such transaction, (II) shall not be liable with respect
to any Indebtedness or allow its property to be subject to any Lien which
it could not become liable with respect to or allow its property to become
subject to under this Agreement on the date of such transaction, and (III)
could incur, if the consolidating or merging Person has outstanding
Indebtedness, at least $1
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of additional Indebtedness in compliance with Section 6.01(f) after giving
effect to such transaction on a pro forma basis, (B) substantially all of
the assets of the Borrower and the Restricted Subsidiaries shall be
located and substantially all of their business shall be conducted within
the United States of America, and (C) immediately after giving effect to
such transaction, (I) no condition or event shall exist which constitutes
a Default or an Event of Default and (II) the Leverage Ratio as of the
last day of such Reference Period, calculated on a pro forma basis as if
such transaction (and any other such transactions and any other Specified
Events which have occurred since the first day of the applicable Reference
Period) had occurred on the first day of such Reference Period, shall be
no greater than the Permitted Maximum Ratio on the date on which such
transaction is consummated; and
(iii) the Borrower may consolidate with or merge into any other
Person if (A) the surviving Person is a corporation, limited partnership,
limited liability company or business trust organized and existing under
the laws of the United States of America or a state thereof or the
District of Columbia, with substantially all of its properties located and
its business conducted within the United States of America, (B) such
surviving Person expressly and unconditionally assumes the obligations of
the Borrower under this Agreement, the Loan Documents and each of the
other Operative Agreements and delivers to each Lender in connection with
such assumption an opinion of counsel reasonably satisfactory to the
Required Lenders with respect to such matters incident to such assumption
as may be reasonably requested by the Required Lenders, including as to
the due authorization and execution of the related agreement of assumption
and the enforceability of such agreement against such surviving Person,
(C) immediately after giving effect to such transaction, such surviving
Person (I) shall not have a Consolidated Net Worth (determined in
accordance with GAAP applied on a basis consistent with the financial
statements of the Borrower most recently delivered pursuant to Section
5.02(b) but without giving effect to any write-up in assets or amounts
attributable pursuant to purchase accounting methods) of less than the
Consolidated Net Worth of the Borrower immediately prior to the
effectiveness of such transaction, (II) shall not be liable with respect
to any Indebtedness or allow its property to be subject to any Lien which
it could not become liable with respect to or allow its property to become
subject to under this Agreement on the date of such transaction and (III)
could incur, if the consolidating or merging Person had outstanding
Indebtedness, at least $1 of additional Indebtedness in compliance with
Section 6.01(f) after giving effect to such transaction on a pro forma
basis, and (D) immediately after giving effect to such transaction, (I) no
condition or event shall exist which constitutes a Default or an Event of
Default and (II) the Leverage Ratio as of the last day of such Reference
Period, calculated on a pro forma basis as if such transaction (and any
other such transactions and any other Specified Events which have occurred
since the first day of the applicable Reference Period) had occurred on
the first day of such Reference Period, shall be no greater than the
Permitted Maximum Ratio on the date on which such transaction is
consummated; and
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(iv) with regard to any merger contemplated by clause (ii) or (iii)
above, the Borrower shall have prepared and furnished to the Agents prior
to consummation of the transaction pro forma financial statements
demonstrating to the satisfaction of the Agents compliance with the
applicable requirements set forth therein;
(b) sell, lease, abandon or otherwise dispose of all or substantially all
its assets, provided that any Restricted Subsidiary may sell, lease or otherwise
dispose of all or substantially all its assets to the Borrower or to any other
Restricted Subsidiary; or
(c) sell, lease, abandon or otherwise dispose of any property to any
Person other than the Borrower or any Restricted Subsidiary (except (i) in a
transaction permitted by subdivision (a)(iii) or (b)(ii) of this Section 6.07,
(ii) an Investment in an Unrestricted Subsidiary permitted by Section 6.03(iv),
(iii) dispositions of inventory in the ordinary course of business and (iv)
dispositions of Obsolete Assets in the ordinary course of business not exceeding
$150,000 in the aggregate in fair market value in any one calendar year);
provided that the Borrower or any Restricted Subsidiary may engage in any such
transaction referred to in this paragraph (c), excluding any such transaction
referred to in paragraph (a) or (b) above, if all of the following conditions
are satisfied:
(i) at least 80% of the consideration therefor shall be in the form
of cash consideration or marketable securities that are promptly converted
into cash (to the extent of the cash received); provided that the amount
of (A) any liabilities (as shown on the Borrower's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of the
Borrower or any Restricted Subsidiary (other than Indebtedness that is by
its terms subordinated in right of payment to the Notes or the Mortgage
Notes) that is assumed by the transferee of any such assets and (B) any
notes or other obligations received by the Borrower or any such Restricted
Subsidiary from such transferee that are promptly converted into cash (to
the extent of the cash received), shall be deemed to be cash for the
purposes of this Section 6.07(c)(i);
(ii) immediately after giving effect to such proposed disposition,
no condition or event shall exist which constitutes an Event of Default or
Default;
(iii) either
(A) the aggregate net after-tax proceeds of all property so
disposed of (whether or not leased back) by the Borrower and all
Restricted Subsidiaries during any fiscal year (including property
disposed of through dispositions of Capital Stock permitted under
Section 6.06 and including all proceeds under title insurance
policies with respect to real property and all Net Insurance
Proceeds (as defined in the Mortgage), self-insurance amounts and
Net Awards (as defined in the Mortgage) with respect to property
lost as a result of damage, destruction or a taking which have not
been applied to the cost of Restoration (as defined in the
Mortgage)), less the sum of (x) the amount of all such net after-tax
proceeds previously applied in accordance with paragraph (iii)(B) of
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this Section 6.07(c) and (y) an amount equal to the purchase price
of any assets acquired (so long as (1) such assets were acquired
within 90 days prior to the date of such disposal of property, (2)
the purchase price of such assets was not previously applied to
reduce the amount of net after-tax proceeds of property disposed of
under this Section 6.07(c), (3) such assets were acquired for
subsequent replacement of the property so disposed of or may be
productively used in the United States of America in the conduct of
the Business, (4) such assets are subject to the Liens of the
Collateral Documents, (5) if and to the extent that there were
unused Tranche B Revolving Credit Commitments, the acquisition of
such assets was not financed in whole or in part with the proceeds
of Indebtedness (other than Tranche B Revolving Loans) and (6) to
the extent such assets were acquired (in whole or in part) with the
proceeds of Indebtedness, such Indebtedness has been repaid in
full), when aggregated with such net after-tax proceeds of all prior
transactions under this Section 6.07(c), shall not exceed
$5,000,000; or
(B) in the event that such net after-tax proceeds (less the
sum of (x) the amount thereof previously applied in accordance with
this paragraph (iii)(B) and (y) an amount equal to the purchase
price of any assets acquired (so long as (1) such assets were
acquired within 90 days prior to the date of such disposal of
property, (2) the purchase price of such assets was not previously
applied to reduce the amount of net after-tax proceeds of property
disposed of under this Section 6.07(c), (3) such assets were
acquired for subsequent replacement of the property so disposed of
or may be productively used in the United States of America in the
conduct of the Business, (4) such assets are subject to the Liens of
the Collateral Documents, (5) if and to the extent that there were
unused Tranche B Revolving Credit Commitments, the acquisition of
such assets was not financed in whole or in part with the proceeds
of Indebtedness (other than Tranche B Revolving Loans) and (6) to
the extent such assets were acquired (in whole or in part) with the
proceeds of Indebtedness, such Indebtedness has been repaid in
full)), when aggregated with such net proceeds of all prior
transactions under this Section 6.07(c), exceed $5,000,000 (the
amount of such excess net after-tax proceeds actually realized being
herein called "Excess Proceeds"), the Borrower shall promptly pay
over to the Trustee such Excess Proceeds not at the time held by the
Trustee for application by the Trustee (I) within 270 days (or 360
days if the Borrower has executed a binding contract for acquisition
or replacement of assets meeting the requirements specified in this
clause (iii) within 270 days) of the date of the disposal or loss of
property, to the acquisition of assets in replacement of the
property so disposed of or lost or of assets which may be
productively used in the United States of America in the conduct of
the Business (and such newly acquired assets shall be subjected to
the Liens of the Collateral Documents) or to the cost of Restoration
(as defined in the Mortgage), or (II) to the extent of Excess
Proceeds not applied pursuant to the immediately preceding clause
(I), to the payment and/or prepayment of the Facilities Obligations
and Parity Debt, if any, pursuant to Section 2.11, all as
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provided in Section 4(d) of the Trust Agreement and Section 2.11,
and the Trustee shall have received an Officers' Certificate from
the Managing General Partner certifying that the consideration
received for such property is at least equal to its fair value (as
determined in good faith by the Board of Directors) and that such
consideration has been applied in accordance with the terms of this
Agreement;
(iv) in the case of any sale, lease or other disposition of
Collateral which includes real property (or any interest therein), or any
sale, lease or other disposition of Collateral resulting in the aggregate
net after-tax proceeds of all such sales, leases or other dispositions
exceeding $10,000,000, the Trustee shall have received an Officers'
Certificate from the Managing General Partner certifying that such sale,
lease or other disposition is in the best interest of the Borrower and
will not have a Material Adverse Effect; and
(v) in the case of any sale, lease or other disposition (or series
of related sales, leases or dispositions) of Collateral involving
aggregate net after-tax proceeds of $5,000,000 or more, the Borrower shall
have prepared and furnished to the Agents prior to the consummation of
such transaction pro forma financial statements demonstrating to the
satisfaction of the Agents compliance with the requirements set forth in
paragraph (ii) above.
Notwithstanding the foregoing, the Borrower and any Restricted Subsidiary
may sell or dispose of (x) real property assets sold or disposed of within 12
months of the acquisition of such assets and (y) all other assets sold or
disposed of within 6 months of the acquisition of such assets, in each case
referred to in clause (x) or (y) constituting a portion of an acquired business;
provided that (1) such assets are specifically designated to the Administrative
Agent in writing prior to such acquisition (or within 30 days thereafter) as
assets to be disposed of, (2) the Administrative Agent shall have received an
Officers' Certificate from the Managing General Partner certifying that the
consideration received for such property is at least equal to its fair market
value (as determined in good faith by the Managing General Partner), (3) such
acquisition was not financed in whole or in part with the proceeds of
Indebtedness (other than Tranche B Revolving Loans), (4) if such acquisition was
financed in whole or in part with Tranche B Revolving Loans, the proceeds of
such disposition shall be applied to repay such Tranche B Revolving Loans and
(5) no Event of Default or Default shall have occurred and be continuing. Such
dispositions under this paragraph will not be applied towards the cumulative
limitations in paragraph (c)(iii)(A) of this Section 6.07. In addition,
notwithstanding the foregoing, the Borrower may, at any time, exchange assets
for other like assets which may be used in the conduct of the Business, provided
(1) the fair value of the assets so acquired is substantially equivalent to the
fair value of the assets so exchanged (as determined in good faith by the
Managing General Partner), (2) such acquired assets are subject to the Lien of
the Collateral Documents and (3) (A) with respect to miscellaneous machinery and
equipment not exchanged as part of an exchange of operating locations, the total
book value of all such miscellaneous machinery and equipment so exchanged after
the date of this Agreement shall not in the aggregate exceed 15% of the total
book value of the machinery and equipment of the
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Borrower as of the date of this Agreement, and (B) with respect to assets
exchanged as part of an exchange of operating locations, the total cash flow of
all such assets exchanged after the date of this Agreement (calculated in all
material respects on the same basis as provided for in the definition of
Consolidated Cash Flow) shall not exceed 15% of Consolidated Cash Flow of the
Borrower for the Reference Period ending on June 30, 1996. The Lenders agree to
take, at the expense of the Borrower, all actions reasonably requested by the
Borrower to cause dispositions of Collateral made in compliance with this
Section 6.07 to be made free and clear of the liens created by the Collateral
Documents. As used herein, the "net after-tax proceeds" shall mean the proceeds
after deduction for all taxes, if any, payable by the Borrower and its
Restricted Subsidiaries, and shall not permit any deduction for taxes payable by
any other persons (including any holders of Units).
SECTION 6.08. Partnership or Corporate Existence, etc.; Business. (a) (i)
The Borrower will at all times preserve and keep in full force and effect its
partnership existence and its status as a partnership not taxable as a
corporation for Federal income tax purposes; (ii) the Borrower will cause each
Restricted Subsidiary to keep in full force and effect its partnership or
corporate existence; and (iii) the Borrower will, and will cause each Restricted
Subsidiary to, at all times preserve and keep in full force and effect all of
its material rights and franchises (in each case except as otherwise
specifically permitted in Sections 6.06 and 6.07 and except that the partnership
or corporate existence of any Restricted Subsidiary, and any right or franchise
of the Borrower or any Restricted Subsidiary, may be terminated if, in the good
faith judgment of the Managing General Partner, such termination is in the best
interest of the Borrower, is not disadvantageous to the Lenders in any material
respect and would not have a Material Adverse Effect).
(b) The Borrower will not, and will not permit any Restricted Subsidiary
to, engage in any material line of business substantially different than the
wholesale and retail sale, distribution, and storage of propane gas and related
petroleum derivative products and the related retail sale of supplies and
equipment, including home appliances; provided that, the Borrower will not
permit National Sales and Service, Inc. to exist for any purpose, or to carry on
any business, other than the ownership and operation of the Service Assets (as
defined in the Conveyance Agreements) and other assets of that type.
(c) The Borrower shall not permit National Propane Corp. (prior to any
merger or consolidation with Triarc) or National Propane SGP to (i) exist for
any purpose or to engage in any business or business activity except (A) to
serve as a General Partner of the Borrower and the Public Partnership, including
serving as the Managing General Partner thereof in the circumstances provided in
the Partnership Agreement and the MLP Agreement, (B) for the purpose of owning
and operating the Excluded Assets (as defined in the Conveyance Agreements) and
the Assets covered by the Agency Agreement, and (C) with respect to National
Propane Corp., to own (I) the Capital Stock of National Propane SGP, (II) the
Retained Assets (as that term is defined in the Triarc Note), (III) a
wholly-owned corporate Subsidiary the sole asset of which shall be a note from
Triarc and which shall not engage in any business or incur any liabilities
(other than tax liabilities) and (IV) other wholly-owned corporate Subsidiaries
provided that, in the case of this clause (IV) National Propane Corp.
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shall have agreed (w) at the time of formation or acquisition of any
wholly-owned corporate Subsidiary thereof that National Propane Corp. will not
merge or consolidate with Triarc, (x) that it will not guaranty or otherwise
agree to be liable with respect to any Indebtedness incurred by such Subsidiary
and at the time of formation or acquisition thereof and in connection therewith,
the assets of National Propane Corp. are not and will not be subject to any
liens or other encumbrances relating to any Indebtedness or other obligations of
such Subsidiaries, (y) National Propane Corp. shall confirm with a Rating Agency
that its rating on the Mortgage Notes in effect at such time will not be
downgraded solely as a result thereof, and (z) to be bound by the terms of
Section 6.32 (all references therein to the Borrowers to be deemed references to
National Propane Corp. and all references therein to Subsidiaries to be deemed
references to Subsidiaries of National Propane Corp.) and (D) with respect to
National Propane Corp., to lease the Marshfield, Wisconsin facility to the
Borrower (collectively, the "Permitted Activities") or (ii) incur any
Indebtedness or other liabilities (other than tax liabilities except with
respect to the Permited Acturties). Notwithstanding the foregoing, National
Propane SGP shall not be permitted to conduct any other business or business
activity directly or incur any Indebtedness or other liabilities (other than tax
liabilities related to the Permitted Activities). The Borrower shall not permit
either General Partner to sell, transfer, pledge, convey or otherwise dispose of
any or all of its partnership interests in the Borrower or its 1.0%
unsubordinated general partner interest in the Public Partnership without the
prior written consent of the Required Lenders, except for the pledge to the
Trustee pursuant to the Partners Security Agreement; it being understood,
however, that the foregoing restriction does not apply to any Subordinated
Units, Incentive Distribution Rights or Common Units in the Public Partnership
(each as defined in the MLP Agreement) held by either General Partner.
(d) The Borrower will not, and will not permit any of its Affiliates to,
take any action or refuse to take any reasonable action the effect of which, if
taken or not taken, as the case may be, would be to cause the Public Partnership
or the Borrower to be treated as an association taxable as a corporation or
otherwise to be taxed as an entity other than a partnership for Federal income
tax purposes.
SECTION 6.09. Payment of Taxes and Claims. The Borrower will, and will
cause each Subsidiary to, pay all taxes, assessments and other governmental
charges or levies imposed upon it or any of its properties or assets or in
respect of any of its franchises, business, income or profits when the same
become due and payable, and all claims (including claims for labor, services,
materials and supplies) for sums which have become due and payable and which by
law have or might become a Lien upon any of its properties or assets, and
promptly reimburse the Agents, the Issuing Bank and the Lenders for any such
taxes, assessments, charges or claims paid by them; provided that, no such tax,
assessment, charge or claim need be paid or reimbursed if the failure to pay or
reimburse the same would not, individually or in the aggregate, have a Material
Adverse Effect or if it is being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and if such reserves or
other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor and be adequate in the good faith judgment of the Managing
General Partner.
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SECTION 6.10. Compliance with ERISA. The Borrower will not, and will not
permit any Subsidiary or Related Person of the Borrower to:
(a) (i) engage in any transaction in connection with which the Borrower or
any Subsidiary could be subject to either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code, (ii)
terminate (within the meaning of Title IV of ERISA) or withdraw from any Plan in
a manner, or take, or fail to take, any other action with respect to any Plan
(including a substantial cessation of operations within the meaning of Section
4062(e) of ERISA), (iii) establish, maintain, contribute to or become obligated
to contribute to any welfare benefit plan (as defined in Section 3(1) of ERISA)
or other welfare benefit arrangement which provides post-employment benefits,
which cannot be unilaterally terminated by the Borrower, (iv) fail to make full
payment when due of all amounts which, under the provisions of any Plan or
applicable law, the Borrower or any Subsidiary or Related Person of the Borrower
is required to pay as contributions or permit to exist any material accumulated
funding deficiency, whether or not waived, with respect to any Plan or (v)
engage in any transaction in connection with which the Borrower, any Subsidiary
or any Related Person of the Borrower could be subject to liability pursuant to
Section 4069(a) or 4212(c) of ERISA, if, any such event, condition or
transaction described in clauses (i) through (v) above, either individually or
together with any other such event, condition or transaction, could reasonably
be expected to result in (x) the imposition of a Lien in a material amount on
any assets or property of the Borrower or any Subsidiary of the Borrower
pursuant to Section 302(f) of ERISA or Section 412(n) of the Code or (y) any
liability to the Borrower, any Subsidiary of the Borrower or any Related Person
of the Borrower, which liability could have a Material Adverse Effect; or
(b) as of any date of determination (i) permit the amount of unfunded
benefit liabilities under any Plan (other than a Multiemployer Plan) maintained
at such time by the Borrower or any Subsidiary or Related Persons of the
Borrower to exceed the current value of the assets of any such Plan by more than
$1,000,000 or (ii) permit the aggregate liability incurred by the Borrower and
any Subsidiary of the Borrower and Related Persons of the Borrower pursuant to
Title IV of ERISA with respect to one or more terminations of, or one or more
complete or partial withdrawals from, any Plan to exceed $1,000,000.
As used in this Section 6.10, the term "accumulated funding deficiency" has the
meaning specified in Section 302 of ERISA and Section 412 of the Code, the term
"current value" has the meaning specified in Section 3 of ERISA and the terms
"benefit liabilities" and "amount of unfunded benefit liabilities" have the
meanings specified in Section 4001 of ERISA.
SECTION 6.11. Maintenance of Properties; Insurance. (a) The Borrower will
maintain or cause to be maintained in working order and condition, in accordance
with normal industry standards, and as otherwise required by the Collateral
Documents, in all material properties used or useful in the business of the
Borrower and the Restricted Subsidiaries and from time to time will make or
cause to be made all appropriate repairs, renewals and replacements thereof.
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(b) The Borrower will, and will cause each of the Restricted Subsidiaries
to, keep its insurable properties adequately insured at all times by Permitted
Insurers; maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; maintain such other insurance as may be
required by law or any Collateral Document; and cause each such insurance policy
to name the Trustee, on behalf of the Secured Parties, as an additional insured
or loss payee thereunder. The Borrower will permit the Agents and an insurance
consultant retained by the Agents, at the expense of the Borrower, to review the
insurance policies maintained by the Borrower on an annual basis and will
implement any changes to such policies reasonably recommended by such
consultant, if available on a commercially reasonable basis.
SECTION 6.12. Operative Agreements; Collateral Documents. The Borrower
will, and will cause each Restricted Subsidiary to, perform and comply in all
material respects with all of its obligations under each of the Operative
Agreements to which it is a party, will enforce each such Operative Agreement
against each other party thereto and will not surrender, release or accept the
termination of any such Operative Agreement, unless the taking of or omitting to
take any such action would not have a Material Adverse Effect and would not be
disadvantageous in any material respect to the Lenders; provided that any
termination of the Triarc Note, other than as a result of its prepayment in full
or payment in full of the principal amount thereof as specified in the Triarc
Note, shall be deemed to have a Material Adverse Effect; provided further that
prepayment in full or payment in full of the principal amount of the Triarc Note
to the Borrower, in and of itself, shall not be deemed to have a Material
Adverse Effect. The Borrower will not, and will not permit any other Loan Party
to, amend, modify or supplement any Operative Agreement or its partnership
agreement, certificate of incorporation or by-laws without the prior written
consent of the Required Lenders; provided that (i) the MLP Agreement and the
Partnership Agreement (other than Sections 4.5, 6.3 and 7.5(a) of the
Partnership Agreement, the amendment of which requires the consent of the
Required Lenders) may be amended, modified or supplemented without the prior
written consent of the Required Lenders if such amendment, modification or
supplement would not have a Material Adverse Effect and does not adversely alter
or change the rights of the Lenders hereunder or under any of the Loan
Documents, and the Borrower shall have delivered to each Lender a copy of such
proposed amendment, modification or supplement together with an Officers'
Certificate describing such proposed amendment, modification or supplement and
confirming that such proposed amendment, modification or supplement would not
have a Material Adverse Effect, (ii) the Note Agreement may be amended, modified
or supplemented without the prior written consent of the Required Lenders if
such amendment, modification or supplement may be made without the written
consent of any Lenders under the Trust Agreement and (iii) the Triarc Note may
be amended, modified or supplemented without the prior written consent of the
Required Lenders if such amendment, modification or supplement would not have a
Material Adverse Effect and would not be disadvantageous in any material respect
to the Lenders.
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SECTION 6.13. Chief Executive Office. The Borrower will not move its chief
executive office and the office at which it maintains its records relating to
the transactions contemplated by this Agreement and the Collateral Documents
unless (a) not less than 45 days' prior written notice of its intention to do
so, clearly describing the new location, shall have been given to the Trustee
and each Lender and (b) such action, reasonably satisfactory to the Trustee and
each Lender, to maintain any security interest in the property subject to the
Collateral Documents at all times fully perfected and in full force and effect
shall have been taken.
SECTION 6.14. Recordation. (a) The Borrower will promptly, but in any
event within 30 days after the Closing Date, cause to be duly recorded,
published, registered and filed all Conveyance Agreements and all Collateral
Documents, not previously recorded, published, registered or filed in accordance
with Section 4.01(d) in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and first priority security
interests of the parties thereto and their respective successors and assigns in
the Collateral covered by such Conveyance Agreements and the Collateral
Documents. The Borrower shall deliver to the Trustee and the Administrative
Agent within six calendar months of the Closing Date copies (originals with
respect to certificates of title of motor vehicles and other rolling stock) of
such duly recorded, published, registered and filed Collateral Documents. With
respect to motor vehicles and other rolling stock, all Collateral Documents
necessary for the creation and perfection of the Liens contemplated hereby shall
be duly prepared, executed and available at Closing. The Borrower will pay all
taxes, fees and other charges then due in connection with the execution,
delivery, recording, publishing, registration and filing of such documents or
instruments in such places.
(b) The Borrower, at its expense, will furnish to the Trustee and to the
Lenders during the period commencing April 1 to May 1 of the year 2001, and at
such other times as the Trustee may reasonably request in connection with the
perfection of Liens granted after the date of Closing, pursuant to the
Collateral Documents, an opinion of counsel satisfactory to the Trustee stating
that in the opinion of such counsel such action has been taken with respect to
the recording, filing, re-recording and re-filing of the Collateral Documents
and any financing statements necessary to maintain the Lien or security interest
created thereby and reciting the details of such action or stating that in the
opinion of such counsel no such other action is necessary to maintain such lien
or security interest.
SECTION 6.15. Covenant to Secure Notes Equally. The Borrower covenants
that, if it or any Restricted Subsidiary shall create or assume any Lien upon
any of its property or assets, whether now owned or hereafter acquired, other
than Liens permitted by the provisions of Section 6.02 (unless prior written
consent to the creation or assumption thereof shall have been obtained from the
Required Lenders), it will make or cause to be made effective provisions whereby
the Facilities Obligations will be secured by such Lien equally and ratably with
any and all other Indebtedness thereby secured so long as any such other
Indebtedness shall be so secured; provided, however, that the provision of such
equal and ratable security shall not constitute a cure or waiver of any related
Event of Default.
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SECTION 6.16. Compliance with Laws. (a) The Borrower will, and will cause
each Subsidiary to, comply with all applicable statutes, rules, regulations, and
orders of, and all applicable restrictions imposed by, the United States of
America, foreign countries, states, provinces and municipalities, and of or by
any Governmental Authority, including any court, arbitrator or grand jury, in
respect of the conduct of their respective businesses and the ownership of their
respective properties or business, except such as are being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted and
if such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor or the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
(b) The Borrower will, and will cause each Restricted Subsidiary to,
comply with all Environmental Laws, other than noncompliance which could not
reasonably be expected to result in a Material Adverse Effect, individually or
in the aggregate with any other liability under any Environmental Laws.
(c) The Borrower will, and will cause each Restricted Subsidiary to,
promptly give notice to the Administrative Agent upon becoming aware of (i) any
material violation of or notice of potential liability under any Environmental
Law or (ii) any release or threatened release of any Hazardous Material at, on,
into, under or from any real property of any facility or equipment thereat in
excess of reportable or allowable standards or levels under any Environmental
Law, or in a manner and/or amount which could reasonably be expected to result
in liability under any Environmental Law, which liability would result in a
Material Adverse Effect.
(d) The Borrower will, and will cause each Restricted Subsidiary to,
promptly provide the Administrative Agent with copies of any notice, submission
or documentation provided by the Borrower or any Restricted Subsidiary to the
Governmental Authority or third party under any Environmental Law if the matter
which is the subject of the notice, submission or other documentation could
reasonably be expected to have a Material Adverse Effect. Such notice,
submission or documentation shall be provided to the Administrative Agent
promptly and, in any event, within 30 days after such material is provided to
the Governmental Authority or third party.
SECTION 6.17. Further Assurances. (a) At any time and from time to time
promptly, the Borrower shall, at its expense, execute and deliver to each Lender
and to the Trustee such further instruments and documents, and take such further
action, as may be required under applicable law or as the Lenders may from time
to time reasonably request, in order to further carry out the intent and purpose
of this Agreement and to establish and protect the rights, interests and
remedies created, or intended to be created, in favor of the Lenders; provided
that, except as provided in Section 6.22, the Borrower shall not be required to
file Mortgages on properties listed on Schedule 3.17(a).
(b) Without limitation of Section 6.17(a), the Borrower will, and will
cause the Subsidiaries to, perform any and all acts and execute any and all
documents (including the exe-
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cution, amendment, supplementation, delivery and recordation and filing of
security agreements and financing statements and continuation statements under
the Uniform Commercial Code of any applicable jurisdiction) for filing under the
provisions of the Uniform Commercial Code and the rules and regulations
thereunder, or any other statute, rule or regulation of any applicable foreign,
Federal, state or local jurisdictions, including any filings in the United
States Patent and Trademark Office or similar foreign office, which are
necessary (or reasonably requested by the Agents), from time to time, in order
to grant and maintain in favor of the Trustee for the ratable benefit of the
Secured Parties a security interest in each item of the Collateral of the type
and priority described in the relevant Collateral Document, perfected to the
extent contemplated hereby and thereby.
(c) Without limitation of Section 6.17(a), the Borrower will, and will
cause the Subsidiaries to, deliver or cause to be delivered to the Lenders from
time to time such other documentation, consents, authorizations, approvals and
orders in form and substance satisfactory to the Agents, as the Agents shall
deem reasonably necessary or advisable to perfect or maintain the Liens for the
benefit of the Secured Parties, including Liens on assets which are required to
become Collateral after the Closing Date.
(d) The Borrower will use its reasonable best efforts to cause all
property and assets covered by the Agency Agreement to be conveyed to the
Borrower in the same manner as the conveyance of the Assets on the Closing Date,
to be pledged and mortgaged under the Collateral Documents in the same manner as
the pledges and mortgages of the Assets on the Closing Date, and generally to do
all things necessary to give the Lenders the same rights, benefits,
certificates, opinions and the like, as if such properties and assets had been
conveyed on the Closing Date. The Borrower shall use its reasonable best efforts
to accomplish the foregoing within 120 days after the Closing Date; provided
that the foregoing shall not result in any Default or Event of Default so long
as the foregoing actions have been accomplished with respect to 80% of the
properties and assets covered by the Agency Agreement within 180 days after the
Closing Date.
SECTION 6.18. Subsidiaries. (a) The Borrower may designate any Restricted
Subsidiary or newly acquired or formed Wholly Owned Subsidiary satisfying the
requirements in clauses (a), (b) and (c) of the definition of Restricted
Subsidiary as an Unrestricted Subsidiary or any Unrestricted Subsidiary or newly
acquired or formed Subsidiary as a Restricted Subsidiary, in each case subject
to satisfaction of the following conditions:
(i) immediately before and after giving effect to such designation
no condition or event shall exist which constitutes an Event of Default or
Default;
(ii) immediately after giving effect to such designation, (A) except
in the case of a designation as a Restricted Subsidiary of an Unrestricted
Subsidiary that does not have any Indebtedness and that has positive
Consolidated Cash Flow for the most recent Reference Period, the Borrower
would be permitted to incur at least $1 of additional Indebtedness in
compliance with Section 6.01(f), (B) the Borrower and the Restricted
Subsidiary would not be liable with respect to Indebtedness or any
Guaranty,
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would not own any Investment and their property would not be subject to
any Lien which is not permitted by this Agreement and (C) substantially
all of the Borrower's and the Restricted Subsidiaries' assets will be
located, and substantially all of the Borrower's and the Restricted
Subsidiaries' business will be conducted, in the United States of America;
(iii) in the case of a designation as an Unrestricted Subsidiary, if
such designation (and all other prior designations of Restricted
Subsidiaries or newly acquired or formed Subsidiaries as Unrestricted
Subsidiaries during the current fiscal year) were deemed to constitute a
sale by the Borrower of all the assets of the Subsidiary so designated
(other than cash in the case of a newly acquired or formed Subsidiary)
such sale would be in compliance with paragraph (iii)(A) of Section
6.07(c) with the amount of such Investment being deemed to equal the fair
market value of such assets (as determined in good faith (after due
inquiry) by the board of directors of the Managing General Partner) in the
case of a Restricted Subsidiary or the cost of acquisition or formation in
the case of a newly acquired or formed Subsidiary; provided that this
subdivision (iii) of this Section 6.18(a) shall not apply to an
acquisition or formation by the Borrower or a Restricted Subsidiary of a
newly acquired or formed Unrestricted Subsidiary to the extent such
acquisition or formation is funded solely by the net cash proceeds
received by the Borrower from the General Partners or from the Public
Partnership as a capital contribution or as consideration for the issuance
by the Public Partnership of additional limited partnership interests; and
provided further, the fair market value of the Restricted Subsidiary
designated an Unrestricted Subsidiary and the cost (other than the amount
paid in cash) of the acquisition or formation of a newly acquired or
formed Subsidiary shall be deemed proceeds from the sale of assets of the
Borrower for purposes of Sections 6.07 and 2.11;
(iv) in the case of a designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, such Restricted Subsidiary shall not have been an
Unrestricted Subsidiary prior to being designated a Restricted Subsidiary;
(v) in the case of a designation of an Unrestricted Subsidiary as a
Restricted Subsidiary, such Unrestricted Subsidiary at the time of such
designation has a positive consolidated net worth;
(vi) the Borrower shall deliver to each Lender, within five Business
Days after any such designation, an Officers' Certificate stating the
effective date of such designation and confirming compliance with the
provisions of this Section 6.18; and
(vii) in the case of the designation of any Unrestricted Subsidiary
as a Restricted Subsidiary, such new Restricted Subsidiary shall be deemed
to have (A) made or acquired all Investments owned by it and (B) incurred
all Indebtedness owing by it and all Liens to which it or any of its
properties are subject, on the date of such designation.
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(b) The Borrower will cause each Restricted Subsidiary, at the time it is
or is deemed to be designated as a Restricted Subsidiary, to (i) become a party
to the Borrower Security Agreement, the Trust Agreement and the Subsidiary
Guarantee Agreement by execution of a Supplemental Agreement and (ii) enter into
such documents as may be necessary or as the Required Lenders may request, in
form and substance satisfactory to the Required Lenders, in order to secure such
Restricted Subsidiary's obligations under the Subsidiary Guarantee Agreement
with all or substantially all of the assets of such Restricted Subsidiary. Prior
to the designation of a Subsidiary as a Restricted Subsidiary, the Borrower
shall deliver to the Lenders an opinion of counsel with respect to the due
execution and delivery of Supplemental Agreement and as to the enforceability of
the Borrower Security Agreement, the Trust Agreement, the Supplemental Agreement
and the Subsidiary Guarantee Agreement, such opinion to be in form and substance
satisfactory to the Borrower.
(c) The Borrower will not own any Subsidiaries other than Wholly Owned
Subsidiaries satisfying the requirements in clauses (a), (b) and (c) of the
definition of Restricted Subsidiary.
SECTION 6.19. Certain Post-Closing Matters. The Borrower shall perform all
of the investigatory and remedial work recommended in the Environmental
Assessment Reports prepared by Environmental Strategies Corporation and
delivered to the Lenders as contemplated by Section 4.01(u), and covering the
properties owned by or to be transferred to the Borrower and the Restricted
Subsidiaries, and in the report prepared by ENSR dated June 25, 1996, as such
work is listed and described on Schedule 6.19 hereto. All remedial work and
additional investigation recommended in such environmental reports shall be
commenced within 60 days from the date hereof, and shall be performed in
accordance with applicable Environmental Laws. The Borrower agrees to diligently
pursue the completion of such remedial work and additional testing. To the
extent that any such additional investigation undertaken as contemplated above
indicates that additional work or remediation is required by applicable
Environmental Laws, then the Borrower agrees to promptly commence such
additional work or remediation and thereafter diligently pursue such additional
work or remediation until completed.
SECTION 6.20. Use of Proceeds. The Borrower will use the proceeds of the
Loans and will use the Letters of Credit only for the purposes set forth in
Section 3.13.
SECTION 6.21. Accounting Changes. The Borrower will not, and will not
suffer or permit any Restricted Subsidiary to, make any significant change in
accounting treatment or reporting practices, except as required by GAAP. The
Borrower will, and will cause each Restricted Subsidiary to, cause its fiscal
year to end on December 31 in each year.
SECTION 6.22. Certain Real Property. Without affecting the obligations of
the Borrower or any of the Restricted Subsidiaries under any of the Collateral
Documents, in the event that the Borrower or any Restricted Subsidiary (other
than National Sales and Service, Inc.), at any time after the date hereof,
whether directly or indirectly, acquires any interest in any real property,
including any fee or other ownership interest in any property, with a cost in
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excess of $50,000, or any interest under any lease of real property for a term
in excess of three years and involving average payments in excess of $100,000
per annum (each such interest, an "After Acquired Property"), the Borrower will,
or will cause such Restricted Subsidiary to, as soon as practical provide
written notice thereof to the Administrative Agent, setting forth with
specificity a description of such After Acquired Property, the location of such
After Acquired Property, any structures or improvements thereon and an appraisal
or its good-faith estimate of the then current value of such real property
("Current Value"). The Administrative Agent shall provide notice to the Borrower
of whether the Required Lenders intend to cause the Borrower or the applicable
Restricted Subsidiary to grant and record a Mortgage on such After Acquired
Property; provided that no new Mortgage on such After Acquired Property shall be
required if the costs that would be incurred as a result thereof are excessive
in relation to the benefits that would be conferred thereby. In such event, the
Borrower or such Restricted Subsidiary shall execute and deliver to the
Administrative Agent a Mortgage, together with such of the documents or
instruments referred to in Sections 4.01(d) and 4.01(e) as the Agents shall
reasonably require. The Borrower shall also cause to be prepared, at its
expense, reports of the type referred to in Sections 4.01(u) and (v) with
respect to each item of owned After Acquired Property for which the cost or fair
market value exceeds $250,000. In no event shall the title insurance policy for
any such After Acquired Property be in an amount which is less than the Current
Value of such After Acquired Property. If, at any time, the aggregate cost to
the Borrower and the Restricted Subsidiaries (other than National Sales and
Service, Inc.) of interests in real property for which a Mortgage in favor of
the Trustees is not in effect (the "Aggregate Cost of Unmortgaged Property"),
exceeds $500,000, the Borrower will as soon as practical provide written notice
thereof to each Lender, setting forth with specificity a description of such
interests in real property, the location of such real property and an appraisal
or its good-faith estimate of the then current value of such real property
interests. The Required Lenders may require the Borrower or the applicable
Restricted Subsidiary (other than National Sales and Service, Inc.) to grant and
record a Mortgage in favor of the Trustee on one or more of such real property
interests so that the Aggregate Cost of Unmortgaged Property does not exceed
$500,000, provided that no new Mortgage on any such real property shall be
required if the costs that would be incurred as a result thereof are excessive
in relation to the benefits that would be conferred thereby. In the event a
Mortgage is granted, the Borrower or such Restricted Subsidiary shall execute
and deliver to the Trustee a Mortgage, together with such documents or
instruments as the Required Lenders shall reasonably require. Further, with
regard to any interest in real property, including any fee or other ownership
interest in real property or any material lease of real property, which is
currently owned or held by the Borrower or any Restricted Subsidiary, which is
not being encumbered by a Mortgage of even date herewith and which has a current
fair market value in excess of $50,000 or any interest under a lease of real
property for a term in excess of three years and involving aggregate payments in
excess of $100,000 per annum (each such interest, an "Existing Unmortgaged
Property"), upon the written request of the Required Lenders, the Borrower will,
or will cause any applicable Restricted Subsidiary to, execute and deliver to
the Administrative Agent a Mortgage, together with such of the documents or
instruments referred to in Section 4.01(d) and 4.01(e) as the Agents shall
require; provided that a title insurance policy, survey and environmental report
shall only be required if the fair market value of such interest in real
property at the time such mortgage is executed exceeds $250,000. In no event
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shall the title insurance policy for any such Existing Unmortgaged Property be
in an amount which is less than the Current Value of such Existing Unmortgaged
Property. The Borrower shall pay all reasonable fees and expenses, including
reasonable attorneys' fees and expenses and expenses of any customary
environmental due diligence, and all title insurance charges and premiums, in
connection with the obligations of the Borrower and the Restricted Subsidiaries
under this Section 6.22.
SECTION 6.23. Sale and Lease-Back Transactions. The Borrower will not, and
will not cause or permit any of the Restricted Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, with an intent to rent or lease such property
or other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
SECTION 6.24. Acquisitions. Except in merger permitted by Section 6.07,
the Borrower will not, and will not cause or permit any of the Restricted
Subsidiaries to, purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person (other than a Restricted Subsidiary), except that (a) the Borrower and
any of the Restricted Subsidiaries may purchase inventory in the ordinary course
of business and (b) the Borrower or any Restricted Subsidiary may engage in any
such acquisition if (i) after giving effect to such acquisition, (A) no
condition or event shall exist which constitutes an Event of Default or Default
and (B) the Leverage Ratio as of the last day of such Reference Period,
calculated on a pro forma basis as if such acquisition (and any other such
acquisitions and other Specified Events which have occurred since the first day
of the applicable Reference Period) had occurred on the first day of such
Reference Period, shall be no greater than the Permitted Maximum Ratio on the
date of consummation of such acquisition and (ii) if such acquisition is made
for aggregate consideration in excess of $5,000,000, the Borrower shall have
prepared and furnished to the Agents prior to the consummation of such
acquisition pro forma financial statements, a pro forma business plan and pro
forma projections covering the balance of the term of the Facilities
demonstrating to the satisfaction of the Agents that the Leverage Ratio
reflecting such pro forma adjustments will not exceed the Permitted Maximum
Ratio at such time or during such period.
SECTION 6.25. Impairment of Security Interests. The Borrower will not, and
will not permit any of the Subsidiaries to, take or omit to take any action,
which action or omission might or would have the result of materially impairing
the security interests in favor of the Trustee on behalf of the Secured Parties
with respect to the Collateral, and the Borrower will not, and will not permit
any of the Subsidiaries to, grant to any Person (other than the Trustee on
behalf of the Secured Parties) any interest whatsoever in the Collateral.
SECTION 6.26. Limitation on Restrictions on Subsidiary Dividends, etc. The
Borrower will not, and will not cause or permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its Capital Stock, or pay any Indebtedness
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owed to the Borrower or any Restricted Subsidiary, (b) make loans or advances to
the Borrower or any Restricted Subsidiary or (c) transfer any of its properties
or assets to the Borrower or any Restricted Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest or other
contract entered into in the ordinary course of business consistent with past
practices, (ii) the terms of any Indebtedness incurred by such Restricted
Subsidiary in accordance with Section 6.01(h) or (iii) this Agreement, the other
Loan Documents and the Note Agreement.
SECTION 6.27. No Other Negative Pledges. The Borrower will not, and will
not cause or permit any of the Restricted Subsidiaries to, directly or
indirectly, enter into any agreement prohibiting the creation or assumption of
any Lien upon the properties or assets of the Borrower or any Restricted
Subsidiary, whether now owned or hereafter acquired, or requiring an obligation
to be secured if some other obligation is secured, except for this Agreement and
the Note Agreement and the terms of any other Indebtedness incurred in
accordance with Section 6.01 (provided that the terms of such agreement for such
other Indebtedness are no more onerous to the Borrower and its Subsidiaries than
those set forth in Section 6.02); provided that no such agreement shall prohibit
the granting of Liens on assets of the Loan Parties as contemplated by the terms
of this Agreement, the Collateral Documents and any documents evidencing or
creating any other Parity Debt.
SECTION 6.28. Sales of Receivables. The Borrower will not, and will not
cause or permit any of the Restricted Subsidiaries to, sell with recourse,
discount or otherwise sell or dispose of its notes or accounts receivable,
except for accounts receivable consisting of assets of an operating unit sold as
a going concern in accordance with all other provisions of this Agreement.
SECTION 6.29. Fixed Price Supply Contracts; Certain Policies. (a) The
Borrower will not, and will not permit any of the Restricted Subsidiaries to, at
any time be a party or subject to any contract for the purchase or supply by
such parties of propane or other product except where (i) the purchase price is
set with reference to a spot index or indices substantially contemporaneously
with the delivery of such product or (ii) delivery of such propane or other
product is to be made no more than one year after the purchase price is agreed
to.
(b) The Borrower will not amend, modify or waive the trading policy or
supply inventory position policy referred to in Section 3.29, except that the
Borrower may enter into Commodity Hedging Agreements as permitted under the
other provisions hereof. The Borrower will provide the Agents and the Lenders
with prompt written notice of any such new Commodity Hedging Agreement. Subject
to the foregoing exception, the Borrower and the Restricted Subsidiaries will
comply in all material respects with such policies at all times.
SECTION 6.30. Certain Operations. The Borrower shall not permit Triarc or
any of its Affiliates (other than the Borrower and the Restricted Subsidiaries)
to engage in the retail sale of propane to end users in the continental United
States.
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SECTION 6.31. Funded Debt to Cash Flow; Net Working Capital. (a) The
Borrower will not permit the ratio on any day (the "date of determination") of
(i) Total Funded Debt as of the last day of the Reference Period with respect to
such date of determination to (ii) Consolidated Cash Flow for such Reference
Period to be greater than the ratio set forth below opposite the calendar period
during which such date of determination occurs:
Maximum
Calendar Period Permitted Ratio
--------------- ---------------
Closing Date through 4.50 : 1.00
June 30, 1997
July 1, 1997 4.25 : 1.00
and thereafter
For purposes of this Section 6.31 only, but not for purposes of determining the
Applicable Margin, calculating the Leverage Ratio as required by Sections
4.03(g), 6.01, 6.03, 6.07 and 6.24, calculating the ratio of Consolidated Cash
Flow to Consolidated Interest Expense as required by Section 6.04 or any other
purpose (other than determining compliance with Section 6.31 as required by
Section 6.04), Consolidated Cash Flow for any Reference Period (other than any
Reference Period including any period prior to June 30, 1996) shall mean the
greater of (i) Consolidated Cash Flow for the most recent period of four
consecutive fiscal quarters prior to the date of determination and (ii) 50% of
Consolidated Cash Flow for the most recent period of eight consecutive fiscal
quarters prior to the date of determination.
(b) The Borrower will not permit Net Working Capital as of September 30 or
June 30 in any year to be less than $5,000,000.
SECTION 6.32. Independent Corporate Existence. Except as set forth on
Schedule 6.32, (a) the Borrower shall maintain, and shall cause each of its
Subsidiaries to maintain, books, records and accounts that are separate from the
books, records and accounts of Triarc, either of the General Partners or any of
their respective Subsidiaries (other than the Borrower and its Subsidiaries)
such that: (i) the revenues of the Borrower and its Subsidiaries will be
credited to the accounts of the Borrower and its Subsidiaries only; (ii) all
expenses incurred by the Borrower and its Subsidiaries shall be paid only from
the accounts of the Borrower and its Subsidiaries (other than those paid by the
Managing General Partner and allocated to the Borrower in the manner set forth
in clause (c) of this Section); (iii) only officers and employees of the
Managing General Partner, the Borrower and its Subsidiaries in their capacity as
such shall have the authority to make disbursements with respect to the accounts
of the Borrower and its Subsidiaries; (iv) there shall occur no sharing of
accounts or funds between the Borrower and its Subsidiaries, on the one hand,
and Triarc, either of the General Partners or any of their respective
Subsidiaries (other than the Borrower and its Subsidiaries), on the other hand;
and (v) all cash and funds of the Borrower and its Subsidiaries shall be managed
separately from the cash and funds of Triarc, either of the General Partners or
any of their respective Subsidiaries (other than the Borrower and its
Subsidiaries), and there shall not
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occur any commingling, including for investment purposes, of funds or assets of
the Borrower and its Subsidiaries with the funds or assets of Triarc, either of
the General Partners or any of their respective Subsidiaries (other than the
Borrower and its Subsidiaries).
(b) All full-time employees, consultants and agents of the Borrower and
its Subsidiaries shall be compensated directly from the bank accounts of the
Managing General Partner, the Borrower and such Subsidiaries for services
provided by such employees, consultants and agents and, to the extent any
employee, consultant or agent is also an employee, consultant or agent of
Triarc, either of the General Partners or any of their respective Subsidiaries
(other than the Borrower and its Subsidiaries), the compensation of such
employee, consultant or agent shall be allocated in accordance with clause (c)
of this Section among the Borrower and its Subsidiaries, on the one hand, and
Triarc, the General Partners and any of their respective Subsidiaries (other
than the Borrower and its Subsidiaries), on the other hand, on a basis which
reasonably reflects the services rendered to the Borrower and its Subsidiaries.
(c) All overhead expenses (including telephone and other utility charges)
for items shared by the Borrower and its Subsidiaries, on the one hand, and
Triarc, either of the General Partners or any of their respective Subsidiaries
(other than the Borrower and its Subsidiaries), on the other hand, shall be
allocated on the basis of actual use to the extent practicable and, to the
extent such allocation is not practicable, on a basis reasonably related to
actual use.
(d) The Borrower shall not permit Triarc, either of the General Partners
or any of their respective Subsidiaries (other than the Borrower and its
Subsidiaries) to be named as a loss payee or additional insured on the insurance
policy covering the property of the Borrower or any of its Subsidiaries, or
enter into an agreement with the holder of such policy whereby in the event of a
loss in connection with such property, proceeds are paid to Triarc, either of
the General Partners or any of their respective Subsidiaries (other than the
Borrower and its Subsidiaries).
SECTION 6.33. Real Estate Leases. The Borrower shall not permit the total
rental expense payable by the Borrower and its Restricted Subsidiaries with
respect to all real property interests leased by the Borrower and its
Subsidiaries to exceed $750,000 in any rolling 12-month period; provided that
there shall be excluded from the foregoing calculation all rental expense
payable with respect to any particular property interest if: (a) the Borrower
shall have obtained a waiver of Liens from the landlord for such property in the
form attached as Exhibit C to the Borrower Security Agreement or (b) the
landlord for such property shall not, as a matter of applicable statutory law,
common law or contract, have any right to subject the assets of the Borrower and
the Restricted Subsidiaries at or on such property to a Lien securing unpaid
rent for such property and the Borrower shall have provided the Agents with
evidence reasonably satisfactory to them of the foregoing.
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ARTICLE VII
EVENTS OF DEFAULT
SECTION 7.01. Events of Default. In case of the happening of any of the
following events ("Events of Default"):
(a) default shall be made in the payment of any principal of any Loan or
any reimbursement obligation in respect of a Letter of Credit when and as the
same shall become due and payable, whether at the due date thereof or at a date
fixed for prepayment thereof or by acceleration thereof or otherwise;
(b) default shall be made in the payment of any interest on any Loan or
any Fee or any other amount (other than an amount referred to in paragraph (a)
above) due under any Loan Document, when and as the same shall become due and
payable, and such default shall continue unremedied for a period of five
Business Days;
(c) default shall be made in the due observance or performance by the
Borrower or any Subsidiary of any covenant, condition or agreement contained in
Section 5.02(f) or any of Sections 6.01 through 6.08, inclusive, Section 6.10,
Section 6.11(b) (other than the failure to deliver any broker report on a timely
basis as required by Section 15.3 of the Mortgage) and Sections 6.18 through
6.31, inclusive, of this Agreement or in Section 4.21 or 4.23 of the Borrower
Security Agreement;
(d) default shall be made in the due observance or performance by the
Borrower or any other Loan Party of any covenant, condition or agreement
contained in any Loan Document (other than those specified in paragraph (a), (b)
or (c) above) and such default shall continue unremedied for a period of 30 days
after such default shall first have become known to any Responsible Officer of
any Loan Party or written notice thereof shall have been received by the
Managing General Partner from the Administrative Agent or any Lender;
(e) any representation or warranty made in writing or deemed made by or on
behalf of the Borrower or any of its Affiliates in this Agreement, any other
Operative Agreement or in any instrument furnished in connection with the
Transactions shall prove to have been false or incorrect in any material respect
on the date as of which made or deemed made;
(f) the Borrower or any Restricted Subsidiary (as principal or guarantor
or other surety) shall default (after receiving the applicable notice, if any,
and/or the expiration of any applicable grace period) (i) in the payment of any
amount of principal of or premium or interest on the Mortgage Notes or any other
Indebtedness (other than the Facilities) in a principal amount of at least
$3,000,000 or (ii) any other event shall occur or condition shall exist in
respect of any Indebtedness which is outstanding in a principal amount of at
least $5,000,000 or the Mortgage Notes or under any evidence of any such
Indebtedness or the Mortgage Notes or of any mortgage, indenture or other
agreement relating to such Indebtedness or the Mortgage Notes, the effect of any
of which is to cause (or to permit one or more Persons to
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cause) such Indebtedness or the Mortgage Notes to become due before its stated
maturity or before its regularly scheduled dates of payment or to permit the
holders of such Indebtedness or the Mortgage Notes to cause the Borrower or any
Restricted Subsidiary to repurchase or repay such Indebtedness or the Mortgage
Notes, and such default, event or condition shall continue for more than the
period of grace, if any, specified therein and shall not have been waived
pursuant thereto;
(g) filing by or on the behalf of the Borrower or the Managing General
Partner of a voluntary petition or an answer seeking reorganization,
arrangement, readjustment of its debts or for any other relief under any
bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment of
debt, dissolution or liquidation or similar act or law, state or Federal, now or
hereafter existing ("Bankruptcy Law"), or any action by the Borrower or the
Managing General Partner for, or consent or acquiescence to, the appointment of
a receiver, trustee or other custodian of the Borrower or the Managing General
Partner, or of all or a substantial part of its property; or the making by the
Borrower or the Managing General Partner of any assignment for the benefit of
creditors; or the admission by the Borrower or the Managing General Partner in
writing of its inability to pay its debts as they become due;
(h) filing of any involuntary petition against the Borrower or the
Managing General Partner in bankruptcy or seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy Law and
an order for relief by a court having juris diction in the premises shall have
been issued or entered therein; or any other similar relief shall be granted
under any applicable Federal or state law; or a decree or order of a court of
competent jurisdiction for the appointment of a receiver, liquidator,
sequestrator, trustee or other officer having similar powers over the Borrower
or the Managing General Partner or over all or a part of its property shall have
been entered; or the involuntary appointment of an interim receiver, trustee or
other custodian of the Borrower or the Managing General Partner or of all or a
substantial part of its property; or the issuance of a warrant of attachment,
execution or similar process against any substantial part of the property of the
Borrower or the Managing General Partner; and continuance of any such event for
60 consecutive days unless dismissed, bonded to the satisfaction of the court of
competent jurisdiction or discharged;
(i) filing by or on the behalf of any Restricted Subsidiary of a voluntary
petition or an answer seeking reorganization, arrangement, readjustment of its
debts or for any other relief under any Bankruptcy Law, or any action by any
Restricted Subsidiary for, or consent or acquiescence to, the appointment of a
receiver, trustee or other custodian of such Restricted Subsidiary or of all or
a substantial part of its property; or the making by any Restricted Subsidiary
of any assignment for the benefit of creditors; or the admission by any
Restricted Subsidiary in writing of its inability to pay its debts as they
become due;
(j) filing of any involuntary petition against any Restricted Subsidiary
in bankruptcy or seeking reorganization, arrangement, readjustment of its debts
or for any other relief under any Bankruptcy Law and an order for relief by a
court of competent jurisdiction shall have been issued or entered therein; or
any other similar relief shall be granted under any applicable Federal or state
law; or a decree or order of a court having jurisdiction in the
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premises for the appointment of a receiver, liquidator, sequestrator, trustee or
other officer having similar powers over any Restricted Subsidiary or over all
or a part of its property shall have been entered; or the involuntary
appointment of an interim receiver, trustee or other custodian of any Restricted
Subsidiary or of all or a substantial part of its property; or the issuance of a
warrant of attachment, execution or similar process against any substantial part
of the property of any Restricted Subsidiary; and continuance of any such event
for 60 consecutive days unless dismissed, bonded to the satisfaction of the
court of competent jurisdiction or discharged;
(k) a final judgment or judgments (which is or are non-appealable or which
has or have not been stayed pending appeal or as to which all rights to appeal
have expired or been exhausted) shall be rendered against the Borrower or any
Restricted Subsidiary for the payment of money in excess of $2,500,000 in the
aggregate and any one of such judgments shall not be discharged or execution
thereon stayed pending appeal within 60 days after the date due, or, in the
event of such a stay, such judgment shall not be discharged within 60 days after
such stay expires, or any action shall be legally taken by a judgment creditor
to levy upon assets or properties of the Borrower or any Restricted Subsidiary
to enforce any such judgment;
(l) any of the Loan Documents or other Operative Agreements shall at any
time, for any reason, cease to be in full force and effect or shall be declared
to be null and void in whole or in any material part by the final judgment
(which is non-appealable or has not been stayed pending appeal or as to which
all rights to appeal have expired or been exhausted) of any court or other
governmental or regulatory authority having jurisdiction in respect thereof, or
the validity or the enforceability of any of the Loan Documents or other
Operative Agreements shall be contested by or on behalf of the Borrower or any
other Loan Party, or the Borrower or any other Loan Party shall renounce any of
the Loan Documents or other Operative Agreements, or deny that it is bound by
the terms of any of the Loan Documents or other Operative Agreements;
(m) any Lien purported to be created by any Collateral Document shall
cease to be, or shall for any reason be asserted by the Borrower or any other
Loan Party not to be, a valid, perfected, first priority Lien on the securities,
properties or assets covered thereby, other than as a result of an act or
omission of any Agent or Lender;
(n) any order, judgment or decree is entered in any proceedings against
the Borrower or any Restricted Subsidiary decreeing a split-up of the Borrower
or such Restricted Subsidiary which requires the divestiture of assets
representing a substantial part, or the divestiture of the stock of a Restricted
Subsidiary whose assets represent a substantial part, of the consolidated assets
of the Borrower and its Restricted Subsidiaries (determined in accordance with
GAAP) or which requires the divestiture of assets, or stock of a Restricted
Subsidiary, which shall have contributed a substantial part of the Consolidated
Net Income of the Borrower and its Restricted Subsidiaries for any of the three
fiscal years then most recently ended, and such order, judgment or decree shall
not be dismissed or execution thereon stayed pending appeal or review within 30
days after entry thereof, or in the event of such a stay, such order, judgment
or decree shall not be dismissed within 30 days after such stay expires;
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(o) there shall occur at any time a change in Legal Requirements
specifically applicable to the Borrower or to the Business or to the business of
the wholesale and retail sale, distribution and storage of propane gas and
related petroleum derivative products and the related retail sale of supplies
and equipment, including home appliances, which would have a Material Adverse
Effect and 60 days after the earlier of (i) such occurrence shall first have
become known to any officer of the Borrower or the Managing General Partner or
(ii) written notice thereof shall have been received by the Borrower from the
Administrative Agent or any Lender, such Material Adverse Effect shall be
continuing;
(p) (i) any Person shall engage in any "prohibited transaction" (as
defined in Section 406 of ERISA or Section 4975 of the Code) involving any Plan
(other than a Multiemployer Plan), (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan, or any Lien shall arise on the assets of the Borrower or
any Related Person in favor of the PBGC or a Plan, (iii) a Reportable Event
shall occur with respect to, or proceedings shall commence to have a trustee
appointed (or a trustee shall be appointed) to administer, or to terminate, any
Single Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required Lenders,
likely to result in the termination of such Plan for purposes of Title IV of
ERISA at a time when the assets of the Plan are not sufficient to satisfy all
benefit liabilities thereunder, (iv) any Single Employer Plan shall terminate
for purposes of Title IV of ERISA or (v) the Borrower or any Related Person
shall, or in the reasonable opinion of the Required Lenders is likely to, incur
any liability in connection with a withdrawal from, or the termination,
reorganization or insolvency of (within the meaning of such terms as used in
ERISA), a Multiemployer Plan and, in each case in clauses (i) through (v) above,
such event or condition, together with all other such events or conditions, if
any, could reasonably be expected to result in a Material Adverse Effect; or any
other event or condition shall occur or exist with respect to a Plan, the
occurrence or existence of which, individually or in the aggregate, has a
Material Adverse Effect;
(q) either (i) the Borrower or any Restricted Subsidiary shall be liable,
whether directly, indirectly through required indemnification of any Person or
otherwise, for the costs of investigation and/or remediation of any Hazardous
Material originating from or affecting property or properties, whether or not
owned, leased or operated by the Borrower or any Restricted Subsidiary, which
liability, together with all other such liabilities, could reasonably be
expected to result in liabilities of the Borrower and the Restricted
Subsidiaries in excess of $2,500,000 or (ii) any Federal, state, regional, local
or other environmental regulatory agency or authority shall commence an
investigation or take any other action that could reasonably be expected to be
determined adversely to the Borrower or any Restricted Subsidiary and, on the
basis of such a determination, to result in liabilities of the Borrower and the
Restricted Subsidiaries in excess of $2,500,000; provided that any obligation to
undertake investigation or remediation or otherwise incur costs in connection
with contamination at the Marshfield, Wisconsin facility shall not constitute an
Event of Default hereunder unless the same could reasonably be expected to
result in liabilities of the Borrower and the Restricted Subsidiaries in excess
of $3,500,000 in the aggregate; or
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(r) National Propane Corp. shall have sold, transferred, pledged, conveyed
or otherwise disposed of any or all of its ownership of Capital Stock of
National Propane SGP, except for the pledge to the Trustee pursuant to the
Partners Security Agreement.
then, and in every such event, and at any time thereafter during the continuance
of such event, the Administrative Agent may, and at the request of the Required
Lenders, shall take one or more of the following actions, at the same or
different times: (i) by notice to the Borrower terminate the Commitments and
they shall immediately terminate; (ii) by notice to the Borrower declare the
Loans then outstanding to be forthwith due and payable (in whole or, in the sole
discretion of the Required Lenders, from time to time in part), whereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and any unpaid accrued Fees and all other liabilities of the
Borrower accrued hereunder or under any other Loan Document, shall thereupon
become immediately due and payable, without presentment, demand, protest or any
other notice of any kind, all of which are hereby expressly waived by the
Borrower, anything contained herein or in any other Loan Document to the
contrary notwithstanding; (iii) require the Borrower to deposit cash collateral
with the Trustee pursuant to the Trust Agreement in an amount not exceeding the
Letter of Credit Exposure; (iv) exercise any remedies available under the
Guarantee Agreements, the Collateral Documents or otherwise; or (v) any
combination of the foregoing; provided that in the case of any of the Events of
Default with respect to the Borrower described in paragraph (g) or (h) above,
the Commitments shall automatically terminate and the principal of the Loans
then outstanding, together with accrued interest thereon and any unpaid accrued
Fees and all other liabilities of the Borrower accrued hereunder or under any
other Loan Document, shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding.
SECTION 7.02. Remedies. In case any one or more Events of Default or
Defaults shall occur and be continuing, (i) any Lender may proceed to protect
and enforce the rights of such Lender by an action at law, suit in equity or
other appropriate proceeding, whether for the specific performance of any
agreement contained herein or in any other Loan Document, or for an injunction
against a violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or otherwise, and (ii)
the Trustee and the Lenders may exercise any rights or remedies in their
respective capacities under the Collateral Documents in accordance with the
provisions thereof. In case of a default in the payment or performance of any
provision hereof or of the Loan Documents, the Borrower will pay to each Lender
such further amount as shall be sufficient to cover the cost and expenses of
collection, including reasonable attorneys' fees, expenses and disbursements,
and any out-of-pocket costs and expenses of any such holder incurred in
connection with analyzing, evaluating, protecting, ascertaining, defending or
enforcing any of its rights as set forth herein or in any of the Loan Documents.
No course of dealing and no delay on the part of any Lender in exercising any
right, power or remedy shall operate as a waiver thereof or otherwise prejudice
such Lender's rights, powers or remedies. No right, power or remedy conferred by
this Agreement or by any other Loan Document upon any Lender shall be exclusive
of any other right, power or remedy referred to herein or therein or now or
hereafter available at law,
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in equity, by statute or otherwise. No covenant herein which requires the
Borrower to cause any of its Affiliates to take, or prohibit any of its
Affiliates from taking, any action shall be excused by the Borrower's inability
to control the actions or inactions of such Affiliates.
ARTICLE VIII
THE AGENTS AND ISSUING BANK
SECTION 8.01. Appointment and Authorization. (a) Each of the Lenders, and
each subsequent holder of any Note by its acceptance thereof, hereby irrevocably
appoints and authorizes each of the Agents and the Issuing Bank to take such
actions as agent on behalf of such Lender or holder and to exercise such powers
as are specifically delegated to such Agent or the Issuing Bank, as the case may
be, by the terms and provisions hereof and of the other Loan Documents, together
with such actions and powers as are reasonably incidental thereto.
(b) The Administrative Agent is hereby expressly authorized by the Lenders
to, without hereby limiting any implied authority, and hereby agrees (in the
case of clause (ii) below, at the direction of the Required Lenders) to, (i)
receive on behalf of the Lenders all payments of principal of and interest on
the Loans and all other amounts due to the Lenders hereunder, and promptly to
distribute to each Lender its proper share of each payment so received; (ii)
give notice on behalf of each of the Lenders to the Borrower of any Event of
Default specified in this Agreement of which the Administrative Agent has actual
knowledge acquired in connection with its agency hereunder; and (iii) distribute
to each Lender copies of all notices, financial statements and other materials
delivered by the Borrower or any Subsidiary pursuant to this Agreement or any
other Loan Document as received by the Administrative Agent (other than
materials required hereunder to be delivered by the Borrower directly to the
Lenders).
SECTION 8.02. Liability of Agents. Neither the Agents, the Issuing Bank,
nor any of their respective directors, officers, employees or agents, shall be
liable as such for any action taken or omitted to be taken by any of them,
except for such party's own gross negligence or wilful misconduct, or be
responsible for any statement, warranty or representation herein or the contents
of any document delivered in connection herewith, or be required to ascertain or
to make any inquiry concerning the performance or observance by the Borrower or
any Subsidiary of any of the terms, conditions, covenants or agreements
contained in any Loan Document. Neither the Agents nor the Issuing Bank shall be
responsible to the Lenders or the holders of the Notes for the due execution,
genuineness, validity, enforceability or effectiveness of this Agreement, the
Notes or any other Loan Documents or other instruments or agreements. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes hereof until it shall have received from the payee of
such Note notice, given as provided herein, of the transfer thereof in
compliance with Section 9.04. Each of the Agents and the Issuing Bank shall in
all cases be fully protected in acting, or refraining from acting, in accordance
with written instructions signed by the Required Lenders and, except as
otherwise specifically provided herein, such instructions and any action or
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inaction pursuant thereto shall be binding on all the Lenders and each
subsequent holder of any Note. Each of the Agents, the Issuing Bank and the
Required Lenders shall, in the absence of knowledge to the contrary, be entitled
to rely on any instrument or document believed by it in good faith to be genuine
and correct and to have been signed or sent by the proper Person or Persons.
Neither the Agents, the Issuing Bank nor any of their respective directors,
officers, employees or agents, shall have any responsibility to the Borrower on
account of the failure of or delay in performance or breach by any Lender of any
of its obligations hereunder or to any Lender on account of the failure of or
delay in performance or breach by any other Lender or the Borrower or any
Subsidiary of any of their respective obligations hereunder or under any other
Loan Document or in connection herewith or therewith. Each of the Agents and the
Issuing Bank may execute any and all duties hereunder by or through agents or
employees, shall be entitled to consult with legal counsel, independent public
accountants and other experts selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts.
SECTION 8.03. Action by Agents. The Lenders hereby acknowledge that none
of the Agents and the Issuing Bank shall be under any duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement unless it shall be requested in writing to do so by the Required
Lenders. The obligations of the Agents and the Issuing Bank under the Loan
Documents are only those expressly set forth herein and therein. Without
limiting the generality of the foregoing, no Agent shall be required to take any
action with respect to any Default or Event of Default, except as expressly
required pursuant to Article VII.
SECTION 8.04. Successor Agents. Subject to the appointment and acceptance
of a successor as provided below, each of the Agents and the Issuing Bank
(except, in the case of the Issuing Bank, in respect of Letters of Credit issued
by it) may resign at any time by notifying the Lenders and the Borrower. Upon
any such resignation, the Required Lenders shall have the right to appoint a
successor. If no successor shall have been so appointed by the Required Lenders,
and shall have accepted such appointment, within 30 days after the retiring
Agent or Issuing Bank, as the case may be, gives notice of its resignation, then
the retiring Agent or Issuing Bank, as the case may be, may, on behalf of the
Lenders, appoint a successor, which shall be a commercial bank organized or
licensed under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as an Agent
or Issuing Bank, as the case may be, hereunder by a successor bank, such
successor shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent or Issuing Bank and the retiring
Agent or Issuing Bank shall be discharged from its duties and obligations
hereunder. After the resignation of an Agent or the Issuing Bank, as the case
may be, hereunder, the provisions of this Article and Section 9.05 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as an Agent or Issuing Bank.
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SECTION 8.05. Agent and Affiliate. With respect to the Loans made by it
hereunder, the Letters of Credit issued by it hereunder and the Notes issued to
it, each of the Agents and the Issuing Bank in its individual capacity and not
as an Agent or the Issuing Bank shall have the same rights and powers as any
other Lender and may exercise the same as though it were not an Agent or the
Issuing Bank. Each of the Agents and the Issuing Bank (and its Affiliates) may
accept deposits from, lend money to and generally engage in any kind of business
and transactions with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not an Agent or the Issuing Bank (or such Affiliate thereof).
SECTION 8.06. Indemnification. Each Lender agrees (a) to reimburse each of
the Agents and the Issuing Bank, on demand, in the amount of its pro rata share
(based on its Commitment hereunder) of any expenses incurred for the benefit of
the Lenders by such Agent or the Issuing Bank, as the case may be, including
counsel fees and compensation of agents and employees paid for services rendered
on behalf of the Lenders, which shall not have been reimbursed by the Borrower
and (b) to indemnify and hold harmless each of the Agents, the Issuing Bank and
any of their respective directors, officers, employees or agents, promptly after
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against it in its capacity as an
Agent or the Issuing Bank or any of them in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
it or any of them under this Agreement or any other Loan Document, to the extent
the same shall not have been reimbursed by the Borrower; provided that no Lender
shall be liable to any Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements resulting from the gross negligence or wilful misconduct of such
Agent, the Issuing Bank or any of their respective directors, officers,
employees or agents.
SECTION 8.07. Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agents, the Issuing Bank or any
other Lender and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon the Agents, the Issuing Bank or any other Lender and based on such
documents and information as it shall from time to time deem appropriate,
continue to make its own decisions in taking or not taking action under or based
upon this Agreement or any other Loan Document, any related agreement or any
document furnished hereunder or thereunder.
SECTION 8.08. Trust Agreement. The Lenders hereby authorize the
Administrative Agent to enter into the Trust Agreement and agree to be bound by
the terms thereof.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopy as follows:
(a) if to the Borrower, to it at Suite 1700, IES Tower, 200 1st Street,
S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067, Attention of Ronald R.
Romaniecki (Telecopy No. (319) 365-3672) with a copy to Paul, Weiss, Rifkind,
Wharton & Garrison, 1285 Avenue of the Americas, New York, New York 10019-6064,
Attention of Paul D. Ginsberg (Telecopy No. (212) 757-3990);
(b) if to the Administrative Agent, to it at 100 Federal Street, Mail Stop
01-08-02, Boston, MA 02110, Attention of Michael P. Hannon (Telecopy No. (617)
434-3652); with a copy to Fennebresque, Clark, Swindell & Hay, at NationsBank
Corporate Center, 100 North Tryon Street, Suite 2900, Charlotte, NC 28202-4011,
Attention of Andrew C. Karp (Telecopy No. (704) 347-3838);
(c) if to the Syndication Agent, to it at 333 Clay Street, Suite 4550,
Houston, Texas 77002, Attention of David Sisler, (Telecopy No. (713) 651-4808);
and
(d) if to a Lender (other than The First National Bank of Boston and Bank
of America NT & SA), to it at its address in the Assignment and Acceptance
pursuant to which such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the Lenders, the Agents and the Issuing Bank and shall
survive the making by the Lenders of the Loans, the execution and delivery to
the Lenders of the Notes evidencing such Loans, and the issuance of the Letters
of Credit, regardless of any investigation made by the Lenders, the Agents or
the Issuing Bank or on their behalf, and shall continue in full force and effect
as long as (a) the principal of or any accrued interest on any Loan, any Fee,
any Letter of Credit Disbursement or any other amount payable under this
Agreement or any other Loan Document is outstanding and unpaid, (b) the
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Commitments have not been terminated or (c) any Letter of Credit has not expired
or been terminated.
SECTION 9.03. Binding Effect. This Agreement shall become effective when
the conditions precedent set forth in Section 4.01 are satisfied (except that,
solely for the purpose of calculating any fees stated herein to commence to
accrue on the date of this Agreement, this Agreement shall become effective when
the conditions precedent set forth in Section 4.01(a) are satisfied).
SECTION 9.04. Successors and Assigns. (a) Subject to Section 9.04(j),
whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and assigns of such party
and all covenants, promises and agreements by or on behalf of the Borrower, the
Agents, the Issuing Bank or the Lenders that are contained in this Agreement
shall be binding upon and inure to the benefit of their respective successors
and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment, the Loans at the time owing to it, the Notes held by
it and the participations in Letters of Credit held by it); provided, however,
that (i) except in the case of an assignment to a Lender or an Affiliate of a
Lender, the assignor shall have obtained the prior written consent to such
assignment (which consent shall not be unreasonably withheld) of the Borrower
(unless an Event of Default or Default shall have occurred and be continuing, in
which case such consent shall not be required), the Agents and, in the case of
an assignment of a Revolving Credit Commitment, the Issuing Bank, (ii) until
each of The First National Bank of Boston and Bank of America NT & SA hold total
Loans, Letter of Credit Exposure and unused Commitments equal to $15,000,000 or
less, any assignment by either of them shall be made together with the other on
a pro rata basis, (iii) except in the case of an assignment to a Lender or an
Affiliate of a Lender, the sum of (A) the principal amount of the outstanding
Loans subject to each such assignment and (B) the unused amount of the
Commitment of the assigning Lender subject to such assignment (in each case
determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than the
lesser of (I) $5,000,000 and (II) the entire remaining amount of the outstanding
Loans and unused Commitment of such Lender, (iv) the parties to each such
assignment shall execute and deliver to the Administrative Agent an Assignment
and Acceptance, together with the Note or Notes subject to such assignment and a
processing and recordation fee of $2,500 and (v) the assignee, if it shall not
be a Lender or an Affiliate thereof, shall deliver to the Administrative Agent
an Administrative Questionnaire. Upon acceptance and recording pursuant to
Section 9.04(e), from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five Business Days after
the execution thereof (unless the Administrative Agent shall otherwise agree),
(A) the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement and (B) the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement
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(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto but shall continue to be entitled
to the benefits of Sections 2.13, 2.15, 2.19 and 9.05, as well as to any Fees
accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim; (ii)
except as set forth in clause (i) above, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement, any other Loan Document or any other instrument or document furnished
pursuant hereto or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Loan Document or
any other instrument or document furnished pursuant hereto, or the financial
condition of the Borrower or any other Loan Party or the performance or
observance by the Borrower or any other Loan Party of any of its obligations
under this Agreement, any other Loan Document or any other instrument or
document furnished pursuant hereto; (iii) such assignee represents and warrants
that it is legally authorized to enter into such Assignment and Acceptance; (iv)
such assignee confirms that it has received a copy of the Loan Documents,
together with copies of the most recent financial statements required hereunder
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into such Assignment and
Acceptance; (v) such assignee will independently and without reliance upon the
Agents, the Issuing Bank, such assigning Lender or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (vi) such assignee appoints and authorizes each of the Agents
and the Issuing Bank to exercise such powers under this Agreement as are
delegated to such party by the terms hereof, together with such powers as are
reasonably incidental hereto; and (vii) such assignee agrees that it will
perform in accordance with their terms all the obligations which by the terms of
this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices in
Boston, Massachusetts, a copy of each Assignment and Acceptance delivered to it
and a register for the recordation of the names and addresses of the Lenders,
and the Commitments of, and principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of manifest error and the
Borrower, the Agents and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by the Borrower, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with the Note or Notes
subject to such
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assignment, an Administrative Questionnaire completed in respect of the assignee
(unless the assignee shall already be a Lender hereunder or shall be an
Affiliate of a Lender), the processing and recordation fee referred to in
Section 9.04(b) and, if required, the written consent of the Borrower and the
Issuing Bank to such assignment, and, if required, upon granting its own consent
to such assignment, the Administrative Agent shall (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the Register
and (iii) give prompt notice thereof to the Issuing Bank, the Syndication Agent
and the Lenders. Within five Business Days after receipt of notice, the
Borrower, at its own expense, shall execute and deliver to the Administrative
Agent, in exchange for the surrendered Note or Notes, a new Note or Notes
payable to the order of such assignee in a principal amount equal to the
applicable portion thereof (and the corresponding Commitment, if any) assumed by
it pursuant to such Assignment and Acceptance and, if the assigning Lender has
retained any portion of such Note or Notes (and such Commitment, if any), a new
Note or Notes payable to the order of such assigning Lender in a principal
amount equal to the applicable portion of such Note or Notes (and such
Commitment, if any) retained by it. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note; such new Note or Notes shall be dated the date of the
surrendered Note or Notes which they replace and shall otherwise be in
substantially the form of Exhibits B-1 and B-2 hereto, as applicable. Cancelled
Notes shall be returned to the Borrower.
(f) Each Lender may, with the prior consent of the Borrower which consent
will not be unreasonably withheld (except that no such consent of the Borrower
shall be required if a Default or Event of Default has occurred and is
continuing), and without the consent of the Agents or the Issuing Bank, sell
participations in all or a portion of its rights and obligations under this
Agreement (including all or a portion of its Commitment, the Loans owing to it,
the Notes held by it and the participations in Letters of Credit held by it) to
one or more participants; provided, however, that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) except in the case of a
participation to an existing participant or its Affiliate, the outstanding
principal amount of the Loans subject to each such participation shall not be
less than the lesser of (A) $5,000,000 and (B) the entire remaining amount of
the outstanding Loans and unused Commitment of such Lender, (iii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iv) the participating banks or other entities shall be
entitled to the benefit of the cost protection provisions contained in Sections
2.13, 2.15 and 2.19 to the same extent as if they were Lenders and (v) the
Borrower, the Agents, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to the Loans and
to approve any amendment, modification or waiver of any provision of this
Agreement (other than amendments, modifications or waivers decreasing the
principal amount of any Loan, extending the Tranche A Maturity Date, the Tranche
B Conversion Date or the Tranche B Maturity Date, extending any Tranche B
Repayment Date or any date for the payment of any interest on any Loan, waiving
or excusing any such payment or any part thereof, decreasing the rate of
interest on any Loan, changing or extending any Commitment or decreasing any
Commitment Fees or Letter of Credit Fees or postponing the date fixed for any
reimbursement of a Letter of Credit Disbursement,
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permitting the release of any material amount of Collateral under any Collateral
Document, permitting the release of any material guarantor from the Guarantee
Agreements or increasing the aggregate Commitments of the Lenders).
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
9.04, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower or any of the other Loan
Parties furnished to such Lender by or on behalf of the Borrower or any of the
other Loan Parties; provided that, prior to any such disclosure of information
designated by the Borrower as confidential, each such assignee or participant or
proposed assignee or participant shall execute an agreement whereby such
assignee or participant shall agree (subject to customary exceptions) to
preserve the confidentiality of such confidential information.
(h) Assignments and participations pursuant to this Section 9.04 shall be
pro rata between the Facilities.
(i) Any Lender may at any time assign all or any portion of its rights
under this Agreement and the Notes issued to it to a Federal Reserve Bank;
provided that no such assignment shall release a Lender from any of its
obligations hereunder.
(j) Except in a transaction permitted under Section 6.07(a)(iii), the
Borrower shall not assign or delegate any of its rights or duties hereunder or
any interest herein (whether voluntarily, by operation of law or otherwise). Any
purported assignment or delegation in violation of the foregoing shall be void.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to pay (whether
or not the transactions contemplated hereby shall be consummated) all reasonable
out-of-pocket costs and expenses incurred by any Agent or the Issuing Bank in
connection with the preparation, execution and delivery of this Agreement and
the other Loan Documents, the closing of the Facilities, the administration of
the Facilities or any amendment, modification or waiver of the provisions hereof
or thereof or incurred by any Agent, the Issuing Bank or any Lender in
connection with the enforcement or protection of the rights of the Agents, the
Issuing Bank and the Lenders under this Agreement and the other Loan Documents
or in connection with the Loans made hereunder, the Notes issued hereunder or
the Letters of Credit issued hereunder, including the reasonable fees, charges
and disbursements of (i) Fennebresque, Clark, Swindell & Hay, counsel for the
Administrative Agent, (ii) Ropes & Gray, environmental counsel to the
Administrative Agent, (iii) reasonable expenses and hourly fees of in-house
counsel to the Syndication Agent, (iv) any third party consultants retained,
with the consent of the Borrower, to assist the Agents in analyzing any
environmental, insurance and other due diligence issues and (v) in connection
with any such enforcement or protection, any other counsel for any Agent, the
Issuing Bank or any Lender.
(b) The Borrower agrees to indemnify each of the Agents, the Issuing Bank,
the affiliates of any Agent, the Issuing Bank, the Lenders, and their respective
directors, officers,
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employees, agents, Controlling Persons and the Trustee (each, an "Indemnified
Party") from and against any and all losses, claims (whether valid or not),
damages and liabilities, joint or several, to which such Indemnified Party may
become subject, related to or arising out of (i) the Transactions or the
Facilities, (ii) any accident or injury to or death of persons or loss of or
damage to property occurring on or about any of the Mortgaged Properties, (iii)
the ownership of any of the Mortgaged Properties, or any interest therein, or
receipt of any rent or other sum therefrom, (iv) any use, non-use or condition
of any of the Mortgaged Properties or any part thereof, (v) any failure of the
Borrower or any other obligor to perform or comply with any of the terms of any
of the Loan Documents, (vi) the performance of any labor or services or the
furnishing of any materials or other property in respect of any of the Mortgaged
Properties or any part thereof, (vii) any work in connection with any
alterations, changes or construction of any of the Mortgaged Properties, (viii)
the execution or delivery of this Agreement or any other Loan Document or any
agreement or instrument contemplated hereby or thereby, the performance by the
parties hereto or thereto of their respective obligations hereunder or
thereunder or the consummation of the Transactions and the other transactions
contemplated hereby and thereby, (ix) the use of the Letters of Credit or the
proceeds of the Loans or (x) any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any Indemnified Party is a
party thereto. The Borrower further agrees to reimburse each Indemnified Party
for all expenses (including reasonable attorneys' fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense of
any pending or threatened claim or any action or proceeding arising therefrom.
Notwithstanding the foregoing, the obligation to indemnify any Indemnified Party
under this Section 9.05(b) shall not apply in respect of any loss, claim, damage
or liability to the extent that a court of competent jurisdiction shall have
determined by final and nonappealable judgment that such loss, claim, damage or
liability resulted from such Indemnified Party's wilful misconduct, gross
negligence or bad faith.
(c) The Borrower agrees to indemnify each of the Agents, the Issuing Bank,
the Lenders and the other Indemnified Parties from and against any and all
losses, claims (whether valid or not), damages and liabilities, joint or
several, to which such Indemnified Party may become subject, related to or
arising out of (i) any Environmental Laws affecting the Borrower or any other
Loan Party or its properties or assets, (ii) any Hazardous Materials managed by
the Borrower or any other Loan Party, (iii) any event, condition or circumstance
involving environmental pollution, regulation or control affecting the Borrower
or any other Loan Party or its properties or assets or (iv) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnified Party is a party thereto. The Borrower further
agrees to reimburse each Indemnified Party for all expenses (including
reasonable attorneys' fees and expenses) as they are incurred in connection with
the investigation of, preparation for or defense of any pending or threatened
claim or any action or proceeding arising therefrom. Notwithstanding the
foregoing, the obligation to indemnify any Indemnified Party under this Section
9.05(c) shall not apply in respect of any loss, claim, damage or liability to
the extent that a court of competent jurisdiction shall have determined by final
and nonappealable judgment that (A) such loss, claim, damage or liability
resulted from such Indemnified Party's wilful misconduct or gross negligence or
the breach by such Indemnified Party of its obligations, if any, under this
Agreement or any other Loan
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Document, or (B) the loss, claim, damage or liability occurred after the
Administrative Agent or any Lender has taken possession and control of the
Mortgaged Property pursuant to Section 21.10 of the Mortgage or Section 6.03 of
the Borrower Security Agreement or has foreclosed on a Lien under any Security
Document and has transferred title to the Trustee.
(d) In the event that the foregoing indemnity is unavailable or
insufficient to hold an Indemnified Party harmless, then the Borrower will
contribute to amounts paid or payable by such Indemnified Party in respect of
such Indemnified Party's losses, claims, damages or liabilities in such
proportions as appropriately reflect the relative benefits received by and fault
of the Borrower and such Indemnified Party in connection with the matters as to
which such losses, claims, damages or liabilities relate and other equitable
considerations.
(e) If any action, proceeding or investigation is commenced, as to which
any Indemnified Party proposes to demand such indemnification, it shall notify
the Borrower with reasonable promptness; provided, however, that any failure by
such Indemnified Party to notify the Borrower shall not relieve the Borrower
from its obligations hereunder except to the extent the Borrower is prejudiced
thereby. The Borrower shall be entitled to assume the defense of any such
action, proceeding or investigation, including the employment of counsel and the
payment of all fees and expenses. Each Indemnified Party shall have the right to
employ separate counsel in connection with any such action, proceeding or
investigation and to participate in the defense thereof, but the fees and
expenses of such counsel shall be paid by such Indemnified Party, unless (i) the
Borrower has failed to assume the defense and employ counsel as provided herein,
(ii) the Borrower has agreed in writing to pay such fees and expenses of
separate counsel or (iii) an action, proceeding or investigation has been
commenced against such Indemnified Party and the Borrower and outside counsel to
the Indemnified Party is of the opinion that representation of both the Borrower
and such Indemnified Party by the same counsel would be inappropriate because of
actual or potential conflicts of interest between the parties (in the case of
any Agent or Lender, the existence of any such actual or potential conflict of
interest to be determined by such party, taking into account, among other
things, any relevant regulatory concerns). In the case of any circumstance
described in clause (i), (ii), or (iii) of the immediately preceding sentence,
the Borrower shall be responsible for the reasonable fees and expenses of such
separate counsel; provided, however, that the Borrower shall not in any event be
required to pay the fees and expenses of more than one separate counsel (plus
appropriate local counsel under the direction of such separate counsel and
in-house counsel to the Syndication Agent) for all Indemnified Parties. The
Borrower shall be liable only for settlement of any claim against an Indemnified
Party made with the Borrower's written consent.
(f) The provisions of this Section 9.05 shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of this
Agreement or any other Loan Document, or any investigation made by or on behalf
of any Agent or Lender. All amounts due under this Section 9.05 shall be payable
on written demand therefor.
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SECTION 9.06. Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement and the other Loan
Documents held by such Lender, irrespective of whether or not such Lender shall
have made any demand under this Agreement or such other Loan Document and
although such obligations may be unmatured. The rights of each Lender under this
Section 9.06 are in addition to other rights and remedies (including other
rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF NEW YORK WITHOUT REGARD TO ANY CONFLICTS OF LAWS PRINCIPLES OF SUCH
STATE.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of any Agent,
the Issuing Bank or any Lender in exercising any power or right hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of the Agents, the
Issuing Bank and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by Section 9.08(b), and
then such waiver or consent shall be effective only in the specific instance and
for the purpose for which given. No notice or demand on the Borrower in any case
shall entitle the Borrower to any other or further notice or demand in similar
or other circumstances.
(b) None of this Agreement, the other Loan Documents and any provision
hereof or thereof may be waived, amended or modified, except pursuant to an
agreement or agreements in writing entered into by the Borrower and the Required
Lenders; provided, however, that no such waiver, amendment or modification shall
(i) decrease the principal amount of any Loan, extend the Tranche A Maturity
Date, the Tranche B Conversion Date or the Tranche B Maturity Date, extend any
Tranche B Repayment Date or any date for the payment of any interest on any
Loan, or waive or excuse any such payment or any part thereof, or decrease the
rate of interest on any Loan, without the prior written consent of each holder
of a Note affected thereby, (ii) change or extend the Commitment or decrease the
Commitment Fees or Letter of Credit Fees of any Lender without the prior written
consent of such Lender, (iii) postpone the date fixed for any reimbursement of a
Letter of Credit Disbursement without the prior written consent of each Lender
affected thereby, (iv) permit the release of any material amount of Collateral
under any Collateral Document or permit the release of any material guarantor
from the Guarantee Agreements without the prior written consent of each Lender,
(v) increase the aggregate Commitments of the Lenders without the prior written
consent of
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each Lender, (vi) waive, amend or modify Section 6.01 so as to permit any
renewal, refunding or refinancing of Facility A without the prior written
consent of each Lender or (vii) amend or modify the provisions of Section 2.16,
the provisions of Section 9.04(j), the provisions of this Section 9.08 or the
definition of "Required Lenders" or otherwise change the percentage of the
Commitments, the percentage of the aggregate unpaid principal amount of the
Notes or the number of Lenders which shall be required for the Lenders or any of
them to take any action under any provision of this Agreement or any other Loan
Document, without the prior written consent of each Lender; provided further
that (A) if any amendment, modification or waiver of Section 2.11(e), (f), (g)
or (h) would affect the holders of Tranche A Revolving Loans or Tranche B
Revolving Loans, as applicable (an "Affected Class"), then such amendment,
modification or waiver shall require the prior written consent of Lenders
holding Loans and participations in Letters of Credit, and having Commitments,
representing a majority of the outstanding principal amount of all Loans of the
Affected Class, the aggregate amount of the Letter of Credit Exposure of the
Affected Class and the aggregate amount of unused Commitments of the Affected
Class and (B) no such agreement shall amend, modify or otherwise affect the
rights or duties of any Agent or the Issuing Bank hereunder without the prior
written consent of such Agent or the Issuing Bank, as applicable. Each Lender
and each holder of a Note shall be bound by any waiver, amendment or
modification authorized by this Section 9.08 regardless of whether its Note
shall have been marked to make reference thereto, and any consent by any Lender
or holder of a Note pursuant to this Section 9.08 shall bind any Person
subsequently acquiring a Note from it, whether or not such Note shall have been
so marked.
SECTION 9.09. Interest Rate Limitation. Notwithstanding anything herein or
in the Notes to the contrary, if at any time the applicable interest rate,
together with all fees and charges which are treated as interest under
applicable law (collectively the "Charges"), as provided for herein or in any
other document executed in connection herewith, or otherwise contracted for,
charged, received, taken or reserved by any Lender, shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by such Lender in accordance with applicable law, the rate
of interest payable under the affected Note held by such Lender, together with
all Charges payable to such Lender, shall be limited to the Maximum Rate.
SECTION 9.10. Entire Agreement. This Agreement, the other Loan Documents,
the other Operative Agreements and the Work Letters constitute the entire
contract among the parties relative to the subject matter hereof and thereof.
Any agreement previously entered into among the parties with respect to the
subject matter hereof and thereof is superseded by this Agreement, the other
Loan Documents, the other Operative Agreements and the Work Letters. Nothing in
this Agreement, the other Loan Documents or the other Operative Agreements,
expressed or implied, is intended to confer upon any party, other than the
parties hereto and the other Secured Parties, any rights, remedies, obligations
or liabilities under or by reason of this Agreement, the other Loan Documents,
the other Operative Agreements or the Work Letters.
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SECTION 9.11. Severability. In the event any one or more of the provisions
contained in this Agreement or in any other Loan Document should be held
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby. The parties shall endeavor in
good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.12. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original but all of which when
taken together shall constitute but one contract, and shall become effective as
provided in Section 9.03.
SECTION 9.13. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 9.14. Jurisdiction; Consent to Service of Process; Waiver of Jury
Trial. (a) Each party to this Agreement hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of any
New York State court or Federal court of the United States of America sitting in
the Borough of Manhattan, New York, New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, the other Loan Documents or any Operative Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that any Agent, the Issuing Bank or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement or the other Loan Documents
against the Borrower or its properties in the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the other Loan Documents in any
New York State court or Federal court of the United States of America sitting in
the Borough of Manhattan, New York, New York. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such action or proceeding in any such
court.
(c) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
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(d) TO THE FULLEST EXTENT PERMITTED UNDER APPLICABLE LAW, EACH OF THE
BORROWER, THE LENDERS, THE AGENTS AND THE ISSUING BANK HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
SECTION 9.15. Legend. THIS AGREEMENT AND THE NOTES ARE SUBJECT TO THE
TERMS AND CONDITIONS CONTAINED IN THE TRUST AGREEMENT WHICH, AMONG OTHER THINGS,
ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS AGREEMENT AND
THE NOTES AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED
CREDITORS. COPIES OF THE TRUST AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THE
NOTES UPON REQUEST TO THE BORROWER.
SECTION 9.16 Limitation of Recourse Against National Propane SGP.
Notwithstanding anything to the contrary contained in any of the Operative
Agreements, it is expressly understood and agreed that National Propane SGP is
not and shall not be liable by reason of being the general partner of the
Borrower or the Public Partnership (i) for the payment of any amount due, or the
performance of any obligations of the Borrower or the Public Partnership
arising, hereunder or under any of the other Loan Documents or (ii) for monetary
damages for the breach of performance by the Borrower or the Public Partnership
of any of the covenants, obligations or indemnifications, or for the breach of
any warranties or representations, contained herein or in any of the other Loan
Documents provided, that the foregoing shall not under any circumstances limit
the ability of any holder of a Note or the Trustee from naming National Propane
SGP a party to, or otherwise joining National Propane SGP in, any action, suit
or proceeding with respect to this Agreement or any other Operative Agreement or
any of the transactions contemplated hereby or thereby, if naming or joining
National Propane SGP is required to bring any action, suit or proceeding against
the Borrower.
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IN WITNESS WHEREOF, the Borrower, the Agents, the Issuing Bank and the
Lenders have caused this Agreement to be duly executed by their respective
authorized officers as of the day and year first above written.
Attest: NATIONAL PROPANE, L.P., as Borrower
By: NATIONAL PROPANE
CORPORATION,
its managing general partner
by /s/ Stuart I. Rosen by /s/ Ronald R. Rominiecki
----------------------- ----------------------------
Name: Stuart I. Rosen Name: Ronald R. Rominiecki
Title: Secretary Title: Senior Vice President & CFO
Attest: By: NATIONAL PROPANE
SGP, INC.,
its general partner
by /s/ Stuart I. Rosen by /s/ Ronald R. Rominiecki
----------------------- ---------------------------
Name: Stuart I. Rosen Name: Ronald R. Rominiecki
Title: Vice President Title: Senior Vice President & CFO
& Secretary
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent and as a Lender
by /s/ Michael P. Hannon
--------------------------
Name: Michael P. Hannon
Title: Vice President
BANK OF AMERICA NT & SA,
as a Lender
by /s/ David E. Sisler
--------------------------
Name: David E. Sisler
Title: Vice President
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BA SECURITIES, INC.,
as Syndication Agent
by /s/ Katherine J. Pattison
---------------------------
Name: Katherine J. Pattison
Title: Sr. Managing Director
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1
ANNEX A to Exhibits C-1, C-2
D-1, D-2, E, and J
DEFINITIONS
"Administrative Agent" shall have the meaning set forth in Section 1.01 of
the Credit Agreement.
"Affiliates," as applied to any Person, shall mean any other Person
directly or indirectly controlling or controlled by or under common control with
such Person, provided that (i) for purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with") as used with respect to any Person shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether as a general
partner or through the ownership of voting securities or by contract or
otherwise, and (ii) neither the Lenders nor any other Person which is an
institution shall be deemed to be an Affiliate of the Borrower solely by reason
of ownership of the Facilities Obligations or the Mortgage Notes or other
securities issued in exchange therefor or by reason of having the benefits of
any agreements or covenants contained in the Credit Agreement, the Note
Agreement or the other Operative Agreements.
"Agency Account Agreements" shall mean an agreement among any Lender or
other bank, the Borrower or any Restricted Subsidiary (other than National Sales
and Services, Inc.), and the Trustee in substantially the form of Exhibit F to
the Credit Agreement and Exhibit J to the Note Agreement, as amended from time
to time.
"Agents" shall mean the Administrative Agent and the Syndication Agent.
"Borrower Security Agreement" shall mean the Pledge and Security Agreement
among the Borrower, the National Propane Corporation, a Delaware corporation,
the Restricted Subsidiaries (other than National Sales and Service, Inc.) and
the Trustee in the form of Exhibit D-2 to the Credit Agreement and Exhibit G to
the Note Agreement, as amended from time to time.
"Business" shall mean the operation by the Borrower and its Subsidiaries
(and prior to the consummation of the Conveyance Agreements, by the General
Partners and their Affiliates) of the wholesale and retail sale, distribution
and storage of propane gas and related petroleum derivative products, the
leasing of propane storage tanks and the related retail sale of supplies and
equipment, including home appliances, and such other businesses in which the
Borrower and its Restricted Subsidiaries were engaged on the Closing Date as
described in the Registration Statement.
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2
"Capital Stock" of any Person shall mean any and all shares, partnership
and other interests (general or limited), rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated) the
equity of such Person.
"Cash Collateral Agreement" shall mean the Cash Collateral Agreement among
the Borrower, the Trustee and the Administrative Agent in the form of Exhibit J
to the Credit Agreement, as amended from time to time.
"Closing" shall mean the time at which the Credit Agreement shall become
effective, as indicated in a certificate from the Lenders to the Borrower to
that effect.
"Closing Date" shall mean the date on which the Closing shall occur.
"Collateral" shall mean all the collateral pledged or purported to be
pledged pursuant to any of the Collateral Documents.
"Collateral Documents" shall mean the Security Agreements, the Perfection
Certificate, the Agency Account Agreement, the Mortgages, the General Partner's
Guarantee Agreement, the Subsidiaries Guarantee Agreement, the Trust Agreement,
the Cash Collateral Agreement, checking and deposit account agreements and all
other security agreements and other documents and instruments executed and
delivered pursuant to the terms of the Credit Agreement or the Note Agreement
(including the certificates of title referred to in Section 4.01 of the Borrower
Security Agreement) in order to secure any Guaranteed Obligations or perfect any
Lien granted for the benefit of the Secured Parties.
"Commitments" shall have the meaning assigned to that term in the Credit
Agreement.
"Commodity Hedging Agreement" shall mean any agreement or arrangement
designed solely to protect the Borrower and the Restricted Subsidiaries against
fluctuations in the price of propane with respect to quantities of propane that
the Borrower and the Restricted Subsidiaries reasonably expect to purchase from
suppliers, sell to their customers or need for their inventory during the period
covered by such agreement or arrangement.
"Conveyance Agreements" shall mean (a) the Contribution, Conveyance and
Assumption Agreement, dated as of the date of the Closing, among the Managing
General Partner, the Special General Partner, the Public Partnership and the
Borrower, (b) the Contribution and Assumption Agreement, dated as of the date of
the Closing, among the Managing General Partner, the Special General Partner,
National Sales and Service, Inc., a Delaware corporation, and the Borrower and
(c) each of the individual conveyances, assignments and bills of sale delivered
to the
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3
Borrower pursuant to the Contribution, Conveyance and Assumption Agreements
referred to in the foregoing clause (a).
"Credit Agreement" shall mean the Credit Agreement dated as of June 26,
1996 among the Borrower, the financial institutions from time to time party
thereto, 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, as such agreement may be amended, modified or supplemented
from time to time.
"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default under the Credit Agreement or
the Note Agreement.
"Environmental Laws" shall mean the common law and all applicable Federal,
state, local and foreign laws, rules or regulations relating to pollution or
protection of employee health and safety or the environment, including laws
relating to (a) emissions, discharges, releases or threatened releases of any
Hazardous Material (as defined in the Credit Agreement) into the environment
(including air, surface water, ground water or land) or (b) the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials.
"Event of Default" shall mean an Event of Default under the Credit
Agreement or the Note Agreement, as applicable.
"Facilities Obligations" shall mean (a) the Borrower's obligations in
respect of the due and punctual payment of principal of and interest on the
Loans and all unreimbursed amounts drawn under the Letters of Credit, when and
as due, whether at maturity, by acceleration, upon one or more dates set for
prepayment or otherwise, (b) all Fees, expenses, indemnities and expense
reimbursement obligations of the Borrower under the Credit Agreement or any
other Loan Document, (c) all obligations of the Borrower to any Agent or Lender
(or Affiliate of a Lender) under any Interest Rate Agreement that covers
interest that may accrue from time to time under the Credit Agreement or any
other Loan Document, and (d) all other obligations, monetary or otherwise, of
the Borrower or any other Loan Party under any Loan Document to which it is a
party, in each case, whether now owing or hereafter existing.
"Fees" shall have the meaning set forth in Section 1.01 of the Credit
Agreement.
"GAAP" shall mean generally accepted accounting principles in effect in the
United States from time to time.
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4
"General Partners" shall mean, collectively, National Propane Corporation,
a Delaware corporation and the Special General Partner.
"General Partner's Guarantee Agreement" shall mean the Guarantee Agreement
between National Propane Corporation and the Trustee in the form of Exhibit C-1
to the Credit Agreement and Exhibit H to the Note Agreement, as amended from
time to time.
"Governmental Authority" shall mean any Federal, state, local or foreign
governmental department, commission, board, bureau, authority, agency, court,
instrumentality or judicial or regulatory body or entity.
"Guaranteed Obligations" shall have the meaning set forth in Section 1 of
the General Partner's Guarantee Agreement or Section 1 of the Subsidiary
Guarantee Agreement, as applicable.
"Hedging Agreement" shall mean any interest rate swap, collar, cap or
similar interest rate arrangement designed solely to protect the Borrower
against fluctuations in interest rates on indebtedness outstanding or committed
under the Credit Agreement or any other Agreement evidencing Parity Debt.
"Intercompany Notes" shall mean the promissory notes representing the
Indebtedness of (i) the Borrower or a Restricted Subsidiary to the Public
Partnership, the Managing General Partner or the Borrower, as applicable, or
(ii) a Restricted Subsidiary to another Restricted Subsidiary, in each case as
outstanding at any time.
"Interest Rate Agreement" shall mean any interest rate swap, collar, cap,
foreign currency exchange Agreement or other arrangement requiring payments
contingent upon interest or exchange rates.
"Lenders" shall have the meaning set forth in Section 1.01 of the Credit
Agreement.
"Letters of Credit" shall have the meaning set forth in Section 1.01 of the
Credit Agreement.
"Letter of Credit Disbursement" shall mean a payment or disbursement made
by an Issuing Bank pursuant to a Letter of Credit.
"Lien" shall mean any mortgage, lien (statutory or otherwise), pledge,
reservation, right of entry, encroachment, easement, right of way, restrictive
covenant, license, charge, security interest or other encumbrance in or on, or
any interest or title of any vendor, lessor, lender or other secured party to or
of such Person under any conditional sale or other title retention agreement or
Capital Lease Obligation (as defined in the Credit Agreement and the Note
Agreement) with respect
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5
to, any property or asset owned or held by such Person, or the signing or filing
of a financing statement with respect to any of the foregoing which names such
Person as debtor, or the signing of any security agreement with respect to any
of the foregoing authorizing any other party as the secured party thereunder to
file any financing statement or any other agreement to give or grant any of the
foregoing. For the purposes of any Guarantee Agreement, a Person shall be deemed
to be the owner of any asset which it has placed in trust for the benefit of the
holders of indebtedness of such Person and such trust shall be deemed to be a
Lien if such indebtedness is deemed to be extinguished under GAAP and such
Person remains legally liable therefor, notwithstanding that such indebtedness
is or may be deemed to be extinguished under GAAP.
"Loan Document" shall have the meaning set forth in Section 1.01 of the
Credit Agreement.
"Loan Parties" shall mean the Public Partnership, the General Partners, the
Borrower and the Restricted Subsidiaries.
"Loans" shall have the meaning set forth in Section 1.01 of the Credit
Agreement.
"Make Whole Amount" shall have the meaning assigned to that term in the
Note Agreement.
"Managing General Partner" shall mean National Propane Corporation, a
Delaware corporation, a Delaware corporation except that (a) if the Special
General Partner has succeeded as managing general partner of the Borrower under
the Partnership Agreement, "Managing General Partner" shall mean the Special
General Partner and (b) if Triarc is the surviving corporation in a merger with
National Propane Corporation, "Managing General Partner" shall mean Triarc.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, operations, property or condition (financial or otherwise) of the
Borrower and its Restricted Subsidiaries, taken as a whole, or the Business, (b)
the ability of the Borrower, the General Partners or any Restricted Subsidiary
to perform its obligations under the Credit Agreement, the Note Agreement or any
other Operative Agreement or (c) the validity, enforceability, perfection or
priority of any Operative Agreement or of the rights or remedies of any Lender,
any Noteholder or the Trustee.
"MLP Agreement" shall mean the Amended and Restated Agreement of Limited
Partnership of the Public Partnership.
"Mortgage Notes" shall mean the 8.54% First Mortgage Notes of National
Propane Corporation in the aggregate principal amount of $125,000,000 and
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6
the 8.54% First Mortgage Notes of the Borrower issued in exchange for the
foregoing, as issued pursuant to the Note Agreement.
"Mortgages" shall have the meaning assigned to that term in both the Credit
Agreement and the Note Agreement.
"Note Agreement" shall mean, collectively, the Note Agreements dated as of
June 26, 1996, among the General Partners, the Borrower and the respective
purchasers named therein.
"Noteholders" shall mean the holders from time to time of the Mortgage
Notes.
"Notes" shall mean the Tranche A Revolving Credit Notes and the Tranche B
Notes.
"Officers' Certificate" shall mean, as to any corporation, a certificate
executed on its behalf by the Chairman of the Board of Directors (if an officer)
or its President or one of its Vice Presidents and its Treasurer, or Controller,
or one of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner.
"Operative Agreements" shall mean the Credit Agreement, the Note
Agreements, the Mortgage Notes, the Notes, the Collateral Documents, the General
Partner's Guarantee Agreement, the Subsidiaries Guarantee Agreement, the
Underwriting Agreement, the Triarc Note, the Conveyance Agreements, the Agency
Agreement, the MLP Agreement and the Partnership Agreement.
"Operative Documents" shall have the meaning set forth in Section 1 of the
General Partners Guarantee Agreement or Section 1 of the Restricted Subsidiaries
Guarantee Agreement.
"Parity Debt" shall mean (x) during the period that any of the Facility
Obligations are outstanding, (a) the Borrower's obligations in respect of the
due and punctual payment of principal of and interest on the Loans and all
amounts drawn under the Letters of Credit, when and as due, whether at maturity,
by acceleration, upon one or more dates set for prepayment or otherwise, (b) all
Fees, expenses, indemnities and expense reimbursement obligations of the
Borrower under the Credit Agreement or any other Loan Document, (c) all other
obligations, monetary or otherwise, of the Borrower or any other Loan Party
under any Loan Document to which it is a party, in each case, whether now owing
or hereafter existing, (d) the principal of and premium, if any, and interest on
the Mortgage Notes, (e) all other obligations, monetary or otherwise, of the
Borrower or any Loan Party under the Note Agreement, the Mortgage Notes, the
Trust Agreement and the Collateral
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7
Documents whether now owing or hereafter existing and (f) all other Indebtedness
of the Borrower incurred in accordance with Sections 6.01(a), 6.01(b), 6.01(i)
and 6.01(k) of the Credit Agreement (but only to the extent such indebtedness
under Section 6.01(k) is incurred to any Lender or Affiliate of a Lender with
respect to Indebtedness under the Loan Documents) and secured by the lien of the
Collateral Documents in accordance with Section 6.02(g) or 6.02(h) of the Credit
Agreement and (y) at all other times, Indebtedness of the Borrower incurred in
accordance with Sections 10.1(b), 10.1(f) or 10.1(i) of the Note Agreement and
secured by the lien of the Collateral Documents in accordance with Section
10.2(h) or 10.2(i) of the Note Agreement.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of the Borrower, as in effect on the Closing Date, and as
the same may from time to time be amended, modified or supplemented in
accordance with the terms thereof and Section 6.12 of the Credit Agreement and
Section 10.12 of the Note Agreements.
"Partners Security Agreement" shall mean the Pledge and Security Agreement
among the Public Partnership, the Managing General Partner and the Trustee in
the form attached to the Credit Agreement as Exhibit D-1 and attached to the
Note Agreement as Exhibit M, as amended from time to time.
"Perfection Certificate" shall have the meaning set forth in Section 1.01
of the Credit Agreement and Section N of the Note Agreement.
"Permitted Insurers" shall mean insurers with ratings of A or better
according to Best's Insurance Reports (or a comparable rating agency for
insurance companies located outside of the United States and Canada) and with
assets of no less than $500 million.
"Person" shall mean any natural person, corporation, business trust, joint
venture, association, company, limited liability company, partnership,
government (or any agency or political subdivision thereof) or other entity.
"Premium Amount" shall have the meaning assigned to that term in the Note
Agreement.
"Public Partnership" shall mean National Propane Partners, L.P., a Delaware
limited partnership.
"Registration Statement" shall mean the Registration Statement on Form S-1
under the Securities Act of 1933, as amended, of the Public Partnership
(Registration Number 333-2768), as initially filed with the SEC on March 26,
1996, as amended by Amendment No. 1 thereto filed with the SEC on May 14, 1996,
Amendment No. 2 thereto filed with the SEC on May 31, 1996, Amendment No. 3
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8
thereto filed with the SEC on June 11, 1996 and any other Amendment thereto
filed with the SEC prior to the date of the Credit Agreement, Amendment No. 4
thereto filed with the SEC on June 25, 1996, and the final prospectus filed in
connection with the foregoing.
"Required Holders" shall have the meaning ascribed to that term in the Note
Agreement.
"Required Lenders" shall have the meaning ascribed to that term in the
Credit Agreement.
"Restricted Subsidiary" shall mean any Wholly Owned Subsidiary of the
Borrower (a) organized under the laws of the United States of America or any
state thereof or the District of Columbia, (b) none of the capital stock or
ownership interests of which is owned by Unrestricted Subsidiaries, (c)
substantially all of the operating assets of which are located in, and
substantially all of the business of which is conducted within the United States
of America and which business consists of the wholesale and retail sale,
distribution and storage of propane gas and related petroleum derivative
products, the leasing of propane storage tanks and/or the related retail sale of
supplies and equipment, including home appliances and (d) designated by the
Borrower as a Restricted Subsidiary in Schedule 1.01 of the Credit Agreement or
Exhibit O of the Note Agreement or at a subsequent date; provided, that (i) to
the extent a newly formed or acquired Wholly Owned Subsidiary satisfying the
requirements of the foregoing clauses (a), (b) and (c) is not declared either a
Restricted Subsidiary or an Unrestricted Subsidiary within 90 days of its
formation or acquisition, such Wholly Owned Subsidiary shall be deemed a
Restricted Subsidiary and (ii) a Restricted Subsidiary may be designated as an
Unrestricted Subsidiary in accordance with the provisions of Section 6.18 of the
Credit Agreement and Section 10.19 of the Note Agreement.
"Secured Parties" shall mean (a) the Lenders, (b) the Administrative Agent
and the Syndication Agent, in their capacities as such under each Loan Document,
(c) each Agent or Lender with which the Borrower enters into an Interest Rate
Agreement, in its capacity as a party to such agreement, (d) the beneficiaries
of each indemnification obligation undertaken by the Borrower or any of the Loan
Parties under any Loan Document or the Note Agreements, (e) the Noteholders, (f)
the holders of any other Guaranteed Obligations, (g) the Trustee and (h) the
successors and assigns of the foregoing.
"Security Agreements" shall mean the Partners Security Agreement, the
Borrower Security Agreement and the Triarc Note.
"Special General Partner" shall mean National Propane SGP, Inc., a Delaware
corporation.
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9
"Subsidiary" of any Person shall mean any corporation, association,
partnership, limited liability company, joint venture or other business entity
at least a majority (by number of votes) of the stock of any class or classes
(or equivalent interests) of which is at the time owned by such Person or by one
or more Subsidiaries such Persons or by such Person and one or more Subsidiaries
of such Person, if the holders of the stock of such class or classes (or
equivalent interests) (a) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or Persons
performing similar functions) of such business entity, even though the right so
to vote has been suspended by the happening of such a contingency, or (b) are at
the time entitled, as such holders, to vote for the election of the majority of
the directors (or Persons performing similar functions) of such business entity,
whether or not the right so to vote exists by reason of the happening of a
contingency. Unless the contest otherwise requires, any reference to a
Subsidiary shall mean a Subsidiary of the Borrower.
"Subsidiary Guarantee Agreement" shall mean the Guarantee Agreement among
the Restricted Subsidiaries (other than National Sales and Service, Inc.) and
the Trustee in the form attached as Exhibit C-2 to the Credit Agreement and
Exhibit P to the Note Agreement, as amended from time to time.
"Supplemental Agreement" shall mean an agreement between a Restricted
Subsidiary and the Trustee in the form attached to the Credit Agreement as
Exhibit L and attached to the Note Agreement as Exhibit Q, as amended from time
to time.
"Syndication Agent" shall mean BA Securities, Inc., in its capacity as
syndication agent under the Credit Agreement, and its successors in such
capacity.
"Tranche A Revolving Credit Note" shall mean a promissory note of the
Borrower, substantially in the form of Exhibit B-1 to the Credit Agreement,
evidencing Tranche A Revolving Loans, and any substitutions or replacement
therefor.
"Tranche A Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.01(a) of the Credit Agreement.
Each Tranche A Revolving Loan shall be a Eurodollar Revolving Loan (as defined
in the Credit Agreement) or an ABR Revolving Loan (as defined in the Credit
Agreement).
"Tranche B Conversion Date" shall mean June 30, 1998.
"Tranche B Note" shall mean a promissory note of the Borrower,
substantially in the form of Exhibit B-2 to the Credit Agreement, evidencing
Tranche B Revolving Loans and (after the Tranche B Conversion Date) Tranche B
Term Loans and any substitutions or replacements therefor.
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10
"Tranche B Revolving Loans" shall mean the revolving loans made by the
Lenders to the Borrower pursuant to Section 2.01(b) of the Credit Agreement.
Each Tranche B Revolving Loan shall be a Eurodollar Revolving Loan or an ABR
Revolving Loan.
"Tranche B Term Loans" shall have the meaning assigned to such term in
Section 2.01(c) of the Credit Agreement. Each Tranche B Term Loan shall be a
Eurodollar Term Loan (as defined in the Credit Agreement) or an ABR Term Loan
(as defined in the Credit Agreement).
"Triarc" shall mean Triarc Companies, Inc., a Delaware corporation.
"Triarc Note" shall mean the promissory note dated as of the Closing Date
made by Triarc in favor of the Borrower, in the form of Exhibit O to the Credit
Agreement and Exhibit L to the Note Agreement, as such note may from time to
time be amended, modified or supplemented as permitted by the Required Lenders
(as defined in the Credit Agreement) and the Required Holders (as defined in the
Note Agreement).
"Trust Agreement" shall mean the Intercreditor and Trust Agreement, dated
as of June 26, 1996, among the Borrower, the Public Partnership, the Managing
General Partner, the Restricted Subsidiaries, the Trustee, the Lenders party
thereto from time to time and the Noteholders, as such agreement may be amended,
modified or supplemented from time to time.
"Underwriters" shall mean the underwriters named in the Underwriting
Agreement.
"Underwriting Agreement" shall mean the Purchase Agreement among the Public
Partnership, the General Partners, the Borrower and the Underwriters, relating
to securities of the Public Partnership registered under the Registration
Statement.
"Unrestricted Subsidiary" shall mean any Wholly Owned Subsidiary other than
a Restricted Subsidiary which is organized under the laws of the United States
of America or any state thereof or the District of Columbia and substantially
all of the operating assets of which are located in, and substantially all of
the business of which is conducted within the United States and which business
consists principally of the distribution of propane gas or related supplies and
equipment.
"Wholly Owned" as applied to any Subsidiary, shall have the meaning set
forth in Section 1.01 of the Credit Agreement.
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<PAGE>
EXHIBIT A
COMMITMENTS
Tranche A Revolving Credit Commitment
The First National Bank of Boston $ 7,500,000
Bank of America NT & SA $ 7,500,000
Tranche B Commitment
The First National Bank of Boston $20,000,000
Bank of America NT & SA $20,000,000
<PAGE>
<PAGE>
EXHIBIT B-1
[FORM OF]
TRANCHE A REVOLVING CREDIT NOTE
$_________________________ New York, New York
_________ __, 1996
FOR VALUE RECEIVED, the undersigned, NATIONAL PROPANE, L.P., a Delaware
limited partnership (the "Borrower"), hereby promises to pay to the order of
______________________________________ (the "Lender"), at the office of The
First National Bank of Boston (the "Administrative Agent"), at 100 Federal
Street, Mail Stop 01-08-02, Boston, MA 02110, (a) on the last day of each
Interest Period (as defined in the Credit Agreement dated as of ___________ ___,
1996 (the "Credit Agreement"), among the Borrower, the financial institutions
party thereto, the Administrative Agent, Bank of America NT & SA, as a lender
and BA Securities, Inc., as Syndication Agent), the aggregate unpaid principal
amount of all Tranche A Revolving Loans made to the Borrower by the Lender
pursuant to the Credit Agreement to which such Interest Period applies and (b)
on the Tranche A Maturity Date, the aggregate unpaid principal amount of all
Tranche A Revolving Loans made to the Borrower by the Lender pursuant to the
Credit Agreement, in each case in lawful money of the United States of America
in immediately available funds, and to pay interest from the date hereof on the
principal amount hereof from time to time outstanding, in like funds, at said
office, at the rate or rates per annum and on the dates provided in the Credit
Agreement.
The defined terms in the Credit Agreement are used herein with the same
meaning. All of the terms, conditions and covenants of the Credit Agreement are
expressly made a part of this promissory note (this "Note") by reference in the
same manner and with the same effect as if set forth herein at length and any
holder of this Note is entitled to the benefits of and remedies provided in the
Credit Agreement and the other Loan Documents.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate or rates provided in the Credit Agreement.
The Borrower and any and all sureties, guarantors and endorsers of this
Note and all other parties now or hereafter liable hereon, severally waive grace
(except grace provided pursuant to the express terms of the Credit Agreement),
presentment for payment, protest, notice of any kind (including notice of
dishonor, notice of protest, notice of intention to accelerate and notice of
acceleration) and diligence in collecting and bringing suit against any party
hereto, and agree (a) to all extensions and partial payments, with or without
notice, before or after maturity, (b) to any substitution, exchange or release
of any security now or hereafter given for this Note, (c) to the
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release of any party primarily or secondarily liable hereon and (d) that it will
not be necessary for the Agents or any Lenders, in order to enforce payment of
this Note, to first institute or exhaust their remedies against the Borrower or
any other party liable therefor or against any security for this Note. The
nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on the schedule attached hereto and made a part
hereof or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such a notation shall not affect the obligations of the Borrower
under this Note or the Credit Agreement.
This Note is one of the Tranche A Revolving Credit Notes referred to in the
Credit Agreement, which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
optional and mandatory prepayment of the principal hereof prior to the maturity
hereof and for the amendment or waiver of certain provisions of the Credit
Agreement, all upon the terms and conditions therein specified.
This Note shall be construed in accordance with and governed by the laws of
the State of New York and any applicable laws of the United States of America.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal of and
interest on this Note, all costs of collection, including reasonable attorneys'
fees.
NATIONAL PROPANE, L.P.,
By: National Propane Corporation,
a Delaware corporation, its
general partner
By:_________________________________________
Name:_______________________________________
Title:______________________________________
<PAGE>
<PAGE>
LOANS AND PAYMENTS
Notations Amount Type Payments Unpaid
Date of of ----------------------- Principal
Made By Loan Loan Principal Interest Balance
- ------- ---- ---- --------- -------- -------
<PAGE>
<PAGE>
EXHIBIT B-2
[FORM OF]
TRANCHE B NOTE
$_________________________ New York, New York
_________ __, 1996
FOR VALUE RECEIVED, the undersigned, NATIONAL PROPANE, L.P., a Delaware
limited partnership (the "Borrower"), hereby promises to pay to the order of
______________________________________ (the "Lender"), at the office of The
First National Bank of Boston (the "Administrative Agent"), at 100 Federal
Street, Mail Stop 01-08-02, Boston, MA 02110, (a) in the case of a Tranche B
Revolving Loan, (i) on the last day of each Interest Period (as defined in the
Credit Agreement dated as of __________ ___, 1996 (the "Credit Agreement"),
among the Borrower, the financial institutions party thereto as lenders, the
Administrative Agent, Bank of America NT & SA, as a lender, and BA Securities,
Inc., as Syndication Agent), the aggregate unpaid principal amount of all
Tranche B Revolving Loans made to the Borrower by the Lender pursuant to the
Credit Agreement to which such Interest Period applies and (ii) on the Tranche B
Conversion Date, the aggregate unpaid principal amount of all Tranche B
Revolving Loans made to the Borrower by the Lender pursuant to the Credit
Agreement and (b) in the case of the Tranche B Term Loan made to the Borrower by
the Lender, (i) on each Tranche B Repayment Date, the principal amount of such
Tranche B Term Loan payable to the Lender on such Tranche B Repayment Date as
provided in the Credit Agreement and (ii) on the Tranche B Maturity Date, the
aggregate unpaid principal amount of such Tranche B Term Loan, in each case in
lawful money of the United States of America in immediately available funds, and
to pay interest from the date hereof on the principal amount hereof from time to
time outstanding, in like funds, at said office, at the rate or rates per annum
and on the dates provided in the Credit Agreement.
The defined terms in the Credit Agreement are used herein with the same
meaning. All of the terms, conditions and covenants of the Credit Agreement are
expressly made a part of this promissory note (this "Note") by reference in the
same manner and with the same effect as if set forth herein at length and any
holder of this Note is entitled to the benefits of and remedies provided in the
Credit Agreement and the other Loan Documents.
The Borrower promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by
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law, overdue interest from their due dates at the rate or rates provided in the
Credit Agreement.
The Borrower and any and all sureties, guarantors and endorsers of this
Note and all other parties now or hereafter liable hereon, severally waive grace
(except grace provided pursuant to the express terms of the Credit Agreement),
presentment for payment, protest, notice of any kind (including notice of
dishonor, notice of protest, notice of intention to accelerate and notice of
acceleration) and diligence in collecting and bringing suit against any party
hereto, and agree (i) to all extensions and partial payments, with or without
notice, before or after maturity, (ii) to any substitution, exchange or release
of any security now or hereafter given for this Note, (iii) to the release of
any party primarily or secondarily liable hereon and (iv) that it will not be
necessary for the Agents or any Lenders, in order to enforce payment of this
Note, to first institute or exhaust their remedies against the Borrower or any
other party liable therefor or against any security for this Note. The
nonexercise by the holder of any of its rights hereunder in any particular
instance shall not constitute a waiver thereof in that or any subsequent
instance.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on the schedule attached hereto and made a part
hereof or on a continuation thereof which shall be attached hereto and made a
part hereof, or otherwise recorded by such holder in its internal records;
provided, however, that the failure of the holder hereof to make such a notation
or any error in such a notation shall not affect the obligations of the Borrower
under this Note or the Credit Agreement.
This Note is one of the Tranche B Notes referred to in the Credit
Agreement, which, among other things, contains provisions for the acceleration
of the maturity hereof upon the happening of certain events, for optional and
mandatory prepayment of the principal hereof prior to the maturity hereof and
for the amendment or waiver of certain provisions of the Credit Agreement, all
upon the terms and conditions therein specified.
This Note shall be construed in accordance with and governed by the laws of
the State of New York and any applicable laws of the United States of America.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal of and
interest on this Note,
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all costs of collection, including reasonable attorneys' fees.
NATIONAL PROPANE, L.P.,
By: National Propane Corporation, a
Delaware corporation, its general
partner
By: _________________________________
Name:____________________________
Title:___________________________
LOANS AND PAYMENTS
Amount
Notations of Type Payments Unpaid
Date Loan of ----------------------- Principal
Made By Made By Loan Principal Interest Interest
- ------- ------- ---- --------- -------- --------
<PAGE>
<PAGE>
08/12/96
EXHIBIT C-1
================================================================================
GUARANTEE AGREEMENT
dated as of June __, 1996
between
NATIONAL PROPANE CORPORATION,
NATIONAL PROPANE SGP, INC.
and
[________________________________],
as Trustee
================================================================================
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<PAGE>
TABLE OF CONTENTS
Section Page
- ------- ----
SECTION 1. Guarantee .................................................... 1
SECTION 2. Representations and Warranties ............................... 2
SECTION 3. Guarantor's Obligations Unconditional ........................ 3
SECTION 4. Full Recourse Obligations .................................... 6
SECTION 5. Waiver ....................................................... 6
SECTION 6. Waiver of Subrogation ........................................ 7
SECTION 7. Subordination ................................................ 7
SECTION 8. Effect of Bankruptcy Proceedings, etc ........................ 7
SECTION 9. Term of Guarantee Agreement .................................. 8
SECTION 10. Notices ...................................................... 8
SECTION 11. Amendments, etc .............................................. 9
SECTION 12. Submission to Jurisdiction ................................... 9
SECTION 13. WAIVER OF JURY TRIAL ......................................... 9
SECTION 14. Survival ..................................................... 9
SECTION 15. Severability ................................................. 10
SECTION 16. Successors and Assigns ....................................... 10
SECTION 17. Table of Contents; Headings .................................. 10
SECTION 18. Counterparts ................................................. 10
SECTION 19. GOVERNING LAW ................................................ 10
SECTION 20. Right of Set-off ............................................. 10
SECTION 21. Covenant Compliance .......................................... 11
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<PAGE>
SECTION 22. .............................................................. 11
Annex A Definitions
<PAGE>
<PAGE>
GUARANTEE AGREEMENT dated as of June ___, 1996, between NATIONAL PROPANE
CORPORATION, a Delaware corporation ("National Propane Corp."), NATIONAL PROPANE
SGP, INC., a Delaware corporation ("National Propane SGP"), and [ ], as Trustee
(in such capacity, the "Trustee") under the Trust Agreement (as defined in Annex
A). Each of National Propane Corp. and National Propane SGP is referred to
herein individually, as a "Guarantor" and collectively, as the "Guarantors".
Reference is made to (a) the Credit Agreement dated as of _____________
___, 1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among National Propane, L.P., a Delaware limited partnership (the
"Borrower"), the financial institutions party thereto as lenders (the
"Lenders"), 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, and (b) the $125,000,000 [ ]% First Mortgage Notes due June
15, 2010 (together with all other securities issued in substitution therefor or
replacement thereof under the Note Agreement, the "Mortgage Notes") issued to
certain institutional investors (the "Purchasers") under the Note Agreement,
dated as of June ___, 1996, among the Borrower, the Guarantors and the
Purchasers (as amended, modified or supplemented from time to time collectively,
the "Note Agreement"). The Lenders have respectively agreed to extend credit to
the Borrower pursuant to, and subject to the terms and conditions specified in,
the Credit Agreement. The Purchasers have respectively agreed to purchase the
Mortgage Notes pursuant to, and subject to the terms and conditions specified
in, the Note Agreement. The obligations of the Lenders to extend credit under
the Credit Agreement and the obligations of the Purchasers to purchase the
Mortgage Notes under the Note Agreement are conditioned upon, among other
things, the execution and delivery by each of the Guarantors of a Guarantee
Agreement in the form hereof. The defined terms set forth in Annex A attached
hereto are used herein with the same meaning.
As general partners of the Borrower, each of the Guarantors acknowledges
that it will derive substantial benefits from the extension of credit to the
Borrower under the Credit Agreement and the purchase of the Mortgage Notes by
the Purchasers under the Note Agreement. As consideration therefor and in order
to induce the Lenders to extend credit under the Credit Agreement and the
Purchasers to purchase the Mortgage Notes under the Note Agreement, each of the
Guarantors is willing to execute and deliver this Guarantee Agreement.
Accordingly, each of the Guarantors, intending to be legally bound, hereby
agrees with the Trustee, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. Guarantee. Each Guarantor unconditionally guarantees, as a
primary obligor and not merely as a surety, the due and punctual payment by the
Borrower of (a) the Borrower's obligations in respect of the due and punctual
payment of principal of and interest on the Loans and all amounts drawn under
the Letters of Credit, when and as due, whether at maturity, by acceleration,
upon one or more dates set for
1
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prepayment or otherwise, (b) all Fees, expenses, indemnities and expense
reimbursement obligations of the Borrower under the Credit Agreement or any
other Loan Document, (c) all other obligations, monetary or otherwise, of the
Borrower or any other Loan Party under any Loan Document to which it is a party,
in each case, whether now owing or hereafter existing, (d) the principal of and
premium, if any, and interest on the Mortgage Notes, (e) all other obligations
(monetary or otherwise) of the Borrower or any Loan Party under the Note
Agreement, the Mortgage Notes and the Collateral Documents whether now owing or
hereafter existing and (f) all indebtedness of the Borrower and the Restricted
Subsidiaries (i) permitted under Sections [ ] (but only to the extent such
indebtedness under Section [ ] is incurred to any Lender with respect to a
Hedging Agreement) of the Credit Agreement and Sections [ ] of the Note
Agreement and (ii) permitted to be secured in accordance with Section [ ] of the
Credit Agreement and Section [ ] of the Note Agreement (all the foregoing
indebtedness and obligations being collectively called the "Guaranteed
Obligations"), and agrees to pay any and all expenses (including reasonable
counsel fees and expenses) incurred in enforcing any rights under this Guarantee
Agreement.
This guaranty is a guaranty of payment, performance and compliance and not
of collectibility and is in no way conditioned or contingent upon any attempt to
collect from or enforce performance or compliance by the Borrower or any other
Loan Party or upon any other event or condition whatsoever. If for any reason
whatsoever the Borrower or any other Loan Party shall fail or be unable duly,
punctually and fully to pay such amounts as and when the same shall become due
and payable or to perform or comply with any other Guaranteed Obligation,
whether or not such failure or inability shall constitute an "Event of Default"
under the Credit Agreement, the Notes, the Note Agreement, the Mortgage Notes,
the Subsidiaries Guarantee Agreement, the other Collateral Documents and all
other documents or agreements governing the Guaranteed Obligations
(collectively, the "Operative Documents"), each of the Guarantors will forthwith
pay or cause to be paid such amounts to the Trustee, for the ratable benefit of
the Secured Parties, in lawful money of the United States, at the place
specified herein, or perform or comply with such Guaranteed Obligations or cause
such Guaranteed Obligations to be performed or complied with together with
interest (in the amounts and to the extent required under such Operative
Documents) on any amount due and owing.
SECTION 2. Representations and Warranties. Each Guarantor hereby represents
and warrants as follows:
(a) All representations and warranties contained in the Credit
Agreement and the Note Agreement that relate to such Guarantor are true and
correct.
(b) Such Guarantor acknowledges that any default in the due observance
or performance by such Guarantor of any covenant, condition or agreement
contained herein shall constitute an Event of Default under the Credit
Agreement, the Note Agreement and each other Operative Agreement.
2
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(c) There are no conditions precedent to the effectiveness of this
Guarantee Agreement that have not been satisfied or waived.
(d) Such Guarantor has, independently and without reliance upon the
Trustee or any other Secured Party and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guarantee Agreement. Such Guarantor has
investigated fully the benefits and advantages which will be derived by it
from execution of this Guarantee Agreement, and the Board of Directors of
such Guarantor has decided that a direct or an indirect benefit will accrue
to such Guarantor by reason of the execution of this Guarantee Agreement.
(e) (i) This Guarantee Agreement is not given with actual intent to
hinder, delay or defraud any Person to which such Guarantor is or will
become, on or after the date hereof, indebted; (ii) such Guarantor has
received at least a reasonably equivalent value in exchange for the giving
of this Guarantee Agreement; (iii) such Guarantor is not insolvent on the
date hereof and will not become insolvent as a result of the giving of this
Guarantee Agreement; (iv) such Guarantor is not engaged in a business or
transaction, nor is about to engage in a business or transaction, for which
any property remaining with such Guarantor constitutes an unreasonably
small amount of capital; and (v) such Guarantor does not intend to incur
debts that will be beyond such Guarantor's ability to pay as such debts
mature.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of each
Guarantor under this Guarantee Agreement are primary, absolute and unconditional
obligations of such Guarantor, are not subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment or defense
based upon any claim any such Guarantor or any other Person may have against the
Borrower, any Secured Party or any other Person, and shall remain in full force
and effect without regard to, and shall not be released, discharged or in any
way affected by, any circumstance or condition whatsoever (whether or not such
Guarantor or the Borrower shall have any knowledge or notice thereof),
including, without limitation:
(a) any renewal, extension, modification, increase, decrease,
alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any
contract or understanding with the Borrower, the Trustee, the other Secured
Parties, or any of them, or any other Person, pertaining to the Guaranteed
Obligations;
(b) any adjustment, indulgence, forbearance or compromise that might
be granted or given by the Trustee or any other Secured Party to the
Borrower or any Loan Party or other Person liable on the Guaranteed
Obligations; or the failure of the Trustee or any other Secured Party to
assert any claim or demand or to exercise any right or remedy against the
Borrower or any other Person under the provisions of any Operative Document
or otherwise; or any rescission, waiver, amendment or modification of, or
any release from any of the terms or provisions of, any
3
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Operative Document, any guarantee or any other agreement, including with
respect to any other Guarantor hereunder or any guarantor under the
Subsidiaries Guarantee Agreement;
(c) the insolvency, bankruptcy arrangement, adjustment, composition,
liquidation, disability, dissolution or lack of power of the Borrower or
any other Loan Party or other Person at any time liable for the payment of
all or part of the Guaranteed Obligations; or any dissolution of the
Borrower or any other Person, or any change, restructuring or termination
of the organizational structure or existence of the Borrower or any other
Person, or any sale, lease or transfer of any or all of the assets of the
Borrower or any other Person, or any change in the shareholders, partners,
or members of the Borrower or any other Person; or any default, failure or
delay, willful or otherwise, in the performance of the Guaranteed
Obligations;
(d) the invalidity, illegality or unenforceability of all or any part
of the Guaranteed Obligations, or any document or agreement executed in
connection with the Guaranteed Obligations, for any reason whatsoever,
including the fact that the Guaranteed Obligations, or any part thereof,
exceed the amount permitted by law, the act of creating the Guaranteed
Obligations or any part thereof is ultra vires, the officers or
representatives executing the documents or otherwise creating the
Guaranteed Obligations acted in excess of their authority, the Guaranteed
Obligations violate applicable usury laws, the Borrower or any other Person
has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from the Borrower or any other party, the creation,
performance or repayment of the Guaranteed Obligations (or the execution,
delivery and performance of any document or instrument representing part of
the Guaranteed Obligations or executed in connection with the Guaranteed
Obligations or given to secure the repayment of the Guaranteed Obligations)
is illegal, uncollectible, legally impossible or unenforceable, or the
documents or instruments pertaining to the Guaranteed Obligations have been
forged or otherwise are irregular or not genuine or authentic;
(e) any full or partial release of the liability of the Borrower on
the Guaranteed Obligations or any part thereof, of any co-guarantors, or of
any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Guaranteed Obligations or any part thereof, it
being recognized, acknowledged and agreed by each Guarantor that such
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other Person, and such Guarantor has not been
induced to enter into this Guarantee Agreement on the basis of a
contemplation, belief, understanding or agreement that any parties other
than the Borrower will be liable to perform the Guaranteed Obligations, or
that the Secured Parties will look to other parties to perform the
Guaranteed Obligations;
(f) the taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
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(g) any release, surrender, exchange, subordination, deterioration,
waste, loss or impairment (including negligent, unreasonable or
unjustifiable impairment) of any Letter of Credit, collateral, property or
security, at any time existing in connection with, or assuring or securing
payment of, all or any part of the Guaranteed Obligations;
(h) the failure of the Trustee, any other Secured Party or any other
Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any
part of such collateral, property or security;
(i) the fact that any collateral, security, security interest or lien
contemplated or intended to be given, created or granted as security for
the repayment of the Guaranteed Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other
security interest or lien, it being recognized and agreed by each of the
Guarantors that such Guarantor is not entering into this Guarantee
Agreement in reliance on, or in contemplation of the benefits of, the
validity, enforceability, collectibility or value of any of the Collateral;
(j) any payment by the Borrower to the Trustee or any other Secured
Party being held to constitute a preference under Title 11 of the United
States Code or any similar Federal or state law, or for any reason the
Trustee or any other Secured Party being required to refund such payment or
pay such amount to the Borrower or someone else;
(k) any other action taken or omitted to be taken with respect to the
Guaranteed Obligations, or the security and collateral therefor, whether or
not such action or omission prejudices such Guarantor or increases the
likelihood that such Guarantor will be required to pay the Guaranteed
Obligations pursuant to the terms hereof, it being the unambiguous and
unequivocal intention of such Guarantor that it shall be obligated to pay
the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action or omission whatsoever, whether or not
contemplated, and whether or not otherwise or particularly described
herein, except for the full and final payment and satisfaction of the
Guaranteed Obligations in cash;
(l) the fact that all or any of the Guaranteed Obligations cease to
exist by operation of law, including by way of a discharge, limitation or
tolling thereof under applicable bankruptcy laws;
(m) any other circumstance (including any statute of limitations) that
might in any manner or to any extent otherwise constitute a defense
available to, vary the risk of, or operate as a discharge of, the Borrower
or any Person as a matter of law or equity;
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(n) any merger or consolidation of the Borrower, any Loan Party or
such Guarantor into or with any other corporation, or any sale, lease or
transfer of any of the assets of the Borrower, or any Loan Party to any
other Person;
(o) any change in the ownership of any shares of capital stock of the
Borrower, or any change in the relationship between the Borrower and such
Guarantor, or any termination of such relationship; or
(p) any other occurrence, circumstance, happening or event whatsoever,
whether similar or dissimilar to the foregoing, whether foreseen or
unforeseen, and any other circumstance which might otherwise constitute a
legal or equitable defense or discharge of the liabilities of a guarantor
or surety or which might otherwise limit recourse against such Guarantor.
All waivers herein contained shall be without prejudice to the Trustee at its
option to proceed against the Borrower, any Guarantor hereunder or any guarantor
under the Subsidiaries Guarantee Agreement or any other Loan Party or Person,
whether by separate action or by joinder.
SECTION 4. Full Recourse Obligations. The obligations of each of the
Guarantors set forth herein constitute the full recourse obligations of such
Guarantor enforceable against it to the full extent of all its assets and
properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the extent
permitted by applicable law:
(a) notice of any of the matters referred to in Section 3;
(b) notice to such Guarantor of the incurrence of any of the
Guaranteed Obligations, notice to such Guarantor or the Borrower of any
breach or default by the Borrower or any Guarantor with respect to any of
the Guaranteed Obligations or any other notice that may be required, by
statute, rule of law or otherwise, to preserve any rights of any Secured
Party against such Guarantor;
(c) presentment to or demand of payment from the Borrower or such
Guarantor with respect to any Note, Mortgage Note or other Guaranteed
Obligation or protest for nonpayment or dishonor;
(d) any right to the enforcement, assertion, exercise or exhaustion by
any Secured Party of any right, power, privilege or remedy conferred in any
of the Operative Documents or otherwise;
(e) any requirement of diligence on the part of the Trustee or any
other Secured Party;
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(f) any requirement to mitigate the damages resulting from any default
under any Operative Document;
(g) any notice of any sale, transfer or other disposition of any
right, title to or interest in any Note, Mortgage Note or other Guaranteed
Obligation by any holder, assignee or participant thereof, or in any
Operative Document;
(h) any release of such Guarantor from its obligations hereunder,
resulting from any loss by it of its rights of subrogation hereunder; and
(i) any other circumstance whatsoever which might otherwise constitute
a legal or equitable discharge, release or defense of a guarantor or surety
or which might otherwise limit recourse against such Guarantor.
SECTION 6. Waiver of Subrogation. In furtherance of the foregoing and not
in limitation of any other right which the Trustee or any other Secured Party
has at law or in equity against either of the Guarantors by virtue hereof, upon
the failure of the Borrower, any Guarantor hereunder or any guarantor under the
Subsidiaries Guarantee Agreement or any other Person to pay any Guaranteed
Obligation when and as the same shall become due, whether at maturity, by
acceleration, after notice of prepayment or otherwise, each of the Guarantors
hereby promises to and will, upon receipt of written demand by the Trustee,
forthwith pay, or cause to be paid, to the Trustee for distribution under [ ] of
the Trust Agreement, if and as appropriate, in cash the amount of such unpaid
Guaranteed Obligation. Until the later of (a) the indefeasible cash payment in
full of the Guaranteed Obligations and all other amounts payable under this
Guarantee Agreement and (b) the termination of the Commitments, each Guarantor
hereby irrevocably waives any claim or other rights that it may now or hereafter
acquire against the Borrower or any other Person that arise from the existence,
payment, performance or enforcement of such Guarantor's obligations under this
Guarantee Agreement or any other Operative Document, including any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of the Trustee or any other Secured
Party against the Borrower or any other Person or any Collateral, whether or not
such claim, remedy or right arises in equity or under contract, statute or
common law, including the right to take or receive from the Borrower or any
other Person, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security on account of such claim, remedy or
right. If any amount shall be paid to any such Guarantor in violation of the
preceding sentence at any time prior to the later of (a) the indefeasible cash
payment in full of the Guaranteed Obligations and all other amounts payable
under this Guarantee Agreement and (b) the termination of the Commitments, such
amount shall be held in trust for the benefit of the Trustee under the Trust
Agreement and shall forthwith be paid to the Trustee to be credited and applied
to the Guaranteed Obligations as provided under [____] of the Trust Agreement
and all other amounts payable under this Guarantee Agreement, whether matured or
unmatured, in accordance with the terms of the Operative Documents, or to be
held as Collateral for
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any Guaranteed Obligations or other amounts payable under this Guarantee
Agreement thereafter arising. Each of the Guarantors acknowledges that it will
receive direct and indirect benefits from the financing arrangements
contemplated by the Operative Documents and that the waiver set forth in this
Section 6 is knowingly made in contemplation of such benefits.
SECTION 7. Subordination. Each Guarantor hereby subordinates in right of
payment all indebtedness of the Borrower or any other Guarantor owing to it,
whether originally contracted with such Guarantor or acquired by such Guarantor
by assignment, transfer or otherwise, whether now owed or hereafter arising,
whether for principal, interest, fees, expenses or otherwise, together with all
renewals, extensions, increases or rearrangements thereof, to the prior
indefeasible payment in full in cash of the Guaranteed Obligations, whether now
owed or hereafter arising, whether for principal, interest (including interest
accruing after the filing of a petition initiating any proceeding referred to in
paragraph [(h) or (i) of Article VII] of the Credit Agreement or paragraph [ ]
of the Note Agreement), fees, expenses or otherwise, together with all renewals,
extensions, increases or rearrangements thereof.
SECTION 8. Effect of Bankruptcy Proceedings, etc. (a) This Guarantee
Agreement shall continue to be effective or be automatically reinstated, as the
case may be, if at any time any payment made by any Person with respect to the
Guaranteed Obligations is rescinded or must otherwise be restored or returned
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any other Person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Borrower or other Person or any substantial part of its property, or
otherwise, all as though such payment had not been made.
(b) If an event permitting the acceleration of the maturity of any of the
Guaranteed Obligations shall at any time have occurred and be continuing, and
such acceleration shall at such time be prevented by reason of the pendency
against the Borrower or any other Person of any case or proceeding contemplated
by Section 8(a) then, for the purpose of defining the obligation of each of the
Guarantors under this Guarantee Agreement, the maturity of the principal amount
of the Guaranteed Obligations shall be deemed to have been accelerated with the
same effect as if an acceleration had occurred in accordance with the terms of
the Credit Agreement and the Note Agreement, as the case may be, and each of the
Guarantors shall forthwith pay such principal amount, all accrued and unpaid
interest thereon, any premium that would have become due under the Credit
Agreement, the Note Agreement, the Notes or the Mortgage Notes, as the case may
be, and all other Guaranteed Obligations upon acceleration of such principal and
any other Guaranteed Obligations without further notice or demand.
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SECTION 9. Term of Guarantee Agreement. This Guarantee Agreement and all
guarantees, covenants and agreements of each Guarantor contained herein shall
continue in full force and effect and shall not be discharged until such time as
all of the Guaranteed Obligations and other independent payment obligations of
the Guarantors under this Guarantee Agreement shall be paid in cash and
performed in full, the Commitments shall have terminated and the Letters of
Credit shall have expired or been terminated and all of the agreements of each
of the Guarantors hereunder shall be duly paid in cash and performed in full.
SECTION 10. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by hand, by express courier
service or by registered or certified mail, return receipt requested, postage
prepaid, addressed,
(a) if to any Purchaser or future holder of the Mortgage Notes, at the
address set forth opposite its name on Schedule [ ] to the Note Agreement,
or at such other address as any such party shall from time to time
designate to the Trustee,
(b) if to any Lender, the Administrative Agent, the Syndication Agent
or either Issuing Bank, at the address set forth in Section 9.01 of the
Credit Agreement, or at such other address as such party shall from time to
time designate to the Trustee,
(c) if to the Trustee, at the address set forth in [ ] of the Trust
Agreement, or at such other address as the Trustee shall from time to time
designate to the Borrower, and
(d) if to either of the Guarantors, at the address for such Guarantor
listed on the signature pages hereto, or at such other address as such
Guarantor shall from time to time designate in writing to the Trustee.
Any notice so addressed shall be deemed given as set forth under [ ] of the
Trust Agreement.
SECTION 11. Amendments, etc. No amendment, alteration, modification or
waiver of any term or provision of this Guarantee Agreement, nor consent to any
departure by either of the Guarantors therefrom, shall in any event be effective
unless the same shall be in writing and consented to by the Trustee, pursuant to
the terms and conditions of the Trust Agreement, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given.
SECTION 12. Submission to Jurisdiction. For the purpose of assuring that
each of the Trustee and the Secured Parties may enforce its rights under this
Guarantee Agreement, each of the Guarantors, for itself and its successors and
assigns, hereby, to the fullest extent permitted by applicable law, irrevocably
(a) agrees that any legal or equitable action, suit or proceeding brought
against it arising out of or relating to this
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Guarantee Agreement or any transaction contemplated hereby or the subject matter
of any of the foregoing or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding may be instituted in any state
or federal court sitting in the State of New York, (b) waives any objection
which it may now or hereafter have to the laying of venue of any such action,
suit or proceeding brought in any such court, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum, or any right to require the proceeding to be conducted in any other
jurisdiction by reason of its present or future domicile, (c) irrevocably
submits itself to the non-exclusive jurisdiction of any state or federal court
of competent jurisdiction sitting in the State of New York for purposes of any
such action, suit or proceeding, and (d) irrevocably waives any immunity from
jurisdiction to which it might otherwise be entitled in any such action, suit or
proceeding which may be instituted in any state or federal court sitting in the
State of New York, and irrevocably waives any immunity from, or objection to,
the maintaining of an action against it to enforce any judgment for money
obtained in any such action, suit or proceeding and any immunity from execution.
Each Guarantor waives personal service of process and consents that service
of process upon it may be made by certified or registered mail, return receipt
requested, at its address specified or determined in accordance with the
provisions of Section 10, and service so made shall be deemed completed on the
third business day after mailing. Nothing contained in this Section 12 shall be
deemed to affect the right of the Trustee or any other Secured Party to serve
process in any other manner permitted by law or to commence legal proceedings or
otherwise proceed against either Guarantor in any jurisdiction.
SECTION 13. WAIVER OF JURY TRIAL. EACH OF THE GUARANTORS IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE
AGREEMENT OR ANY OF THE OTHER OPERATIVE DOCUMENTS OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.
SECTION 14. Survival. All warranties, representations and covenants made by
each of the Guarantors herein or in any certificate or other instrument
delivered by it or on its behalf hereunder shall be considered to have been
relied upon by the Secured Parties and shall survive the execution and delivery
of this Guarantee Agreement, regardless of any investigation made by any Secured
Party or on their respective behalf. All statements in any such certificate or
other instrument shall constitute warranties and representations by such
Guarantor hereunder.
SECTION 15. Severability. Any provision of this Guarantee Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the
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remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, each of the
Guarantors hereby waives any provision of law that renders any provisions hereof
prohibited or unenforceable in any respect.
SECTION 16. Successors and Assigns. The terms of this Guarantee Agreement
shall be binding upon each of the Guarantors and its successors and shall inure
to the benefit of, the Trustee and the other Secured Parties and their
respective successors and assigns.
SECTION 17. Table of Contents; Headings. The section and paragraph headings
in this Guarantee Agreement and the table of contents are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof, and all references herein to numbered sections, unless
otherwise indicated, are to sections in this Guarantee Agreement.
SECTION 18. Counterparts. This Guarantee Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
SECTION 19. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 20. Right of Set-off. Each of the Guarantors hereby irrevocably
authorizes each Secured Party at any time and from time to time without notice
to such Guarantor, any such notice being expressly waived by such Guarantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as such Secured Party may elect,
against and on account of the Guaranteed Obligations, and such Secured Party
shall promptly cause such amounts to be delivered or put in the custody,
possession or control of the Trustee for disposition or distribution in
accordance with the provisions of the Trust Agreement, whether or not the
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Secured Party shall
notify such Guarantor promptly of any such set-off, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Secured Parties under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which any Secured Party may have.
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SECTION 21. Covenant Compliance. Each of the Guarantors agrees to comply
with each of the covenants contained in the Credit Agreement and the Note
Agreement that imposes or purports to impose, by reference to such Guarantor,
express or otherwise, through agreements with the Borrower, restrictions or
obligations on such Guarantor.
SECTION 22. Terms Generally. The definitions in Annex A hereto shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Guarantee
Agreement unless the context shall otherwise require. As used herein, the
"knowledge" of either Guarantor includes the knowledge of each and every Loan
Party. Unless otherwise expressly provided herein, the word "day" means a
calendar day.
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IN WITNESS WHEREOF, each party hereto has caused this Guarantee Agreement to be
duly executed as of the day and year first above written.
NATIONAL PROPANE CORPORATION,
as Guarantor
By:______________________________
Name:
Title:
Address:
Telecopy:
NATIONAL PROPANE SGP, INC.
By:______________________________
Name:
Title:
Address:
Telecopy:
[ ], as Trustee
By:_______________________________
Name:
Title:
Address:
Telecopy:
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EXHIBIT C-2
[FORM OF]
================================================================================
GUARANTEE AGREEMENT
dated as of ______________
among
THE GUARANTORS NAMED HEREIN
and
THE BANK OF NEW YORK,
as Trustee
================================================================================
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TABLE OF CONTENTS
Section Page
- ------- ----
SECTION 1. Guarantee............................................... 1
SECTION 2. Representations and Warranties.......................... 2
SECTION 3. Guarantor's Obligations Unconditional................... 3
SECTION 4. Full Recourse Obligations............................... 6
SECTION 5. Waiver.................................................. 6
SECTION 6. Waiver of Subrogation................................... 7
SECTION 7. Subordination........................................... 8
SECTION 8. Effect of Bankruptcy Proceedings, etc................... 8
SECTION 9. Term of Guarantee Agreement............................. 8
SECTION 10. Contribution............................................ 9
SECTION 11. Limitation of Liability................................. 9
SECTION 12. Supplemental Agreement.................................. 9
SECTION 13. Notices................................................. 10
SECTION 14. Amendments, etc......................................... 10
SECTION 15. Submission to Jurisdiction.............................. 10
SECTION 16. WAIVER OF JURY TRIAL.................................... 11
SECTION 17. Survival................................................ 11
SECTION 18. Severability............................................ 11
SECTION 19. Successors and Assigns.................................. 12
SECTION 20. Table of Contents; Headings............................. 12
SECTION 21. Counterparts............................................ 12
SECTION 22. GOVERNING LAW........................................... 12
SECTION 23. Right of Set-off........................................ 12
SECTION 24. Covenant Compliance..................................... 12
SECTION 25. Terms Generally......................................... 12
Annex A. Definitions
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GUARANTEE AGREEMENT dated as of __________________, among [__________] and
such other Restricted Subsidiaries (as defined in Annex A referred to below) as
shall become parties hereto in accordance with Section 12 hereof (other than
National Sales and Service, Inc.) and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (in such capacity, the "Trustee") under the Trust
Agreement (as defined in Annex A). Each Restricted Subsidiary (other than
National Sales and Service, Inc.) is referred to herein as a "Guarantor" and the
Restricted Subsidiaries (other than National Sales and Service, Inc.) are
referred to herein collectively as the "Guarantors".
Reference is made to (a) the Credit Agreement dated as of June 26, 1996 (as
amended, modified or supplemented from time to time, the "Credit Agreement"),
among National Propane, L.P., a Delaware limited partnership (the "Borrower"),
the financial institutions party thereto as lenders (the "Lenders"), 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, and (b) the
$125,000,000 8.54% First Mortgage Notes due June 30, 2010 (together with all
other securities issued in substitution therefor or replacement thereof under
the Note Agreement, the "Mortgage Notes") issued to certain institutional
investors (the "Purchasers") under the Note Agreements, each dated as of June
26, 1996, among the Borrower, National Propane Corporation, a Delaware
corporation, National Propane SGP, Inc., a Delaware corporation, and the
respective Purchasers (as amended, modified or supplemented from time to time,
collectively being referred to herein as the "Note Agreement," whether one or
more). The Lenders have respectively agreed to extend credit to the Borrower
pursuant to, and subject to the terms and conditions specified in, the Credit
Agreement. The Purchasers have respectively agreed to purchase the Mortgage
Notes pursuant to, and subject to the terms and conditions specified in, the
Note Agreement. The obligations of the Lenders to extend credit under the Credit
Agreement and the obligations of the Purchasers to purchase the Mortgage Notes
under the Note Agreement are conditioned upon, among other things, the execution
and delivery by the Guarantors of a Guarantee Agreement in the form hereof. The
defined terms set forth in Annex A attached hereto are used herein with the same
meaning.
The Guarantors acknowledge that they will derive substantial benefits from
the extension of credit to the Borrower under the Credit Agreement and the
purchase of the Mortgage Notes by the Purchasers under the Note Agreement. As
consideration therefor and in order to induce the Lenders to extend credit under
the Credit Agreement and the Purchasers to purchase the Mortgage Notes under the
Note Agreement, each of the Guarantors is willing to execute and deliver this
Guarantee Agreement.
Accordingly, each of the Guarantors, intending to be legally bound, hereby
agrees with the Trustee, for the ratable benefit of the Secured Parties, as
follows:
SECTION 1. Guarantee. Subject to Section 11, each Guarantor unconditionally
guarantees, jointly with the other Guarantors and severally, as a primary
obligor and not merely as a surety, the due and punctual payment by the Borrower
of (a) the
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Borrower's obligations in respect of the due and punctual payment of principal
of and interest on the Loans and all amounts drawn under the Letters of Credit,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (b) all Fees, expenses, indemnities and expense
reimbursement obligations of the Borrower under the Credit Agreement or any
other Loan Document, (c) all other obligations, monetary or otherwise, of the
Borrower or any other Loan Party under any Loan Document to which it is a party,
in each case, whether now owing or hereafter existing, (d) the principal of and
any Make Whole Amount, Premium Amount and any other premium, if any, and
interest on the Mortgage Notes, (e) all other obligations (monetary or
otherwise) of the Borrower or any Loan Party under the Note Agreement, the
Mortgage Notes and the Collateral Documents whether now owing or hereafter
existing and (f) all other Indebtedness of the Borrower and the Restricted
Subsidiaries that is Parity Debt (all the foregoing indebtedness and obligations
being collectively called the "Guaranteed Obligations"), and agrees to pay any
and all expenses (including reasonable counsel fees and expenses) incurred in
enforcing any rights under this Guarantee Agreement.
This guaranty is a guaranty of payment, performance and compliance and not
of collectibility and is in no way conditioned or contingent upon any attempt to
collect from or enforce performance or compliance by the Borrower or any other
Loan Party or upon any other event or condition whatsoever. If for any reason
whatsoever the Borrower or any other Loan Party shall fail or be unable duly,
punctually and fully to pay such amounts as and when the same shall become due
and payable or to perform or comply with any other Guaranteed Obligation,
whether or not such failure or inability shall constitute an "Event of Default"
under the Credit Agreement, the Notes, the Note Agreement, the Mortgage Notes,
the General Partner's Guarantee Agreement, the Collateral Documents and all
other documents or agreements contemplated thereby and hereby which govern the
Guaranteed Obligations (collectively, the "Operative Documents"), each Guarantor
will forthwith pay or cause to be paid such amounts to the Trustee, for the
ratable benefit of the Secured Parties, in lawful money of the United States, at
the place specified herein, or perform or comply with such Guaranteed
Obligations or cause such Guaranteed Obligations to be performed or complied
with together with interest (in the amounts and to the extent required under
such Operative Documents) on any amount due and owing.
SECTION 2. Representations and Warranties. Each Guarantor hereby represents
and warrants as follows:
(a) All representations and warranties contained in the Credit
Agreement and the Note Agreement that relate to such Guarantor are true and
correct in all material respects.
(b) Such Guarantor acknowledges that any default in the due observance
or performance by such Guarantor of any covenant, condition or agreement
contained herein (if, after the running of any applicable notice and
opportunity to cure periods provided in the Credit Agreement, Note
Agreement or other Collateral
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Documents, such default or event of default remains uncured) shall
constitute an Event of Default under the Credit Agreement, the Note
Agreement and each other Operative Document.
(c) There are no conditions precedent to the effectiveness of this
Guarantee Agreement that have not been satisfied or waived.
(d) Such Guarantor has, independently and without reliance upon the
Trustee or any other Secured Party and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Guarantee Agreement. Such Guarantor has
investigated fully the benefits and advantages which will be derived by it
from execution of this Guarantee Agreement, and the Board of Directors of
such Guarantor has decided that a direct or an indirect benefit will accrue
to such Guarantor by reason of the execution of this Guarantee Agreement.
(e) (i) This Guarantee Agreement is not given with actual intent to
hinder, delay or defraud any Person to which such Guarantor is or will
become, on or after the date hereof, indebted; (ii) such Guarantor has
received at least a reasonably equivalent value in exchange for the giving
of this Guarantee Agreement; (iii) such Guarantor is not insolvent on the
date hereof and will not become insolvent as a result of the giving of this
Guarantee Agreement; (iv) such Guarantor is not engaged in a business or
transaction, nor is about to engage in a business or transaction, for which
any property remaining with such Guarantor constitutes an unreasonably
small amount of capital; and (v) such Guarantor does not intend to incur
debts that will be beyond such Guarantor's ability to pay as such debts
mature.
SECTION 3. Guarantor's Obligations Unconditional. The obligations of each
Guarantor under this Guarantee Agreement are primary, absolute and unconditional
obligations of such Guarantor, are not subject to any counterclaim, set-off,
deduction, diminution, abatement, recoupment, suspension, deferment or defense
based upon any claim such Guarantor or any other Person may have against the
Borrower, any Secured Party or any other Person, and shall remain in full force
and effect without regard to, and shall not be released, discharged or in any
way affected by, any circumstance or condition whatsoever (whether or not such
Guarantor or the Borrower shall have any knowledge or notice thereof),
including:
(a) any renewal, extension, modification, increase, decrease,
alteration or rearrangement of all or any part of the Guaranteed
Obligations or any instrument executed in connection therewith, or any
contract or understanding with the Borrower, the Trustee, the other Secured
Parties, or any of them, or any other Person, pertaining to the Guaranteed
Obligations;
(b) any adjustment, indulgence, forbearance or compromise that might
be granted or given by the Trustee or any other Secured Party to the
Borrower or any Loan Party or other Person liable on the Guaranteed
Obligations; or the failure of
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the Trustee or any other Secured Party to assert any claim or demand or to
exercise any right or remedy against the Borrower or any other Person under
the provisions of any Operative Document or otherwise; or any rescission,
waiver, amendment or modification of, or any release from any of the terms
or provisions of, any Operative Document, any guarantee or any other
agreement, including with respect to National Propane Corporation, under
the General Partner's Guarantee Agreement;
(c) the insolvency, bankruptcy arrangement, adjustment, composition,
liquidation, disability, dissolution or lack of power of the Borrower or
any other Loan Party or other Person at any time liable for the payment of
all or part of the Guaranteed Obligations; or any dissolution of the
Borrower or any other Person, or any change, restructuring or termination
of the partnership structure or existence of the Borrower or any other
Person, or any sale, lease or transfer of any or all of the assets of the
Borrower or any other Person, or any change in the shareholders, partners,
or members of the Borrower or any other Person; or any default, failure or
delay, willful or otherwise, in the performance of the Guaranteed
Obligations;
(d) the invalidity, illegality or unenforceability of all or any part
of the Guaranteed Obligations, or any document or agreement executed in
connection with the Guaranteed Obligations, for any reason whatsoever,
including the fact that the Guaranteed Obligations, or any part thereof,
exceed the amount permitted by law, the act of creating the Guaranteed
Obligations or any part thereof is ultra vires, the officers or
representatives executing the documents or otherwise creating the
Guaranteed Obligations acted in excess of their authority, the Guaranteed
Obligations violate applicable usury laws, the Borrower or any other Person
has valid defenses, claims or offsets (whether at law, in equity or by
agreement) which render the Guaranteed Obligations wholly or partially
uncollectible from the Borrower or any other party, the creation,
performance or repayment of the Guaranteed Obligations (or the execution,
delivery and performance of any document or instrument representing part of
the Guaranteed Obligations or executed in connection with the Guaranteed
Obligations or given to secure the repayment of the Guaranteed Obligations)
is illegal, uncollectible, legally impossible or unenforceable, or the
documents or instruments pertaining to the Guaranteed Obligations have been
forged or otherwise are irregular or not genuine or authentic;
(e) any full or partial release of the liability of the Borrower on
the Guaranteed Obligations or any part thereof, of any co-guarantors, or of
any other Person now or hereafter liable, whether directly or indirectly,
jointly, severally, or jointly and severally, to pay, perform, guarantee or
assure the payment of the Guaranteed Obligations or any part thereof, it
being recognized, acknowledged and agreed by each Guarantor that such
Guarantor may be required to pay the Guaranteed Obligations in full without
assistance or support of any other Person, and such Guarantor has not been
induced to enter into this Guarantee Agreement on the basis of a
contemplation, belief, understanding or agreement that any parties other
than the Borrower will be liable to perform the Guaranteed Obligations, or
that the Secured Parties will look to other parties to perform the
Guaranteed Obligations;
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(f) the taking or accepting of any other security, collateral or
guaranty, or other assurance of payment, for all or any part of the
Guaranteed Obligations;
(g) any release, surrender, exchange, subordination, deterioration,
waste, loss or impairment (including negligent, unreasonable or
unjustifiable impairment) of any Letter of Credit, collateral, property or
security, at any time existing in connection with, or assuring or securing
payment of, all or any part of the Guaranteed Obligations;
(h) the failure of the Trustee, any other Secured Party or any other
Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or any
part of such collateral, property or security;
(i) the fact that any collateral, security, security interest or lien
contemplated or intended to be given, created or granted as security for
the repayment of the Guaranteed Obligations shall not be properly perfected
or created, or shall prove to be unenforceable or subordinate to any other
security interest or lien, it being recognized and agreed by each Guarantor
that such Guarantor is not entering into this Guarantee Agreement in
reliance on, or in contemplation of the benefits of, the validity,
enforceability, collectibility or value of any of the Collateral;
(j) any payment by the Borrower to the Trustee or any other Secured
Party being held to constitute a preference under Title 11 of the United
States Code or any similar Federal or state law, or for any reason the
Trustee or any other Secured Party being required to refund such payment or
pay such amount to the Borrower or someone else;
(k) any other action taken or omitted to be taken with respect to the
Guaranteed Obligations, or the security and collateral therefor, whether or
not such action or omission prejudices such Guarantor or increases the
likelihood that such Guarantor will be required to pay the Guaranteed
Obligations pursuant to the terms hereof, it being the unambiguous and
unequivocal intention of such Guarantor that it shall be obligated to pay
the Guaranteed Obligations when due, notwithstanding any occurrence,
circumstance, event, action or omission whatsoever, whether or not
contemplated, and whether or not otherwise or particularly described
herein, except for the full and final payment and satisfaction of the
Guaranteed Obligations in cash;
(l) the fact that all or any of the Guaranteed Obligations cease to
exist by operation of law, including by way of a discharge, limitation or
tolling thereof under applicable bankruptcy laws;
(m) any other circumstance (including any statute of limitations) that
might in any manner or to any extent otherwise constitute a defense
available to,
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vary the risk of, or operate as a discharge of, the Borrower or any Person
as a matter of law or equity;
(n) any merger or consolidation of the Borrower, any Loan Party or
such Guarantor into or with any other corporation, or any sale, lease or
transfer of any of the assets of the Borrower, the General Partners or any
Loan Party to any other Person;
(o) any change in the ownership of any shares of capital stock of the
Borrower, or any change in the relationship between (i) the Borrower and
such Guarantor or (ii) the Borrower and either General Partner, or any
termination of any such relationship; or
(p) any other occurrence, circumstance, happening or event whatsoever,
whether similar or dissimilar to the foregoing, whether foreseen or
unforeseen, and any other circumstance which might otherwise constitute a
legal or equitable defense or discharge of the liabilities of a guarantor
or surety or which might otherwise limit recourse against such Guarantor.
All waivers herein contained shall be without prejudice to the Trustee at its
option to proceed against the Borrower, National Propane Corporation under the
General Partner's Guarantee Agreement, any Guarantor or any other Loan Party or
Person, whether by separate action or by joinder.
SECTION 4. Full Recourse Obligations. Subject to the terms of Section 11
below, the obligations of each Guarantor set forth herein constitute the full
recourse obligations of such Guarantor enforceable against it to the full extent
of all its assets and properties.
SECTION 5. Waiver. Each Guarantor unconditionally waives, to the extent
permitted by applicable law:
(a) notice of any of the matters referred to in Section 3;
(b) notice to such Guarantor of the incurrence of any of the
Guaranteed Obligations, notice to such Guarantor of any breach or default
by the Borrower or such Guarantor with respect to any of the Guaranteed
Obligations or any other notice that may be required, by statute, rule of
law or otherwise, to preserve any rights of any Secured Party against such
Guarantor;
(c) presentment to or demand of payment from the Borrower or such
Guarantor with respect to any Note, Mortgage Note or other Guaranteed
Obligation or protest for nonpayment or dishonor;
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(d) any right to the enforcement, assertion, exercise or exhaustion by
the Trustee or any other Secured Party of any right, power, privilege or
remedy conferred in any of the Operative Documents or otherwise;
(e) any requirement of diligence on the part of the Trustee or any
other Secured Party;
(f) any requirement to mitigate the damages resulting from any default
under any Operative Document;
(g) any notice of any sale, transfer or other disposition of any
right, title to or interest in any Note, Mortgage Note or other Guaranteed
Obligation by any holder, assignee or participant thereof, or in any
Operative Document;
(h) any release of any Guarantor from its obligations hereunder
resulting from any loss by it of its rights of subrogation hereunder; and
(i) any other circumstance whatsoever which might otherwise constitute
a legal or equitable discharge, release or defense of a guarantor or surety
or which might otherwise limit recourse against such Guarantor.
SECTION 6. Waiver of Subrogation. In furtherance of the foregoing and not
in limitation of any other right which the Trustee or any other Secured Party
has at law or in equity against any Guarantor by virtue hereof, upon the failure
of the Borrower, National Propane Corporation under the General Partner's
Guarantee Agreement, any other Guarantor hereunder or any other Person to pay
any Guaranteed Obligation when and as the same shall become due, whether at
maturity, by acceleration, after notice of prepayment or otherwise, each of the
Guarantors hereby promises to and will, upon receipt of written demand by the
Trustee, forthwith pay, or cause to be paid, to the Trustee for distribution
under Section 4 of the Trust Agreement, if and as appropriate, in cash the
amount of such unpaid Guaranteed Obligation. Until the later of (a) the
indefeasible cash payment in full of the Guaranteed Obligations and all other
amounts payable under this Guarantee Agreement and (b) the termination of the
Commitments, each Guarantor hereby irrevocably waives any claim or other rights
that it may now or hereafter acquire against the Borrower or any other Person
that arise from the existence, payment, performance or enforcement of such
Guarantor's obligations under this Guarantee Agreement or any other Loan
Document, including any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Trustee or any other Secured Party against the Borrower or any
other Person or any Collateral, whether or not such claim, remedy or right
arises in equity or under contract, statute or common law, including the right
to take or receive from the Borrower or any other Person, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right. If any amount
shall be paid to any Guarantor in violation of the preceding sentence at any
time prior to the later of (a) the indefeasible
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cash payment in full of the Guaranteed Obligations and all other amounts payable
under this Guarantee Agreement and (b) the termination of the Commitments, such
amount shall be held in trust for the benefit of the Trustee under the Trust
Agreement and shall forthwith be paid to the Trustee to be credited and applied
to the Guaranteed Obligations as provided under Section 4 of the Trust Agreement
and all other amounts payable under this Guarantee Agreement, whether matured or
unmatured, in accordance with the terms of the Operative Documents, or to be
held as Collateral for any Guaranteed Obligations or other amounts payable under
this Guarantee Agreement thereafter arising. Each Guarantor acknowledges that it
will receive direct and indirect benefits from the financing arrangements
contemplated by the Operative Documents and that the waiver set forth in this
Section 6 is knowingly made in contemplation of such benefits.
SECTION 7. Subordination. Each Guarantor hereby subordinates in right of
payment all indebtedness of the Borrower, the General Partners or any other
Guarantor owing to it, whether originally contracted with such Guarantor or
acquired by such Guarantor by assignment, transfer or otherwise, whether now
owed or hereafter arising, whether for principal, interest, fees, expenses or
otherwise, together with all renewals, extensions, increases or rearrangements
thereof, to the prior indefeasible payment in full in cash of the Guaranteed
Obligations, whether now owed or hereafter arising, whether for principal,
interest (including interest accruing after the filing of a petition initiating
any proceeding referred to in paragraph (g), (h), (i) or (j) of Article VII of
the Credit Agreement or paragraph (g), (h), (i) or (j) of the Note Agreement),
fees, expenses or otherwise, together with all renewals, extensions, increases
or rearrangements thereof; provided, however, that nothing herein shall prevent
the payment of any such indebtedness in accordance with its terms so long as no
Event of Default or Default shall have occurred and be continuing.
SECTION 8. Effect of Bankruptcy Proceedings, etc. (a) This Guarantee
Agreement shall continue to be effective or be automatically reinstated, as the
case may be, if at any time any payment made by any Person with respect to the
Guaranteed Obligations is rescinded or must otherwise be restored or returned
upon the insolvency, bankruptcy, dissolution, liquidation or reorganization of
the Borrower or any other Person, or upon or as a result of the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to the Borrower or other Person or any substantial part of its property, or
otherwise, all as though such payment had not been made.
(b) If an event permitting the acceleration of the maturity of any of the
Guaranteed Obligations shall at any time have occurred and be continuing, and
such acceleration shall at such time be prevented by reason of the pendency
against the Borrower or any other Person of any case or proceeding contemplated
by Section 8(a) then, for the purpose of defining the obligation of any
Guarantor under this Guarantee Agreement, the maturity of the principal amount
of the Guaranteed Obligations, shall be deemed to have been accelerated with the
same effect as if an acceleration had occurred in accordance with the terms of
the Credit Agreement and the Note
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Agreement, as the case may be, and such Guarantor shall forthwith pay such
principal amount, all accrued and unpaid interest thereon, any Make Whole
Amount, Premium Amount or any other premium that would have become due under the
Credit Agreement, the Note Agreement, the Notes or the Mortgage Notes, as the
case may be, and all other Guaranteed Obligations upon acceleration of such
principal and any other Guaranteed Obligations without further notice or demand.
SECTION 9. Term of Guarantee Agreement. This Guarantee Agreement and all
guarantees, covenants and agreements of each Guarantor contained herein shall
continue in full force and effect and shall not be discharged until such time as
all of the Guaranteed Obligations and other independent payment obligations of
such Guarantor under this Guarantee Agreement shall be paid in cash and
performed in full, the Commitments shall have terminated and the Letters of
Credit shall have expired or been terminated and all of the agreements of each
of the Guarantors hereunder shall be duly paid in cash and performed in full.
SECTION 10. Contribution. In order to provide for just and equitable
contribu tion among the Guarantors, each Guarantor agrees that, to the extent
any Guarantor makes any payment hereunder on any date which, when added to all
preceding payments made by such Guarantor hereunder, would result in the
aggregate payments by such Guarantor hereunder exceeding its Percentage (as
defined below) of all payments then or theretofore made by all Guarantors
hereunder, such Guarantor shall have a right of contribution against each other
Guarantor whose aggregate payments then or theretofore made hereunder are less
than its Percentage of all payments by all Guarantors then or theretofore made
hereunder, in an amount such that, after giving effect to any such contribution
rights, each Guarantor will have paid only its Percentage of all payments by all
Guarantors then or theretofore made hereunder. A Guarantor's "Percentage" on any
date shall mean the percentage obtained by dividing (a) the Adjusted Net Assets
of such Guarantor on such date by (b) the sum of the Adjusted Net Assets of all
Guarantors on such date. "Adjusted Net Assets" means, for each Guarantor on any
date, the lesser of (i) the amount by which the fair value of the property of
such Guarantor exceeds the total amount of liabilities, including contingent
liabilities, but excluding liabilities under this Guarantee Agreement, of such
Guarantor on such date and (ii) the amount by which the present fair salable
value of the assets of such Guarantor on such date exceeds the amount that will
be required to pay the probable liability of such Guarantor on its debts,
excluding debt in respect of this Guarantee Agreement, as they become absolute
and matured. The provisions set forth in this Section 10 are for the sole
benefit of the Guarantors and shall in no way affect the obligations of the
Guarantors hereunder to make payments in full to the Trustee under the Trust
Agreement as specified herein.
SECTION 11. Limitation of Liability. Each Guarantor hereby confirms that it
is the intention of such Guarantor that the guarantee by such Guarantor pursuant
to this Guarantee Agreement not constitute a fraudulent transfer or conveyance
for purposes of Title 11 of the United States Code, the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or
state law. To effectuate the
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foregoing intention, each Guarantor hereby irrevocably agrees that the
obligations of such Guarantor under this Guarantee Agreement shall be limited to
the maximum amount as will, after giving effect to all rights to receive any
collections from or payments by or on behalf of any other Guarantor in respect
of the obligations of such other Guarantor pursuant to Section 10 hereof, result
in the obligations of such Guarantor under this Guarantee Agreement not
constituting such a fraudulent transfer or conveyance. In the event that the
liability of any Guarantor hereunder is limited pursuant to this Section 11 to
an amount that is less than the total amount of the Guaranteed Obligations, then
it is understood and agreed that the portion of the Guaranteed Obligations for
which such Guarantor is liable hereunder shall be the last portion of the
Guaranteed Obligations to be repaid.
SECTION 12. Supplemental Agreement. Upon execution and delivery by the
Trustee and a Restricted Subsidiary of a Supplemental Agreement substantially in
the form of Exhibit L to the Credit Agreement and Exhibit Q to the Note
Agreement, such Restricted Subsidiary shall become a Guarantor hereunder with
the same force and effect as if originally named as a Guarantor herein. The
execution and delivery of any such instrument shall not require the consent of
any other Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Guarantee Agreement.
SECTION 13. Notices. All notices under the terms and provisions hereof
shall be in writing, and shall be delivered or sent by hand, by express courier
service or by registered or certified mail, return receipt requested, postage
prepaid, addressed,
(a) if to any Purchaser or future holder of the Mortgage Notes, at the
address set forth opposite its name on Schedule A to the Note Agreement, or
at such other address as any such party shall from time to time designate
to the Trustee and the Borrower,
(b) if to any Lender, the Administrative Agent, the Syndication Agent
or either Issuing Bank, at the address set forth in Section 9.01 of the
Credit Agreement, or at such other address as such party shall from time to
time designate to the Trustee and the Borrower,
(c) if to a Guarantor, at the address such Guarantor set forth on the
signature pages hereto or at such other address as such Guarantor shall
from time to time designate in writing to the Trustee, with a copy to Paul,
Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the Americas, New York,
New York 10019-6064 Attn: Paul D. Ginsberg (Telephone No.: (212) 373-3131;
Telecopy No: (212) 757-3990).
(d) if to the Trustee, at the address set forth in Schedule A of the
Trust Agreement, or at such other address as the Trustee shall from time to
time designate to the Borrower.
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Any notice so addressed shall be deemed given as set forth under Section 18 of
the Trust Agreement.
SECTION 14. Amendments, etc. No amendment, alteration, modification or
waiver of any term or provision of this Guarantee Agreement, nor consent to any
departure by any Guarantor therefrom, shall in any event be effective unless the
same shall be in writing and consented to by the Trustee, pursuant to the terms
and conditions of the Trust Agreement, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that, the Trustee shall have received an opinion of counsel to
the effect that such amendment is authorized and permitted by the Trust
Agreement.
SECTION 15. Submission to Jurisdiction. For the purpose of assuring that
each of the Trustee and the other Secured Parties may enforce its rights under
this Guarantee Agreement, each Guarantor and the Trustee, for itself and its
successors and assigns, hereby, to the fullest extent permitted by applicable
law, irrevocably (a) agrees that any legal or equitable action, suit or
proceeding brought against it arising out of or relating to this Guarantee
Agreement or any transaction contemplated hereby or the subject matter of any of
the foregoing or for recognition or enforcement of any judgment rendered in any
such action, suit or proceeding may be instituted in any state or federal court
sitting in the Borough of Manhattan, State of New York, (b) waives any objection
which it may now or hereafter have to the laying of venue of any such action,
suit or proceeding brought in any such court, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum, or any right to require the proceeding to be conducted in any other
jurisdiction by reason of its present or future domicile, (c) irrevocably
submits itself to the non-exclusive jurisdiction of any state or federal court
of competent jurisdiction sitting in the Borough of Manhattan, State of New
York, for purposes of any such action, suit or proceeding, and (d) irrevocably
waives any immunity from jurisdiction to which it might otherwise be entitled in
any such action, suit or proceeding which may be instituted in any state or
federal court sitting in the Borough of Manhattan, State of New York, and
irrevocably waives any immunity from, or objection to, the maintaining of an
action against it to enforce any judgment for money obtained in any such action,
suit or proceeding and any immunity from execution.
Each Guarantor and the Trustee waives personal service of process and
consents that service of process upon it may be made by certified or registered
mail, return receipt requested, at its address specified or determined in
accordance with the provisions of Section 13, and service so made shall be
deemed completed on the third business day after mailing. Nothing contained in
this Section 15 shall be deemed to affect the right of the Guarantor, the
Trustee or any other Secured Party to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any Guarantor in any jurisdiction.
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SECTION 16. WAIVER OF JURY TRIAL. EACH GUARANTOR IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE
ACTION, SUIT OR PROCEEDING ARISING OUT OF OR RELATING TO THIS GUARANTEE
AGREEMENT OR ANY OF THE OTHER OPERATIVE DOCUMENTS OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.
SECTION 17. Survival. All warranties, representations and covenants made by
each Guarantor herein or in any written certificate or other instrument required
to be delivered by it or on its behalf hereunder or under the Credit Agreement
or the Note Agreement shall be considered to have been relied upon by the
Secured Parties and shall survive the execution and delivery of this Guarantee
Agreement, regardless of any investigation made by any Secured Party or on their
respective behalf. All statements in any such certificate or other instrument
shall constitute warranties and representations by such Guarantor hereunder.
SECTION 18. Severability. Any provision of this Guarantee Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction. To the extent
permitted by applicable law, each Guarantor hereby waives any provision of law
that renders any provisions hereof prohibited or unenforceable in any respect.
SECTION 19. Successors and Assigns. The terms of this Guarantee Agreement
shall be binding upon each Guarantor and its successors and shall inure to the
benefit of, the Trustee and the other Secured Parties and their respective
successors and assigns.
SECTION 20. Table of Contents; Headings. The section and paragraph headings
in this Guarantee Agreement and the table of contents are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof, and all references herein to numbered sections, unless
otherwise indicated, are to sections in this Guarantee Agreement.
SECTION 21. Counterparts. This Guarantee Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
SECTION 22. GOVERNING LAW. THIS GUARANTEE AGREEMENT SHALL IN ALL RESPECTS
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE,
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INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 23. Right of Set-off. Each Guarantor hereby irrevocably authorizes
each Secured Party at any time and from time to time without notice to such
Guarantor, any such notice being expressly waived by such Guarantor, to set-off
and appropriate and apply any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as such Secured Party may elect,
against and on account of the Guaranteed Obligations, and such Secured Party
shall promptly cause such amounts to be delivered or put in the custody,
possession or control of the Trustee for disposition or distribution in
accordance with the provisions of the Trust Agreement, whether or not the
Secured Party has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. Each Secured Party shall
notify such Guarantor promptly of any such set-off, provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of the Secured Parties under this Section are in addition to other
rights and remedies (including, without limitation, other rights of set-off)
which any Secured Party may have.
SECTION 24. Covenant Compliance. Each Guarantor agrees to comply with each
of the covenants contained in the Credit Agreement and the Note Agreement that
imposes or purports to impose, by reference to such Guarantor, express or
otherwise, through agreements with the Borrower and/or the General Partners,
restrictions or obligations on such Guarantor.
SECTION 25. Terms Generally. The definitions in Annex A hereto shall apply
equally to both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". All references
herein to Articles, Sections, Exhibits and Schedules shall be deemed references
to Articles and Sections of, and Exhibits and Schedules to, this Agreement
unless the context shall otherwise require. As used herein, the "knowledge" of
any Guarantor includes the knowledge of the Responsible Officers (as defined in
the Credit Agreement and the Note Agreement) of each and every Loan Party.
Unless otherwise expressly provided herein, the word "day" means a calendar day.
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IN WITNESS WHEREOF, each party hereto has caused this Guarantee Agreement
to be duly executed as of the date first above written.
[ ]
By:______________________________
Name:
Title:
Address:
Telecopy:
THE BANK OF NEW YORK,
not in its individual capacity but solely
as Trustee
By:______________________________
Name:
Title:
Address:
Telecopy:
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EXHIBIT D-1
================================================================================
PLEDGE AND SECURITY AGREEMENT
dated as of ____________ ___, 1996
among
THE GRANTORS NAMED HEREIN
and
----------------------------------------,
as Trustee
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
Article Section Page
ARTICLE I DEFINITIONS............................................... 1
SECTION 1.01. Terms Defined in Annex A........................... 1
SECTION 1.02. Definition of Certain Terms Used Herein............ 1
SECTION 1.03. UCC Definitions.................................... 3
SECTION 1.04. Terms Generally.................................... 3
ARTICLE II SECURITY INTERESTS....................................... 3
SECTION 2.01. The Security Interests............................. 3
SECTION 2.02. Continuing Liability of each Grantor............... 4
SECTION 2.03. Delivery of Pledged Securities..................... 4
SECTION 2.04. Security Interests Absolute........................ 4
SECTION 2.05. ................................................... 5
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................... 6
SECTION 3.01. Credit Agreement................................... 6
SECTION 3.02. Pledged Securities................................. 6
SECTION 3.03. Validity, Perfection and Priority of Security
Interests ....................................... 6
SECTION 3.04. Place of Business; Location of Collateral.......... 7
SECTION 3.05. Effectiveness...................................... 7
ARTICLE IV COVENANTS................................................ 7
SECTION 4.01. Perfection of Security Interests................... 7
SECTION 4.02. Further Actions.................................... 7
SECTION 4.03. Change of Name, Identity or Structure.............. 8
SECTION 4.04. Place of Business and Collateral................... 8
SECTION 4.05. Maintenance of Records............................. 8
SECTION 4.06. Compliance with Laws, etc.......................... 9
SECTION 4.07. Payment of Taxes, etc.............................. 9
SECTION 4.08. Limitation on Liens on Collateral.................. 9
SECTION 4.09. Limitations on Dispositions of Collateral.......... 9
SECTION 4.10. Notices............................................ 9
SECTION 4.11. Change of Law...................................... 10
SECTION 4.12. Reimbursement Obligation........................... 10
SECTION 4.13. Dispositions....................................... 10
ARTICLE V DISTRIBUTIONS ON PLEDGED SECURITIES; VOTING............... 10
SECTION 5.01. Right to Receive Distributions on Pledged
Collateral; Voting............................... 10
ARTICLE VI REMEDIES; RIGHTS UPON DEFAULT............................ 11
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SECTION 6.01. UCC Rights......................................... 11
SECTION 6.02. Sale of Collateral................................. 12
SECTION 6.03. Rights of Purchasers............................... 12
SECTION 6.04. Additional Rights of the Trustee................... 13
SECTION 6.05. Securities Act, etc................................ 13
SECTION 6.06. Remedies Not Exclusive............................. 15
SECTION 6.07. Waiver and Estoppel................................ 15
SECTION 6.08. Power of Attorney.................................. 16
SECTION 6.09. Application of Proceeds............................ 17
ARTICLE VII MISCELLANEOUS........................................... 17
SECTION 7.01. Notices............................................ 17
SECTION 7.02. Survival of Agreement.............................. 17
SECTION 7.03. Counterparts....................................... 18
SECTION 7.04. Amendments, Etc.................................... 18
SECTION 7.05. Assignments........................................ 18
SECTION 7.06. Savings Clause..................................... 18
SECTION 7.07. GOVERNING LAW...................................... 19
SECTION 7.08. Entire Agreement................................... 19
SECTION 7.09. No Waiver; Remedies................................ 19
SECTION 7.10. Headings........................................... 19
SECTION 7.11. ................................................... 19
Schedules
Schedule 1 Chief Executive Office and Principal Place of Business; Locations
of Records of Receivables and General Intangibles
Schedule 2 Pledged Securities
Schedule 3 Trade Names, Division Names, etc.
Schedule 4 Required Filings and Recordings
Annex A Definitions
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PLEDGE AND SECURITY AGREEMENT dated as of _____________ ___, 1996, among
NATIONAL PROPANE PARTNERS, L.P., a Delaware limited partnership (the "Public
Partnership"), NATIONAL PROPANE CORPORATION, a Delaware corporation (the
"Managing General Partner"), NATIONAL PROPANE SGP, INC., a Delaware corporation
(the "Special General Partner", together with the Managing General Partner, the
"General Partners"), and __________________, a New York banking corporation and
trust company, as Trustee (in such capacity, the "Trustee") under the Trust
Agreement (as defined herein).
Reference is made to (a) the Credit Agreement dated as of ____________ ___,
1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among the Borrower, the financial institutions party thereto as
lenders (the "Lenders"), 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, and (b) the $125,000,000 [ ]% First Mortgage Notes
due June 15, 2010 (together with all other securities issued in substitution
therefor or replacement thereof pursuant to the Note Agreement, the "Mortgage
Notes") issued to certain institutional investors (collectively, the
"Purchasers") pursuant to the Note Agreement each dated as of _________________
___, 1996, among the Borrower, the General Partners and the Purchasers (as
amended, modified or supplemented from time to time collectively, the "Note
Agreement"). The Lenders have respectively agreed to extend credit to the
Borrower pursuant to, and subject to the terms and conditions specified in, the
Credit Agreement. The Purchasers have respectively agreed to purchase the
Mortgage Notes pursuant to, and subject to the terms and conditions specified
in, the Note Agreement. The obligations of the Lenders to extend credit under
the Credit Agreement and the obligations of the Purchasers to purchase the
Mortgage Notes under the Note Agreement are conditioned upon, among other
things, the execution and delivery by each of the Public Partnership and the
General Partners (such parties being referred to herein individually as a
"Grantor" and collectively as the "Grantors") of a Pledge and Security Agreement
in the form hereof to secure the Secured Obligations (as defined herein) of such
Grantor.
Accordingly, the Grantors, intending to be legally bound, hereby agree with
the Trustee, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Terms Defined in Annex A. Terms used herein and not otherwise
defined herein shall have the meanings set forth in Annex A hereto.
SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
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"Collateral" shall have the meaning assigned to such term in Section 2.01.
"General Intangibles" of any Grantor shall mean (a) all partnership
interests in the Borrower now owned or hereafter acquired by such Grantor, (b)
the Triarc Security Agreement and (c) all contract rights to receive dividends,
liquidating dividends, distributions, options, rights to subscribe, cash,
instruments and other property and proceeds from time to time in respect of or
in exchange for any or all of such partnership interests referenced in clause
(a) above.
"Noteholders" shall mean the holders from time to time of the Mortgage
Notes.
"Pledged Debt" shall mean (a) the Intercompany Notes, if any, issued to the
General Partners and the Public Partnership by the Borrower, (b) the Triarc Note
and (c) all payments of principal or interest, cash, instruments or other
property from time to time received, receivable or otherwise distributed, in
respect of, in exchange for or upon the conversion of such Intercompany Notes or
Triarc Note, as the case may be.
"Pledged Interests" shall mean (a) the Capital Stock of the Borrower listed
and described on Schedule 2 hereto, and the certificates, if any, representing
such Capital Stock, (b) all additional Capital Stock of the Borrower from time
to time acquired by any Grantor in any manner (which shares shall be considered
to be Pledged Interests under this Agreement), together in each case with the
certificates representing such additional Capital Stock (c) the Capital Stock of
Triarc pledged to the Special General Partner pursuant to the Triarc Security
Agreement, together with the certificates representing such capital stock and
(d) all dividends, liquidating dividends, stock dividends, distributions, stock
or partnership rights, options, rights to subscribe, cash, instruments and other
property and proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such listed Capital
Stock referenced in clauses (a) and (c) above or such additional Capital Stock
referenced in clause (b) above.
"Pledged Securities" shall mean the Pledged Interests and the Pledged Debt.
"Proceeds" shall mean all proceeds, including (a) whatever is received upon
any collection, exchange, sale or other disposition of any of the Collateral and
any property into which any of the Collateral is converted, whether cash or
non-cash and (b) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral.
"Secured Obligations" of any Grantor shall mean (a) in the case of the
General Partners, all amounts now or hereafter payable by the General Partners
under the General Partners Guarantee Agreement and the Mortgage Notes, (b) in
the case of the Public Partnership, the due and punctual payment by the Borrower
of (i) the Borrower's obligations in respect of the due and punctual payment of
principal of and interest on the Loans and all amounts drawn under the Letters
of Credit, when and as due, whether at maturity, by acceleration, upon one or
more dates set for prepayment
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or otherwise, (ii) all Fees, expenses, indemnities and expense reimbursement
obligations of the Borrower under the Credit Agreement or any other Loan
Document, (iii) all other obligations, monetary or otherwise, of the Borrower or
any other Loan Party under any Loan Document to which it is a party, in each
case, whether now owing or hereafter existing, (iv) the principal of and
premium, if any, and interest on the Mortgage Notes, (v) all other obligations
(monetary or otherwise) of the Borrower or any other Loan Party under the Note
Agreement, the Mortgage Notes and the Security Documents whether now owing or
hereafter existing and (vi) all Indebtedness of the Borrower and the Restricted
Subsidiaries permitted (A) to be incurred under Section 6.01(b), (f) and (k)
(but only to the extent such indebtedness under Section 6.01 (k) is incurred to
any Lender with respect to a Hedging Agreement) of the Credit Agreement and
Sections [ ] and [ ] of the Note Agreement and (B) permitted to be secured in
accordance with Section 6.02(g) or (h) of the Credit Agreement and Section [ ]
or [ ] of the Note Agreement and, (c) in the case of either Grantor, all
expenses (including reasonable counsel fees and expenses) incurred in enforcing
any rights of the Trustee and the Secured Parties against such Grantor under
this Agreement.
"UCC" shall mean at any time the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York; provided that if, by
reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
SECTION 1.03. UCC Definitions. The uncapitalized terms "contract right",
"instrument", "general intangible", "money" and "proceeds", as used in Section
1.02 or elsewhere in this Agreement shall have the meanings ascribed thereto in
the UCC.
SECTION 1.04. Terms Generally. The definitions in Annex A hereto and in
Section 1.02 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. As used
herein, the "knowledge" of the Borrower includes the knowledge of each and every
Loan Party. Unless otherwise expressly provided herein, the word "day" means a
calendar day.
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ARTICLE II
SECURITY INTERESTS
SECTION 2.01. The Security Interests. To secure the due and punctual
payment of all Secured Obligations of such Grantor, howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing or due or to become due, in accordance with the terms
thereof, (a) each Grantor hereby grants to the Trustee, its successors and its
assigns, for the ratable benefit of the Secured Parties, a security interest in
and (b) each Grantor hereby pledges to the Trustee, its successors and assigns,
for the ratable benefit of the Secured Parties, all of such Grantor's right,
title and interest in, to and under the following, whether now existing or
hereafter acquired (all of which are herein collectively called the
"Collateral"):
(i) all General Intangibles;
(ii) all Pledged Securities; and
(iii) to the extent not otherwise included, all Proceeds and products
of any or all of the foregoing, whether existing on the date hereof or
arising hereafter.
SECTION 2.02. Continuing Liability of each Grantor. Anything herein to the
contrary notwithstanding, each Grantor shall remain liable to observe and
perform all the terms and conditions to be observed and performed by it under
any contract, agreement, warranty or other obligation with respect to the
Collateral, and shall do nothing to impair the security interests herein
granted. Neither the Trustee nor any Secured Party shall have any obligation or
liability under any such contract, agreement, warranty or obligation by reason
of or arising out of this Agreement or the receipt by the Trustee or any Secured
Party of any payment relating to any Collateral, nor shall the Trustee or any
Secured Party be required to perform or fulfill any of the obligations of any
Grantor with respect to any of the Collateral, to make any inquiry as to the
nature or sufficiency of any payment received by it or the sufficiency of the
performance of any party's obligations with respect to any Collateral.
Furthermore, neither the Trustee nor any Secured Party shall be required to file
any claim or demand to collect any amount due or to enforce the performance of
any party's obligations with respect to the Collateral.
SECTION 2.03. Delivery of Pledged Securities. All certificates or
instruments representing or evidencing the Pledged Securities shall be delivered
to and held by or on behalf of the Trustee, for the ratable benefit of the
Secured Parties, pursuant hereto and shall be in suitable form for transfer by
delivery, duly endorsed and shall be accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately guaranteed, and
accompanied in each case by any required transfer tax stamps, all in form and
substance satisfactory to the Trustee. The Trustee
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shall have the right, at any time in its discretion and without notice to any
Grantor after the occurrence and during the continuance of an Event of Default,
to cause any or all of the Pledged Interests or other Pledged Securities to be
transferred of record into the name of the Trustee or its nominee.
SECTION 2.04. Security Interests Absolute. All rights of the Trustee and
the Secured Parties hereunder, and all obligations of each Grantor hereunder,
shall be absolute and unconditional and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any Secured Obligation, Note, Mortgage Note or any other
document evidencing or securing any Secured Obligation, by operation of law
or otherwise;
(b) any modification or amendment or supplement to the Credit
Agreement, any Note, any Mortgage Note, any Note Agreement, any Collateral
Document, any other Security Document, the Trust Agreement, or any other
document evidencing or securing any Secured Obligation;
(c) any release, non-perfection or invalidity of any direct or
indirect security for any Secured Obligation;
(d) any change in the existence, structure or ownership of the
Borrower, any Grantor or any other Person, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any
Grantor or any other Person or its assets or any resulting disallowance,
release or discharge of all or any portion of the Secured Obligations;
(e) the existence of any claim, set-off or other right which any
Grantor may have at any time against the Borrower, any Grantor, any
guarantor, the Trustee, any Secured Party or any other corporation or
Person, whether in connection herewith or any unrelated transactions;
provided, that nothing herein shall prevent the assertion of any such claim
by counterclaim;
(f) any invalidity or unenforceability for any reason of any Secured
Obligation relating to or against the Borrower, any Grantor or any other
Person, or any provision of applicable law or regulation purporting to
prohibit the payment by the Borrower, any Grantor or any other Person of
the Secured Obligations;
(g) any failure by the Trustee or any Secured Party (i) to file or
enforce a claim against the Borrower, any Grantor or any other Person or
its estate (in a bankruptcy or other proceeding), (ii) to give notice of
the existence, creation or incurrence by the Borrower, any Grantor or any
other Person of any new or additional indebtedness or obligation under or
with respect to the
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Secured Obligations, (iii) to commence any action against the Borrower, any
Grantor or any other Person, (iv) to disclose to the Borrower, any Grantor
or any other Person any facts which the Trustee or any Secured Party may
now or hereafter know with regard to the Borrower, any Grantor or any other
Person or (v) to proceed with due diligence in the collection, protection
or realization upon any collateral securing the Secured Obligations; or
(h) any other act or omission to act or delay of any kind by the
Borrower any Grantor, any guarantor the Trustee, any Secured Party or any
other Person or any other circumstance whatsoever which might, but for the
provisions of this clause, constitute a legal or equitable discharge of any
Grantor's obligations hereunder.
SECTION 2.05. Release of Collateral. Upon (a) the indefeasible payment in
full in cash of all of the Secured Obligations, (b) the termination of the
Commitments, (c) the cancellation or expiration of all Letters of Credit and the
reimbursement in full of all amounts drawn thereunder and (d) the satisfaction
by the Borrower of all terms and conditions hereof, the Credit Agreement, the
Notes, the Mortgage Notes, the Note Agreement, the Collateral Documents, the
other Security Documents and all other documents or agreements governing the
Secured Obligations, the Trustee will (but at the expense of such Grantor)
execute and send to such Grantor, (a) for each filing made under Section 4.01 or
4.02 to perfect the security interests granted to the Trustee and the Secured
Parties hereunder, a termination statement prepared by such Grantor to the
effect that the Trustee and the other Secured Parties no longer claim a security
interest under such filing and (b) all documents and instruments previously
pledged to the Trustee hereunder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the Trustee and
each of the Secured Parties that:
SECTION 3.01. Credit Agreement. All representations and warranties
contained in the Credit Agreement and the Note Agreement that relate to the
Public Partnership are true and correct. The Public Partnership agrees to comply
with each of the covenants contained in the Credit Agreement and the Note
Agreement that imposes or purports to impose, by reference to the Public
Partnership, express or otherwise, through agreements with the Borrower,
restrictions or obligations on the Public Partnership. The Public Partnership
acknowledges that any default in the due observance or performance by the Public
Partnership of any covenant, condition or agreement contained herein shall
constitute an Event of Default as provided in Article VII of the Credit
Agreement and Section 11 of the Note Agreement. There are no
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conditions precedent to the effectiveness of this Agreement that have not been
satisfied or waived.
SECTION 3.02. Pledged Securities. All Pledged Securities have been duly
authorized and validly issued by the issuers thereof and, in the case of Pledged
Securities consisting of capital stock, are fully paid and nonassessable. None
of the Pledged Securities are subject to options to purchase or similar rights
of any Person. No Grantor is or will become a party to or otherwise bound by any
agreement, other than this Agreement, which restricts in any manner the rights
of any present or future holder of any of the Pledged Interests with respect
thereto.
SECTION 3.03. Validity, Perfection and Priority of Security Interests. (a)
By complying with Section 4.01 and by delivering all certificates or
instruments, if any, representing or evidencing the Collateral to the Trustee,
each Grantor will have created a valid and duly perfected security interest in
favor of the Trustee for the benefit of the Secured Parties as security for the
due and punctual payment of all Secured Obligations of such Grantor in all
Collateral and identifiable Proceeds of such Collateral, which security interest
may be perfected by (i) filing UCC financing statements and (ii) possession.
Continuing compliance by each Grantor with the provisions of Section 4.02 will
also (i) create and duly perfect valid security interests in all Collateral
acquired or otherwise coming into existence after the date hereof and in all
identifiable Proceeds of such Collateral as security for the due and punctual
payment of all Secured Obligations of such Grantor and (ii) cause such security
interests in all Collateral and in all Proceeds which are (A) identifiable cash
Proceeds of Collateral covered by financing statements required to be filed
hereunder and (B) identifiable Proceeds in which a security interest may be
perfected by such filing under the UCC to be duly perfected under the UCC.
(b) The security interests of the Trustee in the Collateral rank first in
priority. Other than financing statements or other similar documents perfecting
the security interests of the Trustee, no financing statements or similar
documents covering all or any part of the Collateral are on file or of record in
any government office in any jurisdiction in which such filing or recording
would be effective to perfect a security interest in such Collateral, nor is any
of the Collateral in the possession of any Person (other than a Grantor)
asserting any claim thereto or security interest therein.
SECTION 3.04. Place of Business; Location of Collateral. Schedule 1
correctly sets forth (a) each Grantor's chief executive office and principal
place of business and (b) the offices of each Grantor where records concerning
the General Intangibles are kept.
SECTION 3.05. Effectiveness. The pledge and grant effected hereby is
effective to rest in the Trustee, on behalf of the Secured Parties, the rights
of the Trustee in the Collateral as set forth herein.
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ARTICLE IV
COVENANTS
Each Grantor covenants and agrees with the Trustee that until (a) all the
Secured Obligations have been indefeasibly paid in full in cash, (b) the
Commitments have been terminated, (c) all Letters of Credit have been cancelled
or have expired and all Letter of Credit Disbursements have been reimbursed in
full and (d) all terms and conditions hereof, the Credit Agreement, the Notes,
the Mortgage Notes, the Note Agreement, the Collateral Documents, the other
Security Documents and all other documents or agreements governing the Secured
Obligations have been satisfied, each Grantor will comply with the following:
SECTION 4.01. Perfection of Security Interests. Each Grantor will, at its
own expense, cause all filings and recordings and other actions specified on
Schedule 4 to have been completed and filed on or prior to the Closing Date.
SECTION 4.02. Further Actions. (a) At all times after the Closing Date,
each Grantor will, at its own expense, comply with the following:
(i) as to all General Intangibles and Pledged Securities, it will
cause UCC financing statements and continuation statements to be filed and
to be on file in all applicable jurisdictions as required to perfect the
security interests granted to the Trustee for the ratable benefit of the
Secured Parties hereunder, to the extent that applicable law permits
perfection of a security interest by filing under the UCC;
(ii) as to all Proceeds, it will cause all UCC financing statements
and continuation statements filed in accordance with clause (i) above to
include a statement or a checked box indicating that Proceeds of all items
of Collateral described therein are covered;
(iii) as to any Capital Stock owned by any Grantor and issued by the
Borrower, the applicable Grantor will immediately pledge and deliver the
corresponding certificates, upon the acquisition or certification thereof,
or other instruments to the Trustee as part of the Pledged Interests duly
endorsed in a manner satisfactory to the Trustee;
(iv) as to any amount payable under or in connection with any of the
Collateral which shall be or shall become evidenced by any promissory note
or other instrument, the applicable Grantor will immediately pledge and
deliver such note or other instrument to the Trustee as part of the Pledged
Debt duly endorsed in a manner satisfactory to the Trustee;
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(b) Each Grantor will, from time to time and at its own expense, execute,
deliver, file or record such financing statements pursuant to the UCC and such
other statements, assignments, instruments, documents, agreements or other
papers and take any other action that may be necessary or desirable, or that the
Trustee may reasonably request, in order to create, preserve, perfect, confirm
or validate the security interests, to enable the Trustee and the Secured
Parties to obtain the full benefits of this Agreement or to enable the Trustee
to exercise and enforce any of its rights, powers and remedies hereunder,
including, without limitation, its right to take possession of the Collateral.
(c) To the fullest extent permitted by law, each Grantor authorizes the
Trustee (i) to sign and file financing and continuation statements and
amendments thereto with respect to the Collateral without its signature thereon
and (ii) to the extent permissible by applicable law, file this Agreement in any
UCC filing jurisdiction as a financing statement with respect to the Collateral.
SECTION 4.03. Change of Name, Identity or Structure. (a) No Grantor will
change its name, identity or corporate structure in any manner and, (b) except
as set forth on Schedule 3, no Grantor will conduct its business under any
trade, assumed or fictitious name, in each case under clauses (a) and (b),
unless it shall have given the Trustee at least 30 days' prior written notice
thereof and shall have taken all action (or made arrangements to take such
action substantially simultaneously with such change if it is impossible to take
such action in advance) necessary, desirable or as may be reasonably requested
by the Trustee, to amend any financing statement or continuation statement
relating to the security interests granted hereby in order to preserve such
security interests and to effectuate or maintain the priority thereof against
all Persons.
SECTION 4.04. Place of Business and Collateral. No Grantor will change the
location of its chief executive office unless, prior to such change, (i) it
notifies the Trustee of such change in a manner set forth under Section 6.13 of
the Credit Agreement and Section [ ] of the Note Agreement, (ii) makes all UCC
filings required by Section 4.02 and (iii) takes all other action necessary,
desirable or that the Trustee may reasonably request, to preserve, perfect,
confirm and protect the security interests granted hereby.
SECTION 4.05. Maintenance of Records. Each Grantor will keep and maintain
at its own cost and expense complete books and records relating to the
Collateral which are satisfactory to the Trustee, including, without limitation,
a record of all dividends received with respect to the Collateral and all of its
other dealings with the Collateral. Each Grantor will provide the Trustee with
access to or copies of such records promptly upon Trustee's request therefor.
SECTION 4.06. Compliance with Laws, etc. Each Grantor will comply with all
applicable statutes, rules, regulations, and orders of, and all applicable
restrictions imposed by, the United States of America, foreign countries,
states, provinces and municipalities, and of or by any Governmental Authority,
including any court,
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arbitrator or grand jury, in respect of the Collateral except such as are being
contested in good faith by appropriate proceedings promptly initiated and
diligently conducted and if such reserve or other appropriate provision, if any,
as shall be required by GAAP shall have been made therefor and the failure to so
comply could not reasonably be expected to have a Material Adverse Effect.
SECTION 4.07. Payment of Taxes, etc. Each Grantor will pay all taxes,
assessments and other governmental charges or levies imposed upon the Collateral
or in respect of any of its income or profits therefrom when the same become due
and payable, but in any event before any penalty or interest accrues thereon,
and all claims (including claims for labor, services, materials and supplies)
for sums which have become due and payable and which by law have or might become
a Lien upon any of its properties or assets, and promptly reimburse the Trustee
or any Secured Party for any such taxes, assessments, charges or claims paid by
them; provided that no such tax, assessment, charge or claim need be paid or
reimbursed if being con tested in good faith by appropriate proceedings promptly
initiated and diligently conducted and if such reserves or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor
and be adequate in the good faith judgment of such Grantor.
SECTION 4.08. Limitation on Liens on Collateral. No Grantor will create,
permit or suffer to exist any security interest, encumbrance, claim or other
Lien in respect of the Collateral. Each Grantor will defend the Collateral and
each Grantor's rights with respect thereto against, and take such other action
as is necessary to remove, any security interest, encumbrance, claim or other
Lien in respect of the Collateral.
SECTION 4.09. Limitations on Dispositions of Collateral. No Grantor will,
directly or indirectly, sell, transfer, lease or otherwise dispose of any of the
Collateral, or attempt, offer or contract to do so, except in each case as
expressly permitted under the Credit Agreement and the Note Agreement. The
inclusion of proceeds of the Collateral under the security interest granted
hereby shall not be deemed a consent by the Trustee to any sale or disposition
of any Collateral.
SECTION 4.10. Notices. Each Grantor will advise the Trustee promptly and in
reasonable detail, (a) of any security interest, encumbrance or claim made or
other Lien asserted against any of the Collateral, (b) of any material change in
the composition of the Collateral and (c) of the occurrence of any other event
which would have a material effect on the aggregate value of the Collateral or
on the security interests granted to the Trustee in this Agreement.
SECTION 4.11. Change of Law. Each Grantor shall promptly notify the Trustee
in writing of any change in law known to it which (i) adversely affects or will
adversely affect the validity, perfection or priority of the security interests
granted hereby, (ii) requires or will require a change in the procedures to be
followed in order to maintain and protect such validity, perfection and priority
or (iii) could result in the Trustee not having a perfected security interest in
any of the Collateral.
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SECTION 4.12. Reimbursement Obligation. Should any Grantor fail to comply
with the provisions of this Agreement or any other agreement relating to the
Collateral such that the value of any Collateral or the validity, perfection,
rank or value of any security interest granted to the Trustee hereunder or
thereunder is thereby diminished or potentially diminished or put at risk (as
reasonably determined by the Trustee), the Trustee on behalf of such Grantor
may, but shall not be required to, effect such compliance on behalf of such
Grantor, and such Grantor shall reimburse the Trustee for the costs thereof on
demand, and interest shall accrue on any such unpaid reimbursement obligation
from the date the relevant costs are incurred until reimbursement thereof in
full at the default rate provided in Section 2.07 of the Credit Agreement.
SECTION 4.13. Dispositions. No Grantor will sell, transfer, assign or
otherwise dispose of any of its partnership interests in the Borrower.
ARTICLE V
DISTRIBUTIONS ON PLEDGED SECURITIES; VOTING
SECTION 5.01. Right to Receive Distributions on Pledged Collateral; Voting.
(a) So long as no Event of Default shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Interests or any part
thereof for any purpose permitted by the terms of this Agreement, the
Credit Agreement and the Note Agreement.
(ii) Each Grantor shall be entitled to receive and retain any and all
dividends, interest and principal paid in cash on (A) the Triarc Note and
(B) the other Pledged Securities to the extent and only to the extent that
such cash dividends, interest and principal are permitted by, and otherwise
paid in accordance with, the terms and conditions of the Credit Agreement,
the Note Agreement and applicable laws. Other than pursuant to the first
sentence of this paragraph (a)(ii), all principal, all noncash dividends,
interest and principal, and all dividends, interest and principal paid or
payable in cash or otherwise in connection with a partial or total
liquidation or dissolution, return of capital, capital surplus or paid-in
surplus, and all other distributions made on or in respect of Pledged
Securities, whether paid or payable in cash or otherwise, whether resulting
from a subdivision, combination or reclassification of the outstanding
Capital Stock of the issuer of any Pledged Securities or received in
exchange for Pledged Securities or any part thereof, or in redemption
thereof, or as a result of any merger, consolidation, acquisition or other
exchange of assets to which such issuer may be a party or otherwise, shall
be and become part of the Collateral, and, if received by a Grantor, shall
not be commingled by such Grantor with any of its other funds or property
but shall be held separate
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and apart therefrom, shall be held in trust for the benefit of the Trustee
and shall be forthwith delivered to the Trustee in the form in which
received (with any necessary endorsement).
(iii) The Trustee shall execute and deliver (or cause to be executed
and delivered) to each Grantor all such proxies, powers of attorney,
consents, ratifications and waivers and other instruments as each Grantor
may reasonably request for the purpose of enabling each Grantor to exercise
the voting and other rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends or interest payments which
it is authorized to receive and retain pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuance of an Event of Default:
(i) All rights of any Grantor to receive the dividends and interest
payments which it would otherwise be authorized to receive and retain
pursuant to Section 5.01(a)(ii) shall cease, and all such rights shall
thereupon become vested in the Trustee which shall thereupon have the sole
right to receive and hold as Collateral such dividends and interest
payments.
(ii) All dividends and interest payments which are received by any
Grantor contrary to the provisions of paragraph (i) of this Section 5.01(b)
shall be received in trust for the benefit of the Trustee, shall be
segregated from other funds of such Grantor and shall be forthwith paid
over to the Trustee as Collateral in the same form as so received (with any
necessary endorsement).
(c) Upon the occurrence and during the continuance of an Event of Default
and upon notice by the Trustee to the Borrower, all rights of each Grantor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 5.01(a)(i) shall cease, and all such
rights shall thereupon become vested in the Trustee, which shall thereupon have
the sole right to exercise such voting and other consensual rights.
ARTICLE VI
REMEDIES; RIGHTS UPON DEFAULT
SECTION 6.01. UCC Rights. If any Event of Default shall have occurred, the
Trustee may, in addition to all other rights and remedies granted to it in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Secured Obligations, exercise all rights and remedies of a
secured party under the UCC and all other rights available to the Trustee at law
or in equity.
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SECTION 6.02. Sale of Collateral. (a) Each Grantor expressly agrees that if
an Event of Default shall occur and be continuing, the Trustee, without demand
of performance or other demand or notice of any kind (except the notice
specified below of the time and place of any public or private sale) to any
Grantor or any other Person (all of which demands and/or notices are hereby
waived by each Grantor), may forthwith collect, receive, appropriate and realize
upon the Collateral and/or forthwith sell, lease, assign, give an option or
options to purchase or otherwise dispose of and deliver the Collateral (or
contract to do so) or any part thereof in one or more parcels at public or
private sale, at any exchange, broker's board or at any office of the Trustee or
elsewhere in such manner as is commercially reasonable and as the Trustee may
deem best, for cash or on credit or for future delivery without assumption of
any credit risk. The Trustee or any Secured Party shall have the right upon any
such public sale and, to the extent permitted by law, upon any such private
sale, to purchase the whole or any part of the Collateral so sold. Each Grantor
further agrees, at the Trustee's request, to assemble the Collateral, and to
make it available to the Trustee at places which the Trustee may reasonably
select. To the extent permitted by applicable law, each Grantor waives all
claims, damages and demands against the Trustee or any Secured Party arising out
of the foreclosure, repossession, retention or sale of the Collateral.
(b) Unless the Collateral threatens to decline speedily in value or is of a
type customarily sold in a recognized market, the Trustee shall give Grantor 10
days' written notice of its intention to make any such public or private sale or
sale at a broker's board or on a securities exchange. Such notice shall (i) in
the case of a public sale, state the time and place fixed for such sale, (ii) in
the case of a sale at a broker's board or on a securities exchange, state the
board or exchange at which such sale is to be made and the day on which the
Collateral, or any portion thereof being sold, will first be offered for sale
and (iii) in the case of a private sale, state the day after which such sale may
be consummated. The Trustee shall not be required or obligated to make any such
sale pursuant to any such notice. The Trustee may adjourn any public or private
sale or cause the same to be adjourned from time to time by announcement at the
time and place fixed for the sale, and such sale may be made at any time or
place to which the same may be so adjourned. In the case of any sale of all or
any part of the Collateral for credit or for future delivery, the Collateral so
sold may be retained by the Trustee until the selling price is paid by the
purchaser thereof, but the Trustee shall not incur any liability in case of
failure of such purchaser to pay for the Collateral so sold and, in the case of
such failure, such Collateral may again be sold upon like notice.
SECTION 6.03. Rights of Purchasers. Upon any sale of the Collateral
(whether public or private), the Trustee shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold. Each purchaser
(including the Trustee and the other Secured Parties) at any such sale shall
hold the Collateral so sold free from any claim or right of whatever kind,
including any equity or right of redemption of any Grantor, and each Grantor, to
the extent permitted by law, hereby specifically waives (to the extent permitted
by law) all rights of redemption, stay,
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valuation and appraisal which it has or may at any time in the future have under
any law now existing or hereafter adopted.
SECTION 6.04. Additional Rights of the Trustee. Upon the occurrence and
during the continuance of an Event of Default:
(a) The Trustee shall have the right and power to institute and maintain
such suits and proceedings as it may deem appropriate to protect and enforce the
rights vested in it by this Agreement and may proceed by suit or suits at law or
in equity to enforce such rights and to foreclose upon and sell the Collateral
or any part thereof pursuant to the judgment or decree of a court of competent
jurisdiction.
(b) The Trustee shall, to the extent permitted by law and without regard to
the solvency or insolvency at the time of any Person then liable for the payment
of any of the Secured Obligations or the then value of the Collateral, and
without requiring any bond from any party to such proceedings, be entitled to
the appointment of a special receiver or receivers (who may be the Trustee or
any other Secured Party) for the Collateral or any part thereof and for the
rents, issues, tolls, profits, royalties, revenues and other income therefrom,
which receiver shall have such powers as the court making such appointment shall
confer, and to the entry of an order directing that the rents, issues, tolls,
profits, royalties, revenues and other income of the property constituting the
whole or any part of the Collateral be segregated, sequestered and impounded for
the benefit of the Trustee and the other Secured Parties, and each Grantor
irrevocably consents to the appointment of such receiver or receivers and to the
entry of such order.
SECTION 6.05. Securities Act, etc. (a) In view of the position of the
applicable Grantor in relation to its Pledged Securities, or because of other
present or future circumstances, a question may arise under the Securities Act
of 1933, as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being herein called the "Federal Securities Laws"), with
respect to any disposition of the Pledged Securities permitted hereunder. Each
Grantor understands that compliance with the Federal Securities Laws might very
strictly limit the course of conduct of the Trustee if the Trustee were to
attempt to dispose of all or any part of the Pledged Securities, and might also
limit the extent to which or the manner in which any subsequent transferee of
any such Pledged Securities could dispose of the same. Similarly, there may be
other legal restrictions or limitations affecting the Trustee and the other
Secured Parties in any attempt to dispose of all or part of the Pledged
Securities under applicable Blue Sky or other state securities laws or similar
laws analogous in purpose or effect.
Accordingly, each Grantor expressly agrees that the Trustee is authorized,
in connection with any sale of the Pledged Securities, if it deems it advisable
so to do, (i) to restrict the prospective bidders on or purchasers of any of the
Pledged Securities to a limited number of sophisticated investors who will
represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution
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or sale of any of such Pledged Securities, (ii) to cause to be placed on
certificates for any or all of the Pledged Securities or on any other securities
pledged hereunder a legend to the effect that such security has not been
registered under the Federal Securities Laws and may not be disposed of in
violation of the provision of the Federal Securities Laws and (iii) to impose
such other limitations or conditions in connection with any such sale as the
Trustee deems necessary or advisable in order to comply with the Federal
Securities Laws or any other law. Each Grantor covenants and agrees that it will
execute and deliver such documents and take such other action as the Trustee
deems necessary or advisable in order to comply with the Federal Securities Laws
or any other law. Each Grantor acknowledges and agrees that such limitations may
result in prices and other terms less favorable to the seller than if such
limitations were not imposed, and, notwithstanding such limitations, agrees that
any such sale shall be deemed to have been made in a commercially reasonable
manner, it being the agreement of each Grantor, the Trustee and the other
Secured Parties that the provisions of this Section 6.05 will apply
notwithstanding the existence of a public or private market upon which the
quotations or sales prices may exceed substantially the price at which the
Trustee sells the Pledged Securities. The Trustee shall be under no obligation
to delay a sale of any Pledged Securities for a period of time necessary to
permit the issuer of any securities contained therein to register such
securities under the Federal Securities Laws, or under applicable state
securities laws, even if the issuer would agree to do so.
(b) If the Trustee, pursuant to Section [ ] or [ ] of the Trust Agreement,
shall determine to exercise its right to sell all or any of the Pledged
Securities and if in the opinion of counsel for the Trustee it is necessary, or
if in the opinion of the Trustee it is advisable, to have the securities
included in the Pledged Securities or the portion thereof to be sold registered
under the provisions of the Federal Securities Laws, each Grantor agrees, at its
own expense, (i) to execute and deliver, and to use its best efforts to cause
each Person whose securities are to be sold and their directors and officers to
execute and deliver, all such instruments and documents, and to do or cause to
be done all other such acts and things, as may be necessary or, in the opinion
of the Trustee, advisable to register such securities under the provisions of
the Federal Securities Laws and to cause the registration statement relating
thereto to become effective and to remain effective for such period as
prospectuses are required by law to be furnished, and to make or cause to be
made all amendments and supplements thereto and to the related prospectus which,
in the opinion of the Trustee, are necessary or advisable, all in conformity
with the requirements of the Federal Securities Laws and the rules and
regulations of the Securities and Exchange Commission thereunder, (ii) to use
its best efforts to cause the Person whose securities are to be sold to agree to
prepare, and to make available to its security holders as soon as practicable,
an earnings statement (which need not be audited) covering the period of at
least 12 months beginning with the first month after the effective date of any
such registration statement, which earning statement will satisfy the provisions
of Section 11(a) of the Federal Securities Laws, (iii) to use its best efforts
to qualify such securities under state Blue Sky or securities laws and to obtain
the approval of any governmental authorities for the sale of such securities as
requested by the Trustee and (iv) at the request of the Trustee, to
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indemnify and hold harmless the Trustee, any other Secured Party and any
underwriters (and any Person controlling any of the foregoing) from and against
any loss, liability, claim, damage and expense (and reasonable counsel fees
incurred in connection therewith) under the Federal Securities Laws or otherwise
insofar as such loss, liability, claim, damage or expense arises out of or is
based upon any untrue statement or alleged untrue statement of a material fact
contained in such registration statement or prospectus or in any preliminary
prospectus or any amendment or supplement thereto, or arises out of or is based
upon any omission or alleged omission to state therein a material fact required
to be stated or necessary to make the statements therein not misleading, such
indemnification to remain operative regardless of any investigation made by or
on behalf of the Trustee, any other Secured Party or any underwriters (or any
Person controlling any of the foregoing); provided that such Grantor shall not
be liable in any case to the extent that any such loss, liability, claim, damage
or expense arises out of or is based on an untrue statement or alleged untrue
statement or an omission or an alleged omission made in reliance upon and in
conformity with written information furnished to such Person by the Trustee or
any underwriter expressly for use in such registration statement or prospectus.
SECTION 6.06. Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Trustee in this Agreement is intended to be exclusive of any
other remedy or remedies, but every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter existing
at law, in equity or by statute.
(b) If the Trustee shall have proceeded to enforce any right, remedy or
power under this Agreement and the proceeding for the enforcement thereof shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Trustee, each Grantor and the Trustee shall, subject to any
determination in such proceeding, severally and respectively be restored to
their former positions and rights under this Agreement, and thereafter all
rights, remedies and powers of the Trustee shall continue as though no such
proceedings had been taken.
(c) All rights of action under this Agreement may be enforced by the
Trustee without the possession of any instrument evidencing any Secured
Obligation or the production thereof at any trial or other proceeding relative
thereto, and any suit or proceeding instituted by the Trustee shall be brought
in its name and any judgment shall be held as part of the Collateral.
SECTION 6.07. Waiver and Estoppel. (a) Each Grantor, to the extent it may
lawfully do so, agrees that it will not at any time in any manner whatsoever
claim or take the benefit or advantage of any appraisement, valuation, stay,
extension, moratorium, turnover or redemption law, or any law now or hereafter
in force permitting it to direct the order in which the Collateral shall be sold
which may delay, prevent or otherwise affect the performance or enforcement of
this Agreement and each Grantor hereby waives the benefits or advantage of all
such laws, and covenants that it will not hinder, delay or impede the execution
of any power granted to the Trustee in
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this Agreement but will permit the execution of every such power as though no
such law were in force; provided that nothing contained in this Section 6.07
shall be construed as a waiver of any rights of such Grantor under any
applicable federal bankruptcy law.
(b) Each Grantor, to the extent it may lawfully do so, on behalf of itself
and all who may claim through or under it, including any and all subsequent
creditors, vendees, assignees and lienors, waives and releases all rights to
demand or to have any marshalling of the Collateral upon any sale, whether made
under any power of sale granted herein or pursuant to judicial proceedings or
upon any foreclosure or any enforcement of this Agreement and consents and
agrees that all of the Collateral may at any such sale be offered and sold as an
entirety.
(c) Each Grantor, to the extent it may lawfully do so, waives presentment,
demand, protest and any notice of any kind (except notices explicitly required
hereunder) in connection with this Agreement and any action taken by the Trustee
with respect to the Collateral.
SECTION 6.08. Power of Attorney. Each Grantor hereby irrevocably
constitutes and appoints the Trustee, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, from time to time in the Trustee's discretion for the purpose of
carrying out the terms of this Agreement, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary or
desirable to accomplish the purposes of this Agreement and, without limiting the
generality of the foregoing, hereby gives the Trustee the power and right, on
behalf of such Grantor, without notice to or assent by such Grantor to do the
following:
(a) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral; and
(b) upon the occurrence and continuance of any Event of Default and
otherwise to the extent provided in this Agreement, (i) to direct any party
liable for any payment under any of the Collateral to make payment of any
and all moneys due and to come due thereunder directly to the Trustee or as
the Trustee shall direct; (ii) to receive payment of and receipt for any
and all moneys, claims and other amounts due and to become due at any time
in respect of or arising out of any Collateral; (iii) to commence and
prosecute any suits, actions or proceedings at law or in equity in any
court of competent jurisdiction to collect the Collateral or any thereof
and to enforce any other right in respect of any Collateral; (iv) to defend
any suit, action or proceeding brought against such Grantor with respect to
any Collateral; (v) to settle, compromise and adjust any suit, action or
proceeding described above and, in connection therewith, to give such
discharges or releases as the Trustee may deem appropriate; and (vi)
generally to sell, transfer, pledge, make any agreement with respect to or
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otherwise deal with any of the Collateral as fully and completely as though
the Trustee were the absolute owner thereof for all purposes, and to do, at
the option of the Trustee and each Grantor's expense, at any time, or from
time to time, all acts and things which the Trustee deems necessary to
protect, preserve or realize upon the Collateral and the Trustee's security
interest therein, in order to effect the intent of this Agreement, all as
fully and effectively as such Grantor might do.
Each Grantor hereby ratifies all that such attorneys shall lawfully do or
cause to be done by virtue hereof. This power of attorney is a power coupled
with an interest and shall be irrevocable.
Nothing herein contained shall be construed as requiring or obligating the
Trustee to make any commitment or to make any inquiry as to the nature or
sufficiency of any payment received by the Trustee, or to present or file any
claim or notice, or to take any action with respect to the Collateral or any
part thereof or the moneys due or to become due in respect thereof or any
property covered thereby, and no action taken by the Trustee or omitted to be
taken with respect to the Collateral or any part thereof shall give rise to any
defense, counterclaim or offset in favor of any Grantor or to any claim or
action against the Trustee. It is understood and agreed that the appointment of
the Trustee as the agent of each Grantor for the purposes set forth above in
this Section 6.08 is coupled with an interest and is irrevocable. The provisions
of this Section 6.08 shall in no event relieve any Grantor of any of its
obligations hereunder with respect to the Collateral or any part thereof or
impose any obligation on the Trustee to proceed in any particular manner with
respect to the Collateral or any part thereof, or in any way limit the exercise
by the Trustee of any other or further right which it may have on the date of
this Agreement or hereafter, whether hereunder or by law or otherwise.
SECTION 6.09. Application of Proceeds. The Trustee shall apply the proceeds
of any collection, sale or other disposition of the Collateral in the order and
manner set forth in Section [ ] of the Trust Agreement. The Trustee shall have
absolute discretion as to the time of application of any such proceeds, moneys
or balances in accordance with this Agreement. Upon any sale of the Collateral
by the Trustee (including pursuant to a power of sale granted by statute or
under a judicial proceeding), the receipt of the Trustee or of the officer
making the sale shall be a sufficient discharge to the purchaser or purchasers
of the Collateral so sold and such purchaser or purchasers shall not be
obligated to see to the application of any part of the purchase money paid over
to the Trustee or such officer or be answerable in any way for the
misapplication thereof.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. Unless otherwise specified herein, all notices,
requests or other communications to any party hereunder shall be made pursuant
to Section [ ] of the Trust Agreement in writing, shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, and shall be given to such party at its address or telecopy number set
forth on the signature pages hereof or at any other address or telecopy number
which such party shall have specified for the purpose of communications
hereunder by notice to the other parties hereunder.
SECTION 7.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by each Grantor herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Trustee and the Secured Parties and shall survive the making by the Lenders of
the Loans and the purchase by the Noteholders of the Mortgage Notes and the
execution and delivery to the Lenders of the Notes evidencing such Loans, and
the issuance of the Mortgage Notes, regardless of any investigation made by the
Lenders or the Noteholders or on their behalf, and shall continue in full force
and effect until the Secured Obligations have been indefeasibly paid in full in
cash, the Commitments have been terminated, all Letters of Credit have been
cancelled or have expired, all Letter of Credit Disbursements have been
reimbursed in full and all terms and conditions hereof, the Credit Agreement,
the Notes, the Mortgage Notes, the Note Agreement and all other documents or
agreements governing the Secured Obligations have been satisfied. This Agreement
shall terminate when the security interests granted hereunder have terminated
and the Collateral has been released as provided in Section 2.05; provided that
the obligations of each Grantor under Section 4.12 shall survive any such
termination.
SECTION 7.03. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Agreement shall be
effective with respect to any Grantor when a counterpart hereof which bears the
signature of such Grantor shall have been delivered to the Trustee.
SECTION 7.04. Amendments, Etc. No amendment, modification or waiver of any
provision of this Agreement and no consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be in writing
and shall be executed and delivered in accordance with Section [ ] of the Trust
Agreement, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that this Agreement may be amended, modified or waived
with respect to any Grantor, including by releasing any Grantor hereunder,
without the approval of any other Grantor and without affecting the obligations
of any other Grantor hereunder.
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SECTION 7.05. Assignments. This Agreement and the terms, covenants and
conditions hereof shall be binding upon each Grantor and its successors and
shall inure to the benefit of the Trustee and the Secured Parties and their
respective successors and assigns. Upon (i) the assignment by any Lender of all
or any portion of its rights and obligations under the Credit Agreement
(including all or any portion of its Commitment and the Loans owing to it and
the Note or Notes held by it) to any other Person, (ii) the sale, transfer,
exchange or other disposition of a Mortgage Note by the corresponding Noteholder
thereof to any other Person or (iii) the assignment by any other holder of
Parity Debt of all or any portion of its rights and obligations under such
Parity Debt to any other Person, such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such transferor or assignor
herein or otherwise. None of the Grantors shall be permitted to assign, transfer
or delegate any of its rights or obligations under this Agreement without the
prior written consent of the Trustee (and any such purported assignment,
transfer or delegation without such consent shall be void).
SECTION 7.06. Savings Clause. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect with respect to any Grantor, no party hereto shall
be required to comply with such provision with respect to such Grantor for so
long as such provision is held to be invalid, illegal or unenforceable, and the
validity, legality and enforceability of the remaining provisions contained
herein, and of such invalid, illegal or unenforceable provision with respect to
any other Grantor, shall not in any way be affected or impaired. The parties
shall endeavor in good-faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.07. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
SECTION 7.08. Entire Agreement. This Agreement, the other Loan Documents
and the other Operative Agreements constitute the entire contract between the
parties relative to the subject matter hereof. Any agreement previously entered
into among the parties with respect to the subject matter hereof is superseded
by this Agreement, the other Loan Documents and the other Operative Agreements.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party other than the parties hereto and the Secured Parties, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 7.09. No Waiver; Remedies. No failure on the part of the Trustee or
any Secured Party to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy by such Person preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. All
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remedies hereunder, under the Loan Documents and the other Operative Agreements
are cumulative and are not exclusive of any other remedies provided by law.
SECTION 7.10. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.11. Submission to Jurisdiction. For the purpose of assuring that
the Trustee or any Secured Party may enforce its rights under this Agreement,
each Grantor, for itself and its successors and assigns, hereby, to the fullest
extent permitted by applicable law, irrevocably (a) agrees that any legal or
equitable action, suit or proceeding brought against it arising out of or
relating to this Agreement or any transaction contemplated hereby or the subject
matter of any of the foregoing or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding may be instituted in any state
or federal court sitting in the State of New York, (b) waives any objection
which it may now or hereafter have to the laying of venue of any such action,
suit or proceeding brought in any such court, and hereby further irrevocably and
unconditionally waives and agrees not to plead or claim that any such action,
suit or proceeding brought in any such court has been brought in an inconvenient
forum, or any right to require the proceeding to be conducted in any other
jurisdiction by reason of its present or future domicile, (c) irrevocably
submits itself to the non-exclusive jurisdiction of any state or federal court
of competent jurisdiction sitting in the State of New York for purposes of any
such action, suit or proceeding, and (d) irrevocably waives any immunity from
jurisdiction to which it might otherwise be entitled in any such action, suit or
proceeding which may be instituted in any state or federal court sitting in the
State of New York, and irrevocably waives any immunity from, or objection to,
the maintaining of an action against it to enforce any judgment for money
obtained in any such action, suit or proceeding and any immunity from execution.
Each Grantor waives personal service of process and consents that service
of process upon it may be made by certified or registered mail, return receipt
requested, at its address specified or determined in accordance with the
provisions of Section 7.01, and service so made shall be deemed completed on the
third business day after mailing. Nothing contained in this Section 7.11 shall
be deemed to affect the right of any Secured Party to serve process in any other
manner permitted by law or to commence legal proceedings or otherwise proceed
against any Grantor in any jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first written above.
NATIONAL PROPANE PARTNERS,
L.P.
By: NATIONAL PROPANE
CORPORATION,
its general partner
By:______________________________
Name:
Title:
Address:
Telecopy Number:
NATIONAL PROPANE CORPORATION
By:______________________________
Name:
Title:
Address:
Telecopy Number:
NATIONAL PROPANE SGP, INC.
By:______________________________
Name:
Title:
Address:
<PAGE>
<PAGE>
Telecopy Number:
_________________________________
as Trustee
By:______________________________
Name:
Title:
Address:
Telecopy Number:
<PAGE>
<PAGE>
Schedule 1
CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS
Name Mailing Address County State
---- --------------- ------ -----
LOCATIONS OF RECORDS OF RECEIVABLES AND GENERAL INTANGIBLES
Name Mailing Address County State
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Schedule 2
PLEDGED INTERESTS
Ownership
Grantor Issuer Interests
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Schedule 3
TRADE NAMES, DIVISION NAMES, ETC.
Grantor Trade Names, Division Names, Etc.
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Schedule 4
REQUIRED FILINGS AND RECORDINGS
Grantor UCC Filings & Locations Other Filings
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EXHIBIT D-2
[FORM OF]
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PLEDGE AND SECURITY AGREEMENT
dated as of June 26, 1996
among
THE GRANTORS NAMED HEREIN
and
THE BANK OF NEW YORK,
as Trustee
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TABLE OF CONTENTS
Article Section Page
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ARTICLE I DEFINITIONS............................................... 1
SECTION 1.01. Terms Defined in Annex A........................... 1
SECTION 1.02. Definition of Certain Terms Used Herein............ 1
SECTION 1.03. UCC Definitions.................................... 7
SECTION 1.04. Terms Generally.................................... 7
ARTICLE II SECURITY INTERESTS....................................... 8
SECTION 2.01. The Security Interests............................. 8
SECTION 2.02. Continuing Liability of each Grantor............... 9
SECTION 2.03. Delivery of Pledged Securities..................... 9
SECTION 2.04. Security Interests Absolute........................ 9
SECTION 2.05. Sales and Collections.............................. 10
SECTION 2.06. Segregation of Proceeds............................ 11
SECTION 2.07. Verification of Receivables........................ 11
SECTION 2.08. Release of Collateral.............................. 12
SECTION 2.09. Amendment of Schedules............................. 13
ARTICLE III REPRESENTATIONS AND WARRANTIES......................... 13
SECTION 3.01. Pledged Securities................................. 13
SECTION 3.02. Validity, Perfection and Priority of Security
Interests ....................................... 13
SECTION 3.03. Patents, Trademarks and Copyrights................. 14
SECTION 3.04. Enforceability of Receivables and General
Intangibles ..................................... 14
SECTION 3.05. Place of Business; Location of Collateral.......... 14
SECTION 3.06. Trade Names........................................ 15
SECTION 3.07. Outstanding Interests.............................. 15
SECTION 3.08. Licensor Consents.................................. 15
SECTION 3.09. Motor Vehicles and Other Rolling Stock............. 15
SECTION 3.10. Vessels and Aircraft............................... 15
SECTION 3.11. Accounts........................................... 15
ARTICLE IV COVENANTS............................................... 16
SECTION 4.01. Perfection of Security Interests................... 16
SECTION 4.02. Further Actions.................................... 17
SECTION 4.03. Change of Name, Identity or Structure.............. 19
SECTION 4.04. Place of Business and Collateral................... 19
SECTION 4.05. Fixtures........................................... 19
SECTION 4.06. Maintenance of Records............................. 19
SECTION 4.07. Compliance with Laws, etc.......................... 20
SECTION 4.08. Payment of Taxes, etc.............................. 20
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SECTION 4.09. Compliance with Terms of Accounts, Contracts and
Licenses.................................................... 20
SECTION 4.10. Limitation on Liens on Collateral.................. 20
SECTION 4.11. Limitations on Modifications of Receivables and
General Intangibles; No Waivers or Extensions.... 20
SECTION 4.12. Maintenance of Insurance........................... 21
SECTION 4.13. Limitations on Dispositions of Collateral.......... 22
SECTION 4.14. Periodic Certification............................. 23
SECTION 4.15. Notices............................................ 23
SECTION 4.16. Change of Law...................................... 23
SECTION 4.17. Right of Inspection................................ 24
SECTION 4.18. Maintenance of Equipment........................... 24
SECTION 4.19. Covenants Regarding Patent, Trademark and Copyright
Collateral...................................... 24
SECTION 4.20. Reimbursement Obligation........................... 25
SECTION 4.21. Bank Accounts...................................... 26
SECTION 4.22. Amendments to Schedules............................ 26
SECTION 4.23. Motor Vehicles and Other Rolling Stock............. 26
SECTION 4.24. Covenants Regarding Triarc Note.................... 26
ARTICLE V DISTRIBUTIONS ON PLEDGED SECURITIES; VOTING.............. 26
SECTION 5.01 Right to Receive Distributions on Pledged
Collateral; Voting................................ 26
ARTICLE VI REMEDIES; RIGHTS UPON DEFAULT........................... 28
SECTION 6.01. UCC Rights......................................... 28
SECTION 6.02. Payments on Collateral............................. 28
SECTION 6.03. Possession of Collateral........................... 29
SECTION 6.04. Sale of Collateral................................. 29
SECTION 6.05. Rights of Purchasers............................... 30
SECTION 6.06. Additional Rights of the Trustee................... 30
SECTION 6.07. Securities Act, etc................................ 30
SECTION 6.08. Remedies Not Exclusive............................. 31
SECTION 6.09. Waiver and Estoppel................................ 32
SECTION 6.10. Power of Attorney.................................. 32
SECTION 6.11. Application of Proceeds............................ 34
SECTION 6.12. Grant of License or Sub-License to Use Patent,
Trademark, Copyright and License Collateral...... 34
SECTION 6.13. NPC Bankruptcy Event............................... 34
SECTION 6.14. Trust Agreement.................................... 35
ARTICLE VII MISCELLANEOUS.......................................... 35
SECTION 7.01. Notices............................................ 35
SECTION 7.02. Survival of Agreement.............................. 35
SECTION 7.03. Counterparts....................................... 35
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SECTION 7.04. Amendments, Etc.................................... 35
SECTION 7.05. Assignments........................................ 36
SECTION 7.06. Savings Clause..................................... 36
SECTION 7.07. Supplemental Agreement............................. 36
SECTION 7.08. GOVERNING LAW...................................... 36
SECTION 7.09. Entire Agreement................................... 37
SECTION 7.10. No Waiver; Remedies................................ 37
SECTION 7.11. Headings........................................... 37
SECTION 7.12. Submission to Jurisdiction......................... 37
Schedules
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Schedule 1 Chief Executive Office and Principal Place of Business; Locations
of Records of Receivables and General Intangibles
Schedule 2 Pledged Securities
Schedule 3 Locations of Equipment and Inventory
Schedule 4 Trade Names, Division Names, etc.
Schedule 5 Required Filings and Recordings
Schedule 6 Patents and Patent Applications
Schedule 7 Trademarks and Trademark Applications
Schedule 8 Copyrights and Copyright Applications
Schedule 9 Licenses
Schedule 10 Motor Vehicles and other Rolling Stock
Schedule 11 Vessels and Aircraft
Schedule 12 Accounts
Exhibits
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Exhibit A Assignment of Security Interest in United States Patents and
Trademarks
Exhibit B Assignment of Security Interest in United States Copyrights
Exhibit C Form of Landlord's Waiver and Consent
Exhibit D Security Agreement for Motor Vehicles and Other Rolling Stock
Exhibit E Bailee's Notice
Annex A Definitions
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PLEDGE AND SECURITY AGREEMENT dated as of June 26, 1996, among NATIONAL
PROPANE, L.P., a Delaware limited partnership (the "Borrower"), NATIONAL PROPANE
CORPORATION, a Delaware corporation ("National Propane Corp."), the Restricted
Subsidiaries listed on the signature pages hereof and such other Restricted
Subsidiaries (other than National Sales and Service, Inc.) as shall become
parties hereto in accordance with Section 7.07 hereof (such listed and other
Restricted Subsidiaries (other than National Sales and Service, Inc.) being
referred to herein individually as a "Subsidiary Grantor" and collectively as
the "Subsidiary Grantors"), and THE BANK OF NEW YORK, a New York banking
corporation, as Trustee (in such capacity, the "Trustee") under the Trust
Agreement (as defined herein).
Reference is made to (a) the Credit Agreement dated as of June 26, 1996 (as
amended, or modified or supplemented from time to time, the "Credit Agreement"),
among the Borrower, the financial institutions party thereto as lenders (the
"Lenders"), 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, and (b) the $125,000,000 8.54% First Mortgage Notes due June
30, 2010 (together with all other securities issued in substitution therefor or
replacement thereof under the Note Agreement, the "Mortgage Notes") issued to
certain institutional investors (collectively, the "Purchasers") under the Note
Agreements, dated as of June 26, 1996, among the Borrower, National Propane
Corp., National Propane SGP, Inc. and the respective Purchasers (as amended,
modified or supplemented from time to time, collectively being referred to
herein as the "Note Agreement", whether one or more). The Lenders have
respectively agreed to extend credit to the Borrower pursuant to, and subject to
the terms and conditions specified in, the Credit Agreement. The Purchasers have
respectively agreed to purchase the Mortgage Notes pursuant to, and subject to
the terms and conditions specified in, the Note Agreement. The obligations of
the Lenders to extend credit under the Credit Agreement and the obligations of
the Purchasers to purchase the Mortgage Notes under the Note Agreement are
conditioned upon, among other things, the execution and delivery by each of
National Propane Corp., the Borrower and the Subsidiary Grantors (such parties
being referred to herein individually as a "Grantor" and collectively as the
"Grantors") of a Pledge and Security Agreement in the form hereof to secure the
Secured Obligations (as defined herein) of such Grantor.
Accordingly, the Grantors, intending to be legally bound, hereby agree with
the Trustee, as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Terms Defined in Annex A. Terms used herein and not otherwise
defined herein shall have the meanings set forth in Annex A hereto.
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SECTION 1.02. Definition of Certain Terms Used Herein. As used herein, the
following terms shall have the following meanings:
"Account Debtor" shall mean any Person who is or who may become obligated
to any Grantor under, with respect to or on account of any Receivable or General
Intangible.
"Assets" shall have the meaning assigned to such term in the Credit
Agreement and the Note Agreement.
"Cash Collateral Accounts" shall have the meaning assigned to such term in
Section 2.06(a).
"Cash Equivalents" shall mean:
(a) marketable obligations issued or unconditionally guaranteed by the
United States of America, or issued by any agency thereof and backed by the
full faith and credit of the United States of America, in each case
maturing within one year from the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any
public instrumentality thereof maturing within one year from the date of
acquisition thereof and having as at any date of determination the highest
generic rating obtainable from either Standard & Poor's Ratings Group or
Moody's Investors Service, Inc.;
(c) commercial paper maturing no more than 270 days from the date of
creation thereof and having as at any date of determination one of the two
highest generic ratings obtainable from either Standard & Poor's Ratings
Group or Moody's Investors Service, Inc.;
(d) certificates of deposit maturing one year or less from the date of
acquisition thereof issued by commercial banks incorporated under the laws
of the United States of America or any state thereof or the District of
Columbia or Canada, (I) the commercial paper or other short-term unsecured
debt obligations of which are rated either A-2 or better (or comparably if
the rating system is changed) by Standard & Poor's Ratings Group or Prime-2
or better (or comparably if the rating system is changed) by Moody's
Investors Service, Inc. or (II) the long-term debt obligations of which are
rated either AA- or better (or comparably if the rating system is changed)
by Standard & Poor's Ratings Group or Aa3 or better (or comparably if the
rating system is changed) by Moody's Investors Service, Inc. ("Permitted
Banks");
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(e) bankers' acceptances eligible for rediscount under requirements of
the Board and accepted by Permitted Banks; and
(f) obligations of the type described in clause (a), (b), (c) or (d)
above purchased from a securities dealer designated as a "primary dealer"
by the Federal Reserve Bank of New York or from a Permitted Bank as
counterparty to a written repurchase agreement obligating such counterparty
to repurchase such obligations not later than 14 days after the purchase
thereof and which provides that the obligations which are the subject
thereof are held for the benefit of the Borrower or a Subsidiary by a
custodian which is a Permitted Bank and which is not a counterparty to the
repurchase agreement in question.
"Collateral" shall have the meaning assigned to such term in Section
2.01(a).
"Contract Rights" shall mean all choses in action and causes of action and
all other rights of any Grantor of every kind and nature now owned or hereafter
acquired by any Grantor pursuant to (a) all contracts under which Receivables or
General Intangibles arise, (b) all Interest Rate Agreements, (c) all Material
Contracts, (d) all Conveyance Agreements, (e) all rights of any Grantor under
the Triarc Note, including, without limitation, the right to exercise remedies
pursuant to the terms thereof and (f) all other contract rights of any Grantor.
"Copyright License" shall mean any written agreement (a) granting any right
to any third party under any Copyright of any Grantor or (b) granting any right
to any Grantor under any Copyright of any third party.
"Copyrights" shall mean all right, title and interest of any Person in and
to all of the following, whether now owned or hereafter acquired:
(a) the federally registered United States and foreign copyrights
described on Schedule 8 hereto and any renewals thereof, as such schedule
may be amended from time to time;
(b) all other United States and foreign copyrights; and
(c) all registrations and applications for registration of any such
copyright in the United States or any other country, including
registrations, recordings, supplemental derivative or collective work
registrations and pending applications for registrations in the United
States Copyright Office.
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"Deposit Accounts" shall mean (a) all Lockbox Accounts, (b) all Cash
Collateral Accounts and (c) all other deposit accounts of each Grantor (other
than National Propane Corp.), all funds held therein and all certificates and
instruments, if any, from time to time representing, evidencing or deposited
into such accounts, but excluding the account covered by the Cash Collateral
Agreement.
"Documents" shall mean all of the books, ledgers, records, computer
programs, tapes, discs, punch cards, data processing software, transaction
files, master files and related property and rights (including computer and
peripheral equipment) of any Grantor pertaining to or referencing the
Collateral.
"Equipment" shall mean all equipment now owned or hereafter acquired by any
Grantor, including all items of machinery, equipment, furnishings and fixtures
of every kind (including, without limitation, any and all equipment used in the
distribution of propane and other related petroleum derivative products),
whether affixed to real property or not, as well as all automobiles, trucks and
vehicles of every description, trailers, handling and delivery equipment, all
additions to, substitutions for, replacements of or accessions to any of the
foregoing, all attachments, components, parts (including spare parts) and
accessories whether installed thereon or affixed thereto and all fuel for any
thereof.
"General Intangibles" shall mean all accounts, accounts receivable,
Contract Rights, Documents, instruments, chattel paper, money, general
intangibles or other property of any kind or nature now owned or hereafter
acquired by any Grantor, including, without limitation, permits, federal and
state tax refunds, reversionary interests in pension plan assets, inventions,
designs, Patents, Copyrights, Licenses, Trademarks and associated goodwill,
trade secrets, confidential or proprietary technical and business information,
know-how, show-how or other data or information, software, customer lists,
subscription lists, databases and related documentation, registrations,
franchises, and all other intellectual or other similar property rights not
otherwise described above, but excluding Receivables.
"Inventory" shall mean all inventory now owned or hereafter acquired by any
Grantor, including (a) all goods and other personal property which are held for
sale or lease or are furnished or are to be furnished under a contract of
service or which constitute raw materials, work in process or materials used or
consumed or to be used or consumed in such Grantor's business (including,
without limitation, all gas propane and other related petroleum derivative
products and all commercial and residential propane tanks), (b) all inventory,
wherever located, evidenced by negotiable and non-negotiable documents of title,
warehouse receipts and bills of lading, (c) all of such Grantor's rights in, to
and under all purchase orders now owned or hereafter received or acquired by it
for goods or services and (d) all rights of such Grantor as an unpaid seller of
property formerly constituting such inventory, including rescission, replevin,
reclamation and stopping in transit.
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"License" shall mean any Patent License, Trademark License, Copyright
License or other similar license or sublicense as to which any Grantor is now or
hereafter a party.
"Lockbox Account" of any Grantor shall mean a lockbox account of such
Grantor maintained for the benefit of the Secured Parties pursuant to an Agency
Account Agreement.
"Material Contracts" shall mean each indenture or other agreement or
instrument evidencing Indebtedness and each other material agreement, contract,
lease, license, commitment or other instrument to which the Borrower or any
other Grantor is a party or by which it or any of its properties or assets are
or may be bound as of the Closing Date, after giving effect to the transactions
contemplated by the Note Agreement and the Credit Agreement, including, without
limitation, as of the date hereof, all contracts listed on Schedules 3.10 and
3.20 to the Credit Agreement.
"NPC Bankruptcy Event" shall mean (a) any filing by or on behalf of
National Propane Corp. of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other relief
under any bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar act or law, state or
Federal, now or hereafter existing ("Bankruptcy Law"), or any action by National
Propane Corp. for, or consent or acquiescence to, the appointment of a receiver,
trustee or other custodian of National Propane Corp., or of all or a substantial
part of its property; or the making by National Propane Corp. of any assignment
for the benefit of creditors; or the admission by National Propane Corp. in
writing of its inability to pay its debts as they come due; and
(b) filing of any involuntary petition against National Propane Corp. in
bankruptcy or seeking reorganization, arrangement, readjustment of its debts or
for any other relief under any Bankruptcy Law and an order for relief by a court
having jurisdiction in the premises shall have been issued or entered therein;
or any other similar relief shall be granted under any applicable Federal or
state law; or a decree or order of a court of competent jurisdiction for the
appointment of a receiver, liquidator, sequestrator, trustee or other officer
having similar powers over National Propane Corp. or over all or a part of its
property shall have been entered; or the involuntary appointment of an interim
receiver, trustee or other custodian of National Propane Corp. or of all or a
substantial part of its property; or the issuance of a warrant of attachment,
execution or similar process against any substantial part of the property of
National Propane Corp.; and continuance of any such event for 60 consecutive
days unless dismissed, bonded to the satisfaction of the court of competent
jurisdiction or discharged.
"Patent License" shall mean any written agreement (a) granting any right to
any third party under any Patent of any Grantor or (b) granting any right to any
Grantor under any Patent of any third party.
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"Patents" shall mean all right, title and interest of any Person in and to
all of the following, whether now owned or hereafter acquired:
(a) all letters patent of the United States or any other country, all
registrations and recordings thereof, and all applications for letters
patent of the United States or any other country, including registrations,
recordings and pending applications in the United States Patent and
Trademark Office or any other country, all as described on Schedule 6
hereto, as such schedule may be amended from time to time;
(b) all other letters patent of the United States or any other country
and all other applications for letters patent of the United States or any
other country; and
(c) all reissues, continuations, divisions, continuations-in-part or
extensions thereof and the inventions disclosed therein, including, to the
extent Grantor has such right, the right to make, use and/or sell the
inventions disclosed therein.
"Pledged Debt" shall mean (a) the debt securities listed and described in
Part II of Schedule 2 hereto, payable to such Grantor listed therein, and the
instruments evidencing such debt securities, (b) all additional debt securities
hereafter issued and payable to any Grantor and the instruments evidencing such
debt securities, (c) the Intercompany Notes, (d) the Triarc Note and (e) all
payments of principal, premiums (if any) or interest, cash, instruments or other
property from time to time received, receivable or otherwise distributed, in
respect of, in exchange for or upon the conversion of the debt securities
referred to in clause (a), (b), (c) and (d) above.
"Pledged Interests" shall mean (a) the Capital Stock listed and described
in Part I of Schedule 2 hereto, and the certificates, if any, representing such
Capital Stock, (b) all additional Capital Stock of any issuer of the Pledged
Interests from time to time acquired by any Grantor in any manner and all
Capital Stock of any Subsidiary of a Grantor hereafter acquired by any Grantor
(which shares shall be considered to be Pledged Interests under this Agreement),
together in each case with the certificates, if any, representing such
additional Capital Stock, (c) all of the Capital Stock of National Propane Corp.
owned by Triarc and pledged to the Borrower pursuant to the Triarc Note (which
constitutes 75.7% of the issued and outstanding Capital Stock of National
Propane Corp.), together with the certificates representing such Capital Stock
and (d) all dividends, liquidating dividends, stock dividends, distributions,
stock or partnership rights, options, rights to subscribe, cash, instruments and
other property and proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such listed Capital
Stock referenced in clauses (a) and (c) above or such additional Capital Stock
referenced in clause (b) above.
"Pledged Securities" shall mean the Pledged Interests and the Pledged Debt.
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"Proceeds" shall mean all proceeds, including (a) whatever is received upon
any collection, exchange, sale or other disposition of any of the Collateral and
any property into which any of the Collateral is converted, whether cash or
non-cash, (b) any and all payments or other property (in whatever form) made or
due and payable on account of any insurance, indemnity, warranty or guaranty
payable to any Grantor with respect to any of the Collateral, (c) any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other Person as a result of the destruction, loss,
theft or other involuntary conversion of whatever nature of any asset or
property which constitutes Collateral, (d) any and all payments (in any form
whatsoever) made or due and payable in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part of the
Collateral by any Governmental Authority, (e) any claim of any Grantor against
third parties (i) for past, present or future infringement of any Patent now or
hereafter owned by such Grantor or licensed under a Patent License, (ii) for
past, present or future infringement or dilution of any Trademark now or
hereafter owned by such Grantor or licensed under a Trademark License or injury
to the goodwill associated with any Trademark now or hereafter owned by such
Grantor, (iii) for past, present or future infringement of any Copyright now or
hereafter owned by such Grantor or licensed under a Copyright License and (iv)
for past, present or future breach of any License and (f) any and all other
amounts from time to time paid or payable under or in connection with any of the
Collateral.
"Real Estate" shall mean all real property and all buildings, plants,
furnishings or fixtures or other improvements to or construction on real
property now owned or hereafter acquired by any Grantor, and all leasehold
interests now owned or hereafter acquired by any Grantor in real property.
"Receivables" shall mean all accounts now or hereafter owing to any
Grantor, and all accounts receivable, Contract Rights, Documents, instruments or
chattel paper representing amounts payable or monies due or to become due to any
Grantor, arising from the sale of Inventory or the rendition of services in the
ordinary course of business or otherwise (whether or not earned by performance)
or arising from or in connection with any Copyright, Patent, Trademark or
License, together with all Inventory to be returned by or reclaimed from
customers wherever such Inventory is located, and all guaranties, securities and
liens held for the payment of any such account, account receivable, Contract
Right, Document, instrument or chattel paper.
"Secured Obligations" of any Grantor shall mean, (a) in the case of the
Borrower, all Parity Debt, (b) in the case of National Propane Corp., (i) the
Mortgage Notes issued by National Propane Corp. and its obligations under the
Note Agreement and (ii) all amounts now or hereafter payable by National Propane
Corp. under the General Partner's Guarantee Agreement, (c) in the case of all
other Grantors, all amounts now and hereafter payable by any such Grantor under
the Subsidiary Guarantee Agreement, and (d) in the case of any Grantor, all
expenses (including
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reasonable counsel fees and expenses) incurred in enforcing any rights under
this Agreement.
"Trademark License" shall mean any written agreement (a) granting any right
to any third party under any Trademark of any Grantor or (b) granting any right
to any Grantor under any Trademark of any third party.
"Trademarks" shall mean all of the following now or hereafter owned by any
Person (a) all trademarks, service marks, trade names, corporate names, company
names, business names, fictitious business names, trade styles, trade dress,
logos, other source or business identifiers, designs and general intangibles of
like nature, now existing or hereafter adopted or acquired, all registrations
and recordings thereof, and all applications filed in connection therewith,
including registrations and applications in the United States Patent and
Trademark Office, any State of the United States or any other country or any
political subdivision thereof, and all extensions or renewals thereof, and (b)
all goodwill associated therewith.
"UCC" shall mean at any time the Uniform Commercial Code as the same may
from time to time be in effect in the State of New York; provided that if, by
reason of mandatory provisions of law, the validity or perfection of any
security interest granted herein is governed by the Uniform Commercial Code as
in effect in a jurisdiction other than New York, then, as to the validity or
perfection of such security interest, "UCC" shall mean the Uniform Commercial
Code in effect in such other jurisdiction.
SECTION 1.03. UCC Definitions. The uncapitalized terms "account", "account
debtor", "chattel paper", "contract right", "document", "warehouse receipt",
"bill of lading", "document of title", "instrument", "inventory", "equipment"
"general intangible", "money", "proceeds", "products" and "purchase money
security interest" as used in Section 1.02 or elsewhere in this Agreement shall
have the meanings ascribed thereto in the UCC.
SECTION 1.04. Terms Generally. The definitions in Annex A hereto and in
Section 1.02 shall apply equally to both the singular and plural forms of the
terms defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase "without
limitation". All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise require. As used
herein, the "knowledge" of the Borrower includes the knowledge of the
Responsible Officers (as defined in the Credit Agreement and the Note Agreement)
of each and every Loan Party. Unless otherwise expressly provided herein, the
word "day" means a calendar day.
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ARTICLE II
SECURITY INTERESTS
SECTION 2.01. The Security Interests. (a) To secure the due and punctual
payment of all Secured Obligations of such Grantor, howsoever created, arising
or evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing or due or to become due, in accordance with the terms
thereof, (i) each Grantor (other than National Propane Corp.) hereby grants to
the Trustee, its successors and its assigns, for the ratable benefit of the
Secured Parties, a security interest in, and (ii) each Grantor (other than
National Propane Corp.) hereby pledges and assigns, to the Trustee, its
successors and assigns, for the ratable benefit of the Secured Parties, all of
such Grantor's right, title and interest in, to and under the following, whether
now existing or hereafter acquired (all of which, together with the right, title
and interests of National Propane Corp. in the assets and properties referred to
in Section 2.01(b), are herein collectively called the "Collateral"):
(a) all Receivables;
(b) all General Intangibles (to the extent that, with respect to
Licenses, a security interest may be granted hereunder in favor of, and the
Borrower's interest therein may be assigned to, the Trustee (i) without the
consent of any party or (ii) because such consent has been obtained);
(c) all Equipment;
(d) all Inventory;
(e) all Pledged Securities;
(f) all Deposit Accounts;
(g) to the extent not included in the foregoing (and except to the
extent expressly excluded from the foregoing), all other personal property,
whether tangible or intangible, and wherever located; and
(h) to the extent not otherwise included, all Proceeds and products of
any or all of the foregoing, whether existing on the date hereof or arising
hereafter.
(b) To secure the due and punctual payment of all Secured Obligations of
National Propane Corp., howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, now or hereafter existing or due or to
become due, in accordance with the terms thereof, (i) National Propane Corp.
hereby grants to the
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Trustee, its successors and assigns, for the ratable benefit of the Secured
Parties, a security interest in, and (ii) National Propane Corp. hereby pledges
and assigns, to the Trustee, its successors and assigns, for the ratable benefit
of the Secured Parties, all of National Propane Corp.'s right, title and
interest in, to and under, the assets to be conveyed by it pursuant to the
Conveyance Agreements.
SECTION 2.02. Continuing Liability of each Grantor. Anything herein to the
contrary notwithstanding, each Grantor shall remain liable to observe and
perform all the terms and conditions to be observed and performed by it under
any contract, agreement, warranty or other obligation with respect to the
Collateral, and shall do nothing to impair the security interests herein
granted. Neither the Trustee nor any Secured Party shall have any obligation or
liability under any such contract, agreement, warranty or obligation by reason
of or arising out of this Agreement or the receipt by the Trustee or any Secured
Party of any payment relating to any Collateral, nor shall the Trustee or any
Secured Party be required to perform or fulfill any of the obligations of any
Grantor with respect to any of the Collateral, to make any inquiry as to the
nature or sufficiency of any payment received by it or the sufficiency of the
performance of any party's obligations with respect to any Collateral.
Furthermore, neither the Trustee nor any Secured Party shall be required to file
any claim or demand to collect any amount due or to enforce the performance of
any party's obligations with respect to the Collateral.
SECTION 2.03. Delivery of Pledged Securities. All certificates or
instruments representing or evidencing the Pledged Securities shall be delivered
to and held by or on behalf of the Trustee, for the ratable benefit of the
Secured Parties, pursuant hereto and shall be in suitable form for transfer by
delivery, duly endorsed and shall be accompanied by duly executed instruments of
transfer or assignment in blank, and accompanied in each case by any required
transfer tax stamps, all in form and substance reasonably satisfactory to the
Trustee. The Trustee shall have the right, at any time in its discretion and
without notice to any Grantor after the occurrence and during the continuance of
an Event of Default, and, subject to the terms of Section 6.13, any NPC
Bankruptcy Event, to cause any or all of the Pledged Interests or other Pledged
Securities to be transferred of record into the name of the Trustee or its
nominee.
SECTION 2.04. Security Interests Absolute. All rights of the Trustee and
the Secured Parties hereunder, and all obligations of each Grantor hereunder,
shall be absolute and unconditional and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(a) any extension, renewal, settlement, compromise, waiver or release
in respect of any Secured Obligation, Note, Mortgage Note or any other
document evidencing or securing any Secured Obligation, by operation of law
or otherwise;
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(b) any modification or amendment or supplement to the Credit
Agreement, any Note, any Mortgage Note, any Note Agreement, any Collateral
Document, or any other document evidencing or securing any Secured
Obligation;
(c) any release, non-perfection or invalidity of any direct or
indirect security for any Secured Obligation;
(d) any change in the existence, structure or ownership of the
Borrower, any Grantor or any other Person, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting the Borrower, any
Grantor or any other Person or its assets or any resulting disallowance,
release or discharge of all or any portion of the Secured Obligations;
(e) the existence of any claim, set-off or other right which any
Grantor may have at any time against the Borrower, any Grantor, any
guarantor, the Trustee, any Secured Party or any other Person, whether in
connection herewith or any unrelated transactions; provided, that nothing
herein shall prevent the assertion of any such claim by counterclaim;
(f) any invalidity or unenforceability for any reason of any Secured
Obligation relating to or against the Borrower, any Grantor or any other
Person, or any provision of applicable law or regulation purporting to
prohibit the payment by the Borrower, any Grantor or any other Person of
the Secured Obligations;
(g) any failure by the Trustee or any Secured Party (i) to file or
enforce a claim against the Borrower, any Grantor or any other Person or
its estate (in a bankruptcy or other proceeding), (ii) to give notice of
the existence, creation or incurrence by the Borrower, any Grantor or any
other Person of any new or additional indebtedness or obligation under or
with respect to the Secured Obligations, (iii) to commence any action
against the Borrower, any Grantor or any other Person, (iv) to disclose to
the Borrower, any Grantor or any other Person any facts which the Trustee
or any Secured Party may now or hereafter know with regard to the Borrower,
any Grantor or any other Person or (v) to proceed with due diligence in the
collection, protection or realization upon any collateral securing the
Secured Obligations; or
(h) any other act or omission to act or delay of any kind by the
Borrower, any Grantor, any guarantor, the Trustee, any Secured Party or any
other Person or any other circumstance whatsoever which might, but for the
provisions of this clause, constitute a legal or equitable discharge of any
Grantor's obligations hereunder.
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SECTION 2.05. Sales and Collections. (a) Each Grantor is authorized (i) to
sell in the ordinary course of its business for fair value and on an
arm's-length basis any of its Inventory normally held by it for such purpose and
(ii) to use and consume, in the ordinary course of its business, any raw
materials, supplies and materials normally held by it for such purpose. The
Trustee may, upon the occurrence and during the continuance of any Event of
Default, and, subject to the terms of Section 6.13, upon the occurrence of a NPC
Bankruptcy Event, without cause or notice, curtail or terminate such authority
as to each applicable Grantor at any time.
(b) Each Grantor is authorized to collect amounts owing to it with respect
to the Collateral, subject to the rights of the Trustee under Section 2.06 and
Article VI of this Agreement.
SECTION 2.06. Segregation of Proceeds. (a) Upon the occurrence and
continuation an Event of Default and, subject to the terms of Section 6.13, upon
the occurrence of a NPC Bankruptcy Event, the Trustee shall have the right to
cause to be opened and maintained at the principal office of the Trustee
non-interest bearing bank accounts (the "Cash Collateral Accounts") which will
contain only Proceeds of Collateral of a particular Grantor. Any cash proceeds
(as such term is defined in Section 9-306(1) of the UCC) received by the Trustee
directly from Account Debtors obligated to make payments under Receivables or
General Intangibles to such Grantor or from such Grantor pursuant to clause (b)
of this Section 2.06, whether consisting of checks, notes, drafts, bills of
exchange, money orders, commercial paper or other Proceeds received on account
of any Collateral, shall be promptly deposited in the Cash Collateral Account,
and until so deposited shall be held in trust for the Trustee and the Secured
Parties and shall not be commingled with any funds not constituting Proceeds of
the Collateral. Each Cash Collateral Account shall be designated with the title
"The Bank of New York, as Trustee under the Intercreditor and Trust Agreement
dated as of June 26, 1996 among National Propane, L.P., National Propane Corp.,
National Propane Partners, L.P., the Restricted Subsidiaries (other than
National Sales and Service, Inc.), the Lenders, the Note Holders and the
Trustee". Such Proceeds, when deposited, shall continue to be security for the
Secured Obligations and shall not constitute payment thereof until applied as
hereinafter provided. During the continuance of any Event of Default and,
subject to the terms of Section 6.13, upon the occurrence of a NPC Bankruptcy
Event, the Trustee shall have sole dominion and control over the funds deposited
in the Cash Collateral Account, and such funds may be withdrawn therefrom only
by the Trustee.
(b) Upon notice by the Trustee to the Borrower that the Cash Collateral
Account has been opened in accordance with Section 2.06(a), each Grantor shall
cause all cash Proceeds collected by it to be delivered to the Trustee forthwith
upon receipt, in the original form in which received (with such endorsements or
assignments as may be necessary to permit collection thereof by the Trustee),
and for such purpose each Grantor hereby irrevocably authorizes and empowers the
Trustee, its officers, employees and authorized agents to endorse and sign the
name of such Grantor on all
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checks, drafts, money orders or other media of payment so delivered, and such
endorsements or assignments shall, for all purposes, be deemed to have been made
by such Grantor prior to any endorsement or assignment thereof by the Trustee.
The Trustee may use any convenient or customary means for the purpose of
collecting such checks, drafts, money orders or other media of payment.
SECTION 2.07. Verification of Receivables. Subject to terms of the Credit
Agreement, the Trustee shall have the right to make test verifications of
Receivables in any manner and through any medium that it considers advisable,
and each Grantor agrees to furnish all such assistance and information as the
Trustee may reasonably require in connection therewith. Each Grantor, at its own
expense, will cause its financial officer to furnish to the Trustee at any time
and from time to time promptly upon the Trustee's request, the following
reports: (i) a reconciliation of all Receivables, (ii) an aging of all
Receivables, (iii) trial balances and (iv) a test verification of such
Receivables as the Trustee may request.
SECTION 2.08. Release of Collateral. (a) Each Grantor may sell or realize
upon or transfer or otherwise dispose of Collateral to the extent permitted by,
and in accordance with, Sections 2.05 and 4.13 hereof, and Sections 6.06 and
6.07 of the Credit Agreement and Sections 10.6 and 10.7 of the Note Agreement,
and the security interests of the Trustee and the Secured Parties in such
Collateral so sold, realized upon, licensed or disposed of (but not in the
Proceeds arising from such sale, realization or disposition, except to the
extent expressly permitted pursuant to the Credit Agreement and the Note
Agreement) shall cease immediately upon such sale, realization or disposition,
without any further action on the part of the Trustee or the Secured Parties.
The Trustee, if requested in writing by any Grantor, but at the expense of such
Grantor, is hereby authorized and instructed to deliver to the Account Debtor or
the purchaser or other transferee of any such Collateral applicable UCC
termination statements for such Collateral and a certificate stating that the
Trustee and the Secured Parties no longer have a security interest therein, and
such Account Debtor or such purchaser or other transferee shall be entitled to
rely conclusively on such certificate for any and all purposes.
(b) Upon (i) the indefeasible payment in full in cash of all of the Secured
Obligations, (ii) the termination of the Commitments, (iii) the cancellation or
expiration of all Letters of Credit and the reimbursement in full of all amounts
drawn thereunder and (iv) the satisfaction by the Borrower of all terms and
conditions hereof, the Credit Agreement, the Notes, the Mortgage Notes, the Note
Agreement, the Collateral Documents, and all other documents or agreements
governing the Secured Obligations, the Trustee will (as soon as reasonably
practicable after receipt of notice from any Grantor requesting the same, but at
the expense of such Grantor) upon receipt of written request from the Grantor
(that is approved by the Required Lenders and/or the Required Holders) execute
and deliver to such Grantor, (a) for each filing made under Section 4.01 or 4.02
to perfect the security interests granted to the Trustee and the Secured Parties
hereunder, a termination statement or other appropriate instrument of
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release prepared by such Grantor and furnished to the Trustee to the effect that
the Trustee and the other Secured Parties no longer claim a security interest
under such filing, (b) an instrument signed by the Trustee acknowledging the
termination of this Agreement and (c) any other evidence of satisfaction and
release that such Grantor may reasonably request. In addition to the foregoing,
if a Restricted Subsidiary that is a party hereto is designated as an
Unrestricted Subsidiary, as permitted by Section 6.18 of the Credit Agreement
and Section 10.19 of the Note Agreement, the Trustee will (as soon as reasonably
practicable after receipt of notice from the Borrower requesting the same, but
at the expense of such Restricted Subsidiary) upon receipt of written request
from the Grantor (that is approved by the Required Lenders and/or the Required
Holders) execute and deliver to such Restricted Subsidiary, (a) for each filing
made under Section 4.01 or 4.02 to perfect the security interests granted by
such Restricted Subsidiary to the Trustee and the Secured Parties hereunder, a
termination statement or other appropriate instrument of release prepared by
such Restricted Subsidiary and furnished to the Trustee to the effect that the
Trustee and the other Secured Parties no longer claim a security interest under
such filing, (b) an instrument signed by the Trustee acknowledging the
termination of this Agreement and (c) any other evidence of satisfaction and
release that such Restricted Subsidiary may reasonably request.
Prior to the satisfaction and release of Collateral by the Trustee
hereunder, the Trustee shall be entitled to receive an opinion of counsel to the
effect that such satisfaction and release is authorized and permitted hereunder.
SECTION 2.09. Amendment of Schedules. Each Grantor hereby authorizes the
Trustee to modify this Agreement by amending Schedules 6, 7, 8 and 9 hereto or
to add additional schedules hereto to include any asset or item that may be
Copyrights, Patents, Trademarks, Licenses or any other type of Collateral, as
the case may be, under this Agreement.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Grantors jointly and severally represent and warrant to the Trustee and
each of the Secured Parties that as of the Closing Date:
SECTION 3.01. Pledged Securities. All Pledged Securities have been duly
authorized and validly issued by the issuers thereof and, in the case of Pledged
Securities consisting of capital stock, are fully paid and nonassessable. None
of the Pledged Securities are subject to options to purchase or similar rights
of any Person. No Grantor is or will become a party to or otherwise bound by any
agreement, other than this Agreement, the Operative Documents and the
Partnership Agreement, which restricts in any manner the rights of any present
or future holder of any of the Pledged Interests with respect thereto.
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SECTION 3.02. Validity, Perfection and Priority of Security Interests. (a)
By executing this Agreement, by complying with Section 4.01(a), (c), (d) and (e)
and by delivering all certificates or instruments, if any, representing or
evidencing the Collateral to the Trustee, each Grantor will have created a valid
and duly perfected security interest in favor of the Trustee for the benefit of
the Secured Parties as security for the due and punctual payment of all Secured
Obligations of such Grantor in all Collateral (other than Patents, Trademarks
and Copyrights and Patent Licenses, Trademark Licenses and Copyright Licenses)
(and, in the case of Collateral that constitutes motor vehicles and other
rolling stock, depository accounts and aircraft by complying with the terms of
the Credit Agreement, the Note Agreement and Sections 4.01(c), 4.01(e) and
4.01(f) of this Agreement) and identifiable Proceeds of such Collateral, which
security interest may be perfected by (i) filing UCC financing statements, (ii)
noting such security interest on its certificates of title and/or delivering
possession thereof and/or (iii) possession. By executing this Agreement and by
complying with Section 4.01(a) and (b), each Grantor will have created a valid
and duly perfected security interest in favor of the Trustee for the benefit of
the Secured Parties as security for the due and punctual payment of all Secured
Obligations of such Grantor in all Patents, Trademarks and Copyrights owned by a
Grantor and Patent Licenses, Trademark Licenses and Copyright Licenses in the
United States, to the extent that a security interest may be perfected by (i)
filing UCC financing statements and (ii) timely filing at the United States
Patent and Trademark Office or the United States Copyright Office pursuant to
Section 35 U.S.C. ss. 1060 and 17 U.S.C. ss. 205, as applicable. Continuing
compliance by each Grantor with the provisions of Section 4.02 will also (i)
create and duly perfect valid security interests in all Collateral acquired or
otherwise coming into existence after the date hereof and in all identifiable
Proceeds of such Collateral as security for the due and punctual payment of all
Secured Obligations of such Grantor and (ii) cause such security interests in
all Collateral and in all Proceeds which are (A) identifiable cash Proceeds of
Collateral covered by financing statements required to be filed hereunder, (B)
identifiable Proceeds in which a security interest may be perfected by such
filing under the UCC and (C) any Proceeds in the Deposit Accounts to be duly
perfected under the UCC.
(b) The security interests of the Trustee in the Collateral rank first in
priority, except that the priority of the security interests may be subject to
Liens permitted under Section 6.02 of the Credit Agreement and Section 10.2 of
the Note Agreement. Other than financing statements or other similar documents
perfecting the security interests or deed of trust liens of the Trustee and the
protective filings filed by the lessors of certain equipment leased by the
Grantors, no financing statements, deeds of trust, mortgages or similar
documents covering all or any part of the Collateral other than with respect to
Liens permitted under Section 6.02 of the Credit Agreement and Section 10.2 of
the Note Agreement are on file or of record in any government office in any
jurisdiction in which such filing or recording would be effective to perfect a
security interest in such Collateral, nor is any of the Collateral in the
possession of any Person (other than a Grantor) asserting any claim thereto or
security interest therein.
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SECTION 3.03. Patents, Trademarks and Copyrights. Schedules 6, 7 and 8
correctly set forth all of each Grantor's Patents, registered Trademarks,
Trademarks pending registration, registered Copyrights, and Copyrights pending
registration, respectively, and Schedule 9 correctly sets forth all of each
Grantor's material Licenses. Each of such Patents and registered Trademarks and
Copyrights (and those pending registration) are subsisting, other than those
Patents, Trademarks and Copyrights indicated as "abandoned" or "dropped" on
Schedules 7, 8 and 9, respectively, as of the date hereof, and have not been
adjudged invalid or unenforceable, in whole or in part.
SECTION 3.04. Enforceability of Receivables and General Intangibles. To the
knowledge of each Grantor, each Receivable and General Intangible (that is a
contract right of such Grantor) is a valid and binding obligation of the related
Account Debtor in respect thereof, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general provisions of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law), and complies with any applicable legal requirements.
SECTION 3.05. Place of Business; Location of Collateral. Schedule 1
correctly sets forth (a) each Grantor's chief executive office and principal
place of business and (b) the offices of each Grantor where records concerning
Receivables and General Intangibles are kept. Schedule 3 correctly sets forth
the location of all Equipment and Inventory of each Grantor, other than rolling
stock, vessels, aircraft and goods in transit. Except for goods in transit and
except as otherwise specified in Schedule 3, all Inventory and Equipment has
been located at the addresses specified on Schedule 3 at all times during the
four-month period prior to the date hereof while owned by the applicable
Grantor. No Inventory is evidenced by a negotiable document of title, warehouse
receipt or bill of lading. No non-negotiable document of title, warehouse
receipt or bill of lading has been issued to any Person other than a Grantor,
and such Grantor has retained possession of all of such non-negotiable
documents, warehouse receipts and bills of lading. No amount payable under or in
connection with any of the Collateral is evidenced by promissory notes or other
instruments other than instruments evidencing the Pledged Debt which have been
delivered to the Trustee hereunder other than those promissory notes that do not
exceed a principal balance in the aggregate, at any one time outstanding, of
$100,000.
SECTION 3.06. Trade Names. Any and all trade names, division names, assumed
names or other names under which any Grantor transacts, or at any time during
the past five years prior to the date hereof has transacted, business are
specified on Schedule 4.
SECTION 3.07. Outstanding Interests. The Pledged Interests constitute 100%
of the Capital Stock of all the Subsidiaries of the Borrower and all of their
respective
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Subsidiaries, or in the case of foreign Subsidiaries, 65% of the Capital Stock
of such foreign Subsidiaries.
SECTION 3.08. Licensor Consents. Except as set forth on Schedule 9 hereto,
each Grantor has obtained all requisite consents or approvals by the licensor of
each Copyright License, Patent License or Trademark License to which such
Grantor is a licensee to effect the assignment of all of such Grantor's right,
title and interests thereunder to the Trustee or its designee and to effect the
sub-license contemplated under Section 6.12 upon and during the continuance of
an Event of Default and, subject to the terms of Section 6.13, upon the
occurrence of a NPC Bankruptcy Event.
SECTION 3.09. Motor Vehicles and Other Rolling Stock. Schedule 10 correctly
sets forth all of each Grantor's motor vehicles and other rolling stock.
SECTION 3.10. Vessels and Aircraft. Schedule 11 correctly sets forth all of
each Grantor's vessels and aircraft.
SECTION 3.11. Accounts. Each primary collection account, each primary
operating account and each primary investment account (including accounts used
to hold or trade Cash Equivalents) of the Borrower and each Restricted
Subsidiary (other than National Sales and Service, Inc.) is a Lockbox Account.
Schedule 12 correctly sets forth all of each Grantor's (other than National
Propane Corp.) collection, operating and investment accounts, the financial
institutions therewith, the address of such financial institutions, the account
number of each account and the purpose for which such account is used. Accounts
for deposit of sales, excise and similar taxes which any Grantor (other than
National Propane Corp.) is required by law to collect and pay to a Governmental
Authority shall be so identified.
ARTICLE IV
COVENANTS
Each Grantor covenants and agrees with the Trustee that until (a) all the
Secured Obligations have been indefeasibly paid in full in cash, (b) the
Commitments have been terminated, (c) all Letters of Credit have been cancelled
or have expired and all Letter of Credit Disbursements have been reimbursed in
full and (d) all terms and conditions hereof, the Credit Agreement, the Notes,
the Mortgage Notes, the Note Agreement, the Collateral Documents, and all other
documents or agreements governing the Secured Obligations have been satisfied,
each Grantor will comply with the following:
SECTION 4.01. Perfection of Security Interests. (a) Each Grantor will, at
its own expense, cause all filings and recordings and other actions specified on
Schedule 5 to have been completed and filed on or prior to the Closing Date.
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(b) Each Grantor, at its own expense, will cause fully executed Assignments
of Security Interests, substantially in the forms of Exhibits A and B hereto, as
applicable, to have been completed and filed on or prior to the Closing Date by
the United States Patent and Trademark Office and the United States Copyright
Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C. ss. 1060 or 17 U.S.C. ss. 205,
as applicable, to perfect the security interests granted to the Trustee in the
Patents (that are or could be perfected by filing such Assignments in the United
States Patent and Trademark Office), federally registered Copyrights, federally
registered Trademarks and Licenses.
(c) Each Grantor, at its own expense, will cause fully executed Security
Agreements for motor vehicles and other rolling stock, substantially in the form
of Exhibit D hereto (or other required documentation reasonably acceptable to
the Required Lenders and the Required Holders), to be delivered on or prior to
the Closing Date to the Trustee and will cause the certificates of title to the
motor vehicles and other rolling stock set forth on Schedule 10 to have been
filed within 30 days after the Closing Date, and delivered to the Trustee on or
prior to six calendar months after the Closing Date by the applicable department
of motor vehicles, to perfect the security interests granted to the Trustee in
such motor vehicles and other rolling stock.
(d) The Borrower, at its own expense, will provide notice within 30 days
after the Closing Date, substantially in the form of Exhibit E hereto, to all
bailees as of the date hereof of the Borrower's inventory (i.e., any Person in
possession of the Borrower's inventory) of the Trustee's security interest in
the Inventory granted hereunder; provided that, if the aggregate value of
Inventory held by all bailees at any time is less than $200,000, then such
bailment notices shall not be required unless and until the aggregate amount of
such Inventory not covered by bailment notices exceeds $200,000, in which case
the bailment notices shall be required for all such Inventory with a market
value in excess of $200,000;
(e) Each Grantor, at its expense, will cause each of the accounts listed on
Schedule 12 to be Lockbox Accounts on or prior to 60 days after the Closing
Date.
(f) The Borrower, at its own expense, will cause the aircraft listed on
Schedule 11 hereto to be titled in the name of a trustee, pursuant to a trust
agreement that is reasonably acceptable to the Required Lenders and the Required
Holders, and shall cause such trustee to pledge and assign such aircraft to the
Trustee pursuant to a Security Agreement that is in form and substance
reasonably acceptable to the Required Lenders and the Required Holders, within
thirty (30) days after the Closing Date.
SECTION 4.02. Further Actions. (a) At all times after the Closing Date,
each Grantor will, at its own expense, comply with the following:
(i) as to all Receivables, General Intangibles, Equipment, Inventory,
Pledged Securities and Deposit Accounts, it will cause UCC financing
statements and continuation statements to be filed and to be on
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file in all applicable jurisdictions (except with respect to goods in
transit) as required to perfect the security interests granted to the
Trustee for the ratable benefit of the Secured Parties hereunder, to the
extent that applicable law permits perfection of a security interest by
filing under the UCC;
(ii) as to all Proceeds, it will cause all UCC financing statements
and continuation statements filed in accordance with clause (i) above to
include a statement or a checked box indicating that Proceeds of all items
of Collateral described therein are covered;
(iii) upon the occurrence and continuation of an Event of Default and,
subject to the terms of Section 6.13, upon the occurrence of a NPC
Bankruptcy Event, it will ensure that the provisions of Section 2.06 are
complied with;
(iv) as to any Capital Stock owned by any Grantor, the applicable
Grantor will promptly pledge and deliver the corresponding certificates,
upon the acquisition or certification thereof, or other instruments to the
Trustee as part of the Pledged Interests duly endorsed in a manner
satisfactory to the Trustee;
(v) as to any amount payable under or in connection with any of the
Collateral which shall be or shall become evidenced by any promissory note
or other instrument, the applicable Grantor will immediately pledge and
deliver such note or other instrument to the Trustee as part of the Pledged
Debt duly endorsed in a manner satisfactory to the Trustee;
(vi) as to all Real Estate leased by a Grantor after the date hereof,
such Grantor shall use commercially reasonable efforts to obtain waivers
from the landlords of all such real estate, substantially in the form of
Exhibit C hereto or in such other form as shall be reasonably acceptable to
the Trustee;
(vii) as to all Patents (which are or could be perfected by filing
Assignments in the United States Patent and Trademark Office), federally
registered Trademarks, federally registered Copyrights and Licenses
hereafter acquired by any Grantor, it will cause fully executed Assignments
of Security Interests, substantially in the forms of Exhibits A and B
hereto, as applicable, to be received and recorded within three months
after any such acquisition with respect to Patents and Trademarks and
within one month after any such acquisition with respect to Copyrights by
the United States Patent and Trademark Office and the United States
Copyright Office pursuant to 35 U.S.C. ss. 261, 15 U.S.C.
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ss. 1060 or 17 U.S.C. ss. 205, as applicable, to protect the validity and
first priority of and to perfect a valid first priority security interest
in favor of the Trustee in respect of such hereafter acquired Patents,
Trademarks, Copyrights and Licenses to the extent that a security interest
may be perfected by filing in the United States and its political
subdivisions, territories and possessions pursuant to applicable federal
law;
(viii) as to all Licenses entered into after the date hereof with any
third party licensor, the applicable Grantor will use its commercially
reasonable efforts to obtain all requisite consents or approvals by the
licensor to effect the assignment of all of such Grantor's right, title and
interest thereunder to the Trustee or its designee and to effect the
sub-license contemplated under Section 6.12 upon and during the continuance
of an Event of Default or, subject to the terms of Section 6.13, upon the
occurrence of a NPC Bankruptcy Event, and such Grantor shall provide prompt
written notice to the Trustee upon failure to obtain such consent or
approval; and
(ix) as to any motor vehicles or other rolling stock acquired by any
Grantor after the date hereof (other than any motor vehicles and rolling
stock of immaterial value), such Grantor shall cause the security interests
granted hereunder to be noted on the certificate of title thereof and
promptly deliver such certificate of title to the Trustee as soon as
practicable and take any other actions necessary in order to perfect the
Trustee's security interests in such certificate of title.
(x) as to the Triarc Note, contemporaneously and concurrently with any
required release of the Capital Stock of National Propane Corp. owned by
Triarc and pledged to the Borrower pursuant to the terms of the Triarc
Note, the Borrower shall cause the Trustee to be perfected in any
collateral, property or assets permitted, pursuant to the terms of the
Triarc Note, to be substituted for such Capital Stock. Any such substituted
collateral shall have a fair market value at the time of substitution equal
to or greater than that of the Capital Stock so released.
(b) Each Grantor will, from time to time and at its own expense, execute,
deliver, file or record such financing statements pursuant to the UCC,
applications for certificates of title and such other statements, assignments,
instruments, documents, agreements or other papers and take any other action
that may be necessary or desirable, or that the Trustee may reasonably request,
in order to create, preserve, perfect, confirm or validate the security
interests, to enable the Trustee and the Secured Parties to obtain the full
benefits of this Agreement or to enable the Trustee to exercise and enforce any
of its rights, powers and remedies hereunder, including, without limitation, its
right to take possession of the Collateral, and will use its commercially
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reasonable efforts to obtain such waivers from landlords and mortgagees as
required by the Credit Agreement or the Note Agreement or as the Trustee may
otherwise request.
(c) To the fullest extent permitted by law, each Grantor authorizes the
Trustee (i) to sign and file financing and continuation statements and
amendments thereto with respect to the Collateral without its signature thereon
and, (ii) to the extent permissible by applicable law, file this Agreement in
any UCC filing jurisdiction as a financing statement with respect to the
Collateral.
SECTION 4.03. Change of Name, Identity or Structure. (a) No Grantor will
change its name, identity or corporate or partnership structure in any manner
(except as may be expressly permitted by the Credit Agreement and the Note
Agreement) and, (b) except as set forth on Schedule 4, no Grantor will conduct
its business under any trade, assumed or fictitious name, in each case under
clauses (a) and (b), unless it shall have given the Trustee at least 30 days'
prior written notice thereof and shall have taken all action (or made
arrangements to take such action substantially simultaneously with such change
if it is impossible to take such action in advance) necessary or desirable or as
may be reasonably requested by the Trustee, to amend any financing statement or
continuation statement relating to the security interests granted hereby in
order to preserve such security interests and to effectuate or maintain the
priority thereof against all Persons.
SECTION 4.04. Place of Business and Collateral. No Grantor will change the
location of (a) any of its places of business, (b) its chief executive office or
(c) any of the offices or other locations where it keeps or holds any Collateral
or any records relating thereto from the applicable location listed on Schedule
1 or 4 hereto unless, prior to such change, it (i) notifies the Trustee of such
change in a manner set forth under Section 6.13 of the Credit Agreement and
Section 10.13 of the Note Agreement, (ii) makes all UCC filings required by
Section 4.02 and (iii) takes all other action necessary or desirable or that the
Trustee may reasonably request, to preserve, perfect, confirm and protect the
security interests granted hereby. No Grantor will change the location of any
Collateral if such change would cause the security interest granted hereby in
such Collateral to lapse or cease to be perfected.
SECTION 4.05. Fixtures. No Grantor will permit any Equipment to become a
fixture to real property not covered by a Mortgage unless it shall have given
the Trustee at least 10 days' prior written notice thereof and shall have taken
all such action and delivered or caused to be delivered to the Trustee all
instruments and documents, including, without limitation, waivers and
subordination agreements by any landlords and mortgagees, and filed all
financing statements necessary or reasonably requested by the Trustee, to
preserve and protect the security interest granted herein and to effectuate or
maintain the priority thereof against all Persons.
SECTION 4.06. Maintenance of Records. Each Grantor will keep and maintain
at its own cost and expense complete books and records relating to the
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Collateral which are reasonably satisfactory to the Trustee, including, without
limitation, a record of all payments received and all credits granted with
respect to the Collateral and all of its other dealings with the Collateral.
Each Grantor will mark its Documents to evidence this Agreement and the security
interests granted hereby. For the further security of the Trustee and the other
Secured Parties, each Grantor agrees that the Trustee shall have a special
property interest in each Grantor's Documents and upon the occurrence and during
the continuance of an Event of Default or, subject to the terms of Section 6.13,
a NPC Bankruptcy Event, such Grantor shall deliver and turn over any Document to
the Trustee or to its representatives at any time on demand of the Trustee.
SECTION 4.07. Compliance with Laws, etc. Each Grantor will comply with all
applicable statutes, rules, regulations, and orders of, and all applicable
restrictions imposed by, the United States of America, foreign countries,
states, provinces and municipalities, and of or by any Governmental Authority,
including any court, arbitrator or grand jury, in respect of the Collateral
(including Environmental Laws), except such as are being contested in good faith
by appropriate proceedings promptly initiated and diligently conducted and if
such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor and the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
SECTION 4.08. Payment of Taxes, etc. Each Grantor will pay all taxes,
assessments and other governmental charges or levies imposed upon the Collateral
or in respect of any of its franchises, business, income or profits therefrom
when the same become due and payable, and all claims (including claims for
labor, services, materials and supplies) for sums which have become due and
payable and which by law have or might become a Lien upon any of the Collateral,
and promptly reimburse the Trustee or any Secured Party for any such taxes,
assessments, charges or claims paid by them; provided that no such tax,
assessment, charge or claim need be paid or reimbursed if the failure to pay or
reimburse the same would not, individually or in the aggregate, have a Material
Adverse Effect and if it is being contested in good faith by appropriate
proceedings promptly initiated and diligently conducted and if such reserves or
other appropriate provision, if any, as shall be required by GAAP shall have
been made therefor and be adequate in the good faith judgment of such Grantor.
SECTION 4.09. Compliance with Terms of Accounts, Contracts and Licenses.
Each Grantor will perform and comply in all material respects with all of its
obligations under all agreements relating to the Collateral to which it is a
party or by which it is bound.
SECTION 4.10. Limitation on Liens on Collateral. No Grantor will create,
permit or suffer to exist, but will defend the Collateral and each Grantor's
rights with respect thereto against and take such other action as is necessary
to remove, any security interest, encumbrance, claim or other Lien in respect of
the Collateral other
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than the security interests created hereunder and the Liens permitted under
Section 6.02 of the Credit Agreement and Section 10.02 of the Note Agreement.
SECTION 4.11. Limitations on Modifications of Receivables and General
Intangibles; No Waivers or Extensions. No Grantor will (a) amend, modify,
terminate or waive any provision of any material Receivable or General
Intangible in any manner which is reasonably likely to have a material adverse
effect on the value of the Collateral, (b) consistently fail to exercise or
pursue promptly and diligently material rights which it may have under material
Receivables and General Intangibles or (c) consistently fail to deliver to the
Trustee a copy of material demands or notices received by it relating to
material Receivables or General Intangibles. No Grantor will, without the prior
written consent of the Secured Parties under the Trust Agreement, grant any
extension of the time of payment of any material Receivable or amounts due under
any material General Intangible, compromise, compound or settle the same for
less than the full amount thereof, release, wholly or partly, any Person liable
for the payment thereof or allow any credit or discount whatsoever thereon in
each such case, other than trade discounts granted in the normal course of
business, and except such as in the reasonable judgment of such Grantor is
advisable to enhance the collectability thereof.
SECTION 4.12. Maintenance of Insurance. (a) Each Grantor will at its
expense at all times cause all of the Collateral which is either of a character
required by law to be insured or usually insured by companies of established
reputation engaged in the same or similar business and similarly situated (i) to
be properly insured with Permitted Insurers licensed to do business in the
applicable state against loss or damage from such hazards and risks (including,
without limitation, (a) Inventory and Equipment against loss by fire, explosion,
theft and such other casualties, (b) personal injury arising from, and property
damage relating to, such Inventory and Equipment and (c) business interruption)
as are required by law to be insured or are usually insured by similar business
and similarly situated, and (ii) to the extent consistent with the practice of
companies of established reputation engaged in the same or similar business and
similarly situated (including, without limitation, companies in a similar
financial condition), to be self-insured (in lieu of maintaining insurance
policies with Permitted Insurers as required above, to the extent of such
self-insurance) with respect to losses resulting from liabilities to third
parties for personal injury or property damage or damage to or destruction of
its property, up to $250,000 per occurrence per policy but in any event not
greater than $1,000,000 in the aggregate per occurrence for such risk under all
applicable policies (including self-insurance for reasonable deductible amounts
in respect of insurance policies), provided that, with respect to such
self-insurance or deductibles, such Grantor reserves such amounts as may be
required by GAAP.
(b) All insurance maintained pursuant to Section 14.12(a) shall: (i) name,
except in the case of workers' compensation insurance, the Trustee and the
Secured Parties (for liability insurance) as loss payees or additional insureds,
as their respective
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interests may appear; (ii) provide, except in the case of public liability
insurance and workers' compensation insurance, that all insurance claims shall
be adjusted with the applicable Grantor, subject to the approval of the Required
Lenders and Required Holders, and during any Event of Default or, subject to
Section 6.13, any NPC Bankruptcy Event, shall be payable solely to the Trustee;
(iii) include effective waivers by the insurer of all claims for insurance
premiums against the Trustee and each Secured Party; (iv) provide, to the extent
commercially available, that any losses with respect to property insurance shall
be payable notwithstanding (A) any act, failure to act or negligence of or
violation of warranties, declarations or conditions contained in such policy by
the insureds, including, without limitation, any Grantor, the Trustee or any
Secured Party, (B) the use of the Collateral for purposes more hazardous than
permitted by the terms of the policy, (C) any foreclosure or other proceedings
or notice of sale relating to the Collateral, or (D) any change in the title to
or ownership of any of the Collateral (other than portions of the Collateral
expressly released from the lien of this Agreement); (v) provide, to the extent
commercially available, that no cancellation, termination or lapse in coverage
thereof shall be effective until at least 10 days after receipt by the Trustee
of written notice thereof with respect to the failure to pay insurance premiums
or 30 days after receipt by the Trustee of written notice thereof for any other
reason; (vi) provide, to the extent commercially available, that the Trustee or
any Secured Party may, but shall not be obligated to, pay premiums in respect
thereof; and (vii) be on such other terms as are consistent with the practice of
companies of established reputation engaged in the same or similar business and
similarly situated.
(c) Each Grantor shall deliver to the Trustee, promptly upon request of
such Trustee, certificates of all insurance policies (or, if requested by the
Trustee, copies of the insurance policies, together with an Officers'
Certificate certifying such copies to be true and correct) with respect to the
Collateral which such Grantor is required to maintain or cause to be maintained
pursuant to this Section 4.12, together with evidence as to the payment of all
premiums then due thereon, provided, that the Trustee shall not be deemed by
reason of its custody of such certificates or policies to have knowledge of the
contents thereof. Each Grantor has, simultaneously with the closings under the
Credit Agreement and the Note Agreement, delivered to the Trustee and will
deliver to the Trustee promptly upon request of such Trustee, and in any event
(i) on December 31 of each calendar year, commencing with December 31, 1996, and
(ii) upon each increase in the amount of self-insurance with respect to losses
resulting from liabilities to third parties for personal injury or property
damage or damage to or destruction of its property retained by such Grantor by
$500,000 or more in the aggregate, a report by a firm of independent insurance
brokers or consultants chosen by the Borrower and satisfactory to the Required
Lenders and Required Holders (A) setting forth the insurance obtained pursuant
to this Section 4.12, including, without limitation, the amounts thereof, the
names of the insurers and the property, hazards and risks covered thereby, and
certifying that the same comply with the requirements of this Section 4.12, that
all premiums then due thereon have been paid and that the same are in full force
and effect, (B) setting forth all self-insurance
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maintained by such Grantor pursuant to this Section 4.12 and (C) certifying that
in the opinion of such firm, such insurance or self-insurance complies with the
requirements of this Section 4.12 and is, as to amounts, coverage and
provisions, adequate to protect such Grantor, the Trustee and each Secured Party
against any and all insurable risks affecting the Collateral, or setting forth
any recommendations of such independent insurance brokers as to additional
insurance, if any, reasonably required for the protection of the interest of the
Trustee and each Secured Party in the light of available insurance coverage and
practice in the propane distribution industry. The Trustee shall be entitled to
rely on such reports without further investigation of the facts and
circumstances set forth therein.
SECTION 4.13. Limitations on Dispositions of Collateral. Subject to the
terms of Section 5.01(a)(ii) no Grantor will directly or indirectly (through the
sale of stock, merger or otherwise) without the prior written consent of the
Secured Parties under the Trust Agreement sell, transfer, lease or otherwise
dispose of any of the Collateral, or attempt, offer or contract to do so except
for, (a) subject to Section 2.05, sales of Inventory in the ordinary course of
its business for fair value and on an arm's-length basis, (b) so long as no
Event of Default or, subject to the terms of Section 6.13, no NPC Bankruptcy
Event, has occurred and is continuing, any portion of the Collateral
constituting machinery, fixtures, equipment or motor vehicles owned by such
Grantor which has become worn out or obsolete and which has been replaced by
other machinery, fixtures, equipment or motor vehicles subject to the Lien of
this Agreement or any Mortgage having a utility and value at least equal to
that, at the time of removal, of the machinery, fixtures, equipment or motor
vehicles so removed, provided that such removal and replacement is permitted by
each of Section 6.07 of the Credit Agreement and Section 10.07 of the Note
Agreement and (c) dispositions permitted under Sections 6.06 and 6.07 of the
Credit Agreement and Sections 10.6 and 10.7 of the Note Agreement (other than
dispositions of inventory and dispositions of worn out or obsolete property of
the type referred to in clause (b) above) upon which occurrence pursuant to
clause (a), (b) or (c) above (with respect to clause (c), only if such Grantor
is in compliance with Sections 6.06 and 6.07 of the Credit Agreement, as the
case may be, and Sections 10.6 and 10.7 of the Note Agreement, as the case may
be, to the extent such provisions are applicable to such transactions), the
Required Lenders and Required Holders will instruct the Trustee to grant a
release thereof from the Lien and security interest granted pursuant to this
Agreement; provided that nothing contained herein shall limit the Liens and
security interests granted in the proceeds thereof. The inclusion of Proceeds of
the Collateral under the security interests granted hereby shall not be deemed a
consent by the Trustee to any sale or disposition of any Collateral other than
as permitted by this Section 4.13.
SECTION 4.14. Periodic Certification. Within 90 days after the Closing
Date, the Borrower shall deliver to the Trustee a certificate executed by a
financial officer of the Borrower setting forth, with respect to each filing,
recording or registration contemplated by Section 4.01, the filing office, date
and file number thereof and attaching true, correct and complete acknowledgement
copies of each such filing,
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recording or registration. Each year, at the time of delivery of annual
financial statements with respect to the preceding fiscal year pursuant to
Section 5.02(b) of the Credit Agreement or Section 7 of the Note Agreement, the
Borrower shall deliver to the Trustee a certificate executed by a financial
officer of the Borrower (a) setting forth the information required pursuant to
Section 2 of the Perfection Certificate, (b) certifying that all UCC financing
statements or other appropriate filings, recordings or registrations, including
all refilings, rerecordings and reregistrations, containing a description of the
Collateral have been filed of record in each governmental, municipal or other
appropriate office in each jurisdiction identified pursuant to clause (a) above
to the extent necessary to protect and perfect the security interest created
under Section 2.01 for a period of not less than 18 months after the date of
such certificate and (c) certifying that the Borrower and each Grantor have
complied with all actions required to be taken by the Borrower or such Grantor
under Section 4.02(a)(i).
SECTION 4.15. Notices. Each Grantor will advise the Trustee promptly and in
reasonable detail (a) of any security interest, encumbrance or claim made or
other Lien asserted against any of the Collateral of which any Responsible
Officer of any Grantor has knowledge, (b) of any material adverse change in the
composition of the Collateral and (c) of the occurrence of any other event which
would have a material adverse effect on the aggregate value of the Collateral or
on the security interests granted to the Trustee in this Agreement.
SECTION 4.16. Change of Law. Each Grantor shall promptly notify the Trustee
in writing of any change in law known to it which (i) adversely affects or will
adversely affect the validity, perfection or priority of the security interests
granted hereby, (ii) requires or will require a change in the procedures to be
followed in order to maintain and protect such validity, perfection and priority
or (iii) could result in the Trustee not having a perfected security interest in
any of the Collateral.
SECTION 4.17. Right of Inspection. Each Grantor shall permit any Persons
designated by the Trustee or any Secured Party to visit and inspect the
Collateral, at the expense of such Grantor during the occurrence and
continuation of any Event of Default or Default or NPC Bankruptcy Event, and
otherwise at the expense of such Secured Party and such Grantor shall permit any
Persons designated by the Trustee or any Secured Party to inspect its books of
account, records, reports and other papers, to make copies or extracts
therefrom, and to discuss the affairs, finances and accounts of such Grantor
with the officers and employees of such Grantor (or of the general partner or
general partners of such Grantor if applicable) and representatives of any firm
of independent public accountants employed by such Grantor (and by this
provision such Grantor authorizes said accountants to discuss the finances and
affairs of such Grantor with any such designated Person), each during normal
business hours and upon prior written notice.
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SECTION 4.18. Maintenance of Equipment. Except as provided in Section 4.13,
each Grantor will, at its expense, in all material respects maintain the
Equipment in standard industry operating condition, ordinary wear and tear
excepted.
SECTION 4.19. Covenants Regarding Patent, Trademark and Copyright
Collateral. (a) Each Grantor (either itself or through its licensees or its
sublicensees) will, for each Trademark material to the conduct of such Grantor's
business, (i) maintain such Trademark in full force free from any claim of
abandonment or invalidity for non-use, (ii) maintain the quality of products and
services offered under such Trademark, (iii) display such Trademark with notice
of federal registration to the extent required by applicable law and (iv) not
knowingly use or knowingly permit the use of such Trademark in violation of any
valid and enforceable third party rights.
(b) Each Grantor (either itself or through licensees) will, for each
Patent, not do any act, or omit to do any act, whereby any Patent which is
material to the conduct of such Grantor's business may become invalidated or
dedicated to the public, and shall continue to mark any products covered by a
Patent with the relevant patent number to the extent required by the Patent
laws.
(c) Each Grantor (either itself or through licensees) will, for each work
covered by a material Copyright, continue to publish, reproduce, display, adopt
and distribute the work with appropriate copyright notice to the extent required
under the copyright laws.
(d) Each Grantor shall notify the Trustee in writing promptly if it knows
or has reason to know that any Patent, Trademark or Copyright material to the
conduct of its business is reasonably likely to become abandoned or dedicated to
the public, or of any material adverse determination or development (including
the institution of, or any such determination or development in, any proceeding
in the United States Patent and Trademark Office, United States Copyright Office
or any court) regarding such Grantor's ownership of any material Patent,
Trademark or Copyright, its right to register the same, or to keep and maintain
the same.
(e) In no event shall any Grantor, either itself or through any agent,
employee, licensee or designee, file an application for any Patent, Trademark or
Copyright with the United States Patent and Trademark Office, United States
Copyright Office or any office or agency in any political subdivision of the
United States or in any other country or any political subdivision thereof,
unless it promptly informs the Trustee in writing, and executes and delivers any
and all agreements, instruments, documents and papers as may be required or the
Trustee may reasonably request to evidence the Trustee's security interest in
such Patent, Trademark or Copyright of such Grantor relating thereto or
represented thereby, and each Grantor hereby appoints the Trustee its
attorney-in-fact to execute and file such writings for the foregoing purposes if
Grantor fails to do so, all acts of such attorney being hereby ratified and
confirmed; such power, being coupled with an interest, is irrevocable until the
Secured Obligations
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are indefeasibly paid in full in cash, the Commitments are terminated, all
Letters of Credit are cancelled or expired, all Letter of Credit Disbursements
are reimbursed in full and all terms and conditions hereof, the Credit
Agreement, the Mortgage Notes, the Mortgages, the Note Agreement and all other
documents or agreements governing the Secured Obligations have been satisfied.
(f) Each Grantor will take all necessary steps as it deems appropriate
under the circumstances in any proceeding before the United States Patent and
Trademark Office, United States Copyright Office or any office or agency in any
political subdivision of the United States or in any other country or any
political subdivision thereof, to maintain and pursue each material application
relating to the Patents, Trademarks and/or Copyrights (and to obtain the
relevant grant or registration) and to maintain to the extent permitted by law
each Patent, and the registration of the Trademarks and Copyrights which is
material to the conduct of such Grantor's business, including the filing of
applications for renewal, affidavits of use, affidavits of incontestability and
maintenance fees, and, if consistent with its good business judgment, to
initiate opposition, interference and cancellation proceedings against third
parties.
(g) In the event that any Collateral consisting of a Patent, Trademark or
Copyright material to the conduct of any Grantor's business is infringed,
misappropriated or diluted by a third party, such Grantor shall notify the
Trustee promptly after it learns thereof and shall, if consistent with its good
business judgment, promptly sue for infringement, misappropriation or dilution
and to recover any and all damages for such infringement, misappropriation or
dilution, and take such other actions as are appropriate under the circumstances
in its reasonable business judgment to protect such Collateral.
SECTION 4.20. Reimbursement Obligation. Should any Grantor fail to comply
with the provisions of this Agreement or any other agreement relating to the
Collateral such that the value of any Collateral or the validity, perfection,
rank or value of any security interest granted to the Trustee hereunder or
thereunder is thereby diminished or potentially diminished or put at risk (as
reasonably determined by the Trustee), the Trustee on behalf of such Grantor
may, but shall not be required to, effect such compliance on behalf of such
Grantor, and such Grantor shall reimburse the Trustee for the costs thereof on
demand, and interest shall accrue on any such unpaid reimbursement obligation
from the date the relevant costs are incurred until reimbursement thereof in
full at the default rate provided in Section 2.07 of the Credit Agreement, or if
the Credit Agreement is no longer effective, at the default rate provided in the
Mortgage Notes.
SECTION 4.21. Bank Accounts. (a) As of the Closing Date, each Grantor shall
have complied with Section 4.01(e) and will deliver to the Trustee a complete
set of Agency Account Agreements covering the accounts referred to in Section
4.01(e) in accordance with the terms thereof.
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(b) The Grantors (other than National Propane Corp.) will not establish
after the date hereof any collection, operating, investment (including any
account to be used to hold or trade Cash Equivalents) or other type of account
relating in any way to the Assets or the Business without immediately covering
such account with an Agency Account Agreement; provided, however, that such
Grantors shall be permitted to establish local operating accounts in accordance
with the standard operating practice of the Business without regard to the
foregoing so long as the maximum deposit held at any one time in any such
account shall not exceed $100,000, or $250,000 in the aggregate in all such
accounts. The Grantors will not use any collection, operating, investment or
other type of account for any purpose not identified on Schedule 12.
SECTION 4.22. Amendments to Schedules. Each Grantor has a continuing
obligation hereunder to amend, revise and update, as need be, any and all
schedules hereto so that such schedules accurately reflect the information set
forth therein.
SECTION 4.23. Motor Vehicles and Other Rolling Stock. Within six calendar
months after the Closing Date, the Borrower and each other Grantor shall have
complied with Section 4.01(c) and shall have delivered to the Trustee a complete
set of certificates of title to all of the motor vehicles and other rolling
stock evidencing the perfected security interests of the Trustee.
SECTION 4.24. Covenants Regarding Triarc Note. The Borrower covenants and
agrees that the Trustee shall have the right, at the option of the Required
Lenders and the Required Holders, to exercise all of its remedies under the
Triarc Note upon the occurrence of a default or event of default in the terms
thereof.
ARTICLE V
DISTRIBUTIONS ON PLEDGED SECURITIES; VOTING
SECTION 5.01 Right to Receive Distributions on Pledged Collateral; Voting.
(a) So long as no Event of Default, or, subject to Section 6.13, no NPC
Bankruptcy Event, shall have occurred and be continuing:
(i) Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Interests or any part
thereof for any purpose permitted by the terms of this Agreement, the
Credit Agreement and the Note Agreement.
(ii) Each Grantor shall be entitled to receive, retain, distribute,
use and otherwise dispose of any and all dividends, distributions, interest
and principal paid in cash on (A) the Triarc Note and (B) the other Pledged
Securities to the extent and only to the extent that such cash dividends,
interest, distributions and principal are permitted by, and otherwise paid
in accordance
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with, the terms and conditions of the Credit Agreement and the Note
Agreement and applicable laws. Other than pursuant to the first sentence of
this paragraph (a)(ii), all principal, all noncash dividends,
distributions, interest and principal, and all dividends, distributions,
interest and principal paid or payable in cash or otherwise in connection
with a partial or total liquidation or dissolution, return of capital,
capital surplus or paid-in surplus, and all other distributions made on or
in respect of Pledged Securities, whether paid or payable in cash or
otherwise, whether resulting from a subdivision, combination or
reclassification of the outstanding Capital Stock of the issuer of any
Pledged Securities or received in exchange for Pledged Securities or any
part thereof, or in redemption thereof, or as a result of any merger,
consolidation, acquisition or other exchange of assets to which such issuer
may be a party or otherwise, shall be and become part of the Collateral,
and, if received by a Grantor, shall not be commingled by such Grantor with
any of its other funds or property but shall be held separate and apart
therefrom, shall be held in trust for the benefit of the Trustee and shall
be forthwith delivered to the Trustee in the form in which received (with
any necessary endorsement).
(iii) The Trustee shall execute and deliver (or cause to be executed
and delivered) to each Grantor all such proxies, powers of attorney,
consents, ratifications and waivers and other instruments as each Grantor
may reasonably request for the purpose of enabling each Grantor to exercise
the voting and other rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends, interest or other
payments which it is authorized to receive and retain pursuant to paragraph
(ii) above.
(b) Upon the occurrence and during the continuance of an Event of Default
or, subject to the terms of Section 6.13, if any NPC Bankruptcy Event occurs:
(i) All rights of any Grantor to receive the dividends, distributions
and interest or other payments which it would otherwise be authorized to
receive and retain pursuant to Section 5.01(a)(ii) shall cease, and all
such rights shall thereupon become vested in the Trustee which shall
thereupon have the sole right to receive and hold as Collateral such
dividends, distributions and interest or other payments.
(ii) All dividends, distributions and interest or other payments which
are received by any Grantor contrary to the provisions of paragraph (i) of
this Section 5.01(b) shall be received in trust for the benefit of the
Trustee, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Trustee as Collateral in the same form as so
received (with any necessary endorsement).
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(c) Upon the occurrence and during the continuance of an Event of Default
or, subject to the terms of Section 6.13, if any NPC Bankruptcy Event occurs and
upon notice by the Trustee to the Borrower, all rights of each Grantor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 5.01(a)(i) shall cease, and all such
rights shall thereupon become vested in the Trustee, which shall thereupon have
the sole right, but not the obligation, to exercise such voting and other
consensual rights.
ARTICLE VI
REMEDIES; RIGHTS UPON DEFAULT
SECTION 6.01. UCC Rights. If any Event of Default shall have occurred and
be continuing, or, subject to the terms of Section 6.13, if any NPC Bankruptcy
Event, occurs, the Trustee may, in addition to all other rights and remedies
granted to it in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Secured Obligations, exercise all rights
and remedies of a secured party under the UCC and all other rights available to
the Trustee at law or in equity.
SECTION 6.02. Payments on Collateral. Without limiting the rights of the
Trustee under any other provision of this Agreement, if an Event of Default
shall occur and be continuing or, subject to the terms of Section 6.13, if any
NPC Bankruptcy Event occurs:
(a) The Trustee may, or upon the request of the Trustee each Grantor
shall, notify Account Debtors obligated to make payments under any or all
Receivables or General Intangibles that the Trustee and the other Secured
Parties have a security interest in such Collateral and that payments shall
be made directly to, or to a Cash Collateral Account designated by, the
Trustee. Each Grantor will use all reasonable efforts to cause each Account
Debtor to comply with the foregoing instruction. In furtherance of the
foregoing, each Grantor authorizes the Trustee (i) to ask for, demand,
collect, receive and give acquittances and receipts for any and all amounts
due and to become due under any Collateral and, in the name of such Grantor
or its own name or otherwise, (ii) to take possession of, endorse and
collect any checks, drafts, notes, acceptances or other instruments for the
payment of moneys due under any Collateral and (iii) to file any claim or
take any other action in any court of law or equity or otherwise which it
may deem appropriate for the purpose of collecting any amounts due under
any Collateral. The Trustee shall have no obligation to obtain or record
any information relating to the source of such funds or the obligations in
respect of which payments have been made;
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(b) all payments received by any Grantor under or in connection with
any of the Collateral shall be held by such Grantor in trust for the
Trustee, shall be segregated from other funds of such Grantor and shall
forthwith upon receipt by such Grantor be turned over to the Trustee, in
the same form as received by such Grantor (duly indorsed by each Grantor to
the Trustee, if required to permit collection thereof by the Trustee); and
(c) all such payments received by the Trustee (whether from a Grantor
or otherwise) may, in the sole discretion of the Trustee, be held by the
Trustee as collateral security for, and/or then or at any time thereafter
applied in whole or in part by the Trustee to the payment of the expenses
and Secured Obligations as set forth in Section 6.11.
SECTION 6.03. Possession of Collateral. In furtherance of the foregoing,
each Grantor expressly agrees that, if an Event of Default shall occur and be
continuing or, subject to the terms of Section 6.13, if any NPC Bankruptcy Event
occurs, the Trustee may (a) by judicial powers, or without judicial process if
it can be done without breach of the peace, enter any premises where any of such
Collateral is or may be located, and without charge or liability to the Trustee
seize and remove such Collateral from such premises and (b) have access to and
use of such Grantor's Documents.
SECTION 6.04. Sale of Collateral. (a) Each Grantor expressly agrees that if
an Event of Default or, subject to Section 6.13, any NPC Bankruptcy Event shall
occur and be continuing, the Trustee, without demand of performance or other
demand or notice of any kind (except the notice specified below of the time and
place of any public or private sale) to any Grantor or any other Person (all of
which demands and/or notices are hereby waived by each Grantor), may forthwith
collect, receive, appropriate and realize upon the Collateral and/or forthwith
sell, lease, assign, give an option or options to purchase or otherwise dispose
of and deliver the Collateral (or contract to do so) or any part thereof in one
or more parcels at public or private sale, at any exchange, broker's board or at
any office of the Trustee or elsewhere in such manner as is commercially
reasonable and as the Trustee may deem best, for cash or on credit or for future
delivery without assumption of any credit risk. The Trustee or any Secured Party
shall have the right upon any such public sale and, to the extent permitted by
law, upon any such private sale, to purchase the whole or any part of the
Collateral so sold. In the event that an Event of Default occurs and is
continuing or, subject to the terms of Section 6.13, if any NPC Bankruptcy Event
occurs, each Grantor further agrees, at the Trustee's request, to assemble the
Collateral, and to make it available to the Trustee at places which the Trustee
may reasonably select. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands against the Trustee or any Secured Party
arising out of the foreclosure, repossession, retention or sale of the
Collateral.
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(b) Unless the Collateral threatens to decline speedily in value, the
Trustee shall give Grantor five Business Days' written notice of its intention
to make any such public or private sale or sale at a broker's board or on a
securities exchange. Such notice shall (i) in the case of a public sale, state
the time and place fixed for such sale, (ii) in the case of a sale at a broker's
board or on a securities exchange, state the board or exchange at which such
sale is to be made and the day on which the Collateral, or any portion thereof
being sold, will first be offered for sale and (iii) in the case of a private
sale, state the day after which such sale may be consummated. The Trustee shall
not be required or obligated to make any such sale pursuant to any such notice.
The Trustee may adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In the case of any sale of all or any part of the Collateral for
credit or for future delivery, the Collateral so sold may be retained by the
Trustee until the selling price is paid by the purchaser thereof, but the
Trustee shall not incur any liability in case of failure of such purchaser to
pay for the Collateral so sold and, in the case of such failure, such Collateral
may again be sold upon like notice.
SECTION 6.05. Rights of Purchasers. Upon any sale of the Collateral
(whether public or private), the Trustee shall have the right to deliver, assign
and transfer to the purchaser thereof the Collateral so sold. Each purchaser
(including the Trustee and the other Secured Parties) at any such sale shall
hold the Collateral so sold free from any claim or right of whatever kind,
including any equity or right of redemption of any Grantor but subject to the
rights of existing Licensees of the Collateral, and each Grantor, to the extent
permitted by law, hereby specifically waives all rights of redemption, including
the right to redeem the Collateral under ss. 9-506 of the UCC, and any right to
a judicial or other stay or approval which it has or may have under any law now
existing or hereafter adopted.
SECTION 6.06. Additional Rights of the Trustee. Upon the occurrence and
during the continuance of an Event of Default or, subject to the terms of
Section 6.13, if any NPC Bankruptcy Event occurs:
(a) The Trustee shall have the right and power to institute and maintain
such suits and proceedings as it may deem appropriate to protect and enforce the
rights vested in it by this Agreement and may proceed by suit or suits at law or
in equity to enforce such rights and to foreclose upon and sell the Collateral
or any part thereof pursuant to the judgment or decree of a court of competent
jurisdiction.
(b) The Trustee shall, to the extent permitted by law and without regard to
the solvency or insolvency at the time of any Person then liable for the payment
of any of the Secured Obligations or the then value of the Collateral, and
without requiring any bond from any party to such proceedings, be entitled to
the appointment of a special receiver or receivers (who may be the Trustee or
any other Secured Party) for the Collateral or any part thereof and for the
rents, issues, tolls, profits, royalties,
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revenues and other income therefrom, which receiver shall have such powers as
the court making such appointment shall confer, and to the entry of an order
directing that the rents, issues, tolls, profits, royalties, revenues and other
income of the property constituting the whole or any part of the Collateral be
segregated, sequestered and impounded for the benefit of the Trustee and the
other Secured Parties, and each Grantor irrevocably consents to the appointment
of such receiver or receivers and to the entry of such order.
SECTION 6.07. Securities Act, etc. In view of the position of the
applicable Grantor in relation to its Pledged Securities, or because of other
present or future circumstances, a question may arise under the Securities Act
of 1933, as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being herein called the "Federal Securities Laws" and
together with applicable Blue Sky or other state securities laws or similar laws
analogous in purpose or effect being herein called the "Securities Laws"), with
respect to any disposition of the Pledged Securities permitted hereunder. Each
Grantor understands that compliance with the Securities Laws might very strictly
limit the course of conduct of the Trustee if the Trustee were to attempt to
dispose of all or any part of the Pledged Securities, and might also limit the
extent to which or the manner in which any subsequent transferee of any such
Pledged Securities could dispose of the same.
Accordingly, each Grantor expressly agrees that the Trustee is authorized,
in connection with any sale of the Pledged Securities, if the Trustee deems it
advisable so to do, (i) to restrict the prospective bidders on or purchasers of
any of the Pledged Securities to a limited number of sophisticated investors who
will represent and agree that they are purchasing for their own account for
investment and not with a view to the distribution or sale of any of such
Pledged Securities, (ii) to cause to be placed on certificates for any or all of
the Pledged Securities or on any other securities pledged hereunder a legend to
the effect that such security has not been registered under the Securities Laws
and may not be disposed of in violation of any provision of the Securities Laws
and (iii) to impose such other limitations or conditions in connection with any
such sale as the Trustee deems necessary or advisable in order to enable the
Trustee to qualify for an exception from and/or comply with the Securities Laws
or any other law. Each Grantor covenants and agrees that it will execute and
deliver such documents and take such other action as the Trustee deems necessary
or advisable in order to comply with the Securities Laws or any other law. Each
Grantor acknowledges and agrees that such limitations may result in prices and
other terms less favorable to the seller than if such limitations were not
imposed, and, notwithstanding such limitations, agrees that any such sale shall
be deemed to have been made in a commercially reasonable manner, it being the
agreement of each Grantor, the Trustee and the other Secured Parties that the
provisions of this Section 6.07 will apply notwithstanding the existence of a
public or private market upon which the quotations or sales prices may exceed
substantially the price at which the Trustee sells the Pledged Securities. The
Trustee shall be under no obligation to delay a sale of any
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Pledged Securities for a period of time necessary to permit the issuer of any
securities contained therein to register such securities under the Securities
Laws, or under applicable state securities laws, even if the issuer would agree
to do so.
SECTION 6.08. Remedies Not Exclusive. (a) No remedy conferred upon or
reserved to the Trustee in this Agreement is intended to be exclusive of any
other remedy or remedies, but every such remedy shall be cumulative and shall be
in addition to every other remedy conferred herein or now or hereafter existing
at law, in equity or by statute.
(b) If the Trustee shall have proceeded to enforce any right, remedy or
power under this Agreement and the proceeding for the enforcement thereof shall
have been discontinued or abandoned for any reason or shall have been determined
adversely to the Trustee, each Grantor and the Trustee shall, subject to any
determination in such proceeding, severally and respectively be restored to
their former positions and rights under this Agreement, and thereafter all
rights, remedies and powers of the Trustee shall continue as though no such
proceedings had been taken.
(c) All rights of action under this Agreement may be enforced by the
Trustee without the possession of any instrument evidencing any Secured
Obligation or the production thereof at any trial or other proceeding relative
thereto, and any suit or proceeding instituted by the Trustee shall be brought
in its name and any judgment shall be held as part of the Collateral.
SECTION 6.09. Waiver and Estoppel. (a) Each Grantor, to the extent it may
lawfully do so, agrees that it will not at any time in any manner whatsoever
claim or take the benefit or advantage of any appraisement, valuation, stay,
extension, moratorium, turnover or redemption law, or any law now or hereafter
in force permitting it to direct the order in which the Collateral shall be sold
which may delay, prevent or otherwise affect the performance or enforcement of
this Agreement and each Grantor hereby waives the benefits or advantage of all
such laws, and covenants that it will not hinder, delay or impede the execution
of any power granted to the Trustee in this Agreement but will permit the
execution of every such power as though no such law were in force; provided that
nothing contained in this Section 6.09 shall be construed as a waiver of any
rights of such Grantor under any applicable federal or state bankruptcy law.
(b) Each Grantor, to the extent it may lawfully do so, on behalf of itself
and all who may claim through or under it, including any and all subsequent
creditors, vendees, assignees and lienors, waives and releases all rights to
demand or to have any marshalling of the Collateral upon any sale, whether made
under any power of sale granted herein or pursuant to judicial proceedings or
upon any foreclosure or any enforcement of this Agreement and consents and
agrees that all of the Collateral may at any such sale be offered and sold as an
entirety.
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(c) Each Grantor, to the extent it may lawfully do so, waives presentment,
demand, protest and any notice of any kind (except notices explicitly required
hereunder) in connection with this Agreement and any action taken by the Trustee
with respect to the Collateral.
SECTION 6.10. Power of Attorney. Each Grantor hereby irrevocably
constitutes and appoints the Trustee, with full power of substitution, as its
true and lawful attorney-in-fact with full irrevocable power and authority in
the place and stead of such Grantor and in the name of such Grantor or in its
own name, from time to time in the Trustee's reasonable discretion for the
purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Agreement and,
without limiting the generality of the foregoing, hereby gives the Trustee the
power and right, on behalf of such Grantor, without notice to or assent by such
Grantor to do the following:
(i) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral if
the Grantor shall fail to do so after notice thereof;
(ii) to effect any repairs or any insurance called for by the terms of
this Agreement and to pay all or any part of the premiums therefor and the
costs thereof; and
(iii) upon the occurrence and during the continuance of any Event of
Default or, subject to the terms of Section 6.13, if any NPC Bankruptcy
Event occurs, and otherwise to the extent provided in this Agreement, (A)
to direct any party liable for any payment under any of the Collateral to
make payment of any and all moneys due and to come due thereunder directly
to the Trustee or as the Trustee shall direct; (B) to receive payment of
and receipt for any and all moneys, claims and other amounts due and to
become due at any time in respect of or arising out of any Collateral; (C)
to sign and indorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications and notices in connection with accounts and other documents
relating to the Collateral; (D) to commence and prosecute any suits,
actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any
other right in respect of any Collateral (other than in connection with any
action brought by any Grantor against the Trustee or any Secured Party or
by the Trustee or any Secured Party against any Grantor); (E) to defend any
suit, action or proceeding brought against such Grantor with respect to any
Collateral (other than in connection with any action brought by any Grantor
against the Trustee or any Secured Party or by the Trustee or any Secured
Party against any Grantor); (F) to settle, compromise and adjust any suit,
action or proceeding described above and, in connection therewith, to give
such discharges or releases as the
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Trustee may deem appropriate (other than in connection with any action
brought by any Grantor against the Trustee or any Secured Party or by the
Trustee or any Secured Party against any Grantor); (G) to assign any
Patent, Trademark or Copyright (along with the goodwill of the business to
which such Trademark pertains), for such term or terms, on such conditions,
and in such manner, as the Trustee shall in its sole discretion determine;
(H) to license or, to the extent permitted by any applicable law,
sub-license, whether general, special or otherwise, and whether on an
exclusive or non-exclusive basis, any Patent, Trademark or Copyright,
throughout the world for such term or terms, on such conditions, and in
such manner, as the Trustee shall determine (other than in violation of any
then existing licensing arrangements to the extent that waivers or other
adequate provision cannot be secured therefor); and (I) subject to the
provisions of this Agreement, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the Collateral as
fully and completely as though the Trustee were the absolute owner thereof
for all purposes, and to do, at the option of the Trustee and each
Grantor's expense, at any time, or from time to time, all acts and things
which the Trustee deems necessary to protect, preserve or realize upon the
Collateral and the Trustee's security interest therein, in order to effect
the intent of this Agreement, all as fully and effectively as such Grantor
might do.
Each Grantor hereby ratifies all that such attorneys shall, in accordance
with this Agreement, lawfully do or cause to be done by virtue hereof. This
power of attorney is a power coupled with an interest and shall be irrevocable.
Except as provided for by law or the UCC or its equivalent, nothing herein
contained shall be construed as requiring or obligating the Trustee to make any
commitment or to make any inquiry as to the nature or sufficiency of any payment
received by the Trustee, or to present or file any claim or notice, or to take
any action with respect to the Collateral or any part thereof or the moneys due
or to become due in respect thereof or any property covered thereby, and no
action taken by the Trustee or omitted to be taken with respect to the
Collateral or any part thereof shall give rise to any defense, counterclaim or
offset in favor of any Grantor or to any claim or action against the Trustee. It
is understood and agreed that the appointment of the Trustee as the agent of
each Grantor for the purposes set forth above in this Section 6.10 is coupled
with an interest and is irrevocable. The provisions of this Section 6.10 shall
in no event relieve any Grantor of any of its obligations hereunder with respect
to the Collateral or any part thereof or impose any obligation on the Trustee to
proceed in any particular manner with respect to the Collateral or any part
thereof, or in any way limit the exercise by the Trustee of any other or further
right which it may have on the date of this Agreement or hereafter, whether
hereunder or by law or otherwise.
SECTION 6.11. Application of Proceeds. The Trustee shall apply the proceeds
of any collection, sale or other disposition of the Collateral as provided in
the Trust Agreement. The Trustee shall have absolute discretion as to the time
of
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application of any such proceeds, moneys or balances subject to, and in
accordance with, this Agreement and the Trust Agreement. Upon any sale of the
Collateral by the Trustee (including pursuant to a power of sale granted by
statute or under a judicial proceeding), the receipt of the Trustee or of the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Trustee or such officer or be answerable in any way for the
misapplication thereof.
SECTION 6.12. Grant of License or Sub-License to Use Patent, Trademark,
Copyright and License Collateral. For the purpose of enabling the Trustee to
exercise rights and remedies under this Article VI at such time as the Trustee
shall be lawfully entitled to exercise such rights and remedies, each Grantor
hereby grants to Trustee an irrevocable, non-exclusive license (exercisable
without payment of royalty or other compensation to such Grantor) to use,
license or sub-license any Patent, Trademark, Copyright or, to the extent such
sub-license may be granted pursuant to the terms of the relevant License,
License now owned or licensed or hereafter acquired or licensed by such Grantor,
and wherever the same may be located, and including in such license reasonable
access to all media in which any of the licensed items may be recorded or stored
and to all computer software and programs used for the compilation or printout
thereof. The use of such license or sub-license by the Trustee shall be
exercised, at the option of the Trustee, upon the occurrence and the
continuation of an Event of Default, and, subject to Section 6.13, any NPC
Bankruptcy Event; provided that any license, sub-license or other transaction
entered into by the Trustee in accordance herewith shall be binding upon the
applicable Grantor notwithstanding any subsequent cure of an Event of Default or
NPC Bankruptcy Event. The Trustee agrees to apply the net proceeds received from
any such license as provided in Section 6.11 hereof.
SECTION 6.13. NPC Bankruptcy Event. Upon the occurrence of any NPC
Bankruptcy Event, if no Event of Default has occurred and is continuing, the
Trustee's rights to proceed against Collateral under this Article VI shall be
limited to that portion of the Collateral that is owned by National Propane
Corp. or in which National Propane Corp. has any rights or claims. Upon the
occurrence of any NPC Bankruptcy Event, if an Event of Default has occurred and
is continuing, then the Trustee, at the option of the Lenders and the
Noteholders, may exercise all rights and remedies available upon the occurrence
and during the continuance of an Event of Default.
SECTION 6.14. Trust Agreement. The terms of this Article VI are subject to
the terms and conditions of Section 3 of the Trust Agreement.
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ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Notices. Unless otherwise specified herein, all notices,
requests or other communications to any party hereunder shall be made pursuant
to Section 18 of the Trust Agreement.
SECTION 7.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by each Grantor herein and in the written
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Trustee and the Secured Parties and shall survive the making by the Lenders of
the Loans and the purchase by the Noteholders of the Mortgage Notes and the
execution and delivery to the Lenders of the Notes evidencing such Loans and the
issuance of the Mortgage Notes, regardless of any investigation made by the
Lenders or the Noteholders or on their behalf, and shall continue in full force
and effect until the Secured Obligations have been indefeasibly paid in full in
cash, the Commitments have been terminated, all Letters of Credit have been
cancelled or have expired, all Letter of Credit Disbursements have been
reimbursed in full and all terms and conditions hereof, the Credit Agreement,
the Notes, the Mortgage Notes, the Note Agreement and all other documents or
agreements governing the Secured Obligations have been satisfied. This Agreement
shall terminate when the security interests granted hereunder have terminated
and the Collateral has been released as provided in Section 2.08(b); provided
that the obligations of each Grantor under Section 4.20 shall survive any such
termination.
SECTION 7.03. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument. This Agreement shall be
effective with respect to any Grantor when a counterpart hereof (or of the
applicable Supplemental Agreement) which bears the signature of such Grantor
shall have been delivered to the Trustee.
SECTION 7.04. Amendments, Etc. No amendment, modification or waiver of any
provision of this Agreement and no consent to any departure by any Grantor
therefrom shall in any event be effective unless the same shall be in writing
and shall be executed and delivered in accordance with Section 8 of the Trust
Agreement, and then such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, however, that this Agreement may be amended, modified or waived
with respect to any Grantor, including by releasing any Grantor hereunder,
without the approval of any other Grantor and without affecting the obligations
of any other Grantor hereunder.
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SECTION 7.05. Assignments. This Agreement and the terms, covenants and
conditions hereof shall be binding upon each Grantor and its successors and
shall inure to the benefit of the Trustee and the Secured Parties and their
respective successors and permitted assigns. Upon (i) the assignment by any
Lender of all or any portion of its rights and obligations under the Credit
Agreement (including all or any portion of its Commitment, the Loans owing to it
and the Note or Notes held by it) to any other Person, (ii) the sale, transfer,
exchange or other disposition of a Mortgage Note by the corresponding Noteholder
thereof to any other Person or (iii) the assignment by any other holder of
Parity Debt of all or any portion of its rights and obligations under such
Parity Debt to any other Person, such other Person shall thereupon become vested
with all the benefits in respect thereof granted to such transferor or assignor
herein or otherwise. None of the Grantors shall be permitted to assign, transfer
or delegate any of its rights or obligations under this Agreement without the
prior written consent of the Trustee (and any such purported assignment,
transfer or delegation without such consent shall be void), except as may be
expressly permitted by the Credit Agreement and the Note Agreement.
SECTION 7.06. Savings Clause. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect with respect to any Grantor, no party hereto shall
be required to comply with such provision with respect to such Grantor for so
long as such provision is held to be invalid, illegal or unenforceable, and the
validity, legality and enforceability of the remaining provisions contained
herein, and of such invalid, illegal or unenforceable provision with respect to
any other Grantor, shall not in any way be affected or impaired. The parties
shall endeavor in good-faith negotiations to replace any invalid, illegal or
unenforceable provisions with valid provisions, the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.
SECTION 7.07. Supplemental Agreement. Upon execution and delivery by the
Trustee and a Restricted Subsidiary of a Supplemental Agreement substantially in
the form of Exhibit L to the Credit Agreement and Exhibit Q to the Note
Agreement, such Restricted Subsidiary shall become a Grantor hereunder with the
same force and effect as if originally named as a Grantor herein. The execution
and delivery of any such instrument shall not require the consent of any other
Grantor hereunder. The rights and obligations of each Grantor hereunder shall
remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Agreement.
SECTION 7.08. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES OF SUCH STATE.
SECTION 7.09. Entire Agreement. This Agreement, the other Loan Documents
and the other Operative Agreements constitute the entire contract between the
parties relative to the subject matter hereof. Any agreement previously entered
into
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among the parties with respect to the subject matter hereof is superseded by
this Agreement, the other Loan Documents and the other Operative Agreements.
Nothing in this Agreement, expressed or implied, is intended to confer upon any
party other than the parties hereto and the Secured Parties, any rights,
remedies, obligations or liabilities under or by reason of this Agreement.
SECTION 7.10. No Waiver; Remedies. No failure on the part of the Trustee or
any Secured Party to exercise, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy by such Person preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. All remedies hereunder, under the Loan Documents and the other Operative
Agreements are cumulative and are not exclusive of any other remedies provided
by law.
SECTION 7.11. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 7.12. Submission to Jurisdiction. For the purpose of assuring that
the Trustee or any Secured Party may enforce its rights under this Agreement,
each Grantor and the Trustee, for itself and its successors and assigns, hereby,
to the fullest extent permitted by applicable law, irrevocably (a) agrees that
any legal or equitable action, suit or proceeding brought against it arising out
of or relating to this Agreement or any transaction contemplated hereby or the
subject matter of any of the foregoing or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be instituted in
any state or federal court sitting in the Borough of Manhattan, State of New
York, (b) waives any objection which it may now or hereafter have to the laying
of venue of any such action, suit or proceeding brought in any such court, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum, or any right to require the proceeding to
be conducted in any other jurisdiction by reason of its present or future
domicile, (c) irrevocably submits itself to the non-exclusive jurisdiction of
any state or federal court of competent jurisdiction sitting in the Borough of
Manhattan, State of New York, for purposes of any such action, suit or
proceeding, and (d) irrevocably waives any immunity from jurisdiction to which
it might otherwise be entitled in any such action, suit or proceeding which may
be instituted in any state or federal court sitting in the Borough of Manhattan,
State of New York, and irrevocably waives any immunity from, or objection to,
the maintaining of an action against it to enforce any judgment for money
obtained in any such action, suit or proceeding and any immunity from execution.
Each Grantor and the Trustee waives personal service of process and
consents that service of process upon it may be made by certified or registered
mail, return
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receipt requested, at its address specified or determined in accordance with the
provisions of Section 7.01, and service so made shall be deemed completed on the
third business day after mailing. Nothing contained in this Section 7.12 shall
be deemed to affect the right of any party to this Agreement to serve process in
any other manner permitted by law or to commence legal proceedings or otherwise
proceed against any party to this Agreement in any jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first written above.
Attest: NATIONAL PROPANE, L.P.
By: National Propane Corporation,
its managing general partner
By: __________________________ By:_________________________________
Name: Name:
Title: Title:
Address:
Telecopy Number:
Attest: NATIONAL PROPANE CORPORATION
By: __________________________ By:_________________________________
Name: Name:
Title: Title:
Address:
Telecopy Number:
THE BANK OF NEW YORK, not in its
individual capacity but solely as Trustee
By:_________________________________
Name:
Title:
Address: 101 Barclay Street
Floor 12 East
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New York, New York 10286
Telecopy Number: (212) 815-5999
44
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Schedule 1
CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS
Name Mailing Address County State
---- --------------- ------ -----
LOCATIONS OF RECORDS OF RECEIVABLES AND GENERAL INTANGIBLES
Name Mailing Address County State
---- --------------- ------ -----
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Schedule 2
PLEDGED INTERESTS
Part I List of Pledged Interests:
Ownership
Grantor Issuer Interests
------- ------ ---------
Part II List of Pledged Debt:
Grantor Debt Issuer Date of Issuance Outstanding Balance
------- ----------- ---------------- -------------------
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Schedule 3
LOCATIONS OF EQUIPMENT AND INVENTORY
Grantor Mailing Address County State
------- --------------- ------ -----
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Schedule 4
TRADE NAMES, DIVISION NAMES, ETC.
Grantor Trade Names, Division Names, Etc.
------- ---------------------------------
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Schedule 5
REQUIRED FILINGS AND RECORDINGS
Grantor UCC Filings & Locations Other Filings
------- ----------------------- -------------
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Schedule 6
PATENTS AND PATENT APPLICATIONS
Serial No. or Issue or
Grantor Patent No. Inventor County Filing Date
------- ---------- -------- ------ -----------
None
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Schedule 7
TRADEMARKS AND TRADEMARK APPLICATIONS
Serial No. or Issue or
Grantor Registration No. Country Filing Date Mark
------- ---------------- ------- ----------- ----
National Propane, 74/602,336 USA 11/22/94 NATIONAL*
LP THE
NATION'S
PROPANE
COMPANY
National Propane, 74/602,067 USA 11/22/94 GREEN*
L.P. FUELS
- ----------
* The Borrower has received office actions from the U.S. Patent and Trademark
Office preliminary rejecting each of these applications. The Borrowing is in the
process of preparing a response.
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Schedule 8
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Issue or
Grantor Registration No. Country Filing Date Mark
------- ---------------- ------- ----------- ----
None
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Schedule 9
LICENSES
Grantor Licenses
------- --------
None
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Schedule 10
MOTOR VEHICLES AND OTHER ROLLING STOCK
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Schedule 11
VESSELS AND AIRCRAFT
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Schedule 12
ACCOUNTS
Account
Grantor Financial Address of Financial
Purpose Institution Account No. Institution
- ------- ----------- ----------- -----------
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EXHIBIT A
to
Pledge and Security Agreement
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES PATENTS AND TRADEMARKS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, [NAME OF GRANTOR], a [Jurisdiction] [entity] (the
"Assignor"), having its chief executive office at ___________________________,
hereby assigns and grants to ________________________, as Trustee under the
Trust Agreement (in such capacity, the "Trustee"), with offices at
_________________________________, a security interest in (all of which are
herein collectively referred to as the "PTO Collateral") (i) all of the
Assignor's right, title and interest in and to the United States trademarks,
trademark registrations and trademark applications set forth on Schedule A
attached hereto (the "Marks"), (ii) all of the Assignor's right, title and
interest in and to the United States patents set forth on Schedule B attached
hereto (the "Patents"), in each case together with (iii) all Proceeds (as such
term is defined in the Security Agreement referred to below) and products of the
Marks and Patents, (iv) the goodwill of the businesses symbolized by the Marks
and (v) all causes of action arising prior to or after the date hereof for
infringement of any of the Marks and Patents or unfair competition regarding the
same.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all the Secured Obligations of the Assignor, as such term is defined
in the Security Agreement, dated as of ________________ ___, 1996, among the
Assignor, the Trustee and the other parties thereto (as amended, supplemented or
modified from time to time, the "Security Agreement"). Upon the satisfaction of
the conditions set forth in Section 2.08(b) of the Security Agreement, the
Trustee shall execute, acknowledge, and deliver to the Grantor an instrument in
writing releasing the security interest in the PTO Collateral acquired under
this Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security interest
granted to the Trustee for the benefit of the Secured Parties under the Security
Agreement. The rights and remedies of the Trustee with respect to the security
interest granted herein are without prejudice to, and are in addition to, those
set forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provision of this
Assignment is deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall govern.
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IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
_______ day of __________, 1996.
ATTEST: [NAME OF GRANTOR], as Assignor
______________________________ By:______________________________
Secretary Title:
[Corporate Seal]
ATTEST: _________________________________,
as Trustee
______________________________ By:______________________________
Secretary Title:
[Corporate Seal]
STATE OF _______________
___________ OF _________
The foregoing instrument was acknowledged before me this _______ day of
_________________, 19__ by ______________________________ as [title] of
_________________________________, a _____________________ corporation, on
behalf of the corporation.
My commission expires:
Notarial Seal
____________________________
Notary Public
2
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SCHEDULE A
TRADEMARKS AND TRADEMARK APPLICATIONS
Serial No. or Issue or
Registration No. Country Filing Date Mark
---------------- ------- ----------- ----
3
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SCHEDULE B
PATENTS AND PATENT APPLICATIONS
Serial No. or Issue or
Patent No. Inventor Country Filing Date Title
---------- -------- ------- ----------- -----
4
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EXHIBIT B
to
Pledge and Security Agreement
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, [NAME OF GRANTOR], a [Jurisdiction] corporation (the
"Assignor"), having its chief executive office at _____________________________,
hereby assigns and grants to ___________________________, as Trustee (in such
capacity, the "Trustee"), with offices at ______________________________, a
security interest in (all of which are herein collectively referred to as the
"Copyright Collateral") (i) all of the Assignor's right, title and interest in
and to the United States copyrights and associated United States copyright
registrations and applications for registration set forth in Schedule A attached
hereto (the "Copyrights"), (ii) all Proceeds (as such term is defined in the
Security Agreement referred to below) and products of the Copyrights, (iii) the
goodwill of the businesses symbolized by the Copyrights and (iv) all causes of
action arising prior to or after the date hereof for infringement of any of the
Copyrights.
THIS ASSIGNMENT is made to secure the full and prompt performance and
payment of all of the Secured Obligations of the Assignor, as such term is
defined in the Security Agreement, dated as of _______________ ___, 1996 among
the Assignor, the Trustee and the other parties thereto (as amended,
supplemented or modified from time to time, the "Security Agreement"). Upon the
satisfaction of the conditions set forth in Section 2.08(b) of the Security
Agreement, the Trustee shall execute, acknowledge, and deliver to the Assignor
an instrument in writing releasing the security interests of the Copyright
Collateral acquired under this Assignment.
THIS ASSIGNMENT has been granted in conjunction with the security interest
granted to the Trustee for the benefit of the Secured Parties under the Security
Agreement. The rights and remedies of the Trustee with respect to the security
interest granted herein are without prejudice to, and are in addition to those
set forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provisions of this
Assignment are deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall govern.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
___________ day of __________, 1996.
ATTEST: [NAME OF GRANTOR], as Assignor
______________________________ By:______________________________
Secretary Title:
[Corporate Seal]
ATTEST: _________________________________,
as Trustee
______________________________ By:______________________________
Secretary Title:
[Corporate Seal]
STATE OF _______________
___________ OF _________
The foregoing instrument was acknowledged before me this _______ day of
_________________, 19__ by ______________________________ as [title] of
_________________________________, a _____________________ corporation, on
behalf of the corporation.
My commission expires:
Notarial Seal
____________________________
Notary Public
2
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SCHEDULE A
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Copyright
Registration No. Country Publication Date Title
---------------- ------- ---------------- -----
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EXHIBIT C
to
Pledge and Security Agreement
[FORM OF]
LANDLORD'S WAIVER AND CONSENT
LANDLORD'S WAIVER AND CONSENT dated as of ________________, 199__, is made
by [___________] (the "Landlord"), for the benefit of [ ] (under the
Intercreditor and Trust Agreement dated as of ______________ ___, 1996, among
NATIONAL PROPANE CORPORATION, National Propane Partners, L.P., National Propane,
L.P., (the "Borrower") and the Trustee (the "Trust Agreement"), having an office
at _________________________________, attention of ________________________,
Trustee, and the Secured Parties (defined in the Credit Agreement dated as of
June 26, 1996, (as amended or modified from time to time, the "Credit
Agreement"), among the Borrower, the financial institutions party thereto as
lenders (the "Lenders"), 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).
The Secured Parties have extended or agreed to extend certain loans,
purchase mortgage notes and to extend other financial accommodations to the
Borrower, to be guaranteed by the subsidiaries of the Borrower and secured in
whole or in part pursuant to one or more agreements, instruments and other
documents (collectively, the "Security Agreements") granting security interests
in and liens on, among other things, all presently owned and hereafter acquired
personal property (collectively, the "Collateral") of the Borrower and its
Restricted Subsidiaries (the Borrower and the Restricted Subsidiaries are
referred to herein collectively as the "Debtors" and each is referred to herein
as a "Debtor").
Any or all of the Collateral is or may be installed or kept at the premises
owned by the Landlord and leased to a Debtor known as [ ] and located in [ ], as
more particularly described in Exhibit A attached hereto and made a part hereof
(the "Premises").
In order to induce the Secured Parties to make the loans, to purchase
mortgage notes and to extend other financial accommodations to the Borrower
described in the Credit Agreement, the Landlord has agreed to execute and
deliver this Agreement in favor of the Trustee on behalf of the Secured Parties.
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NOW THEREFORE, the Landlord, for and in consideration of the sum of $10.00
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, hereby agrees as follows:
1. The Landlord (i) consents to the installation or location of the
Collateral in or on the Premises, (ii) agrees that any right, claim, title,
interest or lien in respect of any of the Collateral (including without
limitation any right of distraint, levy, execution or sale) that the Landlord
may have or acquire for any reason or in any manner (including by reason of the
Collateral being installed in or on, attached to or located in or on the
Premises, or otherwise), whether arising under any agreement, instrument or law
now or hereafter in effect, is hereby made fully subordinate, subject and
inferior to every right, claim, title, interest and lien in respect of the
Collateral in favor of the Trustee and the Secured Parties or any of them to the
full extent that the same secures or may hereafter secure any and all
obligations and indebtedness of every kind, now existing or hereafter arising,
of the Debtors, or any of them, to the Secured Parties, and (iii) further agrees
that the Collateral is and will remain personal property and will not become
part of the Premises.
2. The Landlord hereby agrees that so long as this Agreement is in effect,
the Landlord shall not exercise or attempt to exercise any right, assert any
claim, title or interest in or lien upon, or take any action or institute any
proceedings with respect to, the Collateral. The Landlord agrees to use all
reasonable efforts to give Trustee written notice of any event which, with or
without the giving of notice or passage of time or both, could result in the
creation of the right of the Landlord to terminate any lease ("Lease") covering
all or any part of the Premises or to accelerate any rent due thereunder. The
Landlord, simultaneously with the giving by the Landlord of any notice of
default to the then tenant under a Lease, shall send by registered or certified
mail, return receipt requested, or by a reputable overnight courier, to Trustee
a photostat or xerox copy of such notice of default.
3. The Trustee and/or the Secured Parties and their agents, representatives
and designees may, at any time and from time to time upon reasonable prior
notice to the Landlord (which may be oral), enter the Premises without the
consent of the Landlord and remove and take possession of the Collateral free of
any right, claim, title, interest or lien of the Landlord, provided the Secured
Parties restore any parts of the Premises physically damaged by them in the
course of removal to the condition such parts were in prior to such entry and
removal of the Collateral (but the foregoing shall not impose any liability upon
any Secured Party for any damage by fire or other insurable casualty).
4. The provisions hereof shall be irrevocable and remain in full force and
effect until each Debtor has fully paid and performed all of its obligations to
the Secured Parties under and in accordance with the terms of all present and
future agreements, instruments and documents evidencing such obligations and all
present and future Security Agreements (in each case including any extensions,
modifications and
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renewals thereof or substitutions therefor at any time made), and until all
obligations, if any, of the Secured Parties to extend loans, advances, or
provide other financial accommodations to the Debtors (including any commitment
to lend or issue or confirm or participate in letters of credit) shall be
terminated.
5. This Agreement shall be binding upon the Landlord and its successors and
assigns and shall inure to the benefit of the Secured Parties and their
respective successors, assigns and designees. The Landlord agrees to make this
Agreement known to any transferee of the Premises and any Person who may have an
interest or right in the Premises. The Landlord acknowledges and agrees that the
provisions set forth in this Agreement are, and are intended to be, an
inducement and consideration to each Secured Party to make, or to permit to
remain outstanding, loans, advances and financial accommodations to the Debtors,
and each Secured Party shall be deemed conclusively to have relied upon such
provisions in making, or permitting to remain outstanding, such loans, advances
and financial accommodations, and each Secured Party is made an obligee
hereunder and may directly enforce the provisions hereof.
IN WITNESS WHEREOF, the Landlord has duly executed this Agreement under
seal as of the date and year first above written.
ATTEST: [Name of Landlord]
___________________________ By:_____________________________
_________
_________Secretary Name:________________________
_________
Title:_______________________
_____________
[Corporate Seal]
3
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Attachments:
Schedule A - Description of Premises
4
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<PAGE>
STATE OF _______________
COUNTY OF ______________
I, __________________________________, a Notary Public of the aforesaid
County and State, do hereby certify that __________________________ personally
appeared before me this day and acknowledged that (s)he is the
_____________________ of _______________________, a [Jurisdiction] corporation,
and that by authority duly given and as an act of the corporation, the foregoing
instrument was signed in its name by its ___________________, and attested by
herself/himself as ___________________, and sealed with its common corporate
seal.
Witness my hand and notarial seal this ____ day of _____________, 19__.
[STAMP/SEAL]
- ----------------------------
Notary Public
My Commission Expires:
- ----------------------
5
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SCHEDULE A
Description of Premises
<PAGE>
<PAGE>
EXHIBIT D
to
Pledge and Security Agreement
SECURITY AGREEMENT FOR MOTOR VEHICLES
AND OTHER ROLLING STOCK
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency of which are
hereby acknowledged, [NAME OF GRANTOR], a [Jurisdiction] corporation/limited
partnership (the "Grantor"), having its chief executive office at
_______________________________, hereby grants to _____________________, as
Trustee (in such capacity, the "Trustee"), with offices at
___________________________________, a security interest in (all of which are
herein collectively referred to as the "Rolling Stock Collateral") (i) all of
the Assignor's right, title and interest in and to the certificates of title set
forth in Schedule A attached hereto (the "Certificates of Title") and (ii) all
Proceeds (as such term is defined in the Security Agreement referred to below)
and products of the Certificates of Title.
THIS AGREEMENT is made to secure the full and prompt performance and
payment of all of the Secured Obligations of the Grantor, as such term is
defined in the Pledge and Security Agreement, dated as of _______________ ___,
1996 among the Grantor, the Trustee and the other parties thereto (as amended,
supplemented or modified from time to time, the "Security Agreement"). Upon the
satisfaction of the conditions set forth in Section 2.08(b) of the Security
Agreement, the Trustee shall execute, acknowledge, and deliver to the Grantor an
instrument in writing releasing the security interests in the Rolling Stock
Collateral acquired under this Security Agreement.
THIS AGREEMENT has been granted in conjunction with the security interest
granted to the Trustee for the benefit of the Secured Parties under the Security
Agreement. The rights and remedies of the Trustee with respect to the security
interest granted herein are without prejudice to, and are in addition to those
set forth in the Security Agreement, all terms and provisions of which are
incorporated herein by reference. In the event that any provisions of this
Agreement are deemed to conflict with the Security Agreement, the provisions of
the Security Agreement shall govern.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the undersigned have executed this Assignment as of the
day of , 1996.
ATTEST: [NAME OF GRANTOR], as Assignor
______________________________ By:______________________________
Secretary Title:
[Corporate Seal]
ATTEST: _________________________________,
as Trustee
______________________________ By:______________________________
Secretary Title:
[Corporate Seal]
STATE OF _______________
___________ OF _________
The foregoing instrument was acknowledged before me this _______ day of
_________________, 19__ by ______________________________ as [title] of
_________________________________, a _____________________ corporation, on
behalf of the corporation.
My commission expires:
Notarial Seal
____________________________
Notary Public
2
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SCHEDULE A
CERTIFICATES OF TITLE
Date of
State of Issuance Certificate of Title Vehicle Description
- ----------------- -------------------- -------------------
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EXHIBIT E
to
Pledge and Security Agreement
[Form of]
BAILEE'S NOTICE
______________ ___, 1996
[Addressee]
Dear Sirs:
This NOTICE is delivered pursuant to Section 4.01(d) of the Pledge and
Security Agreement, dated as of ____________ ___, 1996 among National Propane,
L.P., a Delaware limited partnership (the "Borrower"), National Propane
Corporation, a Delaware corporation (the "Managing General Partner"), the
Restricted Subsidiaries parties thereto, and _________________________, as
Trustee, as amended, modified or supplemented from time to time. Please be
advised that the Secured Parties under the Security Agreement have a perfected
security interest in all propane owned by the Borrower and the Managing General
Partner and that this NOTICE provides notice to you under Section 9-305 of the
Uniform Commercial Code of the Secured Parties' interest in the propane referred
to above, including any such propane that you may be holding or transporting in
your pipeline or elsewhere for the Borrower or the Managing General Partner.
Very truly yours,
Acknowledged and accepted
this __ day of ______, 19__.
- ------------------------------
- ------------------------------
By:
Title:
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EXHIBIT E
[FORM OF]
INTERCOMPANY NOTE
$--------------------
FOR VALUE RECEIVED, the undersigned, _________________________, a
_____________ organized under the laws of the State of ___________________ (the
"Debtor"), hereby promises to pay to the order of [General Partner/Public
Partnership/Borrower], a __________ organized under the laws of the State of
_______________ (the "Subordinated Creditor"), at ____________________, (i) the
principal amount of $_____________, or, if less, the aggregate unpaid principal
amount of each loan or advance made by the Subordinated Creditor to the Debtor
at any time upon demand by the Subordinated Creditor in lawful money of the
United States of America in immediately available funds and (ii) interest from
the date hereof on the principal amount hereof from time to time outstanding, in
like funds, at a rate per annum equal to the rate applicable at such time to ABR
Tranche A Revolving Loans pursuant to Section 2.06 of the Credit Agreement
referred to below. Indebtedness of the Debtor to the Subordinated Creditor is
hereinafter referred to as "Subordinated Debt". This Note may be prepaid in
whole or in part at any time without premium or penalty. Amounts prepaid on this
Note may be reborrowed. Terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Annex A attached hereto.
The Debtor promises to pay interest, on demand, on any overdue principal
and, to the extent permitted by law, overdue interest from their due dates at
the rate per annum applicable pursuant to the preceding paragraph, plus 2.00%.
The Debtor and any and all sureties, guarantors and endorsers of this Note
and all other parties now or hereafter liable hereon, severally waive grace,
presentment for payment, protest, notice of any kind (including notice of
dishonor, notice of protest, notice of intent to accelerate and notice of
acceleration) and diligence in collecting and bringing suit against any party
hereto, and agree (a) to all extensions and partial payments, with or without
notice, before or after maturity, (b) to any substitution, exchange or release
of any security now or hereafter given for this Note, (c) to the release of any
party primarily or secondarily liable hereon and (d) that it will not be
necessary for the Subordinated Creditor or any
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of its successors or assigns, in order to enforce payment of this Note, to first
institute or exhaust their remedies against the Debtor or any other party liable
therefor or against any security for this Note. The nonexercise by the holder of
any of its rights hereunder in any particular instance shall not constitute a
waiver thereof in that or any subsequent instance.
The outstanding principal balance of the loans and advances evidenced by
this Note shall automatically become immediately due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
expressly waived by the Debtor, upon the occurrence of an Event of Default under
the Credit Agreement.
The Subordinated Creditor and the Debtor agree that the Subordinated Debt
is and shall be subordinate, to the extent and in the manner hereinafter set
forth, to the prior payment in full of (a) the Borrower's obligations in respect
of the due and punctual payment of principal of and interest on the Loans and
all amounts drawn under the Letters of Credit, when and as due, whether at
maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (b) all Fees, expenses, indemnities and expense reimbursement
obligations of the Borrower under the Credit Agreement or any other Loan
Document, (c) all other obligations, monetary or otherwise, of the Borrower or
any other Loan Party under any Loan Document to which it is a party, in each
case, whether now owing or hereafter existing, (d) the principal of and premium,
if any, and interest on the Mortgage Notes, (e) all other Indebtedness and
obligations of the Borrower under the Note Agreement, the Mortgage Notes, the
Trust Agreement and the Collateral Documents and (f) all Indebtedness of the
Borrower and the Restricted Subsidiaries (i) permitted to be incurred under
Sections 6.01(b), (f) and (i) of the Credit Agreement and Sections [ ], [ ] and
[ ] of the Note Agreement and (ii) permitted to be secured in accordance with
Section 6.02(g) or (h) of the Credit Agreement and Section [ ] or [ ] of the
Note Agreement (such obligations being, collectively, the "Senior Debt"). The
Senior Debt shall not be deemed to have been paid in full until (a) all of the
Senior Debt shall have been indefeasibly paid in full in cash, (b) the
Commitments have been terminated and (c) all Letters of Credit have been
cancelled or have expired and all Letter of Credit Disbursements have been
indefeasibly reimbursed in full in cash ("Payment in Full").
In the event of any dissolution, winding up, liquidation, arrangement,
reorganization, adjustment, protection, relief or composition of the Debtor or
its debts, whether voluntary or involuntary, in any bankruptcy, insolvency,
arrangement, reorganization, receivership, relief or other similar case or
proceeding under any federal
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or state bankruptcy or similar law or upon an assignment for the benefit of
creditors or any other marshalling of the assets and liabilities of the Debtor
or otherwise, the Secured Parties shall be entitled to receive Payment in Full
of the Senior Debt before the Subordinated Creditor having any Subordinated Debt
outstanding to the Debtor is entitled to receive any payment of all or any of
such Subordinated Debt, and any payment or distribution of any kind (whether in
cash, property or securities) that otherwise would be payable or deliverable
upon or with respect to such Subordinated Debt in any such case, proceeding,
assignment, marshalling or otherwise (including any payment that may be payable
by reason of any other indebtedness of the Debtor being subordinated to payment
of the Subordinated Debt) shall be paid or delivered directly to the Trustee
under the Trust Agreement for the account of the Secured Parties for application
(in the case of cash) to, or as collateral (in the case of non-cash property or
securities) for, the payment or prepayment of the Senior Debt until the Senior
Debt shall have been indefeasibly paid in full in cash ("Paid in Full").
In the event that (i) any occurrence and continuation of a default in the
payment of any principal of, interest on or fees relating to and of the Senior
Debt or (ii) any judicial proceeding shall be pending with respect to any
default or event of default with respect to any of the Senior Debt, then no
payment (including any payment that may be payable by reason of any other
indebtedness of the Debtor being subordinated to payment of the Subordinated
Debt) shall be made by or on behalf of the Debtor for or on account of any
Subordinated Debt, and the Subordinated Creditor shall not take or receive from
the Debtor, directly or indirectly, in cash or other property or by set-off or
in any other manner, including, without limitation, from or by way of
collateral, payment of all or any of the Subordinated Debt.
In the event that any default or event of default (other than as referred
to in clauses (i) and (ii) of the preceding paragraph) with respect to any of
the Senior Debt shall have occurred and be continuing and the Trustee under the
Trust Agreement gives written notice thereof to the Subordinated Creditor, then
no payment (including any payment that may be payable by reason of any other
indebtedness of the Debtor being subordinated to payment of the Subordinated
Debt specified in such notice) shall be made by or on behalf of the Debtor for
or on account of the Subordinated Debt specified in such notice, and the
Subordinated Creditor shall not take or receive from the Debtor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
including, without limitation, from or by way of collateral, payment of all or
any of the Subordinated Debt specified in such notice,
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unless and until the Senior Debt shall have been Paid in Full.
In the event that any Subordinated Debt is declared due and payable before
its stated maturity, the Secured Parties shall be entitled to receive Payment in
Full of all amounts due or to become due on or in respect of all the Senior Debt
before the Subordinated Creditor is entitled to receive any payment (including
any payment which may be payable by reason of the payment of any other
indebtedness of the Debtor being subordinated to the payment of the Subordinated
Debt) by the Debtor on account of the Subordinated Debt.
The Subordinated Creditor agrees as follows:
(a) If any proceeding referred to above is commenced by or against the
Debtor,
(i) the Trustee under the Trust Agreement is hereby irrevocably
authorized and empowered (in its own name or in the name of the
Subordinated Creditor having Subordinated Debt outstanding to the
Debtor or otherwise), but shall have no obligation, to demand, sue
for, collect and receive every payment or distribution referred to
above and give acquittance therefor and to file claims and proofs of
claim and take such other action (including, without limitation,
voting such Subordinated Debt or enforcing any security interest or
other lien securing payment of such Subordinated Debt) as it may deem
necessary or advisable for the exercise or enforcement of any of the
rights or interests of the Secured Parties hereunder; and
(ii) the Subordinated Creditor having Subordinated Debt
outstanding to the Debtor shall duly and promptly take such action as
the Trustee may request (A) to collect such Subordinated Debt for the
account of the Secured Parties and to file appropriate claims or
proofs of claim in respect of such Subordinated Debt, (B) to execute
and deliver to the Trustee such powers of attorney, assignments, or
other instruments as the Trustee may request in order to enable the
Trustee to enforce any and all claims with respect to, and any
security interests and other liens securing payment of, such
Subordinated Debt and (C) to collect and receive any and all payments
or distributions
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which may be payable or deliverable upon or with respect to such
Subordinated Debt.
(b) All payments or distributions upon or with respect to the
Subordinated Debt which are received by the Subordinated Creditor contrary
to the provisions hereof shall be received in trust for the benefit of the
Secured Parties, shall be segregated from other funds and property held by
the Subordinated Creditor and shall be forthwith paid over to the Trustee
for the account of the Secured Parties in the same form as so received
(with any necessary indorsement) to be applied (in the case of cash) to, or
held as collateral (in the case of non-cash property or securities) for,
the payment or prepayment of the Senior Debt in accordance with the terms
of the Credit Agreement.
(c) The Trustee is hereby authorized to demand specific performance of
this Agreement, whether or not the Debtor shall have complied with any of
the provisions hereof applicable to them, at any time when the Subordinated
Creditor shall have failed to comply with any of the provisions hereof
applicable to it. The Subordinated Creditor hereby irrevocably waives any
defense based on the adequacy of a remedy at law, which might be asserted
as a bar to such remedy of specific performance.
The Subordinated Creditor agrees that, so long as the Senior Debt shall not
have been Paid in Full, the Subordinated Creditor will not sue for payment of
all or any of the Subordinated Debt, or commence, or join with any creditor
other than the Secured Parties in commencing, or directly or indirectly cause
the Debtor to commence, or assist the Debtor in commencing, any proceeding
referred to above.
The Subordinated Creditor agrees that no payment or distribution to the
Secured Parties pursuant to the provisions hereof shall entitle the Subordinated
Creditor to exercise any right of subrogation in respect thereof until the
Senior Debt shall have been Paid in Full.
The Subordinated Creditor will not:
(a) cancel or otherwise discharge any of the Subordinated Debt owing
to it (except upon Payment in Full thereof), convert or exchange any of
such Subordinated Debt into or for any other indebtedness or equity
interest or subordinate any of the Subordinated Debt to any indebtedness of
the Debtor other than the Senior Debt;
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(b) sell, assign, pledge, encumber or otherwise dispose of any of the
Subordinated Debt owing to it; or
(c) permit the terms of any of the Subordinated Debt owing to it to be
changed in such a manner as to have, directly or indirectly, in the
reasonable judgment of the Trustee, an adverse effect upon the rights or
interests of the Secured Parties hereunder.
The Subordinated Creditor shall promptly notify the Trustee of the
occurrence of any default under the Subordinated Debt owing to it.
The Debtor agrees that it will not make any payment of any of the
Subordinated Debt, or take any other action, in contravention of the provisions
hereof.
All rights and interests of the Secured Parties hereunder, and all
agreements and obligations of the Subordinated Creditor and the Debtor
hereunder, shall remain in full force and effect irrespective of:
(a) any lack of validity or enforceability of any Loan Document or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or in any
other term of, all or any of the Senior Debt, or any other amendment or
waiver of or any consent to any departure from any Loan Document,
including, without limitation, any increase in the Senior Debt resulting
from the extension of additional credit to the Debtor or otherwise;
(c) any taking, exchange, release or non-perfection of any other
collateral, or any taking, release or amendment or waiver of or consent to
departure from any guaranty, for all or any of the Senior Debt;
(d) any manner of application of collateral, or proceeds thereof, to
all or any of the Senior Debt, or any manner of sale or other disposition
of any collateral for all or any of the Senior Debt or any other assets of
the Debtor;
(e) any change, restructuring or termination of the corporate
structure or existence of the Debtor; or
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(f) any other circumstance which might otherwise constitute a defense
available to, or a discharge of, the Debtor or the Subordinated Creditor.
This Note shall continue to be effective or be reinstated, as the case may be,
if at any time any payment of any of the Senior Debt is rescinded or must
otherwise be returned by any Secured Party upon the insolvency, bankruptcy or
reorganization of the Debtor or otherwise, all as though such payment had not
been made.
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This Note shall be construed in accordance with and governed by the laws of
the State of New York and any applicable laws of the United States of America.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Debtor agrees to pay, in addition to the principal of and interest
on this Note, all costs of collection, including reasonable attorneys' fees.
THE INDEBTEDNESS EVIDENCED BY THIS NOTE IS SUBORDINATED TO THE PRIOR
PAYMENT IN FULL OF THE SENIOR DEBT, AS DEFINED HEREIN, TO THE EXTENT
PROVIDED HEREIN.
[BORROWER/RESTRICTED SUBSIDIARY],
as Debtor
By:____________________________________
Name:__________________________________
Title:_________________________________
[GENERAL PARTNER/ PUBLIC
PARTNERSHIP/ BORROWER],
as Subordinated Creditor
By:____________________________________
Name:__________________________________
Title:_________________________________
_______________________________________
as Trustee
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By:____________________________________
Name:__________________________________
Title:_________________________________
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ASSIGNMENT
FOR VALUE RECEIVED, [General Partner/Public Partnership/Borrower] hereby
assigns and transfers unto _____________________________ the Intercompany Note
dated as of _____________ ___, 1996 and made by ------------------------------.
Dated: _____________ ___, 1996
[General Partner/Public
Partnership/Borrower]
By:____________________________________
Title:_________________________________
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EXHIBIT F
[FORM OF]
AGENCY ACCOUNT AGREEMENT
___________ ___, 1996
VIA CERTIFIED MAIL
[Depository Bank]
[Address]
Dear [name]:
Reference is made to (a) the Credit Agreement dated as of June 26, 1996 (as
amended or modified from time to time, the "Credit Agreement"), among National
Propane, L.P., a Delaware limited partnership (the "Borrower"), the financial
institutions party thereto as lenders (the "Lenders"), 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, (b) the Note Agreements
dated as of June 26, 1996 (as amended, modified or supplemented from time to
time, collectively referred to herein as the "Note Agreement", whether one or
more) among the Borrower, National Propane Corporation (the "Managing General
Partner"), National Propane SGP, Inc. and certain institutions party thereto and
(c) the Pledge and Security Agreement dated as of June 26, 1996 (the "Borrower's
Security Agreement") among the Borrower, the Managing General Partner, the
Restricted Subsidiaries and The Bank of New York, a New York banking
corporation, as Trustee (in such capacity, the "Trustee"), under the Trust
Agreement.
This letter refers to Account No. _____________ which the Borrower [or any
Restricted Subsidiary (other than National Sales and Service, Inc.)] (the
"Obligor") maintains with ______________ (the "Depository Bank") in the
Obligor's name (the "Agency Account").
Please be advised that the Obligor has granted to the Trustee, under the
Borrower's Security Agreement, a security interest in all of the Obligor's
assets including without limitation, all of the Obligor's right, title and
interest in and to the Agency Account.
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This letter shall constitute notice to the Depository Bank from the Obligor
that the Obligor and the Trustee have agreed that, all funds which from time to
time that may be on deposit in the Agency Account are to be under the sole
dominion and control of the Trustee; provided that as long as the Depository
Bank has not been notified by the Trustee that an Event of Default (as defined
in the Credit Agreement) has occurred and is continuing, the Obligor shall be
entitled to access the funds in the Agency Account. In accordance therewith, the
Obligor irrevocably instructs the Depository Bank that upon receipt by the
Depository Bank of written notification from the Trustee, the Depository Bank
will not permit the Obligor to withdraw funds from the Agency Account (including
by honoring checks drawn on the Agency Account), the Trustee will have sole and
exclusive control over the Agency Account, and unless otherwise notified by the
Trustee, the Depository Bank shall transfer no later than 2:00 p.m. New York
time on each business day commencing on the first business day following notice
from the Trustee, collected funds from the Agency Account by wire transfer or by
ACH method (or other means reasonably acceptable to the Trustee) solely to the
Trustee's account, Account No. ________, for credit to ____________, Attn:
____________, at the Trustee's office located at ____________________, ABA No.
___. The Obligor acknowledges that in the event that a check or other instrument
is drawn on the Agency Account prior to the Depository Bank's receipt of notice
from the Trustee of an Event of Default and is presented to the Depository Bank
after it has received such notice as provided herein, the Depository Bank has
the authority and is instructed to dishonor any such check or other instrument.
If an Event of Default shall have been waived or cured, the Trustee, in
compliance with the Trust Agreement, shall forthwith notify the Depository Bank
that it is permitted to honor instructions from the Obligor effective upon
receipt thereof.
The Obligor agrees to indemnify and hold harmless the Depository Bank from
and against any and all claims, actions and suits (whether groundless or
otherwise), losses, damages, costs, expenses and liabilities of every nature and
character arising out of or related to this letter or the transactions
contemplated hereby or the Depository Bank's actions taken hereunder, including,
without limitation, claims arising out of the Depository Bank's failure to
prohibit the Obligor or any other authorized person or entity to withdraw funds
from the Agency Account other than in accordance with the terms of this letter,
except to the extent that any of same shall be directly caused by the Depository
Bank's wilful misconduct or gross negligence as may be and must be determined by
a state or Federal court of law.
By signing this letter, the Depository Bank hereby consents and agrees to
the foregoing, and agrees that it will not exercise any right of setoff or any
similar right in connection with such funds, except that the Depository Bank may
debit the Agency Account and permit the Obligor to withdraw funds from the
Agency Account in
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payment of customary service charges associated with administering the Agency
Account and due to the Depository Bank.
If the foregoing is acceptable to the Depository Bank, please execute the
enclosed copy of this letter and return it to Borrower, in the enclosed stamped,
self-addressed envelope provided.
NATIONAL PROPANE, L.P.
By: National Propane Corporation
(Managing General Partner)
By:_________________________________
[name]
[title]
Consented and Agreed as of _________ ___, 1996
_______________________________
("Depository Bank")
By:_________________________________
Title: Vice President/Cashier
The Bank of New York, not in its individual
capacity but solely as Trustee ("Trustee")
By:__________________________________
Title:
cc: The First National Bank of Boston
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Exhibit G-1
================================================================================
NATIONAL PROPANE, L.P.
and
NATIONAL PROPANE CORPORATION
as Mortgagors,
and
THE BANK OF NEW YORK,
as Trustee under the Trust Agreement,
as Mortgagee.
--------------------------
MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING
--------------------------
Dated as of June 26, 1996
================================================================================
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TABLE OF CONTENTS
Section Page
1. Definitions......................................................5
2. Payment of Notes, Bank Notes and Parity Debt....................11
3. Title to Property; Authority, etc...............................12
4. Title Insurance; Application of Proceeds........................12
5. Recordation.....................................................13
6. Maintenance and Repairs; Inspection.............................14
6.1. Maintenance and Repairs...................................14
6.2. Inspection of Mortgaged Property..........................14
7. Alterations and Additions.......................................14
8. Removal and Disposal of Equipment...............................15
9. No Claims Against Trustee under Trust Agreement, Any Note
Holder or Parity Lender.......................................15
10. [Intentionally Omitted.]........................................15
11. Payment of Impositions..........................................16
12. Compliance with Legal and Insurance Requirements, Instruments;
Environmental Matters.........................................16
13. Liens...........................................................17
14. Permitted Contests..............................................17
15. Insurance.......................................................18
15.1. Risks to be Insured.......................................18
15.2. Policy Provisions.........................................18
15.3. Delivery of Policies; Insurance Certificates..............19
15.4. Separate Insurance........................................20
16. Destruction of Property.........................................20
16.1. The Company to Give Notice...............................20
16.2. Restoration...............................................20
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16.3. Application of Net Insurance Proceeds.....................20
17. Taking of Property..............................................21
17.1. The Company to Give Notice; Assignment of Awards, etc....21
17.2. Restoration...............................................21
17.3. Application of Net Awards, etc............................21
18. Assignment of Rents and Leases..................................22
19. Events of Default...............................................23
20. Rights of Note Holders, Bank Lenders and Parity Lenders.........23
20.1. Suits by Note Holders, Bank Lenders or Parity Lenders....23
20.2. Cost of Collection.......................................24
20.3. Notice of Claimed Default................................24
20.4. No Waiver................................................24
21. Remedies........................................................25
21.1. General..................................................25
21.2. Foreclosure by Power of Sale.............................26
21.3. Trustee under the Trust Agreement Authorized to Execute
Deeds .................................................26
21.4. Purchase of Trust Estate by the Trustee under the Trust
Agreement or Note Holders, Bank Lenders and Parity
Lenders................................................27
21.5. Request for Notice.......................................27
21.6. Waiver of Appraisement, Valuation........................27
21.7. Sale a Bar Against the Company and NPC...................27
21.8. Application of Proceeds of Sale..........................27
21.9. Appointment of Receiver..................................28
21.10. Possession, Management and Income........................28
21.11. Right of the Trustee under the Trust Agreement to
Perform the Company's Covenants........................28
21.12. Remedies Cumulative......................................29
22. Terms Subject to Applicable Law; Governing Law..................29
23. No Waiver.......................................................30
24. After Acquired Property.........................................30
25. Further Assurances..............................................30
26. Additional Security.............................................31
27. Defeasance, Release and Reconveyance............................31
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28. Notices.........................................................32
29. No Credit for Payment of Taxes or Impositions...................32
30. Security Agreement; Fixture Filing..............................32
31. Future Advances.................................................33
32. Execution of Mortgage by NPC....................................33
33. Miscellaneous...................................................33
34. Conflicts.......................................................34
EXHIBIT A - Description of Land
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MORTGAGE, SECURITY AGREEMENT AND FIXTURE FILING, dated as of June 26, 1996,
between NATIONAL PROPANE, L.P. (the "Company"), a Delaware limited partnership,
and NATIONAL PROPANE CORPORATION ("NPC"), a Delaware corporation, each having
its principal office and place of business at Suite 1700, IES Tower, 200 1st
Street, P.O. Box 2067, Cedar Rapids, Iowa 52401-2067, as mortgagors, and THE
BANK OF NEW YORK, a New York banking corporation, having its principal office at
101 Barclay Street, New York, New York 10286, as Trustee under the Trust
Agreement (as such terms and certain other terms used herein are defined in
section 1) and as mortgagee hereunder.
TO SECURE THE PAYMENT in accordance with the terms thereof of:
(a) the principal of and premium, if any, and interest on the 8.54%
First Mortgage Notes due June 30, 2010 to be issued by NPC in the aggregate
principal amount of $125,000,000, which notes will be assumed by the
Company and exchanged for the Company's 8.54% First Mortgage Notes due June
30, 2010 in the aggregate principal amount of $125,000,000, to be issued
pursuant to the Note Agreements (such notes of the Company so issued
originally, together with any notes issued in substitution therefor or
replacement thereof in accordance with section 14 of the Note Agreements,
being referred to herein collectively as the "Notes");
(b) the principal of and premium, if any, and interest outstanding
from time to time under the Credit Agreement, including, without
limitation, loans to the Company in the initial aggregate principal amount
of up to $55,000,000, in the form of (i) a facility for acquisitions and
certain capital expenditures in the aggregate principal amount of up to
$40,000,000, and (ii) a facility for working capital in the aggregate
principal amount of up to $15,000,000, for a total amount of loans under
the Credit Agreement of up to $55,000,000;
(c) the principal of and premium, if any, and interest on the
Company's Parity Debt, if any, outstanding from time to time under the
Parity Debt Agreements, if any; and
(d) all other indebtedness and obligations of the Company, NPC, SGP,
the Public Partnership, Triarc or any Restricted Subsidiary under the Note
Agreements (including, without limitation, the Note Obligations), the
Notes, the Credit Agreement (including, without limitation, the Facilities
Obligations), the Bank Notes, the Guarantee Agreements, the Trust
Agreement, this Mortgage, the other Security Documents, the Parity Debt
Agreements, if any, and the Parity Debt, if any, in each case whether now
owing or hereafter existing; and
(e) all of the expenses (including, without limitation, reasonable
counsel fees and expenses) incurred by the Trustee under the Trust
Agreement, the Note Holders, the Bank Lenders or the Parity Lenders in
enforcing any of their rights or remedies hereunder;
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and to secure the due performance of and compliance with all of the terms of and
other obligations under the Note Agreements, the Notes, the Credit Agreement,
the Bank Notes, the Guarantee Agreements, the Trust Agreement, this Mortgage,
the other Secur ity Documents, the Parity Debt Agreements, if any, and the
Parity Debt, if any (the obligations described in the foregoing clauses (a),
(b), (c), (d) and (e) above being hereinafter collectively referred to as the
"Obligations"), the Company and NPC, each to the full extent of its interest, of
whatever kind or nature, legal or equitable, and whether as nominee, trustee,
beneficial owner or otherwise, and whether now owned or hereafter acquired, do
each hereby grant, bargain, sell, warrant, alien, remise, release, convey,
assign, transfer, mortgage, hypothecate, pledge, set over and confirm, WITH
POWER OF SALE, to the Trustee under the Trust Agreement for the benefit and
security of the Note Holders, the Bank Lenders and the Parity Lenders, if any,
and to its successors and as signs forever the following property (collectively,
the "Mortgaged Property"):
(a) the parcel or parcels of land described in Exhibit A attached
hereto (each such parcel being individually referred to as the "Land") and
all easements or rights-of-way benefitting the Land, including, without
limitation, the easements identified on Exhibit A, if any;
(b) all additional lands, estates and development rights hereafter
acquired by the Company or NPC for use in connection with the Land and the
development of the Land and all additional lands and estates therein which
may, from time to time, by supplemental mortgage or otherwise, be expressly
made subject to the lien hereof;
(c) all right, title and interest of the Company or NPC whether now
owned or hereafter acquired, in and to any sidewalks, streets, alleys and
ways adjoining the Land and any strips and gores adjacent to or comprised
in the Land and all oil, gas and other minerals and mineral substances
(which term shall include all propane and all propane derivatives, all
coal, lignite, hydrocarbon or other fossil materials or substances,
fissionable materials or substances and all other minerals of any kind or
character, whether gaseous, liquid or hard minerals, whether now or
hereafter found to exist and whether associated with the surface or mineral
estate) in, on or under the Land or produced, saved or severed from the
Land;
(d) all right, title and interest of the Company or NPC, whether now
owned or hereafter acquired, in and to the structures, buildings, plants,
warehouses, shops, laboratories, storage tanks, propane tanks, platforms
and other improvements and facilities of every kind and description and any
replacements thereof, now or hereafter erected or to be erected upon the
Land, all fixtures, fittings, appliances, apparatus, equipment, machinery,
material and similar articles of personal property and replacements
thereof, now or at any time here after affixed to, attached to, placed upon
or used in any way in connection with the use, enjoyment, occupancy or
operation of the Land or such improvements, structures or buildings,
including, without limitation, partitions, furnaces, boilers, oil burners,
radiators and piping, plumbing fixtures, refrigeration, air conditioning
and sprinkler systems, gas and electric fixtures, furnishings, elevators,
motors, dynamos, storage or tankage facilities, pumps, tanks, fittings,
valves, engines, meters, telephone and telegraphic lines, electric power
lines, poles, wires, and all other equipment and
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machinery, appliances, fittings and fixtures of every kind located in or
used in the operation of the improvements, structures or buildings standing
on such premises, together with any and all replacements thereof and
additions thereto (collectively, the "Improvements");
(e) all goods, inventory (including propane, whether in liquid or
gaseous form), and all of the interest of the Company and NPC in present
and future "goods", "equipment" and "fixtures" (as such terms are defined
in the Uniform Commercial Code in effect in the State) and any personal
property and fixtures which are leased, and all repairs, attachments,
betterments, renewals, replacements, substitutions and accessions thereof
and thereto, all general intangibles now owned or hereafter acquired by
either the Company or NPC and relating to the design, development,
operation, management and use of the Land or the Improvements, including,
but not limited to, all contract rights, trademarks, trade names, customer
lists, logos and other rights relating to the name and style under which
the Land and the Improvements are operated;
(f) all development rights, air rights, sewer rights, watercourses,
water rights, privileges, servitudes, licenses, tenements, hereditaments
and appurtenances now or hereafter belonging or appertaining to any of the
foregoing;
(g) all leases, subleases and other agreements, now or hereafter
entered into, with respect to the use, enjoyment or occupancy of the Land
or the Improvements or any part thereof, if any (the "Leases") and all
right, title and interest of the Company or NPC, their respective
successors and assigns, therein and thereunder, including, without
limitation, cash or securities deposited thereunder to secure the
performance by the lessees of their obligations there under, and the right
upon the happening of any Event of Default to receive and collect the rents
thereunder;
(h) all certificates, franchises, permits, licenses, contracts and
agreements, now or hereafter entered into by the Company or NPC or their
respective predecessors-in-interest, and all rights therein and thereto,
respecting or pertaining to the use, occupation, construction or operation
of the Land or Improvements or any part thereof, including, without
limitation, the right upon the happening of any Event of Default to receive
and collect any sums payable to the Company or NPC thereunder;
(i) all insurance proceeds received by or on behalf of the Company or
NPC in respect of any damage to or destruction of any of the foregoing and
all awards received by or on behalf of the Company and NPC in respect of
any taking, conveyance or sale of the Land or Improvements or interest
therein as a result of or in lieu of any Taking, and all proceeds and
products and all other payments in respect of any of the foregoing; and
(j) all rents, income, revenues, issues and profits arising from or in
connection with, and all proceeds of, any of the foregoing, to the extent
received by or on behalf of the Company or NPC and the right, exercisable
upon an Event of Default and during the continuance thereof, to make claim
for, collect, receive
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and receipt for, any and all such rents, income, revenues, issues, profits
and proceeds.
AND without limiting any of the other provisions of this Mortgage, the
Company and NPC do hereby expressly grant to the Trustee under the Trust
Agreement for the benefit and security of the Note Holders, the Bank Lenders and
the Parity Lenders, if any, pursuant to the terms of the Trust Agreement, as
secured party, a security interest in all of those portions of the Mortgaged
Property which are or may be subject to the Uniform Commercial Code provisions
applicable to secured transactions to secure the payment and performance of each
of the Obligations.
TO HAVE AND TO HOLD the Mortgaged Property unto the Trustee under the Trust
Agreement, its successors and assigns, forever for the benefit and security of
the Note Holders, the Bank Lenders and the Parity Lenders under the terms of the
Trust Agreement without any preference, distinction or priority as to lien or
otherwise of any Note, Bank Note or Parity Debt over any other Note, Bank Note
or Parity Debt by reason of priority in time of the issue, sale or negotiation
thereof, or by reason of the purpose of issue, or otherwise, except as herein
otherwise expressly provided.
SUBJECT, HOWEVER, to such of the Permitted Encumbrances hereto as shall at
the time be in effect and applicable to any of the foregoing.
AND the Company and NPC hereby bind themselves and their respective
successors and assigns to warrant and forever defend the same to the Trustee
under the Trust Agreement, the Note Holders, the Bank Lenders and the Parity
Lenders and their respective successors and assigns.
IT IS HEREBY COVENANTED by the parties hereto that the Trust Estate is to
be held and applied subject to the further terms set forth herein and in the
Trust Agreement and the Company and NPC, for themselves and their respective
successors and assigns, hereby covenant for the benefit of the Trustee under the
Trust Agreement, the Note Holders, the Bank Lenders and the Parity Lenders as
follows:
1. Definitions. As used in this Mortgage the following terms have the
following respective meanings:
Affiliate: as defined in the Note Agreements and the Credit Agreement.
Bank Lenders: The First National Bank of Boston, Bank of America NT & SA,
BA Securities, Inc., any other financial institution listed on the signature
page of the Credit Agreement as a lender thereunder, each assignee which becomes
a lender pursuant to section 9.04(b) of the Credit Agreement and their
respective successors and assigns.
Bank Notes: the Notes (as defined in the Credit Agreement).
Bankruptcy Code: the Revised Bankruptcy Act of 1978, as amended and any
successor act thereto.
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Board of Directors: the board of directors of each of NPC, SGP or any
successor general partner or general partners of the Company.
Business: as defined in the Note Agreements and the Credit Agreement.
Certified Resolution: a copy of a resolution of the Board of Directors
certified by the Secretary or an Assistant Secretary of NPC or SGP, as
applicable, or any successor general partner of the Company, under its corporate
seal, duly adopted and in full force and effect on the date of such
certification.
Company: National Propane, L.P., a Delaware limited partnership, and any
successor or successors to its obligations hereunder.
Credit Agreement: the Credit Agreement, dated as of June 26, 1996, among
the Company, 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, as amended, supplemented or modified from time to time in
accordance with the terms thereof. The term Credit Agreement shall also include
any extension, renewal, refunding, replacement or restatement of the Credit
Agreement.
Default: as defined in the Credit Agreement.
Default Rate: the rate per annum equal to the rate of interest stated on
the face of the Notes plus 2%.
Destruction: any damage to or destruction of all or any part of the
Mortgaged Property.
Events of Default: as defined in section 19.
Excess Proceeds: as defined in section 10.7(c)(iii) of the Note Agreements
and section 6.07(c)(iii) of the Credit Agreement.
Facilities Obligations: as defined in the Credit Agreement.
Guarantee Agreements: the General Partner's Guarantee Agreement and the
Subsidiary Guarantee Agreement (as defined in the Note Agreements) and the
General Partners Guarantee Agreement and the Subsidiaries Guarantee Agreement
(as defined in the Credit Agreement).
Hazardous Substances: (a) any and all hazardous substances, hazardous
materials or toxic substances as defined in the Clean Air Act, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, and the Hazardous
Materials Transportation Act and the regulations promulgated thereunder, (b) any
sub stance or materials listed as hazardous or toxic in the United States
Department of Transportation Table, by the Environmental Protection Agency or
any successor agency or under any applicable Federal, state, local or foreign
laws or regulations, (c) any asbestos, poly-chlorinated biphenyls, urea
formaldehyde foam, explosives or radioactive waste, or (d) any
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other chemical, material or substance which is not classified as hazardous or
toxic but exposure to which is prohibited, limited or regulated by any
applicable Federal, state, local or foreign authority or other governmental
authority having jurisdiction over the Mortgaged Property, including, without
limitation, propane and any related petroleum products or by-products.
Impositions: all taxes (including, without limitation, income, gross
receipts, sales, use, excise, personal property (tangible and intangible) and
stamp taxes), assessments (including, without limitation, all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof), water, sewer or other rents, rates and charges, excises,
levies, license fees, permit fees, inspection fees and other authorization fees
and other charges, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character (including all
interest and penalties thereon), which at any time may be assessed, levied,
confirmed or imposed on or in respect of or be a lien upon (a) the Trust Estate
or any part thereof or any rent therefrom or any estate, right or interest
therein, or (b) any occupancy, use or possession of or activity conducted on the
Mortgaged Property or any part thereof.
Improvements: as defined in the granting clauses hereof.
Insurance Requirements: all terms of any insurance policy covering or
applicable to the Mortgaged Property or any part thereof that is required to be
carried hereunder or under the Trust Agreement, the Note Agreements, the Credit
Agreement or any other Security Document, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Underwriters (or any other body exercising similar
functions) applicable to or affecting the Mortgaged Property or any part thereof
or any use or condition of the Mortgaged Property or any part thereof.
Land: as defined in the granting clauses hereof.
Legal Requirements: all laws, statutes, codes, acts, ordinances, orders,
judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements (including, without limitation,
those pertaining to health or environmental effects, such as the Clean Air Act,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, and the Hazardous Materials Transportation Act and the regulations
promulgated pursuant to such Acts) of all governments and subdivisions thereof,
Federal, state, local and foreign, foreseen or unforeseen, ordinary or
extraordinary, which now or at any time hereafter are applicable to the
Mortgaged Property or any part thereof, or any use or condition of the Mortgaged
Property or any part thereof.
Mortgage: this Mortgage, Security Agreement and Fixture Filing, as amended,
modified or supplemented from time to time in accordance with the terms hereof.
Mortgaged Property: as defined in the granting clauses hereof.
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Mortgage Recording Supplement: any instrument hereafter executed by the
Company, NPC and, if necessary, the Trustee under the Trust Agreement solely for
the purpose of recording in any jurisdiction a more particular description of
property of the Company or NPC located in such jurisdiction intended to be
subject to this Mortgage, or to correct the recorded description of property of
the Company or NPC located in such jurisdiction.
NPC: National Propane Corporation, a Delaware corporation, a general
partner of the Company.
Net Awards: all awards and payments on account of a Taking of all or any
part of the Mortgaged Property, less the actual costs, fees and expenses
incurred in the collection thereof.
Net Insurance Proceeds: all insurance proceeds on account of any
Destruction of all or any part of the Mortgaged Property, less the actual costs,
fees and expenses incurred in the collection thereof.
Note Agreements: the separate Note Agreements, each dated as of June 26,
1996, among the Company, NPC, SGP and the Note Holders, as amended, modified or
supplemented from time to time in accordance with the terms thereof. The term
Note Agreements shall also include any extension, renewal, refunding,
replacement or restatement of the Note Agreements.
Note Holders: the original purchasers of the Notes as set forth in Sched
ule A to the Note Agreements and any successors or assigns thereof.
Note Obligations: (a) the Company's obligations in respect of the due and
punctual payment of principal of, premium (including the Make Whole Amount as
defined in the Note Agreements) and interest on the Notes, when and as due,
whether at maturity, by acceleration, upon one or more dates for prepayment or
otherwise, (b) all expenses, indemnities and expense reimbursement obligations
of the Company or any Restricted Subsidiary under the Note Agreements, the
Notes, the Guarantee Agreements, the Security Documents or the Trust Agreement,
and (c) all other obligations, monetary or otherwise, of the Company, NPC, SGP
the Public Partnership or the Restricted Subsidiaries under any of the Note
Agreements, the Notes, the Guarantee Agreements, the Security Documents or the
Trust Agreement to which it is a party, in each case, whether now owing or
hereafter existing.
Notes: as defined in the granting clauses hereof.
Obligations: as defined in the granting clauses hereof.
Officers' Certificate: as to any corporation, a certificate executed on its
behalf by the Chairman of the Board of Directors (if an officer) or its
President or one of the Vice Presidents and its Treasurer, or Controller, or one
of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner hereunder.
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Parity Debt: as defined in the Note Agreements and the Credit Agreement.
Parity Debt Agreements: the agreements between the Company and each Parity
Lender, providing for the incurrence of Parity Debt.
Parity Lenders: the purchasers or lenders of the Parity Debt pursuant to
the Parity Debt Agreements, and any successors or assigns thereof.
Permitted Encumbrances: with respect to the Mortgaged Property: (a) liens
for Impositions not yet due and payable or which are being contested as
permitted by section 14, (b) liens imposed by law arising in the ordinary course
of business (including, without limitation, mechanic's, materialman's, and other
non-consensual statutory liens and other like liens) which are not due and
payable or, if due and payable, which are being contested as permitted by, and
in accordance with the provisions of, section 14, (c) the easements, exceptions,
encumbrances, restrictions (including zoning restrictions), covenants or minor
irregularities in title not, in any material respect, impairing the use of the
Mortgaged Property for its intended purposes, but specifically excluding all
liens securing or representing monetary obligations, and (d) all liens permitted
pursuant to section 10.2 of the Note Agreements and section 6.02 of the Credit
Agreement.
Permitted Insurers: as defined in the Note Agreements and the Credit
Agreement.
Person: a corporation, a limited liability company, a joint venture, an
association, a partnership, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
Potential Event of Default: as defined in the Note Agreements.
Public Partnership: National Propane Partners, L.P., a Delaware limited
partnership.
Registration Statement: as defined in the Note Agreements and the Credit
Agreement.
Requisite Percentage: as defined in the Trust Agreement.
Restoration: The restoration, replacement or rebuilding of the Mortgaged
Property as nearly as possible to its value, condition and character immediately
prior to any Destruction, Taking or title insurance loss, as the case may be,
with such alterations and additions as may be made at the Company's election
pursuant to and subject to the conditions of section 7, together with any
temporary repairs and property protection pending completion of the work.
Restricted Subsidiaries: as defined in the Note Agreements and the Credit
Agreement.
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Security Documents: (a) this Mortgage, (b) the separate mortgage, security
agreement and fixture filing documents, each dated the date hereof, among the
Company, NPC, and the Trustee under the Trust Agreement covering property of the
Company or NPC located in Arkansas, Connecticut, Florida, Illinois, Iowa,
Kansas, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, New Mexico,
New York, Rhode Island, Vermont, and Wisconsin, (c) the separate deed of trust,
security agreement and fixture filing documents, each dated the date hereof,
from the Company and NPC to the deed of trust trustee named therein for the
benefit of the Trustee under the Trust Agreement covering property of the
Company or NPC located in Arizona, Colorado, and Missouri, (d) the pledge and
security agreement, dated the date hereof, among the Company, NPC,the Restricted
Subsidiaries named therein and the Trustee under the Trust Agreement, (e) the
pledge and security agreement, dated the date hereof, among the Public
Partnership, NPC and the Trustee under the Trust Agreement, and (f) any other
agreement executed by the Company, NPC, any Restricted Subsidiary or the Public
Partnership which purports to grant to the Trustee under the Trust Agreement a
security interest in or a lien on property to secure any of the Obligations and
which is stated therein to be a "Security Document", as each of the same may be
amended, modified or supplemented from time to time in accordance with its
terms.
SGP: National Propane SGP, Inc., a Delaware corporation.
State: The State of _________.
Subsidiary: as defined in the Note Agreements and the Credit Agreement.
Taking: a taking of all or any part of the Mortgaged Property, or any
interest therein or right accruing thereto, including, without limitation, any
right of access thereto existing on the date of this Mortgage, as the result of
or in lieu or in anticipation of the exercise of the right of condemnation or
eminent domain.
Triarc: Triarc Companies, Inc., a Delaware corporation, and its successors
and assigns.
Trust Agreement: the Intercreditor and Trust Agreement, dated as of June
26, 1996, among the Company, NPC, the Public Partnership, the Restricted
Subsidiaries, the Note Holders, the Bank Lenders, The First National Bank of
Boston, as Administrative Agent and the Trustee under the Trust Agreement, as
amended, modified or supplemented from time to time in accordance with the terms
thereof.
Trust Estate: the Mortgaged Property at the time subject to this Mortgage
and all other properties and moneys at the time subject to this Mortgage or held
by the Trustee under the Trust Agreement.
Trustee under the Trust Agreement: The Bank of New York, a New York banking
corporation, as Trustee under the Trust Agreement, or any successor trustee or
co-trustee at the time acting as such thereunder.
2. Payment of Notes, Bank Notes and Parity Debt. The Company will duly and
punctually pay or cause to be paid (a) in accordance with the terms of the
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Note Agreements, the principal of and premium, if any, and interest on the
Notes, (b) in accordance with the terms of the Credit Agreement, the
indebtedness evidenced by the Bank Notes, (c) in accordance with the terms of
any Parity Debt Agreements, the principal of and premium, if any, and interest
on any Parity Debt, and (d) all other sums which may become payable under the
terms of the Note Agreements (including, without limitation, the Note
Obligations), the Notes, the Credit Agreement (including, without limitation,
the Facilities Obligations), the Bank Notes, the Guarantee Agreements, the Trust
Agreement, this Mortgage, the other Security Documents, the Parity Debt
Agreements and the Parity Debt, and the Company will duly perform and comply
with all of the terms of the Note Agreements, the Notes, the Credit Agreement,
the Bank Notes, the Guarantee Agreements, the Trust Agreement, this Mortgage,
the other Security Docu ments, the Parity Debt Agreements and the Parity Debt
which are required to be performed or complied with by, or which are otherwise
applicable to, the Company and NPC will duly perform and comply with all terms
of the Note Agreements, the Guarantee Agreements, the Trust Agreement, this
Mortgage and the other Security Documents which are required to be performed or
complied with by, or which are otherwise applicable to NPC.
3. Title to Property; Authority, etc. The Company represents and warrants
that it or NPC is the absolute owner of good, marketable and indefeasible fee
simple absolute title to the Land and the Improvements and to all other property
included in the Mortgaged Property, subject to no mortgage, lien, pledge,
charge, security interest, encumbrance or other matter other than the Permitted
Encumbrances. There is no defect in or challenge to the Company's or NPC's
ownership of or rights or other interests in any of the Mortgaged Property which
would, individually or in the aggregate, materially lessen the value of the
Mortgaged Property for its current use or materially interfere with the ordinary
conduct of the business of the Company on the Mortgaged Property. The lien of
this Mortgage is valid and enforceable in accordance with its terms on the
right, title and interest of the Company and NPC in and to the Mortgaged
Property (except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application
or principles of equity relating to or affecting the rights and remedies of
creditors). The Company and NPC represent and warrant that they have all
necessary power and authority to execute this Mortgage and to convey the
Mortgaged Property as provided herein. The Company at its expense will warrant
and defend to the Trustee under the Trust Agreement such title to the Mortgaged
Property as described in this section 3 and the liens and security interests
thereon and therein against all claims and demands and will maintain and
preserve such lien so long as any of the Note Obligations, the Facilities
Obligations or Parity Debt is outstanding, subject only to the Permitted
Encumbrances.
4. Title Insurance; Application of Proceeds. Subject to section 27 hereof,
the Company and NPC hereby irrevocably assign, transfer and set over to the
Trustee under the Trust Agreement all of their respective right, title and
interest in and to any insurance proceeds payable to the Company or NPC under
any policies of title in surance which relate to the Trust Estate and which name
or inure to the benefit of the Company and NPC. All proceeds received by the
Trustee under the Trust Agreement for any loss under the title insurance
policies with respect to the Trust Estate shall be held, and all proceeds
payable to the Company or NPC under any such title insurance policy naming or
inuring to the benefit of the Company or NPC shall be paid over to the Trustee
under the Trust Agreement and shall be held and applied by the Trustee under the
Trust
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Agreement as part of the Trust Estate for the benefit of the Note Holders,
the Bank Lenders and the Parity Lenders, provided that the Trustee under the
Trust Agreement may invest such proceeds in accordance with the provisions of
section 4(h) of the Trust Agreement.
5. Recordation. The Company at its expense will at all times cause this
Mortgage and the other Security Documents and any instruments amendatory hereof
or thereof or supplemental hereto or thereto (and appropriate financing
statements), in cluding, without limitation, any Mortgage Recording Supplement,
to be recorded, registered and filed and to be kept recorded, registered and
filed in such manner and in such places, and will pay all such recording,
registration, filing or other taxes, fees and other charges, and will comply
with all such statutes and regulations, as may be required by applicable law in
order to establish, preserve and protect the lien of this Mortgage and the
security interest created hereby as a valid and direct first priority mortgage
lien of record and a valid first priority perfected security interest in the
Mortgaged Property (in cluding, without limitation, any such property or
interest included in the Trust Estate and acquired after the execution hereof)
and any repairs, replacements, alterations and additions to the Mortgaged
Property, and the rights of the Trustee under the Trust Agreement, the Note
Holders, the Bank Lenders and the Parity Lenders hereunder. Promptly upon
effecting any re-recording, re-registration or refiling in order to comply with
this section, the Company at its expense will furnish to the Trustee under the
Trust Agreement and each Note Holder, Bank Lender and Parity Lender an opinion
of counsel reasonably satisfactory to each Note Holder, Bank Lender and Parity
Lender specifying the action taken and stating that such action has been duly
taken and that no other action is at the time required to be taken under this
section. The Company, at its expense, will furnish to the Trustee under the
Trust Agreement and each Note Holder, Bank Lender and Parity Lender at such
times as the Trustee under the Trust Agreement may reason ably request in
connection with the recordation of a Mortgage Recording Supplement, an opinion
of counsel satisfactory to the Trustee under the Trust Agreement stating that in
the opinion of such counsel such action has been taken in connection with the
recording of the Mortgage Recording Supplement necessary to maintain the lien or
security interest created hereby and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien or security interest, or, alternatively if this Mortgage
secures Land listed on Schedule 4.15 of the Note Agreements, will furnish to the
Trustee under the Trust Agreement an endorsement to the title insurance policy
insuring the priority of the lien and security interest of this Mortgage,
reasonably satisfactory to the Trustee under the Trust Agreement, which
endorsement shall insure the continued priority of the lien and security
interest created hereby as modified by the Mortgage Recording Supplement.
6. Maintenance and Repairs; Inspection. 6.1.Maintenance and Repairs.
Subject to the terms of Section 16 hereof with respect to any Restoration
following a Destruction and subject to the terms of Section 17 hereof with
respect to any Restoration following a Taking, the Company at its expense will
maintain the Mortgaged Property in good repair, working order and condition and
will promptly make all necessary or appropriate repairs, replacements, renewals,
additions, betterments and improvements to the Mortgaged Property, whether
interior or exterior, structural or nonstructural, ordinary or extraordinary,
foreseen or unforeseen, so that at all times the value and utility of the
Mortgaged Property shall be properly preserved and maintained.
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6.2. Inspection of Mortgaged Property. The Company and NPC shall permit any
persons designated by the Trustee under the Trust Agreement, any Note Holder
holding at least 5% of the principal amount of Notes (other than a Competitor
(as defined in the Note Agreements)(or an Affiliate thereof) of the Company)
then outstanding, Bank Lender or Parity Lender to visit and inspect the
Mortgaged Property, at the expense of the Company during the occurrence and
continuance of an Event of Default or a Potential Event of Default or a Default
and otherwise at the expense of such Note Holder , Bank Lender or Parity Lender,
and the Company shall permit any persons designated by the Trustee under the
Trust Agreement, any Note Holder, Bank Lender or Parity Lender to inspect its
books of account, records, reports and other papers, to make copies or extracts
therefrom, and to discuss the affairs, finances and accounts of the Company with
the officers and employees of the general partner of the Company and
representatives of any firm of independent public accountants employed by the
Company (and by this provision the Company authorizes said accountants to
discuss the finances and affairs of the Company with any such designated
person), all at such reasonable times and as often as may be reasonably
requested upon reasonable notice to the Company or NPC, as applicable.
7. Alterations and Additions. Unless and until an Event of Default shall
have occurred and be continuing, the Company at its expense may from time to
time make alterations of and additions to the Mortgaged Property or any part
thereof, provided that any such alteration or addition shall (a) not impair the
usefulness of the Mortgaged Property for use in the Business or reduce in any
material respect the fair market value thereof below its value immediately
before such alteration or addition, (b) be effected with due diligence in a good
and workmanlike manner and in compliance with all Legal Requirements and
Insurance Requirements and (c) be promptly and fully paid for so that the
Mortgaged Property shall at all times be free of liens for labor and materials
supplied or claimed to have been supplied, other than any lien or right thereto
under a contract claim pursuant to which payment is not yet due or which is
being contested as permitted by, and in accordance with the provisions of,
section 14. All repairs and alterations of and additions to the Mortgaged
Property shall immediately become subject to the lien of this Mortgage without
further action on the part of the Company, NPC or the Trustee under the Trust
Agreement.
8. Removal and Disposal of Equipment. The Company will not and will not
permit any other Person to abandon, scrap, salvage, remove, sell or otherwise
dispose of any of the portions of the Mortgaged Property constituting machinery,
fixtures or equipment, provided that the Company may, if no Event of Default at
the time exists, (a) sell, lease, abandon or otherwise dispose of any of its
assets as permitted by section 2(c) of the Trust Agreement, section 10.7 of the
Note Agreements and section 6.07 of the Credit Agreement, or (b) remove and sell
or otherwise dispose of, free of any right or claim of the Trustee under the
Trust Agreement, any portion of the Mortgaged Property constituting machinery,
fixtures or equipment owned by the Company which has become worn out or obsolete
and which has been replaced by other machinery, fixtures or equipment subject to
the lien of this Mortgage having a utility and value at least equal to that, at
the time of removal, of the machinery, fixtures or equipment so removed. Upon
any such disposition pursuant to clause (a) (but only to the extent section 2(c)
of the Trust Agreement, section 10.7(c) of the Note Agreements and section
6.07(c) of the Credit Agreement is applicable thereto and the Company is in
compliance with the requirements
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thereof) or (b) above, the Trustee under the Trust Agreement shall promptly
grant and deliver to the Company a release thereof from the lien and security
interest granted pursuant to this Mortgage, provided that nothing contained
herein shall limit the lien and security interest granted in the proceeds
thereof.
9. No Claims Against Trustee under Trust Agreement, Any Note Holder or
Parity Lender. Nothing contained in this Mortgage shall constitute any consent
or request by the Trustee under the Trust Agreement or any Note Holder, Bank
Lender or Parity Lender, express or implied, for the performance of any labor or
services or the furnishing of any materials or other property in respect of the
Mortgaged Property or any part thereof, nor as giving the Company or NPC any
right, power or authority to contract for or permit the performance of any labor
or services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against the Trustee under the Trust
Agreement or any Note Holder, Bank Lender or Parity Lender in respect thereof or
any claim that any lien based on the performance of such labor or services or
the furnishing of any such materials or other property is prior to the lien or
security interest of this Mortgage.
10. [Intentionally Omitted.]
11. Payment of Impositions. Subject to section 14 relating to permitted
contests, the Company will pay all Impositions when the same become due and
payable but in any event before any fine, penalty, interest or cost may be added
for nonpayment, will deliver to the Trustee under the Trust Agreement, upon
request, an Officers' Certificate certifying to the payment of all Impositions
required to be paid by this section 11 and will, upon request, furnish to the
Trustee under the Trust Agreement certified copies of official receipts or other
satisfactory proof evidencing such payments.
12. Compliance with Legal and Insurance Requirements, Instruments;
Environmental Matters. (a) Subject to section 14 relating to permitted contests,
the Company at its expense will promptly (i) comply in all material respects
with all Legal Requirements and all Insurance Requirements, whether or not
compliance therewith shall require structural changes in the Mortgaged Property
or interfere with the use and enjoyment of the Mortgaged Property or any part
thereof, (ii) procure, maintain and comply in all material respects with all
permits, licenses and other authorizations required for any use of the Mortgaged
Property or any part thereof then being made, including, without limitation, the
location of propane storage tanks thereon and for the proper erection,
installation, operation and maintenance of the Mortgaged Property or any part
thereof, and (iii) comply in all material respects with any instruments of
record at the time in force affecting the Mortgaged Property or any part
thereof.
(b) Environmental Matters. Subject to section 14 relating to permitted
contests, the Company shall comply in all material respects with any and all
Legal Requirements and Insurance Requirements with respect to the management,
use, storage, transmission, presence, containment, remediation, clean-up or
removal of Hazardous Substances on the Mortgaged Property, shall pay promptly
when due the costs of containment, remediation, clean-up or removal of any
Hazardous Substances or the threat of release of any Hazardous Substance on the
Mortgaged Property required to be re-
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moved pursuant to any Legal Requirements or Insurance Requirements and shall
keep the Mortgaged Property free of any lien pursuant to such Legal
Requirements. In the event the Company fails to do so, after notice to the
Company and the failure of the Company to commence and pursue appropriate cure
of such failure with reasonable diligence, the Trustee under the Trust
Agreement, the Note Holders, the Bank Lenders or the Parity Lenders may, but
shall not be obligated to, take such action as they deem reasonably necessary to
bring the property into compliance with such Legal Requirements or Insurance
Requirements. The Company shall give the Trustee under the Trust Agreement, the
Note Holders, the Bank Lenders and the Parity Lenders, their agents, employees
and contractors, access to the Mortgaged Property to enable the Trustee under
the Trust Agreement, the Note Holders, the Bank Lenders and the Parity Lenders
to comply with such Legal Requirements or Insurance Requirements. The Company
shall not, and shall not permit any Person to, voluntarily release, discharge,
or dispose of any Hazardous Substances on the Mortgaged Property except in
material compliance with all Legal Requirements and Insurance Requirements and,
if any Hazardous Substances shall be released, discharged or disposed of,
whether voluntarily or involuntarily, in violation of any Legal Requirement or
Insurance Requirement, the Company shall promptly contain, remediate, clean-up
or remove or cause to be contained, remediated, cleaned-up or removed from the
Mortgaged Property such Hazardous Substances to the extent required to be
removed by any Legal Requirement or Insurance Requirement. The Company shall not
install nor permit to be installed in the Mortgaged Property asbestos or any
substance containing asbestos, and, with respect to any such material currently
present in the Mortgaged Property, shall promptly comply in all material
respects with all applicable Legal Requirements and Insurance Requirements. If
the Company fails to comply with any of the foregoing provisions, the Trustee
under the Trust Agreement, the Note Holders, the Bank Lenders or the Parity
Lenders, after notice to the Company and the failure of the Company to commence
and pursue compliance with reasonable diligence, shall have the right (but not
the obligation) to do whatever they deem reasonably necessary to cure any such
default or to comply with such Legal Requirements or Insurance Requirements. The
Company shall give the Trustee under the Trust Agreement, the Note Holders, the
Bank Lenders and the Parity Lenders and their agents, employees and contractors
access to the Mortgaged Property to enable the Trustee under the Trust
Agreement, the Note Holders, the Bank Lenders and the Parity Lenders to take
such action as they deem reasonably necessary to cure any such default or to
comply with such Legal Requirements or Insurance Requirements. The Trustee under
the Trust Agreement shall have the right (but shall not be obligated to), at the
expense of the Company during the existence of a Potential Event of Default, a
Default or an Event of Default, to conduct an environmental audit of the
Mortgaged Property at such times as shall be deemed reasonable by the Requisite
Percentage based upon the nature of the Company's business or the results of any
prior environmental audit, and the Company and NPC shall cooperate in the
conduct of such environmental audit.
13. Liens. The Company will not directly or indirectly create or permit or
suffer to be created or to remain, and will discharge, or promptly cause to be
discharged, any mortgage, lien, pledge, adverse interest in property, charge,
security interest or other encumbrance in or on the Trust Estate or any part
thereof, or the interest of the Company, NPC or the Trustee under the Trust
Agreement therein, other than this Mortgage, the other Security Documents and
the liens permitted pursuant to section 10.2 of the
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Note Agreements and section 6.02 of the Credit Agreement and any other Permitted
Encumbrances.
14. Permitted Contests. The Company at its expense may contest, by
appropriate legal actions conducted in good faith and with due diligence, the
amount or validity or application, in whole or in part, of any Imposition or
lien therefor or any Legal Requirement or any lien for labor or materials
supplied or claimed to have been supplied or the application of any instrument
of record referred to in section 12, provided that (a) neither the Trust Estate
nor any part thereof or interest therein shall be subject to reasonable danger
of sale, loss or forfeiture, (b) in the case of a Legal Requirement, neither the
Trustee under the Trust Agreement nor any Note Holder, Bank Lender or Parity
Lender would be in reasonable danger of any criminal liability or subject to
reasonable danger of incurring any civil liability or penalty for failure to
comply therewith, nor will the Company or NPC be in reasonable danger of any
criminal liability or in reasonable danger of incurring any material civil
liability or penalty for failure to comply therewith, (c) the Company shall have
furnished such security, if any, as may be required in the proceedings or
reasonably requested by the holders of the Requisite Percentage, and (d) such
reserves or other appropriate provision, if any, as shall be re quired by
generally accepted accounting principles shall have been made therefor. The
Company shall give prompt written notice to the Trustee under the Trust
Agreement of the commencement of any contest referred to in the preceding
sentence.
15. Insurance. 15.1. Risks to be Insured. The Company will at its expense
at all times cause all of the Mortgaged Property which is either of a character
required by law to be insured or usually insured by companies of established
reputation engaged in the same or similar business and similarly situated (a) to
be properly insured with Permitted Insurers against loss or damage from such
hazards and risks (including liability to other persons and property and
business interruption insurance), as are required by law to be insured or are
usually insured by companies of established reputa tion engaged in the same or
similar business and similarly situated, and (b) to the extent consistent with
the practice of companies of established reputation engaged in the same or
similar business and similarly situated (including, without limitation,
companies in a similar financial condition), to be self-insured for all or any
of such hazards and risks (in lieu of maintaining insurance policies with
Permitted Insurers as required above, to the extent of such self-insurance) with
respect to losses resulting from liabilities to third parties for personal
injury or property damage or damage to or destruction of its property, up to
$1,000,000 of self-insurance per occurrence per policy but in any event not
greater than $3,000,000 of self-insurance in the aggregate per occurrence for
such risk under all applicable policies (including self-insurance for reasonable
deductible amounts in re spect of insurance policies), provided that, with
respect to such self-insurance or deductibles, the Company reserves such amounts
as may be required by generally ac cepted accounting principles.
15.2. Policy Provisions. All insurance maintained pursuant to Section 15.1
shall: (a) name, except in the case of workers' compensation insurance, the
Trustee under the Trust Agreement, the Note Holders (for liability insurance),
the Bank Lenders (for liability insurance) and the Parity Lenders (for liability
insurance) as additional insureds, as their respective interests may appear; (b)
provide, except in the case of public liability insurance and workers'
compensation insurance, that all insurance claims
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shall be adjusted with the Company, subject to the approval of the Trustee under
the Trust Agreement, and shall be payable solely to the Trustee under the Trust
Agreement, provided that any claim with respect to a Destruction involving
insurance claims of less than $500,000 in the aggregate may be adjusted by and
payable to the Company alone; (c) include effective waivers by the insurer of
all claims for insurance premiums against the Trustee under the Trust Agreement
and each Note Holder, Bank Lender and Parity Lender; (d) provide, to the extent
commercially available at a commercially reasonable cost, that any losses with
respect to property insurance shall be payable notwithstanding (i) any act,
failure to act or negligence of or violation of warran ties, declarations or
conditions contained in such policy by the insureds, including, without
limitation, the Company, NPC, the Trustee under the Trust Agreement or any Note
Holder, Bank Lender or Parity Lender, (ii) the occupation or use of the
Mortgaged Property for purposes more hazardous than permitted by the terms of
the policy, (iii) any foreclosure or other proceedings or notice of sale
relating to the Mortgaged Property, or (iv) any change in the title to or
ownership of any of the Mortgaged Property (other than portions of the Mortgaged
Property expressly released from the lien of this Mortgage); (e) provide, to the
extent commercially available at a commercially reasonable cost, that no
cancellation, termination or lapse in coverage thereof shall be effective until
at least 10 days after receipt by the Trustee under the Trust Agreement of
written notice thereof with respect to the failure to pay insurance premiums or
30 days after receipt by the Trustee under the Trust Agreement of written notice
thereof for any other reason; and (f) be on such other terms as are consistent
with the practice of companies of established reputation engaged in the same or
similar business and similarly situated.
15.3. Delivery of Policies; Insurance Certificates. The Company will
deliver to the Trustee under the Trust Agreement, promptly upon request of such
Trustee, certificates of all insurance policies (or, if requested by the Trustee
under the Trust Agreement, copies of the insurance policies, together with an
Officers' Certificate certifying such copies to be true and correct) with
respect to the Mortgaged Property which the Company is required to maintain or
cause to be maintained pursuant to this section 15, together with evidence as to
the payment of all premiums then due thereon, provided that the Trustee under
the Trust Agreement shall not be deemed by reason of its custody of such
certificates or policies to have knowledge of the contents thereof. The Company
has, simultaneously with the closing under the Note Agreements and Credit
Agreement, delivered to the Trustee under the Trust Agreement and will deliver
to the Trustee under the Trust Agreement promptly upon request of such Trustee,
and in any event (a) on December 31 of each calendar year, commencing with
December 31, 1996, and (b) upon each increase in the amount of self-insurance
with respect to losses resulting from liabilities to third parties for personal
injury or property damage or damage to or destruction of its property retained
by the Company by $500,000 or more in the aggregate, a report by a firm of
independent insurance brokers or consultants chosen by the Company and
satisfactory to the Trustee under the Trust Agreement (i) setting forth the
insurance obtained pursuant to this section 15, including, without limitation,
the amounts thereof, the names of the insurers and the property, hazards and
risks covered thereby, and certifying that the same comply with the requirements
of this section 15, that all premiums then due thereon have been paid and that
the same are in full force and effect, (ii) setting forth all self-insurance
maintained by the Company pursuant to this section 15 and (iii) certifying that
in the opinion of such firm, such insurance or self-insurance complies with the
requirements of this section 15 and is, as to amounts, coverage and
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provisions, adequate to protect the Company, the Trustee under the Trust
Agreement and each Note Holder, Bank Lender and Parity Lender against any and
all insurable risks affecting the Mortgaged Property required to be insured
hereunder, or setting forth any recommendations of such independent insurance
brokers as to additional insurance, if any, reasonably required for the
protection of the interest of the Trustee under the Trust Agreement and each
Note Holder, Bank Lender and Parity Lender in the light of available insurance
coverage and practice in the propane distribution industry. The Trustee under
the Trust Agreement shall be entitled to rely on such reports without further
investigation of the facts and circumstances set forth therein.
15.4. Separate Insurance. The Company will not take out separate insurance
concurrent in form or contributing in the event of loss with that required to be
maintained pursuant to this section 15.
16. Destruction of Property. 16.1. The Company to Give Notice. In case of
any Destruction of $100,000 or more, the Company will promptly give written
notice thereof to the Trustee under the Trust Agreement and each Note Holder,
Bank Lender and Parity Lender, generally describing the nature and extent of
such Destruction.
16.2. Restoration. In case of any Destruction the Company shall either (a)
subject to section 10.20 of the Note Agreements and section 2.11(f) of the
Credit Agreement, promptly commence and complete, at its expense, whether or not
the insurance proceeds, if any, on account of such Destruction shall be
sufficient for the purpose, the Restoration; or (b) elect, by written notice to
the Trustee under the Trust Agreement and each Note Holder, Bank Lender and
Parity Lender given within 90 days after such Destruction, not to effect
Restoration.
16.3. Application of Net Insurance Proceeds. In the event of any
Destruction involving insurance claims of $500,000 or more, the Company will
cause all Net Insurance Proceeds (and, if the Company has elected to
self-insure, the amount of any self-insurance) to be paid to the Trustee under
the Trust Agreement for application by such Trustee in accordance with section 4
of the Trust Agreement. If at the time of any Destruction any policy or policies
as required by section 15 are not in effect, the amount that would have been
payable as Net Insurance Proceeds if such policy or policies had been in effect
at such time without any self-insurance shall be deemed to be Net Insurance
Proceeds.
17. Taking of Property. 17.1. The Company to Give Notice; Assignment of
Awards, etc. In case of a Taking, or the commencement of any proceedings or
negotiations which will likely result in a Taking, the Company will promptly
give written notice thereof to the Trustee under the Trust Agreement and each
Note Holder, Bank Lender and Parity Lender, generally describing the nature and
extent of such Taking or the nature of such proceedings or negotiations and the
nature and extent of the Taking which might result therefrom, as the case may
be. Subject to section 27, the Company and NPC hereby irrevocably assign,
transfer and set over to the Trustee under the Trust Agreement all rights of the
Company and NPC to any award or payment on account of any Taking. The Company
and NPC will in good faith and with due diligence file and prosecute what would
otherwise be the Company's or NPC's claim for any such award or payment and
cause the same to be applied as set forth in section 17.3, and, in the
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event the Company or NPC fails so to act or is otherwise in default hereunder,
the Company and NPC irrevocably authorize and empower the Trustee under the
Trust Agreement to file and prosecute such claim. The Company will pay all
costs, fees and expenses reasonably incurred by the Trustee under the Trust
Agreement in connection with any Taking and in seeking and obtaining any award
or payment on account thereof.
17.2. Restoration. In case of any Taking, the Company shall either (a)
subject to section 10.20 of the Note Agreements and section 2.11(f) of the
Credit Agreement, promptly commence and complete, at its expense, whether or not
the awards or payments, if any, on account of such Taking shall be sufficient
for the purpose, Restoration of the Mortgaged Property, except to the extent
made impossible by any reduction in area caused by such Taking, provided that in
case of a Taking for temporary use the Company shall not be required to effect
Restoration until such Taking is terminated or (b) elect, by written notice to
the Trustee under the Trust Agreement and each Note Holder, Bank Lender and
Parity Lender given within 90 days after such Taking, not to effect Restoration
of the Mortgaged Property or the portion thereof.
17.3. Application of Net Awards, etc. In the event of any Taking, the
Company will cause all Net Awards to be paid to the Trustee under the Trust
Agreement for application by such Trustee in accordance with section 4 of the
Trust Agreement.
18. Assignment of Rents and Leases. (a) The Company hereby assigns to the
Trustee under the Trust Agreement all of its right, title and interest, if any,
as landlord under each Lease now existing or hereafter entered into, and all
rents and other sums payable to the Company under each such Lease, together with
the right to collect and receive the same, provided that, if and so long as no
Event of Default shall have occurred and be continuing, the Company shall have
the right to exercise its rights and perform its obligations as landlord under
the Leases and to collect and receive such rents and other sums for its own uses
and purposes. Upon the occurrence and during the continuance of an Event of
Default, all such rents and other sums shall be collected and held by the
Trustee under the Trust Agreement and shall be applied as provided in section 4
of the Trust Agreement and the Trustee under the Trust Agreement or its agent
shall have the right to enter upon the Mortgaged Property for the purposes of
such collection.
(b) The assignment of rents, income and other benefits contained in the
Granting Clause shall constitute an absolute and present assignment, subject,
however, to the conditional permission given herein to the Company to collect
and use such rents, income and other benefits. Such assignment shall be fully
operative without any further action on the part of either party and the Trustee
under the Trust Agreement shall be entitled, at its option, upon the occurrence
and during the continuance of an Event of Default hereunder, to all rents,
income and other benefits from the Mortgaged Property, whether or not it takes
possession of the Mortgaged Property. The Company hereby further grants to the
Trustee under the Trust Agreement the right, upon the occurrence and during the
continuance of an Event of Default, at its option, to (i) enter upon and take
possession of the Mortgaged Property for the purpose of collecting the said
rents, income and other benefits, (ii) dispossess by the usual summary
proceedings any tenant defaulting in the payment thereof to the Trustee under
the Trust Agreement, (iii) let the Mortgaged Property or any part thereof, and
(iv) apply such rents, income and other benefits, after payment of all necessary
charges and expenses, on account of the Obligations. Such
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assignment and grant shall continue in effect until the indebtedness and other
sums secured hereby are paid, the execution of this Mortgage constituting and
evidencing the irrevocable consent of the Company to the entry upon and taking
possession of the Mortgaged Property by the Trustee under the Trust Agreement
pursuant to such grant, whether or not foreclosure has been instituted. Neither
the exercise of any rights under this paragraph by the Trustee under the Trust
Agreement nor the application of any such rents, income or other benefits to the
indebtedness and other sums secured hereby, shall cure or waive any Event of
Default, or notice of default hereunder or invalidate any act done pursuant
hereto or to any such notice, but shall be cumulative with all other rights and
remedies.
19. Events of Default. It shall be an "Event of Default" under this
Mortgage if one or more of the following events shall occur:
(a) if an "Event of Default" as defined in the Note Agreements or in
the Credit Agreement or in any Security Document shall occur; or
(b) if a default shall occur under any Parity Debt Agreement and such
default shall continue for more than the period of grace specified therein,
shall not have been waived pursuant thereto and shall permit the holders of
the Parity Debt to cause such Parity Debt to become due before its stated
maturity or to permit the holders of the Parity Debt to cause the Company
or any Subsidiary to repurchase or repay such Parity Debt.
20. Rights of Note Holders, Bank Lenders and Parity Lenders. 20.1. Suits by
Note Holders, Bank Lenders or Parity Lenders. No Note Holder, Bank Lender or
Parity Lender shall have any right to institute any action, suit or proceeding
at law or in equity or otherwise for the foreclosure of this Mortgage, for the
appointment of a receiver, for the enforcement of any other remedy hereunder or
for the execution of any other power or trust hereunder, unless
(a) an Event of Default shall have occurred and be continuing,
(b) such Note Holder, Bank Lender or Parity Lender previously shall
have given to the Trustee under the Trust Agreement written notice of the
occurrence of such Event of Default,
(c) the Requisite Percentage shall have made written request to the
Trustee under the Trust Agreement either to institute such action, suit or
pro ceeding in its own name or to proceed to execute any other powers or
trusts herein granted to the Trustee under the Trust Agreement and shall
have afforded to the Trustee under the Trust Agreement reasonable
opportunity to do so and shall have offered to the Trustee under the Trust
Agreement reasonable security and indemnity against the costs, expenses and
other charges to be incurred therein or thereby, and
(d) the Requisite Percentage shall have determined that the Trustee
under the Trust Agreement shall have refused or neglected to act on such
request within a reasonable time;
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and such notification, request, offer of security and indemnity and refusal or
neglect are hereby declared to be conditions precedent to the enforcement by any
such Note Holder, Bank Lender or Parity Lender of any action or cause of action
for foreclosure or for the appointment of a receiver or for any other remedy
hereunder or to the execution by any such Note Holder, Bank Lender or Parity
Lender of any other powers or trusts of this Mortgage; it being understood and
intended that no Note Holder, Bank Lender or Parity Lender shall have any right
in any manner whatsoever hereunder or under the Notes, the Note Agreements, the
Bank Notes, the Credit Agreement, the Guarantee Agreements, the Trust Agreement,
the other Security Documents, the Parity Debt, if any, or the Parity Debt
Agreements, if any, by its action or their action to affect, disturb or
prejudice the lien of this Mortgage or to enforce any right hereunder, except in
the manner herein provided, and that all proceedings hereunder, at law or in
equity or otherwise, shall be instituted, had and maintained in the manner
herein provided and for the benefit of all the Note Holders, the Bank Lenders
and Parity Lenders, provided that nothing contained in this Mortgage or in the
Notes, the Note Agreements, the Bank Notes, the Credit Agreement, the Guarantee
Agreements, the Trust Agreement, the other Security Documents, the Parity Debt,
if any, or the Parity Debt Agreements, if any, shall affect or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of and premium, if any, and interest on, and any amount due under the
Note Obligations, the Facilities Obligations and the Parity Debt, at the time
and place, from the source and in the manner expressed herein and in the Notes,
the Note Agreements, the Bank Notes, the Credit Agreement, the Guarantee
Agreements, the Parity Debt and the Parity Debt Agreements or affect or impair
the right, which is also absolute and uncondi tional, of any Note Holder, Bank
Lender or Parity Lender to enforce by action at law the payment thereof.
20.2. Cost of Collection. If the Company shall fail to pay any principal of
or premium, if any, or interest on any Note Obligations or Facilities
Obligations or any Parity Debt, the Company will pay (to the extent permitted
under applicable law) to the holder thereof such further amount as shall be
sufficient to cover the reasonable cost and expense of collection, including,
without limitation, attorneys' fees and expenses.
20.3. Notice of Claimed Default. If any Note Holder, Bank Lender or Parity
Lender shall serve any notice or demand or take any other action in respect of a
claimed default, the Company will forthwith give written notice thereof to the
Trustee under the Trust Agreement and each Note Holder, Bank Lender and Parity
Lender describing the notice, demand or action and the nature of the claimed
default.
20.4. No Waiver. Neither failure nor delay on the part of the Trustee under
the Trust Agreement or any Note Holder, Bank Lender or Parity Lender to exercise
any right, remedy, power or privilege provided for herein or in the Note
Agreements, the Notes, the Bank Notes, the Credit Agreement, the Guarantee
Agreements, the Trust Agreement, the other Security Documents, the Parity Debt
or the Parity Debt Agreements or by statute or at law or in equity or otherwise
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right, remedy, power or privilege preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
21. Remedies. 21.1. General. If any Event of Default shall have occurred
and be continuing, the Trustee under the Trust Agreement may:
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(a) proceed at law or in equity or otherwise to foreclose the lien of
this Mortgage as against all or any part of the Trust Estate and to have
the same sold under the judgment or decree of a court of competent
jurisdiction;
(b) exercise any or all of the remedies available to a secured party
under the Uniform Commercial Code of the State, including, but not limited
to:
(i) either personally or by means of a court appointed receiver,
take possession of all or any of the Trust Estate constituting
personal property and exclude therefrom the Company and NPC and all
others claiming under the Company or NPC, and thereafter hold, store,
use, operate, manage, maintain and control, make repairs,
replacements, altera tions, additions and improvements to and exercise
all rights and powers of the Company or NPC in respect of such
personal property or any part thereof; and in the event the Trustee
under the Trust Agreement demands or attempts to take possession of
such personal property in the exercise of its rights, the Company and
NPC shall promptly turn over and deliver complete possession thereof
to the Trustee under the Trust Agreement;
(ii) without notice to or demand upon the Company or NPC, make
such payments and do such acts as the Trustee under the Trust
Agreement may deem necessary to protect its security interest in such
personal property, including, without limitation, paying, purchasing,
contesting or compromising any encumbrance, charge or lien which is
prior to or superior to the security interest granted hereunder and,
in exercising any such powers or authority, to pay all expenses
incurred in connection therewith;
(iii) require the Company and NPC to assemble such personal
property or any portion thereof, at a place designated by the Trustee
under the Trust Agreement and reasonably convenient to such parties,
and promptly to deliver such personal property to the Trustee under
the Trust Agreement or an agent or representative designated by it;
and the Trustee under the Trust Agreement and its agents and
representatives shall have the right to enter upon any or all of the
Company's or NPC's premises and property to exercise the rights
hereunder of the Trustee under the Trust Agreement;
(iv) sell, lease or otherwise dispose of such personal property
at public sale, with or without having such personal property at the
place of sale, and upon such terms and in such manner as the Trustee
under the Trust Agreement may determine, provided that unless such
personal property is perishable or threatens to decline speedily in
value or is of a type cus tomarily sold on a recognized market, the
Trustee under the Trust Agreement shall give the Company and NPC at
least ten days' prior writ ten notice of the time and place of any
public sale of such personal property or other intended disposition
thereof; and
(c) exercise any other remedy permitted to be exercised by the
mortgagee or a secured party or both under the laws of the State.
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21.2. Foreclosure by Power of Sale. If an Event of Default shall have
occurred and be continuing, the Trustee under the Trust Agreement may cause to
be recorded, published and delivered to the Company and NPC such notice of
default and election to sell as then required by applicable law. The Trustee
under the Trust Agree ment shall, without demand on the Company or NPC, after
lapse of such time as may then be required by applicable law, sell the Trust
Estate at the time and place of sale fixed by it in such notice of sale, either
as a whole, or in separate lots or parcels or items as the Trustee under the
Trust Agreement shall deem expedient, and in such order as it may determine, at
public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale. The Trustee under the Trust Agreement shall
deliver to such purchaser or purchasers thereof a good and sufficient deed or
deeds conveying the property so sold, but without any covenant or warranty,
express or implied. The recitals in such deed of any matters or facts shall be
conclusive proof of the truthfulness thereof. The Trustee under the Trust
Agreement may postpone a sale of all or any portion of the Trust Estate by
public announcement at such time and place of sale, and from time to time
thereafter may postpone such sale by public announcement at the time fixed by
the preceding postponement or subsequently noticed sale, and without further
notice make such sale at the time fixed by the last postponement, or may, in its
discretion, give a new notice of sale.
21.3. Trustee under the Trust Agreement Authorized to Execute Deeds. The
Company and NPC irrevocably appoint the Trustee under the Trust Agreement the
true and lawful attorney of the Company and NPC in their names and stead and on
their behalf, for the sole purpose of effectuating any sale, assignment,
transfer or delivery for the enforcement of this Mortgage, whether pursuant to
foreclosure or power of sale or otherwise, to execute and deliver all such
deeds, bills of sale, assignments and other instruments as the Trustee under the
Trust Agreement may consider necessary or appropriate, with full power of
substitution, the Company and NPC hereby ratifying and confirming all that such
attorney or any substitute shall lawfully do by virtue hereof. Nevertheless, if
so requested by the Trustee under the Trust Agreement or any purchaser, the
Company and NPC shall ratify and confirm any such sale, assignment, transfer or
delivery by executing and delivering to the Trustee under the Trust Agreement or
such purchaser all deeds, bills of sale, assignments, releases and other proper
instruments to effect such ratification and confirmation as may be designated in
any such request.
21.4. Purchase of Trust Estate by the Trustee under the Trust Agreement or
Note Holders, Bank Lenders and Parity Lenders. The Trustee under the Trust
Agreement or any Note Holder, Bank Lender or Parity Lender may be a purchaser of
the Trust Estate or of any part thereof or of any interest therein at any sale
thereof, whether pursuant to foreclosure or power of sale or otherwise
hereunder, and may apply upon the purchase price the indebtedness secured hereby
owing to such purchaser, to the extent of such purchaser's distributive share of
the purchase price. Any such purchaser shall, upon any such purchase, acquire
good title to the properties so purchased, free of the lien of this Mortgage,
and the Company hereby covenants to warrant and defend the title of such
purchaser to the same extent set forth in section 3.
21.5. Request for Notice. The Company and NPC hereby request that a copy of
any notice of an Event of Default and any notice of sale be mailed to them at
the address set forth in section 28.
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21.6. Waiver of Appraisement, Valuation. The Company and NPC hereby waive,
to the full extent they may lawfully do so, the benefit of all appraisement,
valuation, stay, extension and redemption laws now or hereafter in force and all
rights of marshaling in the event of any sale of the Trust Estate or any part
thereof or any interest therein.
21.7. Sale a Bar Against the Company and NPC. Any sale of the Trust Estate
or any part thereof or any interest therein, whether pursuant to foreclosure or
power of sale or otherwise hereunder, shall forever be a perpetual bar against
any right or equity of redemption or interest of the Company and NPC with
respect to the Mortgaged Property.
21.8. Application of Proceeds of Sale. The proceeds of any sale of the
Trust Estate or any part thereof or any interest therein, whether pursuant to
foreclosure or power of sale or otherwise, shall be turned over to the Trustee
under the Trust Agreement and, together with any other moneys at the time held
by the Trustee under the Trust Agreement as part of the Trust Estate, shall be
applied in accordance with section 4 of the Trust Agreement.
21.9. Appointment of Receiver. If an Event of Default shall have occurred
and be continuing, the Trustee under the Trust Agreement shall, as a matter of
right and without notice to the Company or NPC or anyone claiming under the
Company or NPC, and without regard to the then value of the Trust Estate or the
interest of the Company or NPC therein, be entitled to apply to any court having
jurisdiction to appoint a receiver or receivers of the Trust Estate, and the
Company and NPC, to the extent permitted by law, hereby irrevocably consent to
such appointment and waive notice of any application therefor. Any such receiver
or receivers shall have all the usual powers and duties of receivers in like or
similar cases and all the powers and duties of the Trustee under the Trust
Agreement in case of entry as provided in section 21.10 and shall continue as
such and exercise all such powers until the date of confirmation of sale of the
Trust Estate unless such receivership is sooner terminated.
21.10. Possession, Management and Income. If an Event of Default shall have
occurred and be continuing, the Trustee under the Trust Agreement, without
further notice, so far as permitted by law, may enter upon and take possession
of the Trust Estate or any part thereof by force, summary proceedings, ejectment
or otherwise and may remove the Company and NPC and all other Persons and any
and all property therefrom, and may hold, operate and manage the same and
receive all earnings, income, rents, issues and proceeds accruing with respect
thereto or any part thereof. The Trustee under the Trust Agreement shall be
under no liability except for its gross negligence or willful misconduct for or
by reason of any such taking of possession, entry, removal or holding, operation
or management, except that any amounts so received by the Trustee under the
Trust Agreement shall be applied in accordance with section 4 of the Trust
Agreement.
21.11. Right of the Trustee under the Trust Agreement to Perform the
Company's Covenants. If the Company shall fail to make any payment or the
Company or NPC shall fail to perform any act required to be made or performed
hereunder, the Trustee under the Trust Agreement, subject to ten days' prior
written notice to the Company (except that no prior notice shall be required in
the case of an emergency or where the
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failure to make such payment or perform such obligation could affect the prior
ity of the lien of this Mortgage), without waiving or releasing any obligation
or default, may (but shall be under no obligation to) at any time thereafter
make such payment or perform such act for the account and at the expense of the
Company, and may enter upon the Mortgaged Property or any part thereof for such
purpose and take all such action thereon as, in such Trustee's opinion, may be
necessary or appropriate therefor. All sums so paid by the Trustee under the
Trust Agreement and all reasonable costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) so incurred, together with
interest thereon at the Default Rate from the date of payment or incurrence,
shall constitute additional indebtedness secured by this Mortgage and shall be
paid by the Company to the Trustee under the Trust Agreement on demand.
21.12. Remedies Cumulative. The Trustee under the Trust Agreement shall be
entitled to enforce payment and performance of any indebtedness or obligations
secured hereby and to exercise all rights and powers under this Mortgage or
under the Note Agreements, the Notes, the Credit Agreement, the Bank Notes, the
Guarantee Agreements, the Trust Agreement, the other Security Documents, the
Parity Debt, or the Parity Debt Agreements or other agreement or any laws now or
hereafter in force, notwithstanding that some or all of such indebtedness and
obligations secured hereby may now or hereafter be otherwise secured, whether by
mortgage, deed of trust, pledge, lien, assignment or otherwise. Neither the
acceptance of this Mortgage nor its enforcement, whether by court action or
pursuant to the power of sale or other powers herein contained, shall prejudice
or in any manner affect the right of the Trustee under the Trust Agreement to
realize upon or enforce any other security now or hereafter held by the Trustee
under the Trust Agreement, it being agreed that the Trustee under the Trust
Agreement shall be entitled to enforce this Mortgage and any other security now
or hereafter held by the Trustee under the Trust Agreement in such order and
manner as it may in its absolute discretion determine. Each right, power and
remedy of the Trustee under the Trust Agreement provided for in this Mortgage or
now or hereafter existing at law or in equity or by statute or otherwise shall
be cumulative and concurrent and shall be in addition to every other right,
power or remedy provided for in this Mortgage or now or hereafter existing at
law or in equity or by statute or otherwise, and the exercise or beginning of
the exercise by the Trustee under the Trust Agreement of any one or more of the
rights, powers or remedies provided for in this Mortgage or now or hereafter
existing at law or in equity or by statute or otherwise shall not preclude the
simultaneous or later exercise by the Trustee under the Trust Agreement of any
or all such other rights, powers or remedies.
22. Terms Subject to Applicable Law; Governing Law. (a) All rights, powers
and remedies provided herein may be exercised only to the extent that the
exercise thereof does not violate any applicable law, and are intended to be
limited to the extent necessary so that they will not render this Mortgage
invalid, unenforceable or not entitled to be recorded, registered or filed under
any applicable law. If any term of this Mortgage or any application thereof
shall be held to be invalid, illegal or unenforceable, the validity of other
terms of this Mortgage or any other application of such term shall in no way be
affected thereby.
(b) THIS MORTGAGE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
INTERNAL LAWS OF THE STATE
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OF NEW YORK; except that the laws of the State shall govern with respect to the
perfection, creation, priority, validity or enforcement of the liens and
security interests hereby created.
23. No Waiver. No failure by the Trustee under the Trust Agreement or any
Note Holder, Bank Lender or Parity Lender to insist upon the strict performance
of any term hereof or to exercise any right, power or remedy consequent upon a
breach thereof, shall constitute a waiver of any such term or of any such
breach. No waiver of any breach shall affect or alter this Mortgage, which shall
continue in full force and effect, or the rights of the Trustee under the Trust
Agreement with respect to any other then existing or subsequent breach.
24. After Acquired Property. All property of every kind whether real or
personal, including, without limitation, additional land, acquired by the
Company or NPC after the date hereof which by the terms of Section 6.22 of the
Credit Agreement or Section 10.22 of the Note Agreement is required to be
subjected to the lien of this Mortgage or which relates to the operation of or
is used or procured for use in connection with the Mortgaged Property or the
Business of the Company conducted at the Mortgaged Property shall, immediately
upon the acquisition thereof by the Company or NPC, and without any further
mortgage, assignment or conveyance, become subject to the lien of this Mortgage,
provided that the Company and NPC (a) will, upon any such acquisition, forthwith
execute and cause to be recorded, registered and filed, as provided in section
5, any amendment or modification hereof or supplement hereto, and any financing
statements and any amendments or modifications thereof or supplements thereto,
in such places as may be required by law in order to establish, perfect,
preserve and protect the first priority lien of this Mortgage on the property so
acquired and the rights of the Trustee under the Trust Agreement and the Note
Holders, the Bank Lenders and the Parity Lenders hereunder and (b) will do,
execute, acknowledge and deliver all and every such further acts, conveyances,
mortgages, assignments and assurances as the Trustee under the Trust Agreement
shall reasonably require for accomplishing the purposes of this Mortgage,
including, without limitation, subjecting such after-acquired property to the
lien of this Mortgage.
25. Further Assurances. The Company and NPC at their expense will execute,
acknowledge and deliver all such instruments and take all such action as the
Trustee under the Trust Agreement or any Note Holder, Bank Lender or Parity
Lender may reasonably request for the better assuring to the Trustee under the
Trust Agreement of the properties and rights now or hereafter subject to the
lien hereof or assigned hereunder or intended so to be.
26. Additional Security. Without notice to or consent of the Company or NPC
and without impairment of the lien and rights created by this Mortgage, the
Trustee under the Trust Agreement may accept (but the Company and NPC shall not
be obligated to furnish), from the Company or NPC or from any other Person or
Persons, additional security for the Note Obligations, the Facilities
Obligations or the Parity Debt at the time outstanding and any other obligations
secured hereby. Neither the giving of this Mortgage nor the acceptance of any
such additional security shall prevent the Trustee under the Trust Agreement
from resorting, first, to such additional security, and, second,
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to the security created by this Mortgage, without affecting the lien and rights
of the Trustee under the Trust Agreement under this Mortgage.
27. Defeasance, Release and Reconveyance. If the Company shall irrevocably
pay (a) the principal of and premium, if any, and interest on the Notes in
accordance with the terms thereof, (b) the principal of and premium, if any, and
interest on the Bank Notes in accordance with the terms thereof and all of the
Commitments (as defined in the Credit Agreement) of the Bank Lenders shall have
expired or terminated and all of the Letters of Credit (as defined in the Credit
Agreement) have been canceled or expired, (c) the principal of and premium, if
any, and interest on the Parity Debt, if any, in accordance with the terms
thereof, and (d) all other sums payable by the Company pursuant to the Note
Agreements (including, without limitation, the Note Obligations), the Notes, the
Credit Agreement (including, without limitation, the Facilities Obligations),
the Bank Notes, the Guarantee Agreements, the Trust Agreement, this Mortgage,
the other Security Documents, the Parity Debt and the Parity Debt Agreements and
shall comply with all the terms hereof and of the Note Agreements, the Notes,
the Credit Agreement, the Bank Notes, the Guarantee Agreements, the Trust
Agreement, the other Security Documents, the Parity Debt and the Parity Debt
Agreements to the extent that a failure to so comply may result in any cost or
liability to the Note Holders, the Bank Lenders or the Parity Lenders, then this
Mortgage shall be null and void and of no further force and effect and the
Mortgaged Property shall be released and reconveyed by the Trustee under the
Trust Agreement and at the expense of the Company. Upon the indefeasible payment
in full in cash of the Facilities Obligations and termination of the Credit
Agreement and the Commitments (as defined in the Credit Agreement), all
references herein to the Credit Agreement, the Bank Lenders and the Bank Notes
shall be deemed to be deleted and of no further force and effect. Upon the
indefeasible payment in full in cash of the Note Obligations and termination of
the Note Agreements, all references herein to the Note Agreements, the Notes and
the Note Holders shall be deemed to be deleted and of no further force and
effect.
28. Notices. All notices and other communications under this Mortgage shall
be in writing and shall be delivered by hand, by express courier service or by
registered or certified mail, return receipt requested, postage prepaid,
addressed (a) if to the Company or NPC, at Suite 1700, IES Tower, 200 1st
Street, S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067, Attention: Senior
Vice President and Chief Financial Officer with a copy to Paul, Weiss, Rifkind,
Wharton & Garrison, at 1285 Avenue of the Americas, New York, New York
10019-6064, Attention: Paul D. Ginsberg, Esq. if such notice relates to the
occurrence of an Event of Default, or at such other address, or to the attention
of such other officer, as the Company shall have furnished to the Trustee under
the Trust Agreement and each Note Holder and Parity Lender in writing, or (b) if
to the Trustee under the Trust Agreement, at 101 Barclay Street, New York, New
York 10286 or at such other address, or to the attention of such other officer,
as the Trustee under the Trust Agreement shall have furnished to the Company NPC
and each Note Holder, Bank Lender and Parity Lender in writing, or (c) if to a
Note Holder which is a party to a Note Agreement, at the address of such Note
Holder listed in Schedule "A" of the Note Agreements or at such other address as
such Note Holder shall have furnished to the Company and the Trustee under the
Trust Agreement in writing, or (d) if to any other holder of a Note, at the most
recent address of such holder as it appears on the register maintained by or on
behalf of the Company pursuant to section 14.1 of the Note
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Agreements, (e) if to any Bank Lender, at the most recent address of such lender
as set forth in the Credit Agreement or (f) if to the holder of any Parity Debt,
at the most recent address of such holder maintained by or on behalf of the
Company pursuant to the Parity Debt Agreements. Any notice so addressed and (x)
delivered by hand, shall be deemed to be given upon actual receipt thereof or
the first Business Day (as defined in the Note Agreements and the Credit
Agreement) thereafter if delivered other than on a Business Day, (y) delivered
by express courier service, shall be deemed to be given one Business Day after
being so deposited with the express courier service, (z) mailed, shall be deemed
to be given three Business Days after being so mailed or, in the case of all
notices to the Trustee under the Trust Agreement, upon the actual receipt
thereof.
29. No Credit for Payment of Taxes or Impositions. The Company shall not be
entitled to any credit against the principal, premium, if any, or interest pay
able on the Notes, the Bank Notes or the Parity Debt or any other sums which may
become payable under the terms thereof by reason of the payment of any tax on
the Mortgaged Property or any part thereof or by reason of the payment of any
other Imposition.
30. Security Agreement; Fixture Filing. To the extent that the Mortgaged
Property includes personal property, or items of personal property which are or
are to become fixtures under applicable law, this Mortgage shall also be
construed as a security agreement under the Uniform Commercial Code for the
State and shall constitute a financing statement filed as a fixture filing as
those terms are defined in the Uniform Commercial Code and accordingly (i) the
address of the secured party is 101 Barclay Street, New York, New York 10286;
(ii) the mailing address of the debtor is Suite 1700, IES Tower, 200 1st Street,
S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067 ; (iii) the types of
collateral that now or hereafter may become fixtures are described in the
granting clauses hereof; and (iv) the taxpayer identification numbers of the
debtors are 42-1453041 for the Company and 11-1723340 for NPC; and, if an Event
of Default has occurred and is continuing, the Trustee under the Trust Agreement
shall be entitled with respect to such personal property to all remedies
available under the Uniform Commercial Code for the State and all other remedies
available under applicable law.
31. Future Advances. This Mortgage secures indebtedness of the Company
under the Credit Agreement and the Facilities Obligations. The Credit Agreement
contemplates the Company and the Bank Lenders entering into a series of
advances, or advances, payments and readvances. The Parity Debt Agreements may
also provide for a series of advances or advances, payments and readvances. This
Mortgage secures not only the original indebtedness of the Company under the
Credit Agreement and the Facilities Obligations, if any, but also the
indebtedness of the Company created by future advances under the Facilities
Obligations or the Parity Debt Agreements, whether such advances are obligatory
or are to be made at the option of the Bank Lenders or Parity Lenders, as
applicable, to the extent and with the same priority of lien as if such future
advances had been made at the time this Mortgage was recorded, although there
may have been no advances under the Credit Agreement and the Facilities
Obligations or the Parity Debt Agreements made at the time of the execution,
acknowledgment and recording of this Mortgage, and although there may be no
indebtedness outstanding at the time any advance is made.
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32. Execution of Mortgage by NPC. NPC has executed this Mortgage solely for
the purpose of granting the Trustee under the Trust Agreement a mortgage lien on
and security interest in the portion of the Mortgaged Property held by NPC, if
any, and as collateral security for the payment of the Obligations and for the
compliance by the Company and NPC, as applicable, with all the obligations and
terms hereof, the Trust Agreement, the Note Agreements, the Notes, the Credit
Agreement, the Bank Notes, the Guarantee Agreements, the other Security
Document, the Parity Debt and the Parity Debt Agreements. In the event of an
Event of Default hereunder, the Trustee under the Trust Agreement shall be
entitled to exercise all of its rights and remedies with respect to such
portions of the Mortgaged Property as if such Mortgaged Property were owned or
leased or held by the Company, as the case may be.
33. Miscellaneous. This Mortgage may be changed, waived or amended only by
an instrument in writing signed by the Company, NPC and the Trustee under the
Trust Agreement and may be discharged, terminated or partially released only in
accordance with section 27 hereof or in accordance with section 2(c) of the
Trust Agreement, section 10.7 of the Note Agreements and section 6.07 of the
Credit Agreement. The Trustee under the Trust Agreement shall have no obligation
to take any action hereunder except as provided in the Trust Agreement. This
Mortgage shall be binding upon the Company, NPC, and their successors and
assigns, and all Persons claiming under or through the Company or NPC or any
such successor or assign, and shall inure to the benefit of and be enforceable
by the Trustee under the Trust Agreement and its successors and assigns. Upon
(i) the assignment by any Bank Lender of all or any portion of its rights and
obligations under the Credit Agreement (including all or any portion of its
Commitment (as defined in the Credit Agreement), the Facilities Obligations
owing to it and the Bank Note or Bank Notes held by it) to any other Person,
(ii) the sale, transfer, exchange or other disposition of a Note by the
corresponding Note Holder thereof to any other Person, or (iii) the assignment
by any Parity Lender of all or any portion of its rights and obligations under
such Parity Debt to any other Person, such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such transferor or
assignor herein or otherwise. The headings in this Mortgage are for purposes of
reference only and shall not limit or define the meaning hereof. This Mort-
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gage may be executed in any number of counterparts, each of which shall be an
original, but all of which together shall constitute one and the same
instrument. To facilitate filing and recording, there may be omitted from
certain counterparts the parts of Exhibit A containing specific descriptions of
certain portions of the Mortgaged Property which relate to land under the
jurisdiction of offices or located in counties other than the office or county
in which the particular counterpart is to be filed or recorded. All references
in Exhibit A to recording information are to the official real property records
of the county in which the affected land is located, unless otherwise specified
in such Exhibit. The maturity of the Facilities Obligations for purposes of
determining the statute of limitations for enforcement of this Mortgage with
respect to the Facilities Obligations shall be as set forth in the Credit
Agreement.
34. Conflicts. In the event the terms and conditions of this Mortgage shall
directly conflict with the terms and conditions of the Note Agreements or the
Credit Agreement, the terms and conditions of the Note Agreements or the Credit
Agreement, as the case may be, shall control and supersede the provisions of
this Mortgage with respect to such direct conflicts.
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IN WITNESS WHEREOF, the Company and NPC caused this Mortgage to be executed
by its officers thereunto duly authorized, as of the date set forth above.
NATIONAL PROPANE, L.P.,
a Delaware limited partnership
By: NATIONAL PROPANE CORPORATION,
its general partner
By:__________________________________
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
its general partner
By:__________________________________
Name:
Title:
NATIONAL PROPANE CORPORATION,
a Delaware corporation
By:__________________________________
Name:
Title:
[Add acknowledgments]
29
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EXHIBIT A
Description of Land
<PAGE>
<PAGE>
STATE OF ________________
COUNTY OF _______________
This document was prepared by the attorney described below in consultation with
counsel in the state in which the Mortgaged Property is located and, when
recorded, the recorded counterparts should be returned to:
Jacqueline I. Glassman, Esq.
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
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Exhibit G-2
================================================================================
NATIONAL PROPANE, L.P.
and
NATIONAL PROPANE CORPORATION
_________ as Trustors,
and
________________,
as Deed of Trust Trustee,
and
THE BANK OF NEW YORK,
as Trustee under the Trust Agreement,
as Beneficiary.
----------
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
----------
Dated as of June 26, 1996
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
Section Page
1. Definitions......................................................5
2. Payment of Notes, Bank Notes and Parity Debt....................11
3. Title to Property; Authority, etc...............................11
4. Title Insurance; Application of Proceeds........................12
5. Recordation.....................................................12
6. Maintenance and Repairs; Inspection.............................13
6.1. Maintenance and Repairs...................................13
6.2. Inspection of Mortgaged Property..........................13
7. Alterations and Additions.......................................14
8. Removal and Disposal of Equipment...............................14
9. No Claims Against Deed of Trust Trustee or Any Beneficiary......15
10. [Intentionally Omitted.]........................................15
11. Payment of Impositions..........................................15
12. Compliance with Legal and Insurance Requirements, Instruments;
Environmental Matters...........................................15
13. Liens...........................................................17
14. Permitted Contests..............................................17
15. Insurance.......................................................17
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15.1. Risks to be Insured.......................................17
15.2. Policy Provisions.........................................18
15.3. Delivery of Policies; Insurance Certificates..............18
15.4. Separate Insurance........................................19
16. Destruction of Property.........................................19
16.1. The Company to Give Notice................................19
16.2. Restoration...............................................19
16.3. Application of Net Insurance Proceeds.....................20
17. Taking of Property..............................................20
17.1. The Company to Give Notice; Assignment of Awards, etc.....20
17.2. Restoration...............................................20
17.3. Application of Net Awards, etc............................21
18. Assignment of Rents and Leases..................................21
19. Events of Default...............................................22
20. Rights of Note Holders, Bank Lenders and Parity Lenders.........22
20.1. Suits by Note Holders, Bank Lenders or Parity Lenders.....22
20.2. Cost of Collection........................................23
20.3. Notice of Claimed Default.................................23
20.4. No Waiver.................................................23
21. Remedies........................................................24
21.1. General...................................................24
21.2. Foreclosure by Power of Sale..............................25
21.3. Deed of Trust Trustee and Trustee under the Trust
Agreement Authorized to Execute Deeds...................25
21.4. Purchase of Trust Estate by the Beneficiaries.............26
21.5. Request for Notice........................................26
21.6. Waiver of Appraisement, Valuation.........................26
21.7. Sale a Bar Against the Company and NPC....................26
21.8. Application of Proceeds of Sale...........................26
21.9. Appointment of Receiver...................................27
21.10.Possession, Management and Income.........................27
21.11.Right of the Trustee under the Trust Agreement
to Perform the Company's Covenants......................27
21.12.Remedies Cumulative.......................................28
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22. Terms Subject to Applicable Law; Governing Law..................28
23. No Waiver.......................................................29
24. After Acquired Property.........................................29
25. Further Assurances..............................................29
26. Additional Security.............................................30
27. Defeasance, Release and Reconveyance............................30
28. Notices.........................................................30
29. No Credit for Payment of Taxes or Impositions...................31
30. Security Agreement; Fixture Filing..............................31
31. Successor Deed of Trust Trustee.................................32
32. Future Advances.................................................32
33. Execution of Deed of Trust by NPC...............................33
34. Miscellaneous...................................................33
35. Conflicts.......................................................34
EXHIBIT A - Description of Land
iii
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<PAGE>
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING, dated as of June
26, 1996, between NATIONAL PROPANE, L.P. (the "Company"), a Delaware limited
partnership, and NATIONAL PROPANE CORPORATION ("NPC"), a Delaware corporation,
each having its principal office and place of business at Suite 1700, IES Tower,
200 1st Street, P.O. Box 2067, Cedar Rapids, Iowa 52401-2067, as trustors,
________, a ________, having its principal office at __________________, as Deed
of Trust Trustee, and THE BANK OF NEW YORK, a New York banking corporation,
having its principal office at 101 Barclay Street, New York, New York 10286, as
Trustee under the Trust Agreement (as such terms and certain other terms used
herein are defined in section 1) and as a beneficiary hereunder.
TO SECURE THE PAYMENT in accordance with the terms thereof of:
(a) the principal of and premium, if any, and interest on the 8.54%
First Mortgage Notes due June 30, 2010 to be issued by NPC in the aggregate
principal amount of $125,000,000, which notes will be assumed by the
Company and exchanged for the Company's 8.54% First Mortgage Notes due June
30, 2010 in the aggregate principal amount of $125,000,000, to be issued
pursuant to the Note Agreements (such notes of the Company so issued
originally, together with any notes issued in substitution therefor or
replacement thereof in accordance with section 14 of the Note Agreements,
being referred to herein collectively as the "Notes");
(b) the principal of and premium, if any, and interest outstanding
from time to time under the Credit Agreement, including, without
limitation, loans to the Company in the initial aggregate principal amount
of up to $55,000,000, in the form of (i) a facility for acquisitions in the
aggregate principal amount of up to $40,000,000, and (ii) a facility for
working capital in the aggregate principal amount of up to $15,000,000, for
a total amount of loans under the Credit Agreement of up to $55,000,000;
(c) the principal of and premium, if any, and interest on the
Company's Parity Debt, if any, outstanding from time to time under the
Parity Debt Agree ments, if any; and
(d) all other indebtedness and obligations of the Company, NPC, SGP,
the Public Partnership, Triarc or any Restricted Subsidiary under the Note
Agreements (including, without limitation, the Note Obligations), the
Notes, the Credit Agreement (including, without limitation, the Facilities
Obligations), the Bank Notes, the Guarantee Agreements, the Trust
Agreement, this Deed of Trust, the other Security Documents, the Parity
Debt Agreements, if any, and the Parity Debt, if any, in each case whether
now owing or hereafter existing; and
(e) all of the expenses (including, without limitation, reasonable
counsel fees and expenses) incurred by the Trustee under the Trust
Agreement, the Note Holders, the Bank Lenders or the Parity Lenders in
enforcing any of their rights or remedies hereunder;
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<PAGE>
and to secure the due performance of and compliance with all of the terms of and
other obligations under the Note Agreements, the Notes, the Credit Agreement,
the Bank Notes, the Guarantee Agreements, the Trust Agreement, this Deed of
Trust, the other Security Documents, the Parity Debt Agreements, if any, and the
Parity Debt, if any (the obligations described in the foregoing clauses (a),
(b), (c), (d) and (e) above being hereinafter collectively referred to as the
"Obligations"), the Company and NPC, each to the full extent of its interest, of
whatever kind or nature, legal or equitable, and whether as nominee, trustee,
beneficial owner or otherwise, and whether now owned or hereafter acquired, do
each hereby grant, bargain, sell, warrant, alien, remise, release, convey,
assign, transfer, mortgage, hypothecate, pledge, set over and confirm, WITH
POWER OF SALE, to the Deed of Trust Trustee for the benefit and security of the
Trustee under the Trust Agreement, the Note Holders, the Bank Lenders and the
Parity Lenders, if any, and to its successors and assigns forever the following
property (collectively, the "Mortgaged Property"):
(a) the parcel or parcels of land described in Exhibit A attached
hereto (each such parcel being individually referred to as the "Land")
and all easements or rights-of-way benefitting the Land, including,
without limitation, the easements identified on Exhibit A, if any;
(b) all additional lands, estates and development rights
hereafter acquired by the Company or NPC for use in connection with
the Land and the development of the Land and all additional lands and
estates therein which may, from time to time, by supplemental mortgage
or otherwise, be expressly made subject to the lien hereof;
(c) all right, title and interest of the Company or NPC whether
now owned or hereafter acquired, in and to any sidewalks, streets,
alleys and ways ad joining the Land and any strips and gores adjacent
to or comprised in the Land and all oil, gas and other minerals and
mineral substances (which term shall include all propane and all
propane derivatives, all coal, lignite, hydrocarbon or other fossil
materials or substances, fissionable materials or substances and all
other minerals of any kind or character, whether gaseous, liquid or
hard minerals, whether now or hereafter found to exist and whether
associated with the surface or mineral estate) in, on or under the
Land or produced, saved or severed from the Land;
(d) all right, title and interest of the Company or NPC whether
now owned or hereafter acquired, in and to the structures, buildings,
plants, ware houses, shops, laboratories, storage tanks, propane
tanks, platforms and other improvements and facilities of every kind
and description and any replacements thereof, now or hereafter erected
or to be erected upon the Land, all fixtures, fittings, appliances,
apparatus, equipment, machinery, material and similar articles of
personal property and replacements thereof, now or at any time here
after affixed to, attached to, placed upon or used in any way in
connection with the use, enjoyment, occupancy or operation of the Land
or such improvements, structures or buildings, including, without
limitation, partitions, furnaces, boilers, oil burners, radiators and
piping, plumbing fixtures, refrigeration, air conditioning and
sprinkler systems, gas and electric fixtures, furnishings, elevators,
motors, dynamos, storage or tankage facilities, pumps, tanks,
fittings, valves, engines, meters, telephone and telegraphic lines,
electric power lines, poles, wires, and all other equipment and
machinery, appliances, fittings and fixtures of every kind located in
or used in the
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operation of the improvements, structures or buildings standing on
such premises, together with any and all replacements thereof and
additions thereto (collectively, the "Improvements");
(e) all goods, inventory (including propane, whether in liquid or
gaseous form), and all of the interest of the Company and NPC in
present and future "goods", "equipment" and "fixtures" (as such terms
are defined in the Uniform Commercial Code in effect in the State) and
any personal property and fixtures which are leased, and all repairs,
attachments, betterments, renewals, replacements, substitutions and
accessions thereof and thereto, all general intangibles now owned or
hereafter acquired by either the Company or NPC and relating to the
design, development, operation, management and use of the Land or the
Improvements, including, but not limited to, all contract rights,
trademarks, trade names, customer lists, logos and other rights
relating to the name and style under which the Land and the
Improvements are operated;
(f) all development rights, air rights, sewer rights,
watercourses, water rights, privileges, servitudes, licenses,
tenements, hereditaments and ap purtenances now or hereafter belonging
or appertaining to any of the foregoing;
(g) all leases, subleases and other agreements, now or hereafter
entered into, with respect to the use, enjoyment or occupancy of the
Land or the Improvements or any part thereof, if any (the "Leases")
and all right, title and interest of the Company or NPC, their
respective successors and assigns, therein and thereunder, including,
without limitation, cash or securities deposited thereunder to secure
the performance by the lessees of their obligations there under, and
the right upon the happening of any Event of Default to receive and
collect the rents thereunder;
(h) all certificates, franchises, permits, licenses, contracts
and agreements, now or hereafter entered into by the Company or NPC or
their respective predecessors-in-interest, and all rights therein and
thereto, respecting or pertaining to the use, occupation, construction
or operation of the Land or Improvements or any part thereof,
including, without limitation, the right upon the happening of any
Event of Default to receive and collect any sums payable to the
Company or NPC thereunder;
(i) all insurance proceeds received by or on behalf of the
Company or NPC in respect of any damage to or destruction of any of
the foregoing and all awards received by or on behalf of the Company
and NPC in respect of any taking, conveyance or sale of the Land or
Improvements or interest therein as a result of or in lieu of any
Taking, and all proceeds and products and all other payments in
respect of any of the foregoing; and
(j) all rents, income, revenues, issues and profits arising from
or in connection with, and all proceeds of, any of the foregoing, to
the extent received by or on behalf of the Company or NPC and the
right, exercisable upon an Event of Default and during the continuance
thereof, to make claim for, collect, receive and receipt for, any and
all such rents, income, revenues, issues, profits and proceeds.
3
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AND without limiting any of the other provisions of this Deed of
Trust, the Company and NPC do hereby expressly grant to the Trustee under the
Trust Agreement pursuant to the terms of the Trust Agreement, as secured party,
a security interest in all of those portions of the Mortgaged Property which are
or may be subject to the Uniform Commercial Code provisions applicable to
secured transactions to secure the payment and performance of each of the
Obligations.
TO HAVE AND TO HOLD the Mortgaged Property unto the Deed of Trust
Trustee, its successors and assigns, forever.
SUBJECT, HOWEVER, to such of the Permitted Encumbrances hereto as
shall at the time be in effect and applicable to any of the foregoing.
IN TRUST, NEVERTHELESS, WITH POWER OF SALE, upon the terms and trusts
herein set forth, for the benefit and security of the Beneficiaries under the
terms of the Trust Agreement without any preference, distinction or priority as
to lien or otherwise of any Note or Parity Debt over any other Note or Parity
Debt by reason of priority in time of the issue, sale or negotiation thereof, or
by reason of the purpose of issue, or otherwise, except as herein otherwise
expressly provided.
AND the Company and NPC hereby bind themselves and their respective
successors and assigns to warrant and forever defend the same to the Deed of
Trust Trustee and the Beneficiaries, and their respective successors and
assigns.
IT IS HEREBY COVENANTED by the parties hereto that the Trust Estate is
to be held and applied subject to the further terms set forth herein and in the
Trust Agreement and the Company and NPC, for themselves and their respective
successors and assigns, hereby covenant for the benefit of the Deed of Trust
Trustee and the Beneficiaries as follows:
35. Definitions. As used in this Deed of Trust the following terms
have the following respective meanings:
Affiliate: as defined in the Note Agreements and the Credit Agreement.
Bank Lenders: The First National Bank of Boston, Bank of America NT &
SA, BA Securities, Inc., any other financial institution listed on the signature
page of the Credit Agreement as a lender thereunder, each assignee which becomes
a lender pursuant to section 9.04(b) of the Credit Agreement and their
respective successors and assigns.
Bank Notes: the Notes (as defined in the Credit Agreement).
Bankruptcy Code: the Revised Bankruptcy Act of 1978, as amended and
any successor act thereto.
Beneficiaries: the Trustee under the Trust Agreement, the Bank
Lenders, the Note Holders, or the Parity Lenders.
Board of Directors: the board of directors of each of NPC, SGP or any
successor general partner or general partners of the Company.
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Business: as defined in the Note Agreements and the Credit Agreement.
Certified Resolution: a copy of a resolution of the Board of Directors
certified by the Secretary or an Assistant Secretary of NPC or SGP, as
applicable, or any successor general partner of the Company, under its corporate
seal, duly adopted and in full force and effect on the date of such
certification.
Company: National Propane, L.P., a Delaware limited partnership, and
any successor or successors to its obligations hereunder.
Credit Agreement: the Credit Agreement, dated as of June 26, 1996,
among the Company, 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, as amended, supplemented or modified from time to time in
accordance with the terms thereof. The term Credit Agreement shall also include
any extension, renewal, refunding, replacement or restatement of the Credit
Agreement.
Deed of Trust: this Deed of Trust, Security Agreement and Fixture
Filing, as amended, modified or supplemented from time to time in accordance
with the terms hereof.
Deed of Trust Trustee: __________, a __________, or any successor
trustee or co-trustee at the time acting as deed of trust trustee hereunder.
Default: as defined in the Credit Agreement.
Default Rate: the rate per annum equal to the rate of interest stated
on the face of the Notes plus 2%.
Destruction: any damage to or destruction of all or any part of the
Mortgaged Property.
Events of Default: as defined in section 19.
Excess Proceeds: as defined in section 10.7(c)(iii) of the Note
Agreements and section 6.07(c)(iii) of the Credit Agreement.
Facilities Obligations: as defined in the Credit Agreement.
Guarantee Agreements: the General Partners Guarantee Agreement and the
Subsidiary Guarantee Agreement (as defined in the Note Agreements) and the
General Partner's Guarantee Agreement and the Subsidiaries Guarantee Agreement
(as defined in the Credit Agreement).
Hazardous Substances: (a) any and all hazardous substances, hazardous
materials or toxic substances as defined in the Clean Air Act, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, the
Resource Conservation and Recovery Act of 1976, as amended, and the Hazardous
Materials Transportation Act and the regulations promulgated thereunder, (b) any
sub stance or materials listed as hazardous or toxic in the United States
Department of Transportation Table, by the Environmental Protection Agency or
any successor agency or under any
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applicable Federal, state, local or foreign laws or regulations, (c) any
asbestos, poly-chlorinated biphenyls, urea formaldehyde foam, explosives or
radioactive waste, or (d) any other chemical, material or substance which is not
classified as hazardous or toxic but exposure to which is prohibited, limited or
regulated by any ap plicable Federal, state, local or foreign authority or other
governmental authority having jurisdiction over the Mortgaged Property,
including, without limitation, propane and any related petroleum products or
by-products.
Impositions: all taxes (including, without limitation, income, gross
receipts, sales, use, excise, personal property (tangible and intangible) and
stamp taxes), assessments (including, without limitation, all assessments for
public improvements or benefits, whether or not commenced or completed prior to
the date hereof), water, sewer or other rents, rates and charges, excises,
levies, license fees, permit fees, inspection fees and other authorization fees
and other charges, in each case whether general or special, ordinary or
extraordinary, foreseen or unforeseen, of every character (including all
interest and penalties thereon), which at any time may be assessed, levied,
confirmed or imposed on or in respect of or be a lien upon (a) the Trust Estate
or any part thereof or any rent therefrom or any estate, right or interest
therein, or (b) any occupancy, use or possession of or activity conducted on the
Mortgaged Property or any part thereof.
Improvements: as defined in the granting clauses hereof.
Indemnified Party or Indemnified Parties: as defined in the Note
Agreements or the Credit Agreement
Insurance Requirements: all terms of any insurance policy covering or
applicable to the Mortgaged Property or any part thereof that is required to be
carried hereunder or under the Trust Agreement, the Note Agreements, the Credit
Agreement or any other Security Document, all requirements of the issuer of any
such policy, and all orders, rules, regulations and other requirements of the
National Board of Fire Under writers (or any other body exercising similar
functions) applicable to or affecting the Mortgaged Property or any part thereof
or any use or condition of the Mortgaged Prop erty or any part thereof.
Land: as defined in the granting clauses hereof.
Legal Requirements: all laws, statutes, codes, acts, ordinances,
orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
authorizations, directions and requirements (including, without limitation,
those pertaining to health or environmental effects, such as the Clean Air Act,
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, the Resource Conservation and Recovery Act of 1976, as
amended, and the Hazardous Materials Transportation Act and the regulations
promulgated pursuant to such Acts) of all govern ments and subdivisions thereof,
Federal, state, local and foreign, foreseen or unforeseen, ordinary or
extraordinary, which now or at any time hereafter are applicable to the
Mortgaged Property or any part thereof, or any use or condition of the Mortgaged
Property or any part thereof.
Mortgaged Property: as defined in the granting clauses hereof.
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Mortgage Recording Supplement: any instrument hereafter executed by
the Company, NPC and, if necessary, the Deed of Trust Trustee and/or the Trustee
under the Trust Agreement solely for the purpose of recording in any
jurisdiction a more particular description of property of the Company or NPC
located in such jurisdiction intended to be subject to this Deed of Trust, or to
correct the recorded description of property of the Company or NPC located in
such jurisdiction.
NPC: National Propane Corporation, a Delaware corporation, a general
partner of the Company.
Net Awards: all awards and payments on account of a Taking of all or
any part of the Mortgaged Property, less the actual costs, fees and expenses
incurred in the collection thereof.
Net Insurance Proceeds: all insurance proceeds on account of any
Destruction of all or any part of the Mortgaged Property, less the actual costs,
fees and expenses incurred in the collection thereof.
Note Agreements: the separate Note Agreements, each dated as of June
26, 1996, among the Company, NPC, SGP and the Note Holders, as amended, modified
or supplemented from time to time in accordance with the terms thereof. The term
Note Agreements shall also include any extension, renewal, refunding,
replacement or restatement of the Note Agreements.
Note Holders: the original purchasers of the Notes as set forth in
Sched ule A to the Note Agreements and any successors or assigns thereof.
Note Obligations: (a) the Company's obligations in respect of the due
and punctual payment of principal of, premium (including the Make Whole Amount
as defined in the Note Agreements) and interest on the Notes, when and as due,
whether at maturity, by acceleration, upon one or more dates for prepayment or
otherwise, (b) all expenses, indemnities and expense reimbursement obligations
of the Company or any Restricted Subsidiary under the Note Agreements, the
Notes, the Guarantee Agreements, the Security Documents or the Trust Agreement,
and (c) all other obligations, monetary or otherwise, of the Company, NPC, SGP,
the Public Partnership or the Restricted Sub sidiaries under any of the Note
Agreements, the Notes, the Guarantee Agreements, the Security Documents or the
Trust Agreement to which it is a party, in each case, whether now owing or
hereafter existing.
Notes: as defined in the granting clauses hereof.
Obligations: as defined in the granting clauses hereof.
Officers' Certificate: as to any corporation, a certificate executed
on its behalf by the Chairman of the Board of Directors (if an officer) or its
President or one of the Vice Presidents and its Treasurer, or Controller, or one
of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner hereunder.
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Parity Debt: as defined in the Note Agreements and the Credit
Agreements.
Parity Debt Agreements: the agreements between the Company and each
Parity Lender, providing for the incurrence of Parity Debt.
Parity Lenders: the purchasers or lenders of the Parity Debt pursuant
to the Parity Debt Agreements, and any successors or assigns thereof.
Permitted Encumbrances: with respect to the Mortgaged Property: (a)
liens for Impositions not yet due and payable or which are being contested as
permitted by section 14, (b) liens imposed by law arising in the ordinary course
of business (including, without limitation, mechanic's, materialman's, and other
non-consensual statutory liens and other like liens) which are not due and
payable or, if due and payable, which are being contested as permitted by, and
in accordance with the pro visions of, section 14, (c) the easements,
exceptions, encumbrances, restrictions, (including zoning restrictions),
covenants or minor irregularities in title not, in any material respect,
impairing the use of the Mortgaged Property for its intended purposes, but
specifically excluding all liens securing or representing monetary obligations,
and (d) all liens permitted pursuant to section 10.2 of the Note Agreements and
section 6.02 of the Credit Agreement.
Permitted Insurers: as defined in the Note Agreements and the Credit
Agreement.
Person: a corporation, a limited liability company, a joint venture,
an association, a partnership, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.
Potential Event of Default: as defined in the Note Agreements.
Public Partnership: National Propane Partners, L.P., a Delaware
limited partnership.
Registration Statement: as defined in the Note Agreements and the
Credit Agreement.
Requisite Percentage: as defined in the Trust Agreement.
Restoration: The restoration, replacement, or rebuilding of the
Mortgaged Property as nearly as possible to its value, condition and character
immediately prior to any Destruction, Taking or title insurance loss, as the
case may be, with such alterations and additions as may be made at the Company's
election pursuant to and subject to the conditions of section 7, together with
any temporary repairs and property protection pending completion of the work.
Restricted Subsidiaries: as defined in the Note Agreements and the
Credit Agreement.
Security Documents: (a) this Deed of Trust, (b) the separate deed of
trust, security agreement and fixture filing documents, each dated the date
hereof, from the
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Company and NPC to the deed of trust trustee named therein for the benefit of
the Trust ee under the Trust Agreement covering property of the Company or NPC
located in Arizona, California, Colorado, and Missouri, (c) the separate
mortgage, security agreement and fixture filing documents, each dated the date
hereof, among the Company, NPC, and the Trustee under the Trust Agreement
covering property of the Company or NPC located in Arkansas, Connecticut,
Florida, Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, New
Hampshire, New Mexico, New York, Rhode Island, Vermont and Wisconsin, (d) the
pledge and security agreement, dated the date hereof, among the Company, NPC,
the Restricted Subsidiaries named therein and the Trustee under the Trustee
Agreement, (e) the pledge and security agreement, dated the date hereof, among
the Public Partnership, NPC, and the Trustee under the Trust Agreement, and (f)
any other agreement executed by the Company, NPC, any Restricted Subsidiary or
the Public Partnership which purports to grant to the Trustee under the Trust
Agreement a security interest in or a lien on property to secure any of the
Obligations and which is stated therein to be a "Security Document", as each of
the same may be amended, modified or supplemented from time to time in
accordance with its terms.
SGP: National Propane SGP, a Delaware corporation.
State: The State of _________.
Subsidiary: as defined in the Note Agreements and the Credit
Agreement.
Taking: a taking of all or any part of the Mortgaged Property, or any
interest therein or right accruing thereto, including, without limitation, any
right of access thereto existing on the date of this Deed of Trust, as the
result of or in lieu or in anticipation of the exercise of the right of
condemnation or eminent domain.
Triarc: Triarc Companies, Inc., a Delaware corporation, and its
successors and assigns.
Trust Agreement: the Intercreditor and Trust Agreement, dated as of
June 26, 1996, among the Company, NPC, the Public Partnership, the Restricted
Subsidiaries, the Note Holders, the Bank Lenders, The First National Bank of
Boston, as Administrative Agent and the Trustee under the Trust Agreement, as
amended, modified or supplemented from time to time in accordance with the terms
thereof.
Trust Estate: the Mortgaged Property at the time subject to this Deed
of Trust and all other properties and moneys at the time subject to this Deed of
Trust or held by the Trustee under the Trust Agreement.
Trustee under the Trust Agreement: The Bank of New York, a New York
Bank corporation, as Trustee under the Trust Agreement, or any successor trustee
or co-trustee at the time acting as such thereunder.
36. Payment of Notes, Bank Notes and Parity Debt. The Company will
duly and punctually pay or cause to be paid (a) in accordance with the terms of
the Note Agreements, the principal of and premium, if any, and interest on the
Notes, (b) in accordance with the terms of the Credit Agreement, the
indebtedness evidenced by the Bank Notes, (c) in accordance with the terms of
any Parity Debt Agreements, the principal
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of and premium, if any, and interest on any Parity Debt, and (d) all other sums
which may become payable under the terms of the Note Agreements (including,
without limitation, the Note Obligations), the Notes, the Credit Agreement
(including, without limitation, the Facilities Obligations), the Bank Notes, the
Guarantee Agreements, the Trust Agreement, this Deed of Trust, the other
Security Documents, the Parity Debt Agreements and the Parity Debt, and the
Company will duly perform and comply with all of the terms of the Note
Agreements, the Notes, the Credit Agreement, the Bank Notes, the Guarantee
Agreements, the Trust Agreement, this Deed of Trust, the other Security
Documents, the Parity Debt Agreements and the Parity Debt which are required to
be performed or complied with by, or which are otherwise applicable to, the
Company and NPC will duly perform and comply with all terms of the Note
Agreements, the Guarantee Agreements, the Trust Agreement, this Deed of Trust
and the other Security Documents which are required to be performed or complied
with by, or which are otherwise applicable to, NPC.
37. Title to Property; Authority, etc. The Company represents and
warrants that it or NPC is the absolute owner of good, marketable and
indefeasible fee simple absolute title to the Land and the Improvements and to
all other property included in the Mortgaged Property, subject to no mortgage,
lien, pledge, charge, security interest, encumbrance or other matter other than
the Permitted Encumbrances. There is no defect in or challenge to the Company's
or NPC's ownership of or rights or other interests in any of the Mortgaged
Property which would, individually or in the aggregate, materially lessen the
value of the Mortgaged Property for its current use or materially interfere with
the ordinary conduct of the business of the Company on the Mortgaged Property.
The lien of this Deed of Trust is valid and enforceable in accordance with its
terms on the right, title and interest of the Company and NPC in and to the
Mortgaged Property (except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium and similar laws of general application
or principles of equity relating to or affecting the rights and remedies of
creditors). The Company and NPC represent and warrant that they have all
necessary power and authority to execute this Deed of Trust and to convey the
Mortgaged Property as provided herein. The Company at its expense will warrant
and defend to the Deed of Trust Trustee and to the Trustee under the Trust
Agreement such title to the Mortgaged Property as described in this section 3
and the liens and security interests of the Deed of Trust Trustee thereon and
therein against all claims and demands and will maintain and preserve such lien
so long as any of the Note Obligations, the Facilities Obligations or Parity
Debt is outstanding, subject only to the Permitted Encumbrances.
38. Title Insurance; Application of Proceeds. Subject to section 27
hereof, the Company and NPC hereby irrevocably assign, transfer and set over to
the Trustee under the Trust Agreement all of their respective right, title and
interest in and to any insurance proceeds payable to the Company or NPC under
any policies of title in surance which relate to the Trust Estate and which name
or inure to the benefit of the Company and NPC. All proceeds received by the
Trustee under the Trust Agreement for any loss under the title insurance
policies with respect to the Trust Estate shall be held, and all proceeds
payable to the Company or NPC under any such title insurance policy naming or
inuring to the benefit of the Company or NPC shall be paid over to the Trustee
under the Trust Agreement and shall be held and applied by the Trustee under the
Trust Agreement as part of the Trust Estate for the benefit of the Note Holders,
the Bank Lenders and the Parity Lenders, provided that the Trustee under the
Trust Agreement may invest such proceeds in accordance with the provisions of
section 4(h) of the Trust Agreement.
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39. Recordation. The Company at its expense will at all times cause
this Deed of Trust and the other Security Documents and any instruments
amendatory hereof or thereof or supplemental hereto or thereto (and appropriate
financing statements), including, without limitation, any Mortgage Recording
Supplement, to be recorded, registered and filed and to be kept recorded,
registered and filed in such manner and in such places, and will pay all such
recording, registration, filing or other taxes, fees and other charges, and will
comply with all such statutes and regulations, as may be required by applicable
law in order to establish, preserve and protect the lien of this Deed of Trust
and the security interest created hereby as a valid and direct first priority
deed of trust lien of record and a valid first priority perfected security
interest in the Mortgaged Property (including, without limitation, any such
property or interest included in the Trust Estate and acquired after the
execution hereof) and any repairs, replacements, alterations and additions to
the Mortgaged Property, and the rights of the Deed of Trust Trustee and the
Beneficiaries hereunder. Promptly upon effecting any re-recording,
re-registration or refiling in order to comply with this section, the Company at
its expense will furnish to the Trustee under the Trust Agreement and each Note
Holder, Bank Lender and Parity Lender an opinion of counsel reasonably
satisfactory to each Note Holder, Bank Lender and Parity Lender specifying the
action taken and stating that such action has been duly taken and that no other
action is at the time required to be taken under this section. The Company, at
its expense, will furnish to the Trustee under the Trust Agreement and each Note
Holder, Bank Lender and Parity Lender at such times as the Trustee under the
Trust Agreement may reasonably request in connection with the recordation of a
Mortgage Recording Supplement, an opinion of counsel satisfactory to the Trustee
under the Trust Agreement stating that in the opinion of such counsel such
action has been taken in connection with the recording of the Mortgage Recording
Supplement necessary to maintain the lien or security interest created hereby
and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien or security interest,
or, alternatively if this Mortgage secures Land listed on Schedule 4.15 of the
Note Agreements, will furnish to the Trustee under the Trust Agreement an
endorsement to the title insurance policy insuring the priority of the lien and
security interest of this Mortgage, reasonably satisfactory to the Trustee under
the Trust Agreement, which endorsement shall insure the continued priority of
the lien and security interest created hereby as modified by the Mortgage
Recording Supplement.
40. Maintenance and Repairs; Inspection. 40.1 Maintenance and Repairs.
Subject to the terms of Section 16 hereof with respect to any Restoration
following a Destruction and subject to the terms of Section 17 hereof with
respect to any Restoration following a Taking, the Company at its expense will
maintain the Mortgaged Property in good repair, working order and condition and
will promptly make all necessary or appropriate repairs, replacements, renewals,
additions, betterments and improvements to the Mortgaged Property, whether
interior or exterior, structural or nonstructural, ordinary or extraordinary,
foreseen or unforeseen, so that at all times the value and utility of the
Mortgaged Property shall be properly preserved and maintained.
40.2. Inspection of Mortgaged Property. The Company and NPC shall
permit any persons designated by the Trustee under the Trust Agreement, any Note
Holder holding at least 5% of the principal amount of Notes (other than a
Competitor (as defined in the Note Agreements) (or an Affiliate thereof) of the
Company) then outstanding, Bank Lender or Parity Lender to visit and inspect the
Mortgaged Property, at the expense of the Company during the occurrence and
continuance of an Event of Default or a Potential Event of Default or a Default
and otherwise at the expense of such
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Note Holder, Bank Lender or Parity Lender, and the Company shall permit any
persons designated by the Trustee under the Trust Agreement, any Note Holder,
Bank Lender or Parity Lender to inspect its books of account, records, reports
and other papers, to make copies or extracts therefrom, and to discuss the
affairs, finances and accounts of the Company with the officers and employees of
the general partner of the Company and representatives of any firm of
independent public accountants employed by the Company (and by this provision
the Company authorizes said accountants to discuss the finances and affairs of
the Company with any such designated person), all at such reasonable times and
as often as may be reasonably requested upon reasonable notice to the Company or
NPC, as applicable.
41. Alterations and Additions. Unless and until an Event of Default
shall have occurred and be continuing, the Company at its expense may from time
to time make alterations of and additions to the Mortgaged Property or any part
thereof, provided that any such alteration or addition shall (a) not impair the
usefulness of the Mortgaged Property for use in the Business or reduce in any
material respect the fair market value thereof below its value immediately
before such alteration or addition, (b) be effected with due diligence in a good
and workmanlike manner and in compliance with all Legal Requirements and
Insurance Requirements and (c) be promptly and fully paid for so that the
Mortgaged Property shall at all times be free of liens for labor and materials
supplied or claimed to have been supplied, other than any lien or right thereto
under a contract claim pursuant to which payment is not yet due or which is
being contested as permitted by, and in accordance with the provisions of,
section 14. All repairs and alterations of and additions to the Mortgaged
Property shall immediately become subject to the lien of this Deed of Trust
without further action on the part of the Company, NPC, the Deed of Trust
Trustee or the Trustee under the Trust Agreement.
42. Removal and Disposal of Equipment. The Company will not and will
not permit any other Person to abandon, scrap, salvage, remove, sell or
otherwise dispose of any of the portions of the Mortgaged Property constituting
machinery, fixtures or equipment, provided that the Company may, if no Event of
Default at the time exists, (a) sell, lease, abandon or otherwise dispose of any
of its assets as permitted by section 2(c) of the Trust Agreement, section 10.7
of the Note Agreements and section 6.07 of the Credit Agreement, or (b) remove
and sell or otherwise dispose of, free of any right or claim of the Deed of
Trust Trustee or the Trustee under the Trust Agreement, any portion of the
Mortgaged Property constituting machinery, fixtures or equipment owned by the
Company which has become worn out or obsolete and which has been replaced by
other machinery, fixtures or equipment subject to the lien of this Deed of Trust
having a utility and value at least equal to that, at the time of removal, of
the machinery, fixtures or equipment so removed. Upon any such disposition
pursuant to clause (a) (but only to the extent section 2(c) of the Trust
Agreement, section 10.7(c) of the Note Agreements and section 6.07(c) of the
Credit Agreement is applicable thereto and the Company is in compliance with the
requirements thereof) or (b) above, the Trustee under the Trust Agreement shall
promptly grant and deliver to the Company a release thereof from the lien and
security interest granted pursuant to this Deed of Trust, provided that nothing
contained herein shall limit the lien and security interest granted in the
proceeds thereof.
43. No Claims Against Deed of Trust Trustee or Any Beneficiary.
Nothing contained in this Deed of Trust shall constitute any consent or request
by the Deed of Trust Trustee or any Beneficiary, express or implied, for the
performance of any labor or services or the furnishing of any materials or other
property in respect of the
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Mortgaged Property or any part thereof, nor as giving the Company or NPC any
right, power or authority to contract for or permit the performance of any labor
or services or the furnishing of any materials or other property in such fashion
as would permit the making of any claim against the Deed of Trust Trustee or any
Beneficiary in respect thereof or any claim that any lien based on the
performance of such labor or services or the furnishing of any such materials or
other property is prior to the lien or security interest of this Mortgage.
44. [Intentionally Omitted.]
45. Payment of Impositions. Subject to section 14 relating to
permitted contests, the Company will pay all Impositions when the same become
due and payable but in any event before any fine, penalty, interest or cost may
be added for nonpayment, will deliver to the Trustee under the Trust Agreement,
upon request, an Officers' Certificate certifying to the payment of all
Impositions required to be paid by this section 11 and will, upon request,
furnish to the Trustee under the Trust Agreement certified copies of official
receipts or other satisfactory proof evidencing such payments.
46. Compliance with Legal and Insurance Requirements, Instruments;
Environmental Matters. (a) Subject to section 14 relating to permitted contests,
the Company at its expense will promptly (i) comply in all material respects
with all Legal Requirements and all Insurance Requirements, whether or not
compliance therewith shall require structural changes in the Mortgaged Property
or interfere with the use and enjoyment of the Mortgaged Property or any part
thereof, (ii) procure, maintain and comply in all material respects with all
permits, licenses and other authorizations required for any use of the Mortgaged
Property or any part thereof then being made, including, without limitation, the
location of propane storage tanks thereon and for the proper erection,
installation, operation and maintenance of the Mortgaged Property or any part
thereof, and (iii) comply in all material respects with any instruments of
record at the time in force affecting the Mortgaged Property or any part
thereof.
(b) Environmental Matters. Subject to section 14 relating to permitted
contests, the Company shall comply in all material respects with any and all
Legal Requirements and Insurance Requirements with respect to the management,
use, storage, transmission, presence, containment, remediation, clean-up or
removal of Hazardous Substances on the Mortgaged Property, shall pay promptly
when due the costs of containment, remediation, clean-up or removal of any
Hazardous Substances or the threat of release of any Hazardous Substance on the
Mortgaged Property required to be re moved pursuant to any Legal Requirements or
Insurance Requirements and shall keep the Mortgaged Property free of any lien
pursuant to such Legal Requirements. In the event the Company fails to do so,
after notice to the Company and the failure of the Company to commence and
pursue appropriate cure of such failure with reasonable diligence, the Trustee
under the Trust Agreement, the Note Holders, the Bank Lenders or the Parity
Lenders may, but shall not be obligated to, take such action as they deem
reasonably necessary to bring the property into compliance with such Legal
Requirements or Insurance Requirements. The Company shall give the Trustee under
the Trust Agreement, the Note Holders, the Bank Lenders and the Parity Lenders,
their agents, employees and contractors, access to the Mortgaged Property to
enable the Trustee under the Trust Agreement, the Note Holders, the Bank Lenders
and the Parity Lenders to comply with such Legal Requirements or Insurance
Requirements. The Company shall not, and shall not permit any Person to,
voluntarily release, discharge, or dispose of any Hazardous
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Substances on the Mortgaged Property except in material compliance
with all Legal Requirements and Insurance Requirements and, if any Hazardous
Substances shall be released, discharged or disposed of, whether voluntarily or
involuntarily, in violation of any Legal Requirement or Insurance Requirement,
the Company shall promptly con tain, remediate, clean-up or remove or cause to
be contained, remediated, cleaned-up or removed from the Mortgaged Property such
Hazardous Substances to the extent required to be removed by any Legal
Requirement or Insurance Requirement. The Company shall not install nor permit
to be installed in the Mortgaged Property asbestos or any substance containing
asbestos, and, with respect to any such material currently present in the
Mortgaged Property, shall promptly comply in all material respects with all
applicable Legal Requirements and Insurance Requirements. If the Company fails
to comply with any of the foregoing provisions, the Trustee under the Trust
Agreement, the Note Holders, the Bank Lenders or the Parity Lenders, after
notice to the Company and the failure of the Company to commence and pursue
compliance with reasonable diligence, shall have the right (but not the
obligation) to do whatever they deem reasonably necessary to cure any such
default or to comply with such Legal Requirements or In surance Requirements.
The Company shall give the Trustee under the Trust Agreement, the Note Holders,
the Bank Lenders and the Parity Lenders and their agents, employees and
contractors access to the Mortgaged Property to enable the Trustee under the
Trust Agreement, the Note Holders, the Bank Lenders and the Parity Lenders to
take such action as they deem reasonably necessary to cure any such default or
to comply with such Legal Requirements or Insurance Requirements. The Trustee
under the Trust Agreement shall have the right (but shall not be obligated to),
at the expense of the Company during the existence of a Potential Event of
Default, a Default or an Event of Default, to conduct an environmental audit of
the Mortgaged Property at such times as shall be deemed reasonable by the
Requisite Percentage based upon the nature of the Company's business or the
results of any prior environmental audit, and the Company and NPC shall
cooperate in the conduct of such environmental audit.
47. Liens. The Company will not directly or indirectly create or
permit or suffer to be created or to remain, and will discharge, or promptly
cause to be discharged, any mortgage, lien, pledge, adverse interest in
property, charge, security interest or other encumbrance in or on the Trust
Estate or any part thereof, or the interest of the Company, NPC, SGP, the Deed
of Trust Trustee or the Beneficiaries therein, other than this Deed of Trust,
the other Security Documents and the liens permitted pursuant to section 10.2 of
the Note Agreements and section 6.02 of the Credit Agreement and any other
Permitted Encumbrances.
48. Permitted Contests. The Company at its expense may contest, by
appropriate legal actions conducted in good faith and with due diligence, the
amount or validity or application, in whole or in part, of any Imposition or
lien therefor or any Legal Requirement or any lien for labor or materials
supplied or claimed to have been supplied or the application of any instrument
of record referred to in section 12, provided that (a) neither the Trust Estate
nor any part thereof or interest therein shall be subject to reasonable danger
of sale, loss or forfeiture, (b) in the case of a Legal Requirement, neither the
Deed of Trust Trustee nor any Beneficiary would be in reasonable danger of any
criminal liability or subject to reasonable danger of incurring any civil
liability or penalty for failure to comply therewith, nor will the Company and
NPC be in reasonable danger of any criminal liability or in reasonable danger of
incurring any material civil liability or penalty for failure to comply
therewith, (c) the Company shall have furnished such security, if any, as may be
required in the proceedings or reasonably requested by the
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holders of the Requisite Percentage, and (d) such reserves or other appropriate
provision, if any, as shall be required by generally accepted accounting
principles shall have been made therefor. The Company shall give prompt written
notice to the Trustee under the Trust Agreement of the commencement of any
contest referred to in the pre ceding sentence.
49. Insurance. 49.1. Risks to be Insured. The Company will at its
expense at all times cause all of the Mortgaged Property which is either of a
character required by law to be insured or usually insured by companies of
established reputation engaged in the same or similar business and similarly
situated (a) to be properly insured with Permitted Insurers against loss or
damage from such hazards and risks (including liability to other persons and
property and business interruption insurance) as are required by law to be
insured or are usually insured by companies of established reputa tion engaged
in the same or similar business and similarly situated, and (b) to the extent
consistent with the practice of companies of established reputation engaged in
the same or similar business and similarly situated (including, without
limitation, companies in a similar financial condition), to be self-insured for
all or any of such hazards and risks (in lieu of maintaining insurance policies
with Permitted Insurers as required above, to the extent of such self-insurance)
with respect to losses resulting from liabilities to third par ties for personal
injury or property damage or damage to or destruction of its property, up to
$1,000,000 of self-insurance per occurrence per policy but in any event not
greater than $3,000,000 of self-insurance in the aggregate per occurrence for
such risk under all applicable policies (including self-insurance for reasonable
deductible amounts in respect of insurance policies), provided that, with
respect to such self-insurance or deductibles, the Company reserves such amounts
as may be required by generally accepted account ing principles.
49.2. Policy Provisions. All insurance maintained pursuant to Section
15.1 shall: (a) name, except in the case of workers' compensation insurance, the
Deed of Trust Trustee, the Trustee under the Trust Agreement, and the other
Beneficiaries (for liability insurance) as additional insureds, as their
respective interests may appear; (b) provide, except in the case of public
liability insurance and workers' compensation insurance, that all insurance
claims shall be adjusted with the Company, subject to the approval of the
Trustee under the Trust Agreement, and shall be payable solely to the Trustee
under the Trust Agreement, provided that any claim with respect to a Destruction
involving insurance claims of less than $500,000 in the aggregate may be
adjusted by and payable to the Company alone; (c) include effective waivers by
the insurer of all claims for insurance premiums against the Deed of Trust
Trustee, the Trustee under the Trust Agreement and each other Beneficiary; (d)
provide, to the extent commercially available at a commercially reasonable cost,
that any losses with respect to property insurance shall be payable
notwithstanding (i) any act, failure to act or negligence of or violation of
warranties, declarations or conditions contained in such policy by the insureds,
including, without limitation, the Company, NPC, the Deed of Trust Trustee, the
Trustee under the Trust Agreement or any other Beneficiary, (ii) the occupation
or use of the Mortgaged Property for purposes more hazardous than permitted by
the terms of the policy, (iii) any foreclosure or other proceedings or notice of
sale relating to the Mortgaged Property, or (iv) any change in the title to or
ownership of any of the Mortgaged Property (other than portions of the Mortgaged
Property expressly released from the lien of this Deed of Trust); (e) provide,
to the extent commercially available at a commercially reasonable cost, that no
cancellation, termination or lapse in coverage thereof shall be effective until
at least 10 days after receipt by the Trustee under the Trust Agreement of
written notice thereof with respect to the failure to pay insurance premiums or
30 days after receipt by
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the Trustee under the Trust Agreement of written notice thereof for any other
reason; and (f) be on such other terms as are consistent with the practice of
companies of established reputation engaged in the same or similar business and
similarly situated.
49.3. Delivery of Policies; Insurance Certificates. The Company will
deliver to the Trustee under the Trust Agreement, promptly upon request of such
Trustee, certificates of all insurance policies (or, if requested by the Trustee
under the Trust Agreement, copies of the insurance policies, together with an
Officers' Certificate certifying such copies to be true and correct) with
respect to the Mortgaged Property which the Company is required to maintain or
cause to be maintained pursuant to this section 15, together with evidence as to
the payment of all premiums then due thereon, provided that the Trustee under
the Trust Agreement shall not be deemed by reason of its custody of such
certificates or policies to have knowledge of the contents thereof. The Company
has, simultaneously with the closing under the Note Agreements and Credit
Agreement, delivered to the Trustee under the Trust Agreement and will deliver
to the Trustee under the Trust Agreement promptly upon request of such Trustee,
and in any event (a) on December 31 of each calendar year, commencing with
December 31, 1996, and (b) upon each increase in the amount of self-insurance
with respect to losses resulting from liabilities to third parties for personal
injury or property damage or damage to or destruction of its property retained
by the Company by $500,000 or more in the ag gregate, a report by a firm of
independent insurance brokers or consultants chosen by the Company and
satisfactory to the Trustee under the Trust Agreement (i) setting forth the
insurance obtained pursuant to this section 15, including, without limitation,
the amounts thereof, the names of the insurers and the property, hazards and
risks covered thereby, and certifying that the same comply with the requirements
of this section 15, that all premiums then due thereon have been paid and that
the same are in full force and effect, (ii) setting forth all self-insurance
maintained by the Company pursuant to this section 15 and (iii) certifying that
in the opinion of such firm, such insurance or self-insurance complies with the
requirements of this section 15 and is, as to amounts, coverage and provisions,
adequate to protect the Company, the Deed of Trust Trustee, the Trustee under
the Trust Agreement and each other Beneficiary against any and all insurable
risks affecting the Mortgaged Property required to be insured hereunder, or
setting forth any recommendations of such independent insurance brokers as to
additional insurance, if any, reasonably required for the protection of the
interest of the Deed of Trust Trustee, the Trustee under the Trust Agreement and
each other Beneficiary in the light of avail able insurance coverage and
practice in the propane distribution industry. The Trustee under the Trust
Agreement shall be entitled to rely on such reports without further
investigation of the facts and circumstances set forth therein.
49.4. Separate Insurance. The Company will not take out separate
insurance concurrent in form or contributing in the event of loss with that
required to be maintained pursuant to this section 15.
50. Destruction of Property. 50.1. The Company to Give Notice. In case
of any Destruction of $100,000 or more, the Company will promptly give written
notice thereof to the Deed of Trust Trustee and each Beneficiary, generally
describing the nature and extent of such Destruction.
50.2. Restoration. In case of any Destruction the Company shall either
(a) subject to section 10.20 of the Note Agreements and section 2.11(f) of the
Credit Agreement, promptly commence and complete, at its expense, whether or not
the
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insurance proceeds, if any, on account of such Destruction shall be sufficient
for the purpose, the Restoration; or (b) elect, by written notice to the Trustee
under the Trust Agreement and each Note Holder, Bank Lender and Parity Lender
given within 90 days after such Destruction, not to effect Restoration.
50.3. Application of Net Insurance Proceeds. In the event of any
Destruction involving insurance claims of $500,000 or more, the Company will
cause all Net Insurance Proceeds (and, if the Company has elected to
self-insure, the amount of any self-insurance) to be paid to the Trustee under
the Trust Agreement for application by such Trustee in accordance with section 4
of the Trust Agreement. If at the time of any Destruction any policy or policies
as required by section 15 are not in effect, the amount that would have been
payable as Net Insurance Proceeds if such policy or policies had been in effect
at such time without any self-insurance shall be deemed to be Net Insurance
Proceeds.
51. Taking of Property. 51.1. The Company to Give Notice; Assignment
of Awards, etc. In case of a Taking, or the commencement of any proceedings or
negotiations which will likely result in a Taking, the Company will promptly
give written notice thereof to the Deed of Trust Trustee and each Beneficiary,
generally describing the nature and extent of such Taking or the nature of such
proceedings or negotiations and the nature and extent of the Taking which might
result therefrom, as the case may be. Subject to section 27, the Company, NPC,
and the Deed of Trust Trustee hereby irrevocably assign, transfer and set over
to the Trustee under the Trust Agreement all rights of the Company, NPC and the
Deed of Trust Trustee to any award or payment on account of any Taking. The
Company and NPC will in good faith and with due diligence file and prosecute
what would otherwise be the Company's or NPC's claim for any such award or
payment and cause the same to be applied as set forth in section 17.3, and, in
the event the Company or NPC fails so to act or is otherwise in default
hereunder, the Company and NPC irrevocably authorize and empower the Trustee
under the Trust Agreement to file and prosecute such claim. The Company will pay
all costs, fees and expenses reasonably incurred by the Deed of Trust Trustee or
the Trustee under the Trust Agreement in connection with any Taking and in
seeking and obtaining any award or payment on account thereof.
51.2. Restoration. In case of any Taking, the Company shall either (a)
subject to section 10.20 of the Note Agreements and section 2.11(f) of the
Credit Agreement, promptly commence and complete, at its expense, whether or not
the awards or payments, if any, on account of such Taking shall be sufficient
for the purpose, Restoration of the Mortgaged Property, except to the extent
made impossible by any reduction in area caused by such Taking, provided that in
case of a Taking for temporary use the Company shall not be required to effect
Restoration until such Taking is terminated or (b) elect, by written notice to
the Deed of Trust Trustee and each Beneficiary given within 90 days after such
Taking, not to effect Restoration of the Mortgaged Property or the portion
thereof.
51.3. Application of Net Awards, etc. In the event of any Taking, the
Company will cause all Net Awards to be paid to the Trustee under the Trust
Agreement for application by such Trustee in accordance with section 4 of the
Trust Agreement.
52. Assignment of Rents and Leases. (a) The Company hereby assigns to
the Trustee under the Trust Agreement all of its right, title and interest, if
any,
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as landlord under each Lease now existing or hereafter entered into, and all
rents and other sums payable to the Company under each such Lease, together with
the right to collect and receive the same, provided that, if and so long as no
Event of Default shall have occurred and be continuing, the Company shall have
the right to exercise its rights and perform its obligations as landlord under
the Leases and to collect and receive such rents and other sums for its own uses
and purposes. Upon the occurrence and during the continuance of an Event of
Default, all such rents and other sums shall be collected and held by the
Trustee under the Trust Agreement and shall be applied as provided in section 4
of the Trust Agreement and the Trustee under the Trust Agreement or its agent
shall have the right to enter upon the Mortgaged Property for the purposes of
such collection.
(b) The assignment of rents, income and other benefits contained in
the Granting Clause shall constitute an absolute and present assignment,
subject, however, to the conditional permission given herein to the Company to
collect and use such rents, income and other benefits. Such assignment shall be
fully operative without any further action on the part of either party and the
Trustee under the Trust Agreement shall be entitled, at its option, upon the
occurrence and during the continuance of an Event of Default hereunder, to all
rents, income and other benefits from the Mortgaged Property, whether or not it
takes possession of the Mortgaged Property. The Company hereby further grants to
the Trustee under the Trust Agreement the right, upon the occurrence and during
the continuance of an Event of Default, at its option, to (i) enter upon and
take possession of the Mortgaged Property for the purpose of collecting the said
rents, income and other benefits, (ii) dispossess by the usual summary
proceedings any tenant defaulting in the payment thereof to the Trustee under
the Trust Agreement, (iii) let the Mortgaged Property or any part thereof, and
(iv) apply such rents, income and other benefits, after payment of all necessary
charges and expenses, on account of the Obligations. Such assignment and grant
shall continue in effect until the indebtedness and other sums secured hereby
are paid, the execution of this Deed of Trust constituting and evidencing the
irrevocable consent of the Company to the entry upon and taking pos session of
the Mortgaged Property by the Trustee under the Trust Agreement pursuant to such
grant, whether or not foreclosure has been instituted. Neither the exercise of
any rights under this paragraph by the Trustee under the Trust Agreement nor the
application of any such rents, income or other benefits to the indebtedness and
other sums secured hereby, shall cure or waive any Event of Default, or notice
of default hereunder or invalidate any act done pursuant hereto or to any such
notice, but shall be cumulative with all other rights and remedies.
53. Events of Default. It shall be an "Event of Default" under this
Deed of Trust if one or more of the following events shall occur:
(a) if an "Event of Default" as defined in the Note Agreements or in
the Credit Agreement or in any Security Document shall occur; or
(b) if a default shall occur under any Parity Debt Agreement and such
default shall continue for more than the period of grace specified therein,
shall not have been waived pursuant thereto and shall permit the holders of
the Parity Debt to cause such Parity Debt to become due before its stated
maturity or to permit the holders of the Parity Debt to cause the Company
or any Subsidiary to repurchase or repay such Parity Debt.
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54. Rights of Note Holders, Bank Lenders and Parity Lenders. 54.1.
Suits by Note Holders, Bank Lenders or Parity Lenders. No Note Holder, Bank
Lender or Parity Lender shall have any right to institute any action, suit or
proceeding at law or in equity or otherwise for the foreclosure of this Deed of
Trust, for the appointment of a receiver, for the enforcement of any other
remedy hereunder or for the execution of any other power or trust hereunder,
unless
(a) an Event of Default shall have occurred and be continuing,
(b) such Note Holder, Bank Lender or Parity Lender previously shall
have given to the Trustee under the Trust Agreement written notice of the
occurrence of such Event of Default,
(c) the Requisite Percentage shall have made written request to the
Trustee under the Trust Agreement either to institute or cause the Deed of
Trust Trustee to institute such action, suit or proceeding in its own name
or in the name of the Deed of Trust Trustee, or to proceed to execute any
other powers or trusts herein granted to the Trustee under the Trust
Agreement or the Deed of Trust Trustee, and shall have afforded to the
Trustee under the Trust Agreement reasonable opportunity to do so and shall
have offered to the Trustee under the Trust Agreement reasonable security
and indemnity against the costs, expenses and other charges to be incurred
therein or thereby, and
(d) the Requisite Percentage shall have determined that the Trustee
under the Trust Agreement shall have refused or neglected to act on such
request within a reasonable time;
and such notification, request, offer of security and indemnity and refusal or
neglect are hereby declared to be conditions precedent to the enforcement by any
such Note Holder, Bank Lender or Parity Lender of any action or cause of action
for foreclosure or for the appointment of a receiver or for any other remedy
hereunder or to the execution by any such Note Holder, Bank Lender or Parity
Lender of any other powers or trusts of this Deed of Trust; it being understood
and intended that no Note Holder, Bank Lender or Parity Lender shall have any
right in any manner whatsoever hereunder or under the Notes, the Note
Agreements, the Bank Notes, the Credit Agreement, the Guarantee Agreements, the
Trust Agreement, the other Security Documents, the Parity Debt, if any, or the
Parity Debt Agreements, if any, by its action or their action to affect, disturb
or prejudice the lien of this Deed of Trust or to enforce any right hereunder,
except in the manner herein provided, and that all proceedings hereunder, at law
or in equity or other wise, shall be instituted, had and maintained in the
manner herein provided and for the benefit of all the Note Holders, the Bank
Lenders and Parity Lenders, provided that nothing contained in this Deed of
Trust or in the Notes, the Note Agreements, the Bank Notes, the Credit
Agreement, the Guarantee Agreements, the Trust Agreement, the other Security
Documents, the Parity Debt, if any, or the Parity Debt Agreements, if any, shall
affect or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and premium, if any, and interest on, and
any amount due under the Note Obligations, the Facilities Obligations and the
Parity Debt, at the time and place, from the source and in the manner expressed
herein and in the Notes, the Note Agreements, the Bank Notes, the Credit
Agreement, the Guarantee Agreements, the Parity Debt and the Parity Debt
Agreements or affect or impair the right, which is also
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absolute and unconditional, of any Note Holder, Bank Lender or Parity Lender to
enforce by action at law the payment thereof.
54.2. Cost of Collection. If the Company shall fail to pay any
principal of or premium, if any, or interest on any Note Obligations or
Facilities Obligations or any Parity Debt, the Company will pay (to the extent
permitted under applicable law) to the holder thereof such further amount as
shall be sufficient to cover the reasonable cost and expense of collection,
including, without limitation, attorneys' fees and expenses.
54.3. Notice of Claimed Default. If any Note Holder, Bank Lender or
Parity Lender shall serve any notice or demand or take any other action in
respect of a claimed default, the Company will forthwith give written notice
thereof to the Deed of Trust Trustee and each Beneficiary describing the notice,
demand or action and the nature of the claimed default.
54.4. No Waiver. Neither failure nor delay on the part of the Deed of
Trust Trustee or any Beneficiary to exercise any right, remedy, power or
privilege provided for herein or in the Note Agreements, the Notes, the Bank
Notes, the Credit Agreement, the Guarantee Agreements, the Trust Agreement, the
other Security Documents, the Parity Debt or the Parity Debt Agreements or by
statute or at law or in equity or otherwise shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right, remedy, power or
privilege preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
55. Remedies. 55.1. General. If any Event of Default shall have
occurred and be continuing, the Trustee under the Trust Agreement may or may
cause the Deed of Trust Trustee to:
(a) proceed at law or in equity or otherwise to foreclose the lien of
this Deed of Trust as against all or any part of the Trust Estate and to
have the same sold under the judgment or decree of a court of competent
jurisdiction;
(b) exercise any or all of the remedies available to a secured party
under the Uniform Commercial Code of the State, including, but not limited
to:
(i) either personally or by means of a court appointed receiver,
take possession of all or any of the Trust Estate constituting
personal property and exclude therefrom the Company and NPC and all
others claiming under the Company or NPC and thereafter hold, store,
use, operate, manage, maintain and control, make repairs,
replacements, altera tions, additions and improvements to and exercise
all rights and powers of the Company or NPC in respect of such
personal property or any part thereof; and in the event the Trustee
under the Trust Agreement demands or attempts to take possession of
such personal property in the exercise of its rights, the Company and
NPC shall promptly turn over and deliver complete possession thereof
to the Trustee under the Trust Agreement;
(ii) without notice to or demand upon the Company or NPC make
such payments and do such acts as the Trustee under the Trust
Agreement may deem necessary to protect its security interest in such
personal property, including, without limitation, paying, purchasing,
contesting or
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compromising any encumbrance, charge or lien which is prior to or
superior to the security interest granted hereunder and, in exercising
any such powers or authority, to pay all expenses incurred in
connection therewith;
(iii) require the Company and NPC to assemble such personal
property or any portion thereof, at a place designated by the Trustee
under the Trust Agreement and reasonably convenient to such parties,
and promptly to deliver such personal property to the Trustee under
the Trust Agreement or an agent or representative designated by it;
and the Trustee under the Trust Agreement and its agents and
representatives shall have the right to enter upon any or all of the
Company's or NPC's premises and property to exercise the rights
hereunder of the Trustee under the Trust Agreement;
(iv) sell, lease or otherwise dispose of such personal property
at public sale, with or without having such personal property at the
place of sale, and upon such terms and in such manner as the Trustee
under the Trust Agreement may determine, provided that unless such
personal property is perishable or threatens to decline speedily in
value or is of a type cus tomarily sold on a recognized market, the
Trustee under the Trust Agree ment shall give the Company and NPC at
least ten days' prior written notice of the time and place of any
public sale of such personal property or other intended disposition
thereof; and
(c) exercise any other remedy permitted to be exercised by the
mortgagee or a secured party or both under the laws of the State.
55.2. Foreclosure by Power of Sale. If an Event of Default shall have
occurred and be continuing, the Trustee under the Trust Agreement may cause to
be recorded, published and delivered to the Company and NPC such notice of
default and election to sell as then required by applicable law. The Trustee
under the Trust Agree ment shall, or shall cause the Deed of Trust Trustee to,
without demand on the Company or NPC, after lapse of such time as may then be
required by applicable law, sell the Trust Estate at the time and place of sale
fixed by it in such notice of sale, either as a whole, or in separate lots or
parcels or items as the Trustee under the Trust Agreement shall deem expedient,
and in such order as it may determine, at public auction to the highest bidder
for cash in lawful money of the United States payable at the time of sale. The
Trustee under the Trust Agreement shall, or shall cause the Deed of Trust
Trustee to, deliver to such purchaser or purchasers thereof a good and
sufficient deed or deeds conveying the property so sold, but without any
covenant or warranty, express or implied. The recitals in such deed of any
matters or facts shall be conclusive proof of the truthfulness thereof. The
Trustee under the Trust Agreement may postpone a sale of all or any portion of
the Trust Estate by public announcement at such time and place of sale, and from
time to time thereafter may postpone such sale by public announcement at the
time fixed by the preceding postponement or subsequently noticed sale, and
without further notice make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.
55.3. Deed of Trust Trustee and Trustee under the Trust Agreement
Authorized to Execute Deeds. The Company and NPC irrevocably appoint the Deed of
Trust Trustee and the Trustee under the Trust Agreement the true and lawful
attorneys of
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the Company and NPC in their names and stead and on their behalf, for the sole
purpose of effectuating any sale, assignment, transfer or delivery for the
enforcement of this Deed of Trust, whether pursuant to foreclosure or power of
sale or otherwise, to execute and deliver all such deeds, bills of sale,
assignments and other instruments as the Deed of Trust Trustee or the Trustee
under the Trust Agreement may consider necessary or appropriate, with full power
of substitution, the Company and NPC hereby ratifying and confirming all that
such attorney or any substitute shall lawfully do by virtue hereof.
Nevertheless, if so requested by the Deed of Trust Trustee or the Trustee under
the Trust Agreement or any purchaser, the Company and NPC shall ratify and
confirm any such sale, assignment, transfer or delivery by executing and
delivering to the Deed of Trust Trustee or the Trustee or the Trustee under the
Trust Agreement or such purchaser all deeds, bills of sale, assignments,
releases and other proper instruments to effect such ratification and
confirmation as may be designated in any such request.
55.4. Purchase of Trust Estate by the Beneficiaries. Any Beneficiary
may be a purchaser of the Trust Estate or of any part thereof or of any interest
therein at any sale thereof, whether pursuant to foreclosure or power of sale or
otherwise hereunder, and may apply upon the purchase price the indebtedness
secured hereby owing to such purchaser, to the extent of such purchaser's
distributive share of the purchase price. Any such purchaser shall, upon any
such purchase, acquire good title to the properties so purchased, free of the
lien of this Deed of Trust, and the Company hereby covenants to warrant and
defend the title of such purchaser to the same extent set forth in section 3.
55.5. Request for Notice. The Company and NPC hereby request that a
copy of any notice of an Event of Default and any notice of sale be mailed to
them at the address set forth in section 28.
55.6. Waiver of Appraisement, Valuation. The Company and NPC hereby
waive, to the full extent they may lawfully do so, the benefit of all
appraisement, valuation, stay, extension and redemption laws now or hereafter in
force and all rights of marshaling in the event of any sale of the Trust Estate
or any part thereof or any interest therein.
55.7. Sale a Bar Against the Company and NPC. Any sale of the Trust
Estate or any part thereof or any interest therein, whether pursuant to
foreclosure or power of sale or otherwise hereunder, shall forever be a
perpetual bar against any right or equity of redemption or interest of the
Company and NPC with respect to the Mortgaged Property.
55.8. Application of Proceeds of Sale. The proceeds of any sale of the
Trust Estate or any part thereof or any interest therein, whether pursuant to
foreclosure or power of sale or otherwise, shall be turned over to the Trustee
under the Trust Agreement and, together with any other moneys at the time held
by the Trustee under the Trust Agreement as part of the Trust Estate, shall be
applied in accordance with section 4 of the Trust Agreement.
55.9. Appointment of Receiver. If an Event of Default shall have
occurred and be continuing, either the Trustee under the Trust Agreement or, if
directed by the Trustee under the Trust Agreement, the Deed of Trust Trustee
shall, as a matter of right and without notice to the Company or NPC or anyone
claiming under the Company or NPC, and without regard to the then value of the
Trust Estate or the interest of the
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Company or NPC therein, be entitled to apply to any court having jurisdiction to
appoint a receiver or receivers of the Trust Estate, and the Company or NPC, to
the extent permitted by law, hereby irrevocably consent to such appointment and
waive notice of any application therefor. Any such receiver or receivers shall
have all the usual powers and duties of receivers in like or similar cases and
all the powers and duties of the Deed of Trust Trustee and the Trustee under the
Trust Agreement in case of entry as provided in section 21.10 and shall continue
as such and exercise all such powers until the date of confirmation of sale of
the Trust Estate unless such receivership is sooner terminated.
55.10.Possession, Management and Income. If an Event of Default shall
have occurred and be continuing, the Trustee under the Trust Agreement or, if
directed by the Trustee under the Trust Agreement, the Deed of Trust Trustee,
without further notice, so far as permitted by law, may enter upon and take
possession of the Trust Estate or any part thereof by force, summary
proceedings, ejectment or otherwise and may remove the Company and NPC and all
other Persons and any and all property therefrom, and may hold, operate and
manage the same and receive all earnings, income, rents, issues and proceeds
accruing with respect thereto or any part thereof. The Deed of Trust Trustee and
the Trustee under the Trust Agreement shall be under no liability except for its
gross negligence or willful misconduct for or by reason of any such taking of
pos session, entry, removal or holding, operation or management, except that any
amounts so received by the Deed of Trust Trustee shall be turned over to the
Trustee under the Trust Agreement and shall be applied in accordance with
section 4 of the Trust Agreement.
55.11.Right of the Trustee under the Trust Agreement to Perform the
Company's Covenants. If the Company shall fail to make any payment or the
Company or NPC shall fail to perform any act required to be made or performed
hereunder, the Trustee under the Trust Agreement, subject to ten days' prior
written notice to the Company (except that no prior notice shall be required in
the case of an emergency or where the failure to make such payment or perform
such obligation could affect the prior ity of the lien of this Deed of Trust),
without waiving or releasing any obligation or default, may (but shall be under
no obligation to) at any time thereafter make such payment or perform such act
for the account and at the expense of the Company, and may enter upon the
Mortgaged Property or any part thereof for such purpose and take all such action
thereon as, in such Trustee's opinion, may be necessary or appropriate therefor.
All sums so paid by the Trustee under the Trust Agreement and all reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees
and expenses) so in curred, together with interest thereon at the Default Rate
from the date of payment or incurrence, shall constitute additional indebtedness
secured by this Deed of Trust and shall be paid by the Company to the Trustee
under the Trust Agreement on demand.
55.12.Remedies Cumulative. The Trustee under the Trust Agreement shall
be entitled to enforce payment and performance of any indebtedness or
obligations secured hereby and to exercise all rights and powers under this Deed
of Trust or under the Note Agreements, the Notes, the Credit Agreement, the Bank
Notes, the Guarantee Agreements, the Trust Agreement, the other Security
Documents, the Parity Debt, or the Parity Debt Agreements or other agreement or
any laws now or hereafter in force, notwithstanding that some or all of such
indebtedness and obligations secured hereby may now or hereafter be otherwise
secured, whether by mortgage, deed of trust, pledge, lien, assignment or
otherwise. Neither the acceptance of this Deed of Trust nor its enforcement,
whether by court action or pursuant to the power of sale or other powers herein
contained, shall prejudice or in any manner affect the right of the Trustee
under the
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Trust Agreement to realize upon or enforce any other security now or hereafter
held by the Trustee under the Trust Agreement, it being agreed that the Trustee
under the Trust Agreement shall be entitled to enforce this Deed of Trust and
any other security now or hereafter held by the Trustee under the Trust
Agreement in such order and manner as it may in its absolute discretion
determine. Each right, power and remedy of the Trustee under the Trust Agreement
provided for in this Deed of Trust or now or hereafter existing at law or in
equity or by statute or otherwise shall be cumulative and concurrent and shall
be in addition to every other right, power or remedy provided for in this Deed
of Trust or now or hereafter existing at law or in equity or by statute or
otherwise, and the exercise or beginning of the exercise by the Trustee under
the Trust Agreement of any one or more of the rights, powers or remedies
provided for in this Deed of Trust or now or hereafter existing at law or in
equity or by statute or otherwise shall not preclude the simultaneous or later
exercise by the Trustee under the Trust Agreement of any or all such other
rights, powers or remedies.
56. Terms Subject to Applicable Law; Governing Law. (a) All rights,
powers and remedies provided herein may be exercised only to the extent that the
exercise thereof does not violate any applicable law, and are intended to be
limited to the extent necessary so that they will not render this Deed of Trust
invalid, unenforceable or not entitled to be recorded, registered or filed under
any applicable law. If any term of this Deed of Trust or any application thereof
shall be held to be invalid, illegal or unenforceable, the validity of other
terms of this Deed of Trust or any other application of such term shall in no
way be affected thereby.
(b) THIS DEED OF TRUST SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK; except that the laws
of the State shall govern with respect to the perfection, creation, priority,
validity or enforcement of the liens and security interests hereby created.
57. No Waiver. No failure by the Deed of Trust Trustee, the Trustee
under the Trust Agreement or any other Beneficiary to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, shall constitute a waiver of any such term or
of any such breach. No waiver of any breach shall affect or alter this Deed of
Trust, which shall continue in full force and effect, or the rights of the Deed
of Trust Trustee or the Trustee under the Trust Agreement with respect to any
other then existing or subsequent breach.
58. After Acquired Property. All property of every kind whether real
or personal, including, without limitation, additional land, acquired by the
Company or NPC after the date hereof which by the terms of Section 6.22 of the
Credit Agreement or Section 10.22 of the Note Agreement is required to be
subjected to the lien of this Deed of Trust or which relates to the operation of
or is used or procured for use in connection with the Mortgaged Property or the
Business of the Company conducted at the Mortgaged Property shall, immediately
upon the acquisition thereof by the Company or NPC, and without any further
mortgage, assignment or conveyance, become subject to the lien of this Deed of
Trust, provided that the Company and NPC (a) will, upon any such acquisition,
forthwith execute and cause to be recorded, registered and filed, as provided in
section 5, any amendment or modification hereof or supplement hereto, and any
financing statements and any amendments or modifications thereof or supplements
thereto, in such places as may be required by law in order to establish,
perfect, preserve and
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protect the first priority lien of this Deed of Trust on the property so
acquired and the rights of the Deed of Trust Trustee, the Trustee under the
Trust Agreement and the other Beneficiaries hereunder and (b) will do, execute,
acknowledge and deliver all and every such further acts, conveyances, mortgages,
assignments and assurances as the Deed of Trust Trustee or the Trustee under the
Trust Agreement shall reasonably require for ac complishing the purposes of this
Deed of Trust, including, without limitation, subjecting such after-acquired
property to the lien of this Deed of Trust.
59. Further Assurances. The Company and NPC at their expense will
execute, acknowledge and deliver all such instruments and take all such action
as the Deed of Trust Trustee or the Trustee under the Trust Agreement or any
other Beneficiary may reasonably request for the better assuring to the Deed of
Trust Trustee and the Trustee under the Trust Agreement of the properties and
rights now or hereafter subject to the lien hereof or assigned hereunder or
intended so to be.
60. Additional Security. Without notice to or consent of the Company
or NPC and without impairment of the lien and rights created by this Deed of
Trust, the Deed of Trust Trustee or the Trustee under the Trust Agreement may
accept (but the Company and NPC shall not be obligated to furnish), from the
Company or NPC or from any other Person or Persons, additional security for the
Note Obligations, the Facilities Obligations or the Parity Debt at the time
outstanding and any other obligations secured hereby. Neither the giving of this
Deed of Trust nor the acceptance of any such additional security shall prevent
the Deed of Trust Trustee or the Trustee under the Trust Agreement from
resorting, first, to such additional security, and, second, to the security
created by this Deed of Trust, without affecting the lien and rights of the Deed
of Trust Trustee or the Trustee under the Trust Agreement under this Deed of
Trust.
61. Defeasance, Release and Reconveyance. If the Company shall
irrevocably pay (a) the principal of and premium, if any, and interest on the
Notes in accordance with the terms thereof, (b) the principal of and premium, if
any, and interest on the Bank Notes in accordance with the terms thereof and all
of the Commitments (as defined in the Credit Agreement) of the Bank Lenders
shall have expired or terminated and all of the Letters of Credit (as defined in
the Credit Agreement) have been canceled or expired, (c) the principal of and
premium, if any, and interest on the Parity Debt, if any, in accordance with the
terms thereof, and (d) all other sums payable by the Company pursuant to the
Note Agreements (including, without limitation, the Note Obligations), the
Notes, the Credit Agreement (including, without limitation, the Facilities
Obligations), the Bank Notes, the Guarantee Agreements, the Trust Agreement,
this Deed of Trust, the other Security Documents, the Parity Debt and the Parity
Debt Agreements and shall comply with all the terms hereof and of the Note
Agreements, the Notes, the Credit Agreement, the Bank Notes, the Guarantee
Agreements, the Trust Agreement, the other Security Documents, the Parity Debt
and the Parity Debt Agreements to the extent that a failure to so comply may
result in any cost or liability to the Note Holders, the Bank Lenders or the
Parity Lenders, then this Deed of Trust shall be null and void and of no further
force and effect and the Mortgaged Property shall be released and reconveyed by
the Trustee under the Trust Agreement and at the expense of the Company. Upon
the indefeasible payment in full in cash of the Facilities Obligations and
termination of the Credit Agreement, all references herein to the Credit
Agreement, the Bank Lenders and the Bank Notes shall be deemed to be deleted and
of no further force and effect. Upon the indefeasible payment in full in cash of
the Note Obligations and termination of the
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Note Agreements, all references herein to the Note Agreements, the Notes and the
Note Holders shall be deemed to be deleted and of no further force and effect.
62. Notices. All notices and other communications under this Deed of
Trust shall be in writing and shall be delivered by hand, by express courier
service or by registered or certified mail, return receipt requested, postage
prepaid, addressed (a) if to the Company or NPC, at Suite 1700, IES Tower, 200
1st Street, S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067, Attention:
Senior Vice President and Chief Financial Officer with a copy to Paul, Weiss,
Rifkind, Wharton & Garrison, at 1285 Avenue of the Americas, New York, New York
10019-6064, Attention: Paul D. Ginsberg, Esq. if such notice relates to the
occurrence of an Event of Default, or at such other address, or to the attention
of such other officer, as the Company shall have furnished to the Deed of Trust
Trustee, the Trustee under the Trust Agreement and each other Beneficiary in
writing, or (b) if to the Deed of Trust Trustee, at _______ or at such other
address as the Deed of Trust Trustee shall have furnished to the Company, NPC,
and the Trustee under the Trust Agreement in writing, or (c) if to the Trustee
under the Trust Agreement, at 101 Barclay Street, New York, New York 10286 or at
such other address, or to the attention of such other officer, as the Trustee
under the Trust Agreement shall have furnished to the Deed of Trust Trustee, the
Company or NPC and each other Beneficiary in writing, or (d) if to a Note Holder
which is a party to a Note Agreement, at the address of such Note Holder listed
in Schedule "A" of the Note Agreements or at such other address as such Note
Holder shall have furnished to the Company and the Trustee under the Trust
Agreement in writing, or (e) if to any other holder of a Note, at the most
recent address of such holder as it appears on the register maintained by or on
behalf of the Company pursuant to section 14.1 of the Note Agreements, (f) if to
any Bank Lender, at the most recent address of such lender as set forth in the
Credit Agreement or (g) if to the holder of any Parity Debt, at the most recent
address of such holder maintained by or on behalf of the Company pursuant to the
Parity Debt Agreements. Any notice so addressed and (x) delivered by hand, shall
be deemed to be given upon actual receipt thereof or the first Business Day (as
defined in the Note Agreements and the Credit Agreements) thereafter if
delivered other than on a Business Day, (y) delivered by express courier
service, shall be deemed to be given one Business Day after being so deposited
with the express courier service, (z) mailed, shall be deemed to be given three
Business Days after being so mailed or, in the case of all notices to the
Trustee under the Trust Agreement, upon the actual receipt thereof.
63. No Credit for Payment of Taxes or Impositions. The Company shall
not be entitled to any credit against the principal, premium, if any, or
interest pay able on the Notes, the Bank Notes or the Parity Debt or any other
sums which may become payable under the terms thereof by reason of the payment
of any tax on the Mortgaged Property or any part thereof or by reason of the
payment of any other Imposition.
64. Security Agreement; Fixture Filing. To the extent that the
Mortgaged Property includes personal property, or items of personal property
which are or are to become fixtures under applicable law, this Deed of Trust
shall also be construed as a security agreement under the Uniform Commercial
Code for the State and shall constitute a financing statement filed as a fixture
filing as those terms are defined in the Uniform Commercial Code and accordingly
(i) the address of the secured party is 101 Barclay Street, New York, New York
10286; (ii) the mailing address of the debtor is Suite 1700, IES Tower, 200 1st
Street, S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401- 2067; (iii) the types of
collateral that now or hereafter may become fixtures are described
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in the granting clauses hereof; and (iv) the taxpayer identification numbers of
the debtors are 42-1453041 for the Company and 11-1723340 for NPC; and, if an
Event of Default has occurred and is continuing, the Trustee under the Trust
Agreement shall be entitled with respect to such personal property to all
remedies available under the Uniform Commercial Code for the State and all other
remedies available under applicable law.
65. Successor Deed of Trust Trustee. The Deed of Trust Trustee may
resign by the giving of notice of such resignation in writing to the Trustee
under the Trust Agreement. If the Deed of Trust Trustee shall die, resign or
become disqualified from acting in the execution of this trust or shall fail or
refuse to execute the same when requested by the Trustee under the Trust
Agreement so to do, or if, for any reason, with or without cause, the Trustee
under the Trust Agreement or the holders of more than 662/3% in aggregate
principal amount of the Notes, the Bank Notes and the Parity Debt at the time
collectively outstanding shall prefer to appoint a substitute Deed of Trust
Trustee to act instead of the forenamed Deed of Trust Trustee, the Trustee under
the Trust Agreement or the holders of more than 662/3% in aggregate principal
amount of the Notes, the Bank Notes and the Parity Debt at the time collectively
outstanding, as the case may be, shall have full power to appoint a substitute
Deed of Trust Trustee and, if preferred, several substitute Deed of Trust
Trustees in succession who shall succeed to all the estate, rights, powers and
duties of the forenamed Deed of Trust Trustee and such appointment shall be
conclusively presumed to be executed with authority and shall be valid and
sufficient without proof of any action by the Trustee under the Trust Agreement
or the holders of more than 662/3% in aggregate principal amount of the Parity
Debt at the time outstanding.
66. Future Advances. This Deed of Trust secures indebtedness of the
Company under the Credit Agreement and the Facilities Obligations. The Credit
Agreement contemplates the Company and the Bank Lenders entering into a series
of advances, or advances, payments and readvances. The Parity Debt Agreements
may also provide for a series of advances or advances, payments and readvances.
This Deed of Trust secures not only the original indebtedness of the Company
under the Credit Agreement and the Facilities Obligations, if any, but also the
indebtedness of the Company created by future advances under the Facilities
Obligations or the Parity Debt Agreements, whether such advances are obligatory
or are to be made at the option of the Bank Lenders or Parity Lenders, as
applicable, to the extent and with the same priority of lien as if such future
advances had been made at the time this Deed of Trust was recorded, although
there may have been no advances under the Credit Agreement and the Facilities
Obligations or the Parity Debt Agreements made at the time of the execution,
acknowledgment and recording of this Deed of Trust, and although there may be no
indebtedness outstanding at the time any advance is made.
67. Execution of Deed of Trust by NPC. NPC has executed this Deed of
Trust solely for the purpose of granting the Trustee under the Trust Agreement a
mortgage lien on and security interest in the portion of the Mortgaged Property
held by NPC, if any, and as collateral security for the payment of the
Obligations and for the compliance by the Company and NPC, as applicable, with
all the obligations and terms hereof, the Trust Agreement, the Note Agreements,
the Notes, the Credit Agreement, the Bank Notes, the Guarantee Agreements, the
other Security Document, the Parity Debt and the Parity Debt Agreements. In the
event of an Event of Default hereunder, the Trustee under the Trust Agreement
shall be entitled to exercise all of its rights and
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remedies with respect to such portions of the Mortgaged Property as if such
Mortgaged Property were owned or leased or held by the Company, as the case may
be.
68. Miscellaneous. This Deed of Trust may be changed, waived or
amended only by an instrument in writing signed by the Company, NPC, the Deed of
Trust Trustee and the Trustee under the Trust Agreement and may be discharged,
terminated or partially released only in accordance with section 27 hereof or in
accordance with section 2(c) of the Trust Agreement, section 10.7 of the Note
Agreements and section 6.07 of the Credit Agreement. The Trustee under the Trust
Agreement shall have no obligation to take any action hereunder except as
provided in the Trust Agreement. This Deed of Trust shall be binding upon the
Company, NPC, and their successors and assigns, and all Persons claiming under
or through the Company or NPC or any such successor or assign, and shall inure
to the benefit of and be enforceable by the Deed of Trust Trustee, the Trustee
under the Trust Agreement and their successors and assigns. Upon (i) the
assignment by any Bank Lender of all or any portion of its rights and
obligations under the Credit Agreement (including all or any portion of its
Commitment (as defined in the Credit Agreement), the Facilities Obligations
owing to it and the Bank Note or Bank Notes held by it) to any other Person,
(ii) the sale, transfer, exchange or other disposition of a Note by the
corresponding Note Holder thereof to any other Person, or (iii) the assignment
by any Parity Lender of all or any portion of its rights and obligations under
such Parity Debt to any other Person, such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such transferor or
assignor herein or otherwise. The headings in this Deed of Trust are for
purposes of reference only and shall not limit or define the meaning hereof.
This Deed of Trust may be executed in any number of counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument. To facilitate filing and recording, there may be omitted from
certain counterparts the parts of Exhibit A containing specific descriptions of
certain portions of the Mortgaged Property which relate to land under the
jurisdiction of offices or located in counties other than the office or county
in which the particular counterpart is to be filed or recorded. All references
in Exhibit A to recording information are to the official real property records
of the county in which the affected land is located, unless otherwise specified
in such Exhibit. The maturity of the Facilities Obligations for purposes of
determining the statute of limitations for enforcement of this Deed of Trust
with respect to the Facilities Ob ligations shall be as set forth in the Credit
Agreement.
69. Conflicts. In the event the terms and conditions of this Mortgage
shall directly conflict with the terms and conditions of the Note Agreements or
the Credit Agreement, the terms and conditions of the Note Agreements or the
Credit Agreement, as the case may be, shall control and supersede the provisions
of this Mortgage with respect to such direct conflicts.
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IN WITNESS WHEREOF, the Company and NPC caused this Deed of Trust to
be executed by its officers thereunto duly authorized, as of the date set forth
above.
NATIONAL PROPANE, L.P.,
a Delaware limited partnership
By: NATIONAL PROPANE CORPORATION,
its general partner
By:______________________________
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
its general partner
By:______________________________
Name:
Title:
NATIONAL PROPANE CORPORATION,
a Delaware corporation
By:______________________________
Name:
Title:
[Add acknowledgments]
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EXHIBIT A
Description of Land
<PAGE>
<PAGE>
Draft -- June 24, 1996
STATE OF ________________
COUNTY OF _______________
This document was prepared by the attorney described below in consultation with
counsel in the state in which the Mortgaged Property is located and, when
recorded, the recorded counterparts should be returned to:
Jacqueline I. Glassman, Esq.
Debevoise & Plimpton
875 Third Avenue
New York, New York 10022
<PAGE>
<PAGE>
EXHIBIT H
[FORM OF]
ASSIGNMENT AND ACCEPTANCE dated as of ________________ made by
________________ (the "Assignor") to ________________ (the "Assignee") with
reference to the Credit Agreement dated as of ____________ ___, 1996 (as amended
or modified from time to time, the "Credit Agreement"), among National Propane,
L.P., a Delaware limited partnership (the "Borrower"), the financial
institutions party thereto as lenders (the "Lenders"), The First National Bank
of Boston, as Administrative Agent and a Lender (the "Administrative Agent"),
Bank of America NT & SA, as a Lender, and BA Securities, Inc., as Syndication
Agent. Terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement.
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Assignor and the Assignee hereby agree as follows:
1. Effective as of the effective date set forth on Schedule 1 (the
"Effective Date"), the Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes, without recourse or
warranty except as set forth herein and in the provisions of the Credit
Agreement incorporated herein, from the Assignor, the Assigned Interests. The
"Assigned Interests" shall mean and consist of the respective rights and
obligations of the Assignor in respect of a portion or all of the Facilities as
of the Effective Date to the extent of the percentage[s] set forth on Schedule 1
(including the Commitments of the Assignor on the Effective Date and the Loans
owing to the Assignor which are outstanding on the Effective Date), together
with any amount of unpaid interest accrued on the assigned Loans to the
Effective Date which amount is set forth on Schedule 1 and any amount of Fees
accrued to the Effective Date for the account of the Assignor which amount is
set forth on Schedule 1.
2. Each of the Assignor and the Assignee hereby makes and agrees to be
bound by all the applicable representations, warranties and agreements set forth
in Section 9.04(c) of the Credit Agreement, a copy of which has been received by
each such party. From and after the Effective Date, (a) the Assignee shall be a
party to and be bound by the provisions of the Credit Agreement and, to the
extent of the Assigned Interests, have the rights and obligations of a Lender
thereunder and under the Loan Documents and (b) the Assignor shall, to the
extent of the
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Assigned Interests, relinquish its rights and be released from its obligations
under the Credit Agreement but shall continue to be entitled to the benefits of
Sections 2.15, 2.19 and 9.05 thereunder.
3. (a) Fees and interest are payable by the Borrower in respect of the
Assigned Interests as provided in the Credit Agreement. Such Fees and interest
shall be payable to the Assignee only to the extent such Fees and interest, as
applicable, constitute part of the Assigned Interests or accrue after the
Effective Date.
(b) Notwithstanding anything to the contrary contained in this Assignment
and Acceptance, if and when the Assignor receives or collects any payment of
Fees or interest which is payable to the Assignee pursuant to paragraph (a)
above, the Assignor shall distribute such payment to the Assignee.
(c) Notwithstanding anything to the contrary contained in this Assignment
and Acceptance, if and when the Assignee receives or collects any payment of
Fees or interest which is payable to the Assignor pursuant to paragraph (a)
above, the Assignee shall distribute such payment to the Assignor.
4. In consideration of the assignment by the Assignor to the Assignee of
the Assigned Interests as set forth above, the Assignee agrees to pay the
Assignor on or prior to the Effective Date the aggregate amount specified on, or
calculated as provided on, Schedule 1 (the "Aggregate Assignment Payment").
5. This Assignment and Acceptance shall become effective as provided in
Section 9.04(b) of the Credit Agreement.
6. All amounts payable to the Assignor hereunder shall be paid in U.S.
Dollars by transfer of federal funds to the Assignor, ABA No. [ ],
Account No. [ ], Attention: [ ], Reference: [ ].
7. This Assignment and Acceptance is being delivered to the Administrative
Agent together with (a) the Notes evidencing the Loans included in the Assigned
Interests, (b) if the Assignee is organized under the laws of a jurisdiction
outside the United States, the forms specified in Section 2.19(b) of the Credit
Agreement, duly completed and executed by such Assignee, (c) if the Assignee is
not already a Lender or Affiliate thereof under the Credit Agreement, an
Administrative Questionnaire duly
- ii -
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completed by such Assignee and (d) a processing and recordation fee of $2,500.
8. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
- iii -
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<PAGE>
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be duly executed by their respective authorized
officers as of the day and year first above written.
[NAME OF ASSIGNOR]
_________________, as Assignor
By:
Name:
Title:
[NAME OF ASSIGNEE]
_________________, as Assignee
By:
Name:
Title:
Accepted and agreed to
as of the Effective Date (if required):
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent
______________________________________________
Name:
Title:
NATIONAL PROPANE, L.P.,
as Borrower
______________________________________________
Name:
Title:
- iv -
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<PAGE>
SCHEDULE 1 to ASSIGNMENT AND ACCEPTANCE
1. Date of Assignment: ________________
2. Legal Name of Assignor: __________________________
3. Legal Name of Assignee: __________________________
4. Assignee's Address and Telecopy Number for Notices:
5. Effective Date of Assignment and Acceptance: ___________________
6. Assigned Interests:
a. Percentage of Tranche A Revolving Credit Commitment Assigned: ______%
b. Aggregate principal amount of Tranche A Revolving Loans assigned: $______
[c. Percentage of Tranche B Revolving Credit Commitment Assigned: ______%]
[d. Aggregate principal amount of Tranche B Revolving Loans assigned: $_____]
e. Aggregate amount of Tranche B Letter of Credit Exposure assigned: $______
[f. Percentage of Tranche B Term Loan Commitment Assigned: ______%]
[g. Aggregate principal amount of the Tranche B Term Loan assigned: $______]
h. Accrued and unpaid interest assigned (if any)
i. Interest on Tranche A Revolving Loans: $______________
ii. Interest on Tranche B Revolving Loans: $______________
[iii. Interest on Tranche B Term Loans: $______________]
i. Accrued and unpaid Fees assigned (if any)
i. Tranche A Commitment Fees: $______________
ii. Tranche B Commitment Fees: $______________
iii. Tranche A Letter of Credit Fees: $______________
iv. Tranche B Letter of Credit Fees: $______________
7. Aggregate Assignment Payment:
$______________ (may specify method of calculation in lieu of all or a
portion of the amount payable)
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EXHIBIT J
CASH COLLATERAL AGREEMENT
CASH COLLATERAL AGREEMENT dated as of __________ ___, 1996, between
NATIONAL PROPANE, L.P., a Delaware limited partnership (the "Borrower"), THE
FIRST NATIONAL BANK OF BOSTON (the "Administrative Agent"), and _______________,
as Trustee (in such capacity, the "Trustee").
Reference is made to the Credit Agreement dated as of _____________ ___,
1996 (as amended or modified from time to time, the "Credit Agreement"), among
the Borrower, the financial institutions party thereto as lenders (the
"Lenders"), The First National Bank of Boston, as Administrative Agent and a
Lender, Bank of America NT & SA, and BA Securities, Inc., as Syndication Agent.
The Lenders have respectively agreed to extend credit to the Borrower pursuant
to, and subject to the terms and conditions specified in, the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower may be required or elect to
reduce the Letter of Credit Exposure by depositing cash collateral with the
Administrative Agent pursuant to the terms and conditions set forth herein. The
obligations of the Lenders to make the Loans and issue Letters of Credit under
the Credit Agreement are conditioned upon, among other things, the execution and
delivery by the Borrower of this Cash Collateral Agreement in the form hereof.
Accordingly, the Borrower, intending to be legally bound, hereby agrees
with the Administrative Agent as follows:
SECTION 1. Defined Terms. Terms used herein and not otherwise defined
herein shall have the meanings assigned to them in the Credit Agreement. As used
herein, the following terms shall have the following meanings:
"Account" shall mean an account established at the office of the
Administrative Agent, account no. _____________________, designated "The First
National Bank of Boston - National Propane, L.P. Cash Collateral Agreement
Account."
"Agreement" shall mean this Cash Collateral Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Cash Collateral" shall mean all cash deposited from time to time in the
Account and all interest or profits, if any, on investments of such deposits.
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"Collateral" shall have the meaning assigned to such term in Section 3(a).
"Designated Letters of Credit" shall mean Letters of Credit of any Class
identified in a notice to the Trustee pursuant to Section 2.21(k) of the Credit
Agreement as being cash collateralized, in whole or in part, pursuant to this
Agreement.
"Junior Obligations" shall mean the Obligations, as such term is defined
in the Trust Agreement.
"Junior Secured Parties" shall mean the Note Holders, the Bank Lenders and
the Parity Lenders, as such terms are defined in the Trust Agreement.
"Senior Secured Obligations" shall mean the Borrower's obligations under
Section 2.21(g) of the Credit Agreement in respect of Designated Letters of
Credit, including its obligations to reimburse the Issuing Bank for Letter of
Credit Disbursements with respect to Designated Letters of Credit and to pay
interest on any such unreimbursed Letter of Credit Disbursements.
"Senior Secured Parties" shall mean (a) the Lenders and (b) the
Administrative Agent and the Documentation Agent, in their capacities as Issuing
Banks.
SECTION 2. Rules of Interpretation. The rules of interpretation specified
in Section 1.02 of the Credit Agreement shall be applicable to this Agreement.
SECTION 3. Grant of Security Interest. (a) As security for the payment and
performance of the Senior Secured Obligations, the Borrower hereby pledges,
assigns and transfers to the Administrative Agent, for the benefit of the Senior
Secured Parties, and hereby creates and grants to the Administrative Agent, for
the benefit of the Senior Secured Parties, a first priority security interest
in, the Account, the Cash Collateral now or hereafter acquired and all other
proceeds thereof (collectively, the "Collateral").
(b) As security for the payment and performance of the Junior Obligations,
the Borrower hereby pledges, assigns and transfers to the Trustee, for the
benefit of the Junior Secured Parties, and hereby creates and grants to the
Trustee, for the benefit of the Junior Secured Parties, a second priority
security interest in, the Collateral. Such security interest shall be subject to
no
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prior lien except the security interest granted to the Administrative Agent, for
the benefit of the Senior Secured Parties, pursuant to paragraph (a) above.
SECTION 4. Maintenance of Cash Collateral Account. (a) Subject to Section
4(c), the Collateral shall be subject to the exclusive dominion and complete
control of the Administrative Agent, which shall hold the Cash Collateral,
administer the Account subject to the terms and conditions of this Agreement and
have complete control over withdrawal of the Cash Collateral. The Borrower
hereby irrevocably authorizes and empowers the Administrative Agent, its
officers, employees and authorized agents to endorse and sign the name of the
Borrower on all checks, drafts, money orders or other media of payment so
delivered, and such endorsements or assignments shall for all purposes, be
deemed to have been made by the Borrower prior to any endorsement or assignment
thereof by the Administrative Agent. The Administrative Agent may use any
convenient or customary means for the purpose of collecting such checks, drafts,
money orders or other media of payment.
(b) The Cash Collateral shall automatically be applied by the
Administrative Agent to reimburse the Issuing Banks and the other Secured
Parties for Letter of Credit Disbursements with respect to Designated Letters of
Credit and all other Senior Secured Obligations due and payable by the Borrower.
(c) Other than any interest earned on the investment of Cash Collateral in
Cash Equivalents, which investments shall be made as directed by the Borrower
(unless such investments shall be contrary to applicable law or regulation or a
Default or Event of Default shall have occurred and be continuing, in which case
the determination of whomever to make investments shall be made at the option
and in the discretion of the Administrative Agent), deposits of the Cash
Collateral shall not bear interest. Interest or profits, if any, on such
investments shall accumulate in the Account.
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SECTION 5. Representation and Warranty. The Borrower represents and
warrants to the Administrative Agent and the Trustee that the Borrower has the
power and authority to execute, deliver and perform its obligations under this
Agreement and this Agreement has been duly executed and delivered by the
Borrower and constitutes the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with its terms.
SECTION 6. Covenants. (a) The Borrower covenants and agrees with the
Administrative Agent that it will not (i) sell, assign, transfer, exchange, or
otherwise dispose of, or grant any option with respect to, the Collateral or
(ii) create, incur or permit to exist any Lien or option in favor of, or any
claim of any Person with respect to, any of the Collateral, or any interest
therein, except for the security interests created by this Agreement.
(b) Contemporaneously herewith, and at such other times hereafter as may
be required by the Administrative Agent, the Borrower shall execute and deliver
to the Administrative Agent (in blank if required by the Administrative Agent)
such assignments, pledges, notices, transfer instruments, withdrawal forms or
other instruments relating to any of the Cash Collateral as may be required by
the Administrative Agent.
SECTION 7. Release of Cash Collateral. (a) If the Borrower is required to
provide an amount of cash collateral hereunder pursuant to Section 2.11(i) or
2.11(j) of the Credit Agreement, such amount (to the extent not applied as
provided in Section 4(b)) shall be returned to the Borrower upon demand;
provided that, after giving effect to such return, (i) the sum of (A) the
Tranche A Letter of Credit Exposure plus (B) the aggregate outstanding principal
amount of Tranche A Revolving Loans would not exceed the aggregate amount of the
Tranche A Revolving Credit Commitments (or the Borrowing Base, if less), (ii)
the sum of (A) the Tranche B Letter of Credit Exposure plus (B) the aggregate
outstanding principal amount of Tranche B Revolving Loans would not exceed the
aggregate amount of the Tranche B Revolving Credit Commitments and (iii) no
Default or Event of Default shall have occurred and be continuing. In the event
that the conditions set forth in the foregoing clauses (i) and (ii) shall be
satisfied but an Event of Default shall have occurred and be continuing at the
time of any such proposed return of an amount of Collateral, such amount of
Collateral shall be returned to the Trustee.
(b) Upon (i) the indefeasible payment in full in cash of all of the
Facilities Obligations, (ii) the termination of the Commitments, (iii) the
cancellation or expiration of all Letters of Credit and the reimbursement in
full of all amount drawn
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thereunder and (iv) the satisfaction by the Borrower of all terms and conditions
of this Agreement, the Credit Agreement, the Notes and all other Loan Documents,
the Administrative Agent shall transfer any remaining Collateral to the Trustee.
(c) Except for transfers of funds made to the Trustee pursuant to the
foregoing paragraphs of this Section 7 (and payments made by the Trustee
pursuant to the Trust Agreement out of the funds so transferred), none of the
Collateral shall be applied, directly or indirectly, to pay all or any portion
of the Junior Secured Obligations.
SECTION 8. Authority of Administrative Agent. The Borrower acknowledges
that the rights and responsibilities of the Administrative Agent under this
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Administrative Agent and the
Lenders, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Borrower, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and the Borrower shall not be under
any obligation, or entitlement, to make any inquiry respecting such authority.
SECTION 9. Notices. All notices shall be given and shall become effective
as provided in the Credit Agreement.
SECTION 10. Severability. In the event any one or more of the provisions
contained in this Agreement should be held invalid, illegal or unenforceable in
any respect, the validity, legality and enforceability of the remaining
provisions contained herein and therein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 11. Waivers; Amendment. No failure or delay of the Administrative
Agent in exercising any power or right hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent hereunder
and under the other Loan Documents are cumulative and are not exclusive of any
rights or remedies which they would otherwise have. This Agreement and any
provision hereof may not be waived, amended or modified, except pursuant to an
agreement or agreements in writing entered into by the
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Borrower, the Administrative Agent and the Trustee. Any such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
SECTION 12. Section Headings. The section headings used in this Agreement
are for convenience of reference only, are not part of this Agreement and are
not to affect the construction of, or to be taken into consideration in
interpreting this Agreement.
SECTION 13. Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of the Borrower and shall inure to the benefit of the
Administrative Agent and the Secured Parties, the Trustee and the Junior Secured
Parties and their successors and assigns.
SECTION 14. Applicable Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. Additional Agreements. Notwithstanding anything else to the
contrary herein, the parties hereto agree that the sole right, title and
interest of the Trustee and the Junior Secured Parties in and to this Agreement
and the Collateral shall be to receive transfers in accordance with paragraphs
(a) and (b) of Section 7.
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IN WITNESS WHEREOF, the Borrower and the Administrative Agent have caused
this Cash Collateral Agreement to be duly executed and delivered as of the date
first above written.
NATIONAL PROPANE, L.P.,
as Borrower
By: National Propane Corporation,
as General Partner
By
Title
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent
By
Title
_______________________,
as Trustee
By
Title
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EXHIBIT L
[FORM OF]
SUPPLEMENTAL AGREEMENT
SUPPLEMENTAL AGREEMENT dated as of _________________ _____, _____, between
the Restricted Subsidiary listed on the signature page hereto (the "New
Restricted Subsidiary"), and __________________________________________, as
Trustee (the "Trustee") under the Trust Agreement (as defined herein).
Reference is made to (a) the Credit Agreement dated as of ____________
___, 1996 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), among National Propane, L.P., a Delaware limited partnership (the
"Borrower"), the financial institutions party thereto as lenders (the
"Lenders"), 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, (b) the $125,000,000 [ ]% First Mortgage Notes due June 15,
2010 (the "Mortgage Notes") issued to certain institutional investors (the
"Purchasers") under the Note Agreement dated as of _____________ ___, 1996,
among the Borrower, National Propane Corporation, National Propane SGP, Inc. and
the Purchasers, as amended, modified or supplemented from time to time (the
"Note Agreement"), (c) the Pledge and Security Agreement dated as of
____________ ___, 1996 among the Grantors named therein and the Trustee (as
amended or modified from time to time, the "Borrower Security Agreement"), (d)
the Guarantee Agreement dated as of _____________ ___, 1996 among the Guarantors
named therein and the Trustee (as amended or modified from time to time, the
"Subsidiaries' Guarantee Agreement"), and (e) the Trust Agreement dated as of
_____________ ___, 1996 among the Borrower, the General Partners, the Public
Partnership, the Restricted Subsidiaries named therein and the Trustee (as
amended or modified from time to time, the "Trust Agreement"). Terms used herein
and not otherwise defined herein shall have the meanings assigned to them in the
Borrower Security Agreement and the Subsidiaries' Guarantee Agreement.
The Credit Agreement and the Note Agreement require each Restricted
Subsidiary that was not in existence or not a Restricted Subsidiary on the date
thereof to enter into the Borrower Security Agreement (as a Grantor), the
Subsidiaries' Guarantee Agreement (as a Guarantor) and the Trust Agreement.
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The Credit Agreement, the Note Agreement, the Borrower Security Agreement,
the Subsidiaries' Guarantee Agreement and the Trust Agreement specify that
additional Restricted Subsidiaries may become Grantors and Guarantors, as
applicable, under the Borrower Security Agreement and the Subsidiaries'
Guarantee Agreement by execution and delivery of an instrument in the form of
this Agreement. The undersigned New Restricted Subsidiary is executing this
Agreement in accordance with the requirements of the Credit Agreement and the
Note Agreement in order to become a Grantor and a Guarantor under the Borrower
Security Agreement and the Subsidiaries' Guarantee Agreement, respectively, to
induce the Lenders to make additional Loans and to induce the Issuing Banks to
issue Letters of Credit and as consideration for Loans previously made, Letters
of Credit previously issued and Mortgage Notes previously purchased.
Accordingly, the New Restricted Subsidiary and the Trustee agree as
follows:
SECTION 1. Borrower Security Agreement. In accordance with Section 7.07 of
the Borrower Security Agreement, the New Restricted Subsidiary by its signature
hereto shall become a Grantor under the Borrower Security Agreement with the
same force and effect as if originally named therein as a Grantor and the New
Restricted Subsidiary hereby (i) agrees to all the terms and provisions of the
Borrower Security Agreement applicable to it as a Grantor thereunder, (ii)
represents and warrants that the representations and warranties made by it as a
Grantor thereunder are true and correct on and as of the date hereof with the
same effect as though made on the date hereof and (iii) acknowledges receipt of
a copy of and agrees to be bound by the terms of the Borrower Security
Agreement. In furtherance of the foregoing, as security for the payment or
performance, as the case may be, of the Secured Obligations (as defined in the
Borrower Security Agreement) of the New Restricted Subsidiary as a Grantor, the
New Restricted Subsidiary hereby grants to the Trustee, its successors and
assigns, for the ratable benefit of the Secured Parties, a security interest in
and hereby pledges all of such New Restricted Subsidiary's right, title and
interest in, to and under the Collateral listed on Schedules 2, 3, 4, 6, 7, 8,
9, 10 and 11 attached hereto and all other Collateral referred to in the
Borrower Security Agreement. Each reference to a "Grantor" in the Borrower
Security Agreement shall be deemed to include the New Restricted Subsidiary, and
each schedule attached to this Agreement shall be incorporated into and become
part of and supplement the corresponding Schedules 2 through 11 to the Borrower
Security Agreement.
SECTION 2. Subsidiaries' Guarantee Agreement. In accordance with Section
12 of the Subsidiaries' Guarantee Agreement, the New Restricted Subsidiary by
its signature hereto shall become a Guarantor under the Subsidiaries' Guarantee
Agreement with the same force and effect as if originally named therein as a
Guarantor and the New Restricted Subsidiary hereby (a) agrees to all the terms
and provisions of the Subsidiaries' Guarantee Agreement applicable to it as a
Guarantor thereunder, (b)
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represents and warrants that the representations and warranties made by it as a
Guarantor thereunder are true and correct on and as of the date hereof with the
same effect as though made on the date hereof and (c) acknowledges receipt of a
copy of and agrees to be obligated and bound by the terms of the Subsidiaries'
Guarantee Agreement. Each reference to a "Guarantor" in the Subsidiaries'
Guarantee Agreement shall be deemed to include the New Restricted Subsidiary.
SECTION 3. Trust Agreement. In accordance with Section ______ of the Trust
Agreement, the New Restricted Subsidiary by its signature hereto shall become a
party under the Trust Agreement and the New Restricted Subsidiary hereby (a)
agrees to all the terms and provisions of the Trust Agreement applicable to it
as a party thereunder and (b) acknowledges receipt of a copy of and agrees to be
obligated and bound by the terms of the Trust Agreement.
SECTION 4. Enforceability. The New Restricted Subsidiary hereby represents
and warrants that this Agreement has been duly authorized, executed and
delivered by the New Restricted Subsidiary and constitutes a legal, valid and
binding obligation of the New Restricted Subsidiary enforceable against it in
accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally and by equitable principles of
general applicability (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
SECTION 5. Effectiveness. This Agreement shall become effective upon the
satisfaction of the following conditions:
(a) the receipt by the Trustee, in form and substance satisfactory
to the Trustee, of the following:
(i) duly executed counterparts of this Agreement;
(ii) a copy of the New Restricted Subsidiary's certificate of
incorporation, certificate of partnership or other constitutive
documents, including all amendments thereto, certified as of a
recent date by the Secretary of State of the jurisdiction of its
organization, and a certificate as to its good standing, as of a
recent date, from such Secretary of State;
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(iii) a certificate of the Secretary, Assistant Secretary or
other authorized representative of the New Restricted Subsidiary
certifying (A) that attached thereto is a true and complete copy of
its by-laws or partnership agreement, as applicable, in effect on
the date thereof and at all times since a date prior to the date of
the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by
the Board of Directors of the New Restricted Subsidiary (or, in the
case of a partnership, the managing general partner thereof)
authorizing the execution, delivery and performance of this
Agreement and the performance of the Borrower Security Agreement,
the Subsidiaries' Guarantee Agreement and the Trust Agreement to
which it will be a party and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (C)
that the certificate of incorporation, certificate of partnership or
other constitutive documents of the New Restricted Subsidiary have
not been amended since the date of the last amendment thereto shown
on the certificate of good standing furnished pursuant to clause
(ii) above and (D) as to the incumbency and specimen signature of
each authorized representative executing any document delivered in
connection herewith on behalf of such party;
(iv) a certificate of another authorized representative as to
the incumbency and specimen signature of the person executing the
certificate pursuant to clause (iii) above;
(v) upon the request of the Trustee or any Secured Party,
certified copies of Requests for Information (form UCC-11), or
equivalent reports from Prentice-Hall Financial Services or other
independent search service satisfactory to the Trustee, listing (A)
any judgment naming the New Restricted Subsidiary as judgment debtor
in any of the jurisdictions where a UCC financing statement would be
required by law to be filed in order to create a perfected security
interest in or lien on any of the personal or real property of the
New Restricted Subsidiary, (B) any tax lien that names the New
Restricted Subsidiary as a delinquent taxpayer in any of the
jurisdictions referred to in the preceding clause (A) and (C) any
UCC financing statement that names the New Restricted Subsidiary as
debtor or seller filed in any of the jurisdictions referred to in
the preceding clause (A);
(vi) appropriate duly executed termination statements (Form
UCC-3) signed by all persons disclosed on current financing
statements as secured parties in the jurisdictions referred to in
clause (v) above in form for filing under the UCC of such
jurisdictions (except with respect to Liens permitted under Section
6.02 of the Credit Agreement and Section 10.2 of the Note
Agreement);
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(vii) certificates representing all outstanding Capital Stock
of any subsidiary of the New Restricted Subsidiary (other than
immaterial subsidiaries acceptable to the Trustee and the Secured
Parties), accompanied by stock powers endorsed in blank, and
Intercompany Notes, if any, duly executed by the New Restricted
Subsidiary, accompanied by assignments executed in blank;
(viii) an acknowledgement copy, or other evidence satisfactory
to the Trustee and the Secured Parties, of the proper filing,
registration or recordation of each document (including each UCC
financing statement) required by law or reasonably requested by the
Trustee to be filed, registered or recorded in order to create in
favor of the Trustee for the benefit of the Secured Parties a valid,
legal and perfected security interest in or Lien on the Collateral
that is the subject of the Borrower Security Agreement in each
jurisdiction in which the filing, registration or recordation
thereof is so required or requested;
(ix) an opinion of counsel for the New Restricted Subsidiary,
dated the date that this Agreement shall become effective, as to all
matters relating to the New Restricted Subsidiary as the Trustee or
any Secured Party may reasonably request; and
(x) all documents the Trustee and the Secured Parties may
reasonably request relating to the existence of New Restricted
Subsidiary and its corporate or partnership authority to execute,
deliver and perform the Borrower Security Agreement, the
Subsidiaries' Guarantee Agreement and the Trust Agreement, as
applicable, and any other matters relevant hereto or thereto; and
(b) No Default or Event of Default under the Credit Agreement and no
Potential Event of Default or Event of Default under the Note Agreement
shall have occurred and be continuing at the time of the execution and
delivery hereof or would occur immediately after giving effect thereto.
SECTION 6. Effect on Loan Documents. Except as expressly supplemented
hereby, the Borrower Security Agreement, the Subsidiaries' Guarantee Agreement
and the Trust Agreement shall continue in full force and effect.
SECTION 7. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
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SECTION 8. Savings Clause. To the fullest extent permitted under
applicable law, in the event any one or more of the provisions contained in this
Agreement should be held invalid, illegal or unenforceable in any respect with
respect to the New Restricted Subsidiary, no party hereto shall be required to
comply with such provision for so long as such provision is held to be invalid,
illegal or unenforceable, and the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired. The parties shall endeavor in good-faith negotiations to replace any
invalid, illegal or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, illegal or
unenforceable provisions.
SECTION 9. Notices. All communications to the New Restricted Subsidiary
shall be given to it at the address or telecopy number set forth under its
signature hereto.
SECTION 10. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which, when
taken together, shall constitute but one instrument.
SECTION 11. Expenses. The New Restricted Subsidiary agrees to reimburse
the Trustee and the Agents for its reasonable out-of-pocket expenses in
connection with this Agreement, including the reasonable fees and expenses of
counsel.
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IN WITNESS WHEREOF, the New Restricted Subsidiary and the Trustee have
duly executed this Agreement as of the day and year first above written.
[NEW RESTRICTED SUBSIDIARY],
By:_________________________
Name:
Title:
Address:
Telecopy:
[NAME OF TRUSTEE],
By:________________________
Name:
Title:
Address:
Telecopy:
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Schedule 1
CHIEF EXECUTIVE OFFICE AND PRINCIPAL PLACE OF BUSINESS
Name Mailing Address County State
---- --------------- ------ -----
LOCATIONS OF RECORDS OF RECEIVABLES AND GENERAL INTANGIBLES
Name Mailing Address County State
---- --------------- ------ -----
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Schedule 2
PLEDGED SECURITIES
Part I List of Pledged Interests:
Ownership
Grantor Issuer Interests
------- ------ ---------
Part II List of Pledged Debt:
Grantor Debt Issuer Date of Issuance Outstanding Balance
------- ----------- ---------------- -------------------
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Schedule 3
LOCATIONS OF EQUIPMENT AND INVENTORY
Grantor Mailing Address County State
------- --------------- ------ -----
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Schedule 4
TRADE NAMES, DIVISION NAMES, ETC.
Grantor Trade Names, Division Names, Etc.
------- ---------------------------------
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Schedule 5
REQUIRED FILINGS AND RECORDINGS
Grantor UCC Filings & Locations Other Filings
------- ----------------------- -------------
<PAGE>
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Schedule 6
PATENTS AND PATENT APPLICATIONS
Serial No. or Issue or
Grantor Patent No. Inventor County Filing Date
------- ---------- -------- ------ -----------
<PAGE>
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Schedule 7
TRADEMARKS AND TRADEMARK APPLICATIONS
Serial No. or Issue or
Grantor Registration No. Country Filing Date Mark
------- ---------------- ------- ----------- ----
<PAGE>
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Schedule 8
COPYRIGHTS AND COPYRIGHT APPLICATIONS
Serial No. or Issue or
Grantor Registration No. Country Filing Date Mark
------- ---------------- ------- ----------- ----
<PAGE>
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Schedule 9
LICENSES
Grantor Licenses
------- --------
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Schedule 10
MOTOR VEHICLES AND OTHER ROLLING STOCK
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EXHIBIT M
[FORM OF]
NOTICE OF BORROWING
[Date]
The First National Bank of Boston
100 Federal Street
Mail Stop 01-08-02
Boston, MA 02110
Attn:____________________
Re: The Credit Agreement, dated as of ______________ ___, 1996 (as
amended or modified from time to time, the "Credit Agreement"),
among National Propane, L.P. (the "Borrower"), the financial
institutions party thereto as lenders, The First National Bank of
Boston, as Administrative Agent and a Lender, Bank of America NT &
SA a, as a Lender, and BA Securities, Inc., as Syndication Agent
This Notice of Borrowing is delivered to you pursuant to Section 2.03 of
the Credit Agreement, is irrevocable and constitutes the Borrower's request to
borrow in the amounts and in the manner set forth below. The information
relating to the proposed Borrowing is as follows:
1. The Borrowing is to be a [Tranche A Revolving Loan/Tranche B
Revolving Loan/Tranche B Term Loan].
2. The Borrowing is to be a [ABR/Eurodollar] Loan.
4. The date (which shall be a Business Day) of the
proposed Borrowing is _____________, 19__.
5. The amount of the proposed Borrowing is $____________.
6. If the Borrowing is to be a Eurodollar Borrowing,
the Interest Period with respect thereto is _________________.
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Terms used herein and not otherwise defined herein shall have the meanings
assigned to them in the Credit Agreement. In the event of any conflict or
inconsistency between the terms hereof and the terms in the Credit Agreement,
the terms in the Credit Agreement shall be controlling.
The undersigned hereby certifies that, as of the date hereof, the
information herein is true and complete.
Very truly yours,
NATIONAL PROPANE, L.P., as Borrower
by: National Propane Corporation,
its general partner
by:
Name:
Title:
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Exhibit O
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE
SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGIS TRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR AN
APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH LAWS.
TRIARC COMPANIES, INC.
13.5% SENIOR SECURED NOTE
$40,700,000 New York, New York
July 2, 1996
FOR VALUE RECEIVED, the undersigned, Triarc Companies, Inc., a Delaware
corporation (together with its successors and permitted assigns, the
"Borrower"), hereby promises to pay to the order of National Propane, L.P.
(together with its successors and permitted assigns, the "Lender"), at such
place as the Lender shall from time to time designate to the Borrower in
writing, the aggregate principal amount of FORTY MILLION SEVEN HUNDRED THOUSAND
DOLLARS ($40,700,000), in such amounts and on such dates as determined according
to Section 1 hereof, with daily interest on the outstanding principal amount
hereof from the date hereof to (but excluding) the maturity of this Note
(whether by acceleration or otherwise) at the rate set forth in Section 2
hereof, said interest being payable in semi-annual installments in arrears on
the 30th day of June and December in each year and at maturity. The Borrower
shall pay principal, interest and all other amounts due hereunder in immediately
available funds. In the event that any payment due hereunder is required to be
made on a day that is not a Business Day, such payment shall be made on the next
Business Day. In case an Event of Default (as defined in Section 7.1) shall
occur and be continuing, the entire principal amount of this Note may become or
be declared to be due and payable in the manner and with the effect provided
herein. Certain capitalized terms used herein are defined in Section 8.
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2
Section A. Principal.
Beginning on June 30, 2003 and on each anniversary thereafter through and
including June 30, 2010, the Borrower will prepay the principal amount of this
Note in eight equal installments of $5,087,500 with the final maturity date of
this Note being June 30, 2010. Any optional prepayment of the principal of this
Note permitted hereunder shall be applied to reduce the mandatory prepayments
otherwise required by this Section 1 in the direct order such prepayments are
due.
Section B. Interest.
The Borrower will pay interest on the outstanding principal amount hereof,
until the principal amount hereof is paid in full, at a rate of 13.5% per annum.
Interest on this Note will accrue from and including the most recent date on
which interest has been paid (or, if no interest has been paid, from and
including the date of issuance of this Note) to but excluding the date of
payment. Interest will be computed on the basis of a 365-day year and the actual
number of days elapsed. The Borrower shall pay interest on overdue principal and
on overdue interest to the full extent permitted by law at a rate equal to 15.5%
per annum.
Section C. Collateral.
1. Pledge and Grant of Security Interest.
(a) Pledged Interests. To induce the Lender to accept this Note, and
as security for the due and punctual payment and performance of all obligations
of the Borrower now or hereafter existing under this Note, whether for
principal, premium, interest, or any other amount payable under this Note
(collectively, the "Obligations"), the Borrower hereby pledges, assigns,
transfers and grants to the Lender a first priority continuing security interest
in (i) all of the capital stock of the General Partner, now owned or hereafter
acquired by the Borrower (the "Pledged Stock"), (ii) all Permitted Consideration
(the "Pledged Permitted Consideration") received, receivable or otherwise
distributed in exchange for the Pledged Stock in connection with any Permitted
Third Party Sale (as defined below) and (iii) all dividends, distributions,
liquidating dividends, stock dividends, stock or partnership rights, options,
rights to subscribe, cash, instruments and other property and proceeds and
principal, premium and interest payments received, receivable or otherwise
distributable in respect of or exchanged for the Pledged Stock or Pledged
Permitted Consideration (the items listed in clauses (i), (ii) and (iii) being
referred to collectively as the "Pledged Interests").
(b) Pledged Retained Assets. To induce the Lender to accept this Note,
and as security for the due and punctual payment and performance of the
Obligations, the Borrower hereby pledges, assigns, transfers and grants to the
Lender a first priority continuing security interest in the Retained Assets
owned by the
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3
Borrower upon the occurrence of the General Partner Merger in an amount equal to
the lesser of (A) all of the Retained Assets held by the General Partner
immediately prior to the General Partner Merger or (B) Retained Assets having an
aggregate Value equal to the then outstanding principal amount of this Note
(such lesser amount being referred to as the "Pledged Retained Assets").
(c) Delivery of Collateral.
(i) In furtherance of the pledge, assignment, transfer and grant
of the security interests provided for in Section 3.1(a) and (b), the Borrower
herewith delivers to the Lender a certificate or certificates representing the
Pledged Stock, together with an instrument of transfer duly executed in blank
relating thereto. In addition, the Borrower hereby agrees to deliver to the
Lender, upon receipt thereof, certificates representing any other securities
from time to time included in the Pledged Interests and hereby agrees to
deliver, upon the occurrence of the General Partner Merger, a certificate or
certificates representing any of the Pledged Retained Assets, in each case
together with instruments of transfer duly executed in blank relating thereto.
All securities, rights, interests, cash or other assets pledged pursuant to this
Section 3.1 or otherwise required to be pledged pursuant to the terms of this
Note are referred to herein collectively as the "Collateral."
(ii) The Borrower shall cause to be opened and maintained with
The Bank of New York a non-interest bearing bank account (the "Cash Account"),
under the sole dominion and control of the Lender into which shall be deposited
any Permitted Consideration received by the Borrower that is in the form of cash
and, after the General Partner Merger, any consideration that is received by the
Borrower in connection with the sale of Pledged Retained Assets that is in the
form of cash, any cash that is designated as Pledged Retained Assets pursuant to
the last sentence of Section 3.2(b)(ii) and any other cash designated as
Collateral. Any such amounts received by the Borrower shall be promptly
delivered by it to the Lender for deposit into such account, and until so
deposited shall be held in trust for the Lender and not commingled with any
other funds of the Borrower. Such cash when deposited shall continue to be
security for the Obligations and shall not constitute payment thereof until
applied as hereinafter provided. So long as no Event of Default shall have
occurred and be continuing, the Borrower shall be entitled upon notice delivered
to the Lender to direct that such cash be invested in Cash Equivalents as
designated by the Borrower. If any amounts deposited in such account shall have
been identified by the Borrower for release from the security interest created
hereunder as provided in Section 3.3(c), the Lender shall forthwith return such
amounts to the Borrower.
(d) Filings; Other Actions. The Borrower will, from time to time and
at its own expense, execute, deliver, file or record such financing statements
pursuant to the UCC and such other statements, assignments, instruments,
documents, agreements and other papers as necessary or as the Lender may
reasonably request in
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4
order to create, preserve, perfect, confirm or validate the security interests
in the Collateral.
2. Voting Rights; Dividends; Transfers; etc.
(a) Voting Rights; Dividends. So long as no Event of Default shall
have occurred and be continuing, the Borrower shall be entitled to (i) exercise
any and all voting and other consensual rights pertaining to the Collateral or
any part thereof and (ii) receive, retain, dispose of, or otherwise use or deal
with in its sole discretion any and all dividends, distributions and interest
payments paid in respect of the Collateral.
(b) Transfer or Pledge of Pledged Retained Assets.
(i) So long as no Event of Default shall have occurred and be
continuing, the Borrower shall be entitled to sell, assign, transfer, convey,
grant a security interest in, hypothecate or pledge (collectively, "Transfer"),
or permit the Transfer, in an arms'-length transaction with an independent,
unrelated third party, of any of the Pledged Retained Assets if such Transfer
satisfies the condition in Section 3.2(b)(ii). Prior to the General Partner
Merger, this Section 3.2(b) shall also govern the Transfer of (A) all Retained
Assets (other than that portion of the Retained Assets the aggregate Value of
which, when taken together with the aggregate Value of all other Retained
Assets, is greater than the principal amount of this Note outstanding from time
to time) and (B) Retained Assets in which a first priority security interest has
been granted under Section 6.6(a) or 9.2 (collectively, "Potential Pledged
Retained Assets").
(ii) No Transfer of Pledged Retained Assets or Potential Pledged
Retained Assets shall be permitted unless (except as otherwise permitted by the
proviso in Section 6.6(b)), immediately after giving effect to such transaction
the General Partner continues to hold Pledged Retained Assets or Potential
Pledged Retained Assets, as the case may be (excluding any Pledged Retained
Assets or Potential Pledged Retained Assets hypothecated, pledged or in which a
security interest has been granted to any Person other than the Lender) and/or
Cash or Cash Equivalents that are designated by the General Partner as Pledged
Retained Assets (or Potential Pledged Retained Assets), as provided in the last
sentence of this Section 3.2(b) (ii), with a Value equal to not less than the
outstanding principal amount of this Note at such time. For purposes of
satisfying the foregoing condition, the General Partner may designate any of its
cash or Cash Equivalents as Pledged Retained Assets (or Potential Pledged
Retained Assets) and, thereafter, such assets shall be deemed to be Pledged
Retained Assets (or Potential Pledged Retained Assets ) for all purposes of this
Note, including, without limitation, Section 3.1(b).
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5
(iii) Upon the occurrence and the continuance of an Event of
Default, the Borrower shall not Transfer or permit the Transfer of any of the
Pledged Retained Assets or Potential Pledged Retained Assets.
(c) Transfer of Pledged Interests. The Borrower shall not be entitled
to Transfer all or any portion of the Pledged Interests, except in an
arms'-length transaction with an independent, unrelated third party that
satisfies the following conditions (each Transfer permitted hereunder being
referred to as a "Permitted Third Party Sale"):
(i) in any such Transfer (other than a sale, assignment, transfer
or conveyance to any Person that assumes the Borrower's obligations under this
Note as provided in Section 9.2 and pledges the Pledged Interests so acquired as
security for the performance of the Obligations, in which case the condition
contained in this clause (i) shall not be applicable), the consideration
received by the Borrower shall be at least equal to the fair market value of the
Pledged Interest that is Transferred, as determined by the Borrower in good
faith, and shall be in the form of Permitted Consideration,
(ii) the Borrower shall not effect any such Transfer if, after
giving effect to such Transfer, the Borrower shall own Pledged Stock (excluding
Pledged Stock that the Borrower has hypothecated, pledged or granted a security
interest in to any Person other than the Lender) constituting less than a
majority of the voting common stock and voting power of the General Partner then
outstanding (other than in connection with a sale, assignment, transfer or
conveyance of all of the Pledged Stock) unless the Borrower grants to the Lender
a first priority security interest in cash or Cash Equivalents with an aggregate
Value at least equal to the then outstanding principal amount of the Note, and
(iii) no Event of Default shall have occurred and be continuing.
In connection with any Permitted Third Party Sale, the Pledged Interests
transferred shall be released from the security interest created hereunder. In
addition, in connection with a Permitted Third Party Sale under clause (ii)
above that results in the Pledged Stock constituting less than a majority of the
voting common stock of the General Partner and in which the Borrower grants to
the Lender a security interest in the substitute collateral identified in such
clause, all shares of Pledged Stock shall be released from the security interest
created hereunder.
(d) Lender's Rights During Event of Default. If an Event of Default
shall have occurred and be continuing and any amounts shall be due and payable
(whether by maturity or otherwise) under any of the Obligations, all rights of
the Borrower to (i) exercise the voting and other consensual rights which the
Borrower would otherwise be entitled to exercise pursuant to Section 3.2(a);
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6
(ii) Transfer or permit the Transfer of any Pledged Retained Assets as provided
in Section 3.2(b) and (iii) receive and retain any and all dividends,
distributions and interest paid in respect of the Pledged Interests as provided
in Section 3.2(a), shall cease and all such rights shall, to the extent
permitted by law, thereupon become vested in the Lender, and the Lender shall
thereupon have the sole right to exercise such voting and other consensual
rights as provided in Section 3.2(a), to Transfer or permit the Transfer of
Pledged Retained Assets as provided in Section 3.4 and to receive and hold as
Collateral such dividends, distributions and interest payments as provided in
Section 3.2(a); provided that, the Lender shall not be permitted to exercise
such voting or other consensual rights with respect to any capital stock of the
General Partner included in the Pledged Interests if, such exercise would result
in the loss of the Lender's status as a pass-through entity for federal or state
income tax purposes or cause the dissolution of the Lender, in which case the
Lender shall have been deemed to have assigned such voting and other consensual
rights to the Trustee unless the Borrower shall have delivered an opinion of
counsel that the exercise of such rights by such Trustee would cause such a
result, in which case no such deemed assignment shall occur. All such dividends,
distributions and interest payments that are received by the Borrower contrary
to the provisions of this Section 3.2(d) shall be received in trust for the
benefit of the Lender, shall be segregated from other funds of the Borrower and
shall forthwith be paid over to the Lender as Collateral in the same form as so
received (with any necessary endorsements).
3. Releases of Collateral.
(a) If the Value of the Pledged Permitted Consideration received from
any Permitted Third Party Sale that is required to be pledged by the Borrower
pursuant to Section 3.1(a)(ii) (together with the Pledged Permitted
Consideration received from all previous Permitted Third Party Sales that are so
pledged) at any time of determination, exceeds the then outstanding principal
amount of this Note (after giving effect to any repayment of this Note being
made at the time of such determination), any Pledged Permitted Consideration in
excess of such Value shall be released from the security interest granted
hereunder and no longer shall constitute Pledged Permitted Consideration. The
Value of such Pledged Permitted Consideration shall be determined at the time of
each bona fide Permitted Third Party Sale and at the time of each repayment of
any portion of the principal amount of this Note.
(b) If the Value of the Pledged Retained Assets, if any, exceeds the
outstanding principal amount of this Note (after giving effect to any repayment
of this Note being made at the time of such determination) at any time of
determination, any Pledged Retained Assets in excess of such Value shall be
released from the security interest granted hereunder and no longer shall
constitute Pledged Retained Assets. The Value of such Pledged Retained Assets
shall be determined at the time of each bona fide sale of Pledged Retained
Assets to a Person that is not an
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7
Affiliate of the Borrower and upon each repayment of any portion of the
principal amount of this Note.
(c) In the event that any Collateral is required, pursuant to clause
(a) or clause (b) above, to be released from the security interest granted
hereunder, the Borrower may select which of the Collateral shall be so released.
(d) Upon the payment in full in cash of the Obligations, the security
interest granted under this Note shall automatically terminate and cease to be
of any force and effect, the Collateral shall be released from the security
interest created under this Note and the Collateral and the Retained Assets
shall no longer be subject to any restrictions imposed under this Note.
(e) The Lender agrees that it shall execute and deliver such documents
and instruments and take all such other action, as the Borrower may reasonably
request (and at the expense of the Borrower), to evidence the termination of the
security interest, and the release of the Collateral and the Retained Assets, as
provided in this Section 3.3 or otherwise in this Note.
4. Remedies Upon Default. Upon the occurrence and during the continuance of
an Event of Default, the Lender shall have, in addition to any other rights
given by law, including, without limitation, under the UCC, or the rights
hereunder, all of the rights and remedies of a secured party with respect to the
Collateral. In addition, if any Event of Default shall occur and be continuing,
the Lender may apply against the Obligations then due and payable any amounts on
deposit in the Cash Account and upon fifteen (15) days prior written notice to
the Borrower (the "Sale Notice") sell all or any portion of the Collateral at
any public or private sale at such price and on such terms as the Lender
reasonably may determine, and the purchaser of the Collateral or portion thereof
so sold shall thereafter hold the same absolutely, free from any claim,
encumbrance or right of any kind whatsoever. The Sale Notice shall, in the case
of a public sale, state the time and place fixed for such sale or in the case of
a private sale, state the day after which such sale may be consummated. Neither
the Lender nor the Partnership may be a purchaser of any of the Pledged Stock at
such sale or otherwise acquire the Pledged Stock at any time when the General
Partner holds the Unsubordinated General Partner Interest; provided that, the
Lender may assign its rights hereunder to be a purchaser at such sale to any
Person, other than a Subsidiary of the Partnership, and such assignee shall not
be so restricted. The Borrower hereby agrees that, if so requested by the Lender
in the Sale Notice, the Borrower shall use its best efforts to cause the General
Partner to transfer the Unsubordinated General Partner Interest to a third party
(which may be an Affiliate of the Borrower other than a subsidiary of the
General Partner) no later than immediately prior to the consummation of the sale
provided for in the Sale Notice. The Borrower hereby agrees that any transfer or
sale of all or any portion of the Collateral conducted in conformity with
reasonable commercial practices of banks,
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8
insurance companies, or other financial institutions disposing of property
similar to the Collateral shall be deemed to be commercially reasonable.
5. Further Assurances. The Borrower agrees that it will cooperate with the
Lender and will execute and deliver, or cause to be executed and delivered,
instruments of transfer, proxies and such other documents, and will take all
such other action, as the Lender may reasonably request from time to time in
order to carry out the provisions and the purposes hereof.
Section D. Optional Prepayment.
1. Prepayment by Borrower.
(a) Except as otherwise provided herein, the Borrower shall not have
any right to prepay or redeem this Note prior to June 30, 2001.
(b) At any time on or after June 30, 2001 but prior to June 30, 2002,
the Borrower shall have the right, at any time and from time to time, at its
sole option and election, to prepay the outstanding principal amount of this
Note, in whole or in part, at a redemption price equal to 103% of the principal
amount prepaid together with accrued interest on the portion prepaid.
(c) At any time on or after June 30, 2002 but prior to June 30, 2003,
the Borrower shall have the right, at any time and from time to time, at its
sole option and election, to prepay the outstanding principal amount of this
Note, in whole or in part, at a redemption price equal to 101.5% of the
principal amount prepaid, together with accrued interest on the portion prepaid.
(d) At any time on or after June 30, 2003, the Borrower shall have the
right, at any time and from time to time, at its sole option and election, to
prepay the outstanding principal amount of this Note without premium or penalty,
in whole or in part, together with accrued interest on the portion prepaid.
(e) Notwithstanding anything to the contrary contained in this Section
4.1, the Borrower shall have the right, but not the obligation, to prepay the
outstanding principal amount of this Note without premium or penalty,
(i) in whole or in part, within 180 days after the consummation
of an Acquisition (as defined in the Partnership Agreement), in an amount
not to exceed the sum of (x) the total amount of any indebtedness
(including refinancing indebtedness) incurred by the Lender or the
Partnership in connection with such Acquisition that is repaid using the
proceeds of the prepayment of this Note and (y) the total amount of other
cash (not resulting from proceeds of the indebtedness referred to in clause
(x)) paid by the Lender or the Partnership in connection with such
Acquisition; or
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9
(ii) in whole, but not in part, within 180 days of any
transaction (A) that results in either the General Partner no longer being
an Affiliate of the Borrower or the General Partner no longer being an
Affiliate of the Lender and (B) in which (x) the total consideration
received by the General Partner for each Subordinated Unit (or Common Unit
issued upon conversion of a Subordinated Unit) sold, transferred or
assigned by the General Partner in such transaction, if any, is not less
than an amount (the "Threshold Price") equal to the Initial Unit Price (as
such Initial Unit Price may be adjusted for splits, distributions of
capital surplus or other reclassifications of the Units) or (y) if such
transaction does not involve the sale of Units by the General Partner but
rather involves the merger or sale of stock of the General Partner, in
which the total consideration received by the Borrower in such transaction
implies a value, determined by the Borrower in good faith, for each
Subordinated Unit (or Common Unit issued upon conversion of a Subordinated
Unit) of not less than the Threshold Price.
2. Notice. Notice of any optional prepayment by the Borrower of this
Note pursuant to Section 4.1 shall be given to the Lender at least 10 days prior
to the date fixed for such prepayment, which must be a Business Day.
Section E. Representations and Warranties. The Borrower represents and warrants
to the Lender as of the date hereof that:
1. Incorporation. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to execute and deliver this
Note, to grant the security interest in the Collateral as provided herein and to
perform its obligations hereunder.
2. Authority. This Note has been duly authorized, executed and
delivered by the Borrower and constitutes the valid and legally binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
now or hereafter in effect relating to creditors' rights and remedies generally
and (ii) general equitable principles, whether asserted in an action at law or
in equity, and that such enforceability may be subject to the discretion of the
court before which any proceedings therefor may be brought.
3. No Conflicts. The execution, delivery and performance by the
Borrower of this Note, including, without limitation, the grant of the security
interest in the Collateral as provided herein, do not (i) violate any provision
of any law, rule or regulation, order, writ, judgment, decree, determination or
award presently in effect having applicability to the Borrower, (ii) conflict
with or result in a breach of or constitute a default under the Certificate of
Incorporation or Bylaws of the
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10
Borrower or any indenture or loan or credit agreement or any other agreement or
instrument to which the Borrower is a party or (iii) except as contemplated by
this Note, result in, or require the creation or imposition of, any lien or
encumbrance upon or with respect to any of the properties now owned by the
Borrower, except, in the case of (i), (ii) or (iii), where such violation,
conflict, default or creation or imposition of any lien or encumbrance would not
(individually or in the aggregate) have a material adverse effect on the
business, assets or condition (financial or otherwise) of the Borrower and its
subsidiaries, taken as a whole, or on the value of the Collateral.
4. Title to Collateral. The Borrower owns beneficially and of record
all of the Pledged Stock, free and clear of all liens and other encumbrances,
except for those created hereunder. The General Partner owns the Retained Assets
beneficially and of record free and clear of all liens and other encumbrances,
except for those created hereunder, and the restrictions contained in the
Partnership Agreement.
Section F. Covenants.
1. Notice of Defaults. The Borrower shall give notice in writing to
the Lender promptly but in any event within five Business Days after becoming
aware of the occurrence of any Event of Default under this Note or an event
which with notice or lapse of time would become an Event of Default.
2. Financial Reports. The Borrower shall prepare and furnish to the
Lender (i) as soon as practicable, after the close of each fiscal year of the
Borrower, but not later than ten (10) Business Days after the date such are
filed with the Securities and Exchange Commission, an audited consolidated
balance sheet of the Borrower, and the related consolidated statements of
income, additional capital and cash flows (or similar statements) for such
fiscal year and (ii) as soon as practicable after the close of each fiscal
quarter of the Borrower, but not later than ten (10) Business Days after the
date such are filed with the Securities and Exchange Commission, an unaudited
consolidated balance sheet of the Borrower and the related consolidated
statements of income, additional capital and cash flows (or similar statements)
for such fiscal quarter.
3. Compliance with Laws. The Borrower shall comply with all applicable
laws or other governmental rules and regulations to which it is subject the
violation of which would have a material adverse effect on the Borrower's
ability to perform its obligations under this Note.
4. Payment of Material Obligations. The Borrower shall, and shall
cause the General Partner to, pay and discharge, as the same shall become due
and payable, (i) all taxes, assessments and governmental charges levied or
imposed upon
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11
the Borrower or the General Partner, as the case may be, or upon the income,
profits or property of the Borrower or the General Partner, as the case may be,
and (ii) all lawful claims for labor, materials and supplies which, if unpaid,
might by law become a lien upon the property of the Borrower or the General
Partner, as the case may be (including, without limitation, any of the
Collateral); provided that the Borrower and the General Partner shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
contested in good faith by appropriate proceedings diligently pursued and for
which the Borrower has established adequate reserves as required by generally
accepted accounting principles or the failure to pay which would not have a
material adverse effect on the Borrower's ability to perform its obligations
under this Note.
5. Transfer of Interest in the General Partner. The Borrower shall use
its best efforts to prevent:
(i) SEPSCO from transferring any shares of capital stock of the
General Partner to any Person other than (a) the Borrower, (b) a permitted
assignee under Section 9.2 of this Note from the Borrower, (c) a wholly owned
subsidiary of the Borrower, (d) any Person that pledges such shares to the
Lender to secure the Borrower's obligations under this Note pursuant to an
agreement that contains provisions substantially similar to those set forth in
Section 3 (other than Section 3.1(b)) of this Note or (e) in connection with any
Permitted Third Party Sale that results in the Pledged Stock no longer
constituting Collateral,
(ii) the General Partner from issuing any shares of its capital
stock to any Person other than (a) the Borrower, (b) a permitted assignee under
Section 9.2 of this Note from the Borrower or (c) any Person that pledges such
shares to the Lender to secure the Borrower's obligation under this Note
pursuant to an agreement that contains provisions substantially similar to those
set forth in Section 3 (other than Section 3.1(b)) of this Note, or
(iii) any shares of the capital stock of SEPSCO from being
acquired by any Person, other than (a) the Borrower, (b) a wholly owned
subsidiary of the Borrower that agrees to be bound by this Section 6.5, or (c) a
permitted assignee under Section 9.2 of this Note from the Borrower, at any time
that SEPSCO owns any shares of the capital stock of the General Partner.
Notwithstanding anything to the contrary contained in this Note, but subject to
Section 3.1(b), the General Partner and the Borrower may effect the General
Partner Merger.
6. Actions by the General Partner. Prior to the General Partner
Merger, the Borrower shall prevent the General Partner from (a) incurring any
indebtedness for borrowed money, unless the General Partner grants to the Lender
a first priority continuing security interest in Retained Assets and/or cash and
Cash Equivalents and/or Marketable Securities having an aggregate Value equal to
or
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12
greater than the then outstanding principal amount of this Note, in a manner
substantially similar to the security interest to be granted by the Borrower
pursuant to Section 3.1(b) of this Note or (b) Transferring any of the Pledged
Retained Assets (or Potential Pledged Retained Assets) in any manner that does
not comply with Section 3.2(b); provided, however, that the General Partner may
without complying with this Section 6.6(b), (i) consummate the General Partner
Merger and (ii) Transfer any Pledged Retained Assets (or Potential Retained
Pledged Assets) in one or more transactions on an arms'-length basis with an
independent, unrelated third party in which the aggregate net after tax proceeds
(together with the net after tax proceeds from all similar previous
transactions) does not exceed $5 million.
Section G. Defaults and Remedies.
1. Event of Default. An "Event of Default" shall occur if:
(a) the Borrower defaults in the payment of principal or premium of
this Note when the same becomes due and payable;
(b) the Borrower defaults in the payment of interest on this Note when
the same becomes due and payable and such default continues for a period of 5
Business Days;
(c) the Borrower defaults (after notice and the expiration of any
applicable grace period, if any) in the payment of principal or interest under
any indebtedness of the Borrower (other than this Note) or any guarantee by the
Borrower of any indebtedness of any Subsidiary of the Borrower (each a
"Guarantee Obligation") or defaults in the observance or performance of any
other agreement or condition relating to any indebtedness of the Borrower or
Guarantee Obligation (the effect of which covenant default is to cause such
indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable), if the principal amount of such indebtedness or
Guarantee Obligation, together with the principal amount of all other such
indebtedness and Guarantee Obligations with respect to which a payment default
(after notice and the expiration of any applicable grace period or extension of
maturity date, if any) has occurred or the maturity of which has been so
accelerated or become so payable, exceeds $20 million in the aggregate;
(d) the Borrower fails to comply in any material respect with any of
its agreements contained in this Note (other than those set forth in any other
clause of this Section 7.1) and such failure is not cured within 30 days after
notice thereof;
(e) one or more final judgments of any competent tribunal(s)
aggregating in excess of $5 million shall be rendered against the Borrower,
which judgments are not rescinded, discharged, satisfied, vacated, annulled or
stayed or bonded pending appeal within 90 days of their entry;
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13
(f) this Note (or any other agreement contemplated by Section 6.5 or
6.6 purporting to grant a security interest in property securing this Note)
shall cease to create a valid security interest in any of the Collateral;
(g) the General Partner issues any shares of its capital stock to any
Person other than as permitted under Section 6.5(ii);
(h) SEPSCO transfers any shares of the capital stock of the General
Partner to any Person or any shares of SEPSCO's capital stock are acquired by
any Person, in either case other than as permitted under Section 6.5(i) or
(iii), respectively;
(i) the General Partner takes any action which the Borrower has agreed
to use best efforts to prevent pursuant to Section 6.6;
(j) the Borrower fails to comply in any material respect with Section
3.1(b) or the second sentence of Section 3.1(c)(i) or Section 3.1(c)(ii);
(k) the Borrower:
(i) commences a voluntary case, proceeding or other action under
any existing or future law of any jurisdiction relating to bankruptcy,
insolvency, reorganization or relief from debtors (collectively, "Bankruptcy
Laws") seeking to have an order for relief entered with respect to it;
(ii) consents to the entry of an order for relief against it in
an involuntary case commenced under a Bankruptcy Law;
(iii) consents to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official (a
"Custodian") of it or for all or substantially all of its property under a
Bankruptcy Law; or
(iv) makes a general assignment for the benefit of its creditors;
(l) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law (which order or decree remains unstayed and in effect for 90
days) that:
(i) is for relief against the Borrower in an involuntary case;
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14
(ii) appoints a Custodian of the Borrower or for all or
substantially all of its property; or
(iii) orders the winding up or liquidation of the Borrower.
2. Acceleration. If an Event of Default occurs under clause (k) or (l) of
Section 7.1, then the principal of and the accrued interest on this Note shall
become due and payable immediately without presentment, demand, protest or other
notice of any kind, all of which are expressly waived by the Borrower. If any
other Event of Default specified in Section 7.1 occurs and is continuing, the
Lender, by written notice to the Borrower, may declare the principal of and
accrued interest on this Note to be due and payable and upon such declaration
such principal and interest shall be due and payable immediately without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived by the Borrower.
3. Other Remedies. If an Event of Default occurs and is continuing, the
Lender may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on this Note or to enforce the
performance of any provision of this Note. Except as otherwise provided by law,
a delay or omission by Lender in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
4. Waiver of Defaults. The Lender may waive in writing a default and its
consequences. When a default is waived, it is deemed cured, but no such waiver
shall extend to any subsequent or other default or Event of Default or impair
any consequent right. No right or remedy herein conferred upon or reserved to
the Lender is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise.
Section H. Definitions.
For the purposes of this Note, the following terms shall have the meanings
indicated:
"Affiliate" shall mean, 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 Partner, without
limitation, the Borrower, DWG Acquisition Group, L.P., Nelson Peltz, Peter W.
May or any of their respective Affiliates). For purposes of this definition
"control"
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15
of a Person means the ability to direct the management and policies of such
Person whether through the ownership of voting securities or otherwise.
"Business" shall mean the wholesale and retail sale, distribution and
storage of propane gas and related petroleum derivative products, the leasing of
propane storage tanks and the related retail sale of supplies and equipment,
including home appliances, and such other businesses in which the Lender was
engaged on the date hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in the State of New York or the State of Iowa are
authorized or required by law to close.
"Cash Equivalents" shall mean (i) obligations issued or unconditionally
guaranteed by the United States of America or any agency thereof, or obligations
issued by any agency or instrumentality thereof and backed by the full faith and
credit of the United States of America, in each case maturing one year or less
from the date of acquisition thereof; (ii) marketable direct obligations issued
by any state of the United States of America or any political subdivision of any
such state or any public instrumentality thereof maturing one year or less from
the date of acquisition thereof and, at the time of acquisition, having the
highest ratings obtainable from either Standard & Poor's Rating Group or Moody's
Investors Service, Inc.; (iii) commercial paper maturing no more than 270 days
from the date of creation thereof and, at the time of acquisition, having a
rating of at least A-1 or the equivalent thereof from Standard & Poor's Rating
Group or P-1 or the equivalent thereof from Moody's Investors Service, Inc.;
(iv) certificates of deposit or bankers' acceptances maturing one year or less
from the date of acquisition thereof issued by any domestic commercial bank
having combined capital and surplus of not less than $250,000,000, the
commercial paper or other short term unsecured debt obligations of which are
rated either A-2 or better (or comparably if the rating system is changed) by
Standard & Poor's Rating Group or Prime-2 or better (or comparably if the rating
system is changed) by Moody's Investors Service, Inc. or the long term debt
obligations of which are rated either A- or better (or comparably if the rating
system is changed) by Standard & Poor's Ratings Group or A-3 or better (or
comparably if the rating system is changed) by Moody's Investors Service, Inc.;
and (v) repurchase agreements and reverse repurchase agreements with any bank
meeting the qualifications specified in clause (iv) above relating to securities
of the types described in clauses (i), (ii), or (iv) above, in each case
maturing one year or less from the date of acquisition thereof.
"Closing Price" with respect to any security for any day means the last
sale price for securities of the same class as such security 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 reported
in the principal consolidated transaction reporting system on the principal
National Securities Exchange on which securities of the same class as such
security are listed or admitted
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16
to trading or, if securities of the same class as such securities are not listed
or not admitted to trading on any National Securities Exchange, the last quoted
price for securities of the same class as such security on such day or, if not
so quoted, the average of the high bid and low asked prices for securities of
the same class as such security 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
securities of the same class as such security are not quoted by any such
organization, the average of the closing bid and asked prices for securities of
the same class as such security on such day as furnished by a professional
market maker making a market in securities of the same class as such security
selected by the Board of Directors of the Borrower or if on any such day no
market maker is making a market in securities of the same class as such
security, the fair value of such security on such day as determined in good
faith by the Board of Directors of the Borrower.
"Common Unit" shall have the meaning ascribed thereto in the Partnership
Agreement and shall also include any security into which such Common Unit is
converted or exchanged in connection with any merger, consolidation or
recapitalization.
"Current Trading Price" with respect to any security means the average of
the daily Closing Prices for securities of the same class as such security for
the 20 consecutive Trading Days immediately prior to such date.
"General Partner" shall mean National Propane Corporation , a Delaware
corporation, or after the General Partner Merger, the Borrower.
"General Partner Merger" shall mean the consolidation or merger of the
General Partner with and into the Borrower.
"Initial Unit Price" shall have the meaning ascribed thereto in the
Partnership Agreement.
"Marketable Securities" shall mean any security issued by a Person
primarily engaged in the Business that (i) can be immediately sold to the
general public without the necessity of any federal, state or local government
consent, approval or filing (other than any notice filings such as those
required pursuant to Rule 144(h) under the Securities Act of 1933, as amended)
and without violation of federal or state securities laws and (ii) is listed on
a National Securities Exchange or a recognized foreign securities exchange,
carried on an established quotation service for over-the-counter securities or
for which market quotations are readily available in either a domestic or
recognized foreign over-the-counter market.
"National Securities Exchange" shall mean an exchange registered with the
Securities and Exchange Commission under Section 6(a) of the Securities
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17
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.
"Partnership" shall mean National Propane Partners, L.P., a Delaware
limited partnership and its successors.
"Partnership Agreement" shall mean the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of the date hereof, as amended
from time to time.
"Permitted Consideration" shall mean consideration received in connection
with a sale of all or any portion of the Pledged Stock (or any Collateral
permitted hereunder to be substituted therefor) consisting of any combination of
cash, Cash Equivalents, Qualified Marketable Securities and Qualified Public
Company Securities.
"Person" shall mean an individual or a corporation, partnership, limited
liability company, trust, incorporated or unincorporated organization, joint
venture, joint stock company, governmental agency or other entity.
"Public Company Securities" shall mean any equity or debt security issued
by any Person primarily engaged in the Business required by Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended, to file periodic
reports with the Securities and Exchange Commission that are of the same class
(or are convertible, exchangeable or exercisable into securities of the same
class) as any class of securities listed on a National Securities Exchange.
"Qualified Marketable Securities" shall mean any Marketable Security
received by the Borrower or the General Partner in connection with a Significant
Transaction and that is issued by the acquiring Person, or such Person's direct
or indirect parent, in connection with such transaction.
"Qualified Public Company Securities" shall mean any Public Company
Security received by the Borrower or the General Partner in connection with a
Significant Transaction and that is issued by the acquiring Person, or such
Person's direct or indirect parent, in connection with such transaction.
"Qualified Transferee" shall mean any Person that has, at the time of
determination (after giving effect to the transactions giving rise to the need
to make such determination), a consolidated net worth (determined in accordance
with generally accepted accounting principles) of not less than the greater of
(a) $43 million and (b) the consolidated net worth of the Borrower immediately
prior to such transaction.
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18
"Retained Assets" shall mean any combination of (i) Common Units, (ii)
Subordinated Units, (iii) Qualified Public Company Securities and Qualified
Marketable Securities, (iv) cash and Cash Equivalents received upon the sale of
any Retained Assets, and (v) and cash and Cash Equivalents designated by the
General Partner as Pledged Retained Assets (or Potential Pledged Retained
Assets) pursuant to Section 3.2(b).
"SEPSCO" shall mean Southeastern Public Service Company, a Delaware
corporation.
"Significant Transaction" shall mean (i) the merger, consolidation or sale
of all or substantially all of the assets of the Partnership or the Lender, (ii)
the sale of all of the Pledged Stock or (iii) the merger, consolidation or sale
of all or substantially all of the assets of the General Partner, in each case
to a Person that, directly or indirectly, is primarily engaged in the Business.
"Subsidiary" shall mean, with respect to any Person, a corporation or other
entity of which more than 50% of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"Subordinated Unit" shall have the meaning ascribed thereto in the
Partnership Agreement and shall also include any security into which such
Subordinated Unit is converted or exchanged in connection with any merger,
consolidation or recapitalization.
"Trading Day" means a day on which the principal National Securities
Exchange on which securities of the same class as the referent security are
listed or admitted to trading is open for the transaction of business or, if
securities of the same class as the referent security 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.
"UCC" shall mean the Uniform Commercial Code or similar statute in effect
from time to time in any applicable jurisdiction.
"Unsubordinated General Partner Interest" shall have the meaning ascribed
thereto in the Partnership Agreement.
"Units" shall have the meaning ascribed thereto in the Partnership
Agreement.
"Value" shall mean, with respect to the Pledged Retained Assets, the
Potential Pledged Retained Assets or the Permitted Consideration as at the date
of determination, the following: (i) with respect to a Common Unit, 50% of the
Current Trading Price of a Common Unit, (ii) with respect to a Subordinated
Unit, one-half of
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19
the value (as determined in good faith by the General Partner) of the
consideration received by the General Partner in connection with the most recent
sale, assignment or transfer (including, without limitation, the transaction
which gives rise to the need to make such determination) by the General Partner
to an unaffiliated third party of a Subordinated Unit, or if the General Partner
has not so sold, assigned or transferred any Subordinated Units, the amount
determined in clause (i) above, (iii) with respect to cash or Cash Equivalents,
100% of the face value thereof, (iv) with respect to any Marketable Security,
50% of the Current Trading Price therefor, and (v) with respect to any Public
Company Security, 50% of the Current Trading Price therefor.
Section I. Miscellaneous.
1. Amendment. The terms of this Note may be amended only by the written
agreement of the Lender and the Borrower.
2. Successors and Assigns. This Note shall inure to the benefit of, and
shall be binding upon, the successors and permitted assigns of the Borrower and
the Lender. The obligations of the Borrower under this Note may not be assigned
without the written consent of the Lender; provided, however, that the Borrower
may, without the consent of the Lender, assign its obligations under this Note
to, and this Note may be assumed by, any Qualified Transferee that directly or
indirectly through any Person that is its direct or indirect wholly owned
subsidiary or parent (i)(a) acquires the General Partner (whether by merger,
consolidation, acquisition of all of the stock of the General Partner or
otherwise) or all or substantially all of the assets of the General Partner and
(b) grants a first priority security interest in the stock of the General
Partner so acquired, or, if no stock of the General Partner is so acquired, in
the lesser of (A) all Retained Assets held by the General Partner immediately
prior to such acquisition and (B) Retained Assets having an aggregate Value
equal to or greater than the then outstanding principal amount of this Note or
(ii)(a) acquires the Partnership or the Lender (whether by merger,
consolidation, acquisition of all of the Units or partnership interests or
otherwise) or all or substan tially all of the assets of the Partnership or the
Lender and (b) grants a first priority security interest in any combination of
cash and Cash Equivalents or Marketable Securities and Public Company Securities
issued by such acquiring Person (or by the direct or indirect parent or
subsidiary of such Person that is that the most proximate issuer (in terms of
corporate structure) of Marketable Securities or Public Company Securities)
having an aggregate Value equal to or greater than the then outstanding
principal amount of this Note. This Note may not be assigned by the Lender
without the written consent of the Borrower.
3. Consent to Assignment. The Borrower hereby:
(i) irrevocably consents to the assignment by the Lender to The
Bank of New York, in its capacity as Trustee (the "Trustee"), appointed under
the Intercreditor and Trust Agreement, dated as of June 26, 1996 (the
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20
"Trust Agreement"), among the Lender, the General Partner, National Propane SGP,
Inc., the banks listed as parties thereto, the note holders listed as parties
thereto and the other parties thereto, for the benefit of the Note Holders, Bank
Lenders and Parity Lenders (each as defined in the Trust Agreement), pursuant to
the Pledge and Security Agreement, dated as of June 26, 1996 (the "Security
Agreement"), among the grantors named therein and the Trustee, as amended,
modified or supplemented from time to time, of all of the Lender's right, title
and interest in, to and under this Note, as collateral security for the Secured
Obligations (as defined in the Security Agreement);
(ii) irrevocably consents to any subsequent assignment by the
Trustee on behalf of the holders of the Secured Obligations made in accordance
with the terms of the Trust Agreement and the Security Agreement, upon and after
receipt by the Borrower of written notice from the Trustee that it desires to
and is permitted under the Trust Agreement and Security Agreement to exercise
its rights and remedies as a secured party under the Trust Agreement and
Security Agreement, including, without limitation, the acquisition of all of the
Lender's existing and future rights under this Note in foreclosure or otherwise,
or the assignment of this Note to any Person who is a transferee and any
subsequent assignment by such transferee;
(iii) agrees that the Trustee and the holders of the Secured
Obligations shall not, prior to becoming a transferee, be subject to any
liability or obligation hereunder; and
(iv) acknowledges the right of the Trustee, following the
occurrence of an Event of Default (as defined in the Trust Agreement), to
exercise in accordance with the terms of the Security Agreement and the Trust
Agreement its rights under the Security Agreement as a secured creditor and
collateral assignee of this Note, to make all demands, give all notices, take
all actions and exercise all rights of the Lender under this Note.
4. GOVERNING LAW. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO INSTRUMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
TRIARC COMPANIES, INC.
By:___________________
Name:
Title:
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Exhibit P
NATIONAL PROPANE, L.P.,
NATIONAL PROPANE PARTNERS, L.P.,
NATIONAL PROPANE CORPORATION,
and
ALL OF THE QUALIFYING RESTRICTED SUBSIDIARIES
OF
NATIONAL PROPANE, L.P.,
as Obligors,
THE BANK OF NEW YORK,
as Trustee,
THE NOTE PURCHASERS LISTED ON SCHEDULE I
ATTACHED HERETO,
as Note Holders,
THE BANKS LISTED ON
SCHEDULE II ATTACHED HERETO,
as Bank Lenders,
and
THE FIRST NATIONAL BANK OF BOSTON,
in its capacity as
Administrative Agent.
------------------
INTERCREDITOR AND TRUST AGREEMENT
------------------
Dated as of June 26 , 1996
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TABLE OF CONTENTS
Section Page
1. Note Agreements, Credit Agreement, Notes, Parity Debt, Definitions .. 1
2. Security............................................................. 7
3. Enforcement of Security by Trustee................................... 12
4. Application of Moneys by Trustee..................................... 14
5. Payments by Trustee, etc............................................. 24
6. Certificates as to Issue of, Payments of Interest on, and
Prepayments of Notes, Bank Notes and Parity Debt..................... 24
7. Notices, etc., under Security Documents.............................. 24
8. Amendments, etc., of Security Documents.............................. 25
9. Concerning the Trustee............................................... 25
10. Trustee's Compensation, Expenses, etc................................ 29
11. Resignation, Removal and Replacement of Trustee...................... 29
12. Successor Trustee by Merger, Consolidation, etc...................... 30
13. Eligibility of Trustee............................................... 30
14. Appointment of Separate or Co-Trustee................................ 31
15. Obligations Absolute................................................. 32
16. Further Assurances................................................... 33
17. Termination.......................................................... 33
18. Notices, etc......................................................... 34
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19. Amendment of Certain Provisions of the Credit Agreement and the Note
Agreement............................................................ 35
20. Miscellaneous........................................................ 36
21. Legends.............................................................. 38
22. Restricted Subsidiaries.............................................. 39
23. Obligations held by Affiliates....................................... 39
Schedule I Note Holders
Schedule II Bank Lenders
INTERCREDITOR AND TRUST AGREEMENT, dated as of June 26, 1996, among
National Propane, L.P., a Delaware limited partnership (the "Company"), National
Propane Corporation, a Delaware corporation ("National Propane Corp."), National
Propane Partners, L.P., a Delaware limited partnership (the "Public
Partnership"), the Restricted Subsidiaries (as such term and certain other
capitalized terms used herein are defined in Section 1(c) below) listed on the
signature pages hereof and such other Restricted Subsidiaries as shall become
parties hereto in accordance with Section 22 hereof, the Note Purchasers listed
on Schedule I attached hereto (such Note Purchasers and their respective
successors and assigns and holders from time to time of the Notes are
hereinafter referred to as the "Note Holders"), the Banks listed on Schedule II
attached hereto (such Banks, whether acting on their own behalf or on behalf of
the other holders of Facilities Obligations, and their respective successors and
assigns are hereinafter referred to as the "Bank Lenders"), The First National
Bank of Boston, a national banking association, in its capacity as
Administrative Agent under the Credit Agreement (the "Administrative Agent"),
and The Bank of New York (the "Trustee"), a New York banking corporation and
trust company, as Trustee for the benefit of the Note Holders, the Bank Lenders
and the Parity Lenders.
I. Note Agreements, Credit Agreement, Notes, Parity Debt, Definitions. A.
This Agreement is made pursuant to (i) the separate Note Agreements, each dated
as of June 26, 1996 (the "Note Agreements"), among the Company, National Propane
Corp., National Propane SGP, Inc., a Delaware corporation ("National Propane
SGP"), and the institutional investors set forth in Schedule I thereof, executed
counterparts of which are being delivered to the Trustee herewith, providing for
the issue and sale by the National Propane Corp. of its 8.54% First Mortgage
Notes due June 30, 2010 in the aggregate principal amount of $125,000,000, which
notes will be assumed by the Company and exchanged for the Company's 8.54% First
Mortgage Notes due June 30, 2010 in the aggregate principal amount of
$125,000,000 (such notes, including all notes and other securities issued in
substitution therefor or replacement thereof under the Note
1
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Agreements, being referred to herein collectively as the "Notes") and (ii) that
certain Credit Agreement (the "Credit Agreement"), dated as of June 26, 1996,
among the Company, the financial institutions named therein, and the
Administrative Agent, an executed counterpart of which is being delivered to the
Trustee herewith, pursuant to which the Bank Lenders will make loans to the
Company in the initial aggregate principal amount of up to $55,000,000, in the
form of (x) a facility for working capital in the aggregate principal amount of
up to $15,000,000, and (y) a facility for acquisitions in the aggregate
principal amount of up to $40,000,000.
B. This Agreement is made for the purpose of setting forth the duties and
powers of the Trustee with respect to the Security referred to in Section 2
hereof and the respective rights of the Note Holders, the Bank Lenders and the
Parity Lenders with respect to such Security, and is made for the benefit of the
Note Holders, the Bank Lenders and the Parity Lenders to secure (i) the payment
of the principal of and premium, (including, without limitation, Make Whole
Amount and Premium Amount) if any, and interest on the Notes, the Bank Loans,
all amounts drawn under the Letters of Credit and the Parity Debt, (ii) the
payment of all other obligations of the Company, National Propane Corp., the
Public Partnership and the Restricted Subsidiaries (collectively, the
"Obligors") under the Note Agreements (including, without limitation, the Note
Obligations), the Notes, the Credit Agreement (including, without limitation,
the Facilities Obligations), the Bank Notes, the Guarantee Agreements, the
Parity Debt Agreements and the Security Documents, and (iii) the due performance
of and compliance with all of the terms of and other obligations under the Note
Agreements (including, without limitation, the Note Obligations), the Notes, the
Credit Agreement (including, without limitation, the Facilities Obligations),
the Bank Notes, the Guarantee Agreements, the Parity Debt Agreements, the Parity
Debt, this Agreement and the Security Documents (collectively, the
"Obligations").
C. The following terms as used in this Agreement shall have the meanings
set forth below:
"Administrative Agent" has the meaning specified in the Introduction.
"Agency Account Agreement" has the meaning specified in the Credit
Agreement and the Note Agreements.
"Bank Lenders" has the meaning specified in the Introduction.
"Bank Loans" means the Loans (as defined in the Credit Agreement).
"Bank Notes" means the Notes (as defined in the Credit Agreement).
2
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"Business Day" has the meaning specified in the Note Agreements and the
Credit Agreement.
"Cash Collateral Agreement" means the Cash Collateral Agreement, dated the
date hereof, among the Company, the Administrative Agent and the Trustee in the
form of Exhibit K attached to the Credit Agreement and Exhibit F to the Note
Agreements.
"Certificate" has the meaning specified in Section 1(b).
"Collateral" has the meaning ascribed to such term in the Company Security
Agreement or the Partners Security Agreement.
"Commitments" has the meaning specified in the Credit Agreement.
"Company" has the meaning specified in the Introduction.
"Company Security Agreement" has the meaning specified in Section 2(a).
"Credit Agreement" has the meaning specified in Section 1(a).
"Default" has the meaning ascribed to such term in the Credit Agreement.
"Depository Bank" means any of the "depository banks" identified in any
Agency Account Agreement.
"Destruction" has the meaning specified in the Mortgages.
"Direction Notice" has the meaning specified in Section 3(b).
"Event of Default" means an Event of Default as defined in the Note
Agreements or the Credit Agreement.
"Excess Proceeds" has the meaning specified in the Note Agreements and the
Credit Agreement (it being understood that so long as the Credit Agreement and
the Note Agreements are outstanding, in the event of any inconsistency in such
definition in the Credit Agreement and the Note Agreements, the definition that
is more onerous to the Company shall be controlling).
"Facilities Obligations" has the meaning ascribed to such term in the
Credit Agreement.
"general partner of the Company" has the meaning specified in the Note
Agreements.
3
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"Guarantee Agreements" has the meaning ascribed to such term in the Credit
Agreement and the Note Agreements.
"Interest Rate Agreements" means any interest rate swap, collar, cap,
foreign currency exchange agreement or other arrangement requiring payments
contingent upon interest or exchange rate entered into by the Company with any
Bank Lender or Affiliate thereof with respect to the Facilities Obligations.
"Interest Rate Unwind Obligation" means any "breakage" amount or other
similar amount due as a result of an early termination of an Interest Rate
Agreement upon the occurrence of a default or other special termination event
thereunder or any "breakage" due under Section 2.15 of the Credit Agreement on
Eurodollar Loans (as such term is defined in the Credit Agreement).
"Letter of Credit Exposure" has the meaning ascribed to such term in the
Credit Agreement, provided that Letter of Credit Exposure shall not include the
portion of any undrawn Letters of Credit to the extent that the Letter of Credit
expressly provides that the issuer of such Letter of Credit is not required to
honor such Letter of Credit following the occurrence of an Event of Default.
"Letters of Credit" has the meaning ascribed to such term in the Credit
Agreement.
"Make Whole Amount" has the meaning specified in the Note Agreements.
"Mortgage Recording Supplement" has the meaning specified in the Mortgages.
"Mortgages" has the meaning specified in Section 2(a).
"National Propane Corp." has the meaning specified in the Introduction.
"National Propane Entities" means the Company, National Propane Corp., the
Public Partnership and the Restricted Subsidiaries.
"National Propane SGP" has the meaning specified in Section 1(a).
"Net Awards" has the meaning specified in the Mortgages.
"Net Insurance Proceeds" has the meaning specified in the Mortgages.
"Note Agreements" has the meaning specified in Section 1(a).
"Note Holders" has the meaning specified in the Introduction.
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"Note Obligations" means (a) the Company's obligations in respect of the
due and punctual payment of principal of, premium (including , without
limitation, Make Whole Amount and Premium Amount) and interest on the Notes,
when and as due, whether at maturity, by acceleration, upon one or more dates
for prepayment or otherwise, (b) all expenses, indemnities and expense
reimbursement obligations of the Company under the Note Agreements, the Notes,
the Guarantee Agreements, the Security Documents or this Agreement and (c) all
other obligations, monetary or otherwise, of any of the Obligors under any of
the Note Agreements, the Notes, the Guarantee Agreements, the Security Documents
or this Agreement to which it is a party, in each case, whether now owing or
hereafter existing.
"Notes" has the meaning specified in Section 1(a).
"Objecting Party" has the meaning specified in Section 2(c).
"Obligations" has the meaning specified in Section 1(b).
"Obligors" has the meaning specified in Section 1(b).
"Officers' Certificate" means a certificate executed on the Company's
behalf by the Chairman of the Board of Directors (if an officer) or President or
a Vice President and Treasurer, or Controller, or an Assistant Treasurer or
Assistant Controller of the general partner of the Company. . "Parity Debt"
means indebtedness of the Company or any Restricted Subsidiary (a) incurred in
accordance with Sections 10.1(b), 10.1(f), 10.1(i) or 10.1(j) of the Note
Agreements and, so long as the Credit Agreement is effective, Section 6.01(b) of
the Credit Agreement and (b) secured by the Security Documents pursuant to
Section 10.2(i) or 10.2(m) of the Note Agreements and, so long as the Credit
Agreement is effective, Section 6.02(h) of the Credit Agreement.
"Parity Debt Agreements" means the agreements between the Company and each
Parity Lender providing for the incurrence of Parity Debt (but only to the
extent such agreement relates to Parity Debt).
"Parity Lenders" means the purchasers or lenders of the Parity Debt
pursuant to the Parity Debt Agreements and their respective successors and
assigns.
"Partners Security Agreement" has the meaning specified in Section 2(a).
"Partnership Note" has the meaning specified in Section 2(a).
5
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"Potential Event of Default" has the meaning ascribed to such term in the
Note Agreements.
"Premium Amount" has the meaning specified in the Note Agreements.
"Public Partnership" has the meaning specified in the Introduction.
"Required Holders" shall have the meaning ascribed to such term in the Note
Agreements.
"Required Lenders" shall have the meaning ascribed to such term in the
Credit Agreement.
"Requisite Percentage" means all of the following voting as separate
classes: (a) the holders of at least 66-2/3% in aggregate principal amount of
the Notes, the Bank Notes, the Letter of Credit Exposure, the Interest Rate
Unwind Obligations and Parity Debt collectively at the time outstanding; (b) the
Required Holders; and (c) the Required Lenders. From time to time at the request
of the Trustee, each Note Holder, Bank Lender and Parity Lender shall execute
and deliver to the Trustee a certificate describing the principal amount of the
Notes, the Bank Notes, the unused Commitments (for purposes of calculating the
Required Lenders), the Letter of Credit Exposure, the Interest Rate Unwind
Obligations and Parity Debt then outstanding held by such Note Holder, Bank
Lender or Parity Lender as of such date. In addition, each Note Holder, Bank
Lender and Parity Lender shall use its reasonable efforts to update any
previously delivered certificate upon the occurrence of a material change in the
information therein. The Trustee shall be entitled to rely on the last such
certificate received by it as to the principal amount of the Notes, the Bank
Notes, the unused Commitments, the Letter of Credit Exposure, the Interest Rate
Unwind Obligations and Parity Debt then outstanding held by such Note Holder,
Bank Lender or Parity Lender for purposes of determining the Requisite
Percentage.
"Restoration" has the meaning specified in the Mortgages.
"Restricted Subsidiaries" has the meaning specified in the Note Agreements
and the Credit Agreement other than National Sales and Service, Inc.
"Security" has the meaning specified in Section 2(a).
"Security Documents" has the meaning specified in Section 2(a).
"Taking" has the meaning specified in the Mortgages.
6
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"Tranche A Revolving Credit Commitments" has the meaning ascribed to such
term in the Credit Agreement but in no event exceeding $15,000,000.
"Triarc" means Triarc Companies, Inc., a Delaware corporation, and its
successors and assigns.
"Trustee" has the meaning specified in the Introduction.
"Trustee Account" has the meaning specified in Section 3(a).
"Trust Officer" means any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Cashier or any trust officer of the
Trustee customarily performing corporate trust functions and also, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge or any familiarity with the particular
subject. .
"Undrawn Letter of Credit Allocation" has the meaning specified in Section
2(b).
"Undrawn Letters of Credit" has the meaning specified in Section 2(b).
"Voting Actions" has the meaning specified in Section 3(b).
The parties hereto further acknowledge and agree that, for purposes of this
Agreement, the term "Credit Agreement" also shall mean and include any
extension, renewal, replacement, restatement or refunding of the Credit
Agreement and any amendment, modification or supplement thereof entered into in
accordance with Section 19 hereof and the term "Note Agreements" also shall mean
and include any extension, renewal, replacement, restatement or refunding of the
Note Agreements and any amendment, modification or supplement thereof entered
into in accordance with Section 19 hereof.
II. Security. A. The Note Holders, Bank Lenders and Parity Lenders, if any,
will be entitled to the benefits of certain security held or to be held by or
for the benefit of the Trustee, such security to consist of the property held
under this Agreement (including, without limitation, all funds held under
Section 4) and the following instru ments and documents (each, along with any
other instrument or agreement to which one or more Obligors is a party and which
purports to grant to the Trustee a security interest in or a lien on property to
secure the payment or performance of any of the Obligations, or which is stated
therein to be a Security Document for purposes of this Agreement, being
hereinafter referred to as a "Security Document", and collectively, the
"Security Documents") and all rights of the Trustee under the Security Documents
or in respect of such property and Security Documents (such property and any
additional property
7
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subject to any of the Security Documents, together with all such rights, being
referred to herein as the "Security"):
1. the mortgage, security agreement and fixture filing documents and
the deed of trust, security agreement and fixture filing documents, each
among the Company, National Propane Corp. and the Trustee, creating, as
security for the Obligations, a first lien on and security interest in the
properties of the National Propane Entity described therein as subject to
the lien and security interest thereof located in the states of Arkansas,
Arizona, Colorado, Connecticut, Florida, Illinois, Iowa, Kansas, Maine,
Massachusetts, Michigan, Minnesota, Missouri, New Hampshire, New Mexico,
New York, Rhode Island, Vermont and Wisconsin; and all other mortgage,
security agreement and fixture filing documents and deed of trust, security
agreement and fixture filing documents, among any of the Company, National
Propane Corp., any Restricted Subsidiary and the Trustee, creating, as
security for the Obligations, a first lien on and security interest in the
properties of the National Propane Entity described therein as subject to
the lien and security interest thereof;
2. the pledge and security agreement among the Company, National
Propane Corp., the Restricted Subsidiaries referred to therein and the
Trustee, creating, as security for the Obligations, a first priority
security interest in the personal property described therein as subject to
the security interest thereof;
3. the pledge and security agreement among the Public Partnership,
National Propane Corp. and the Trustee, creating, as security for the
Obligations, a first priority security interest in the personal property
described therein as subject to the security interest thereof;
4. the Cash Collateral Agreement, creating, as security for the
Obligations, a subordinate security interest in the collateral described
therein, subject to the express conditions and limitations set forth
therein; and
5. the 13.5% Senior Secured Note of Triarc issued to the Company,
which creates a security interest in certain property of Triarc in favor of
the Company, which note and security interest has been assigned by the
Company to the Trustee as security for the Obligations;
(the mortgage, security agreement and fixture filing documents referred to in
clause (i) above are referred to herein collectively as the "Mortgages" and
individually as a "Mortgage", the pledge and security agreement referred to in
clause (ii) above is referred to herein as the "Company Security Agreement", the
pledge and security agreement referred to in clause (iii) above is referred to
herein as the "Partners Security Agreement" and the note referred to in clause
(v) is referred to herein as the "Partnership Note"). All
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references herein to any Security Document shall mean such Security Document as
at the time supplemented or amended in accordance with the terms thereof and
hereof. The Company will deliver or cause to be delivered to the Trustee,
promptly upon the execution and delivery thereof, executed counterparts of all
Security Documents and all amendments and supplements thereto. The Trustee shall
keep all Security Documents at the time held by it at the principal corporate
trust office of the Trustee in New York, New York, and shall permit any Note
Holder, Bank Lender or Parity Lender to inspect the same during normal business
hours upon reasonable request.
B. 1. Each Note Holder, Bank Lender and Parity Lender acknowledges and
agrees that if any amount (subject to subparagraph (ii) below) to be distributed
in accordance with the terms of Section 4 of this Agreement has been allocated
(the amount of such allocation being hereinafter referred to as the "Undrawn
Letter of Credit Allocation") to the Bank Lenders on account of undrawn (in
whole or in part) Letters of Credit (the "Undrawn Letters of Credit"), such
allocated amounts shall be held by the Trustee as cash security for the benefit
of the Note Holders, Bank Lenders and Parity Lenders for application in
accordance with the terms of this paragraph. If any amounts are held by the
Trustee as cash security as contemplated by the immediately preceding sentence,
then (x) upon receipt of written notice from the Administrative Agent of a draw
under any Undrawn Letter of Credit which is not reimbursed by the Company when
due in accordance with the terms of the Credit Agreement, the Trustee shall pay
to the issuer of such Undrawn Letter of Credit a pro-rata portion of the Undrawn
Letter of Credit Allocation as directed by the Administrative Agent, such
pro-rata portion to be equal to the product of (1) the amount of such draw under
the Undrawn Letter of Credit and (2) a fraction the numerator of which is the
amount of the Undrawn Letter of Credit Allocation and the denominator of which
is an amount equal to the original aggregate amount of the Undrawn Letters of
Credit, and (y) upon the termination of each Undrawn Letter of Credit a pro-rata
portion of the Undrawn Letter of Credit Allocation shall be distributed by the
Trustee to the Note Holders, Bank Lenders and Parity Lenders in accordance with
the applicable provisions of Section 4, such pro-rata share to be equal to the
product of (1) the Undrawn Letter of Credit Allocation and (2) a fraction the
numerator of which is the amount of the terminated Undrawn Letter of Credit and
the denominator of which is the original aggregate amount of the Undrawn Letters
of Credit. Each Undrawn Letter of Credit Allocation shall be treated separately
for purposes of distributions hereunder. In determining any payments to be made
hereunder, the Trustee may rely on a certificate from the Administrative Agent
regarding the original aggregate amount of Letters of Credit, any draws on the
Undrawn Letters of Credit and the amount of the Undrawn Letters of Credit
outstanding from time to time.
2. Each Note Holder, Bank Lender and Parity Lender acknowledges that as
provided in Section 2.21(k) of the Credit Agreement, the Administrative Agent
may hold pursuant to the Cash Collateral Agreement certain cash collateral
deposited by the Company with the Administrative Agent on account of outstanding
Letters of Credit;
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provided that, to the extent required to perfect the second priority security
interest granted to the Trustee pursuant to Section 3(b) of the Cash Collateral
Agreement, the Administrative Agent shall also be and act as bailee (which for
purposes hereof shall be treated as a co-trustee) of the Trustee for the benefit
of the Junior Secured Parties (as defined in the Cash Collateral Agreement) with
respect to the cash, instruments, securities and other items in the Account (as
defined in the Cash Collateral Agreement) and the Administrative Agent hereby
accepts such appointment. Each Note Holder, Bank Lender and Parity Lender
further acknowledges that the Bank Lenders have a senior security interest in
such cash collateral and the Trustee has a subordinate security interest in such
cash collateral as provided in the Cash Collateral Agreement. If any amounts are
held by the Administrative Agent as cash collateral as contemplated by this
subparagraph (ii), such amounts shall be applied by the Administrative Agent in
accordance with the Cash Collateral Agreement to the payment of any draw under a
Letter of Credit which is not reimbursed by the Company when due. If the
Administrative Agent is required to release any of such cash collateral to the
Company pursuant to the terms of the Cash Collateral Agreement and an Event of
Default has occurred and is continuing, then, in lieu of delivering such amounts
to the Company, the Administrative Agent shall deliver such amounts to the
Trustee to be held and applied in accordance with Section 4 of this Agreement.
C. The Trustee shall (without any requirement of consent of or notice
(except as provided in Section 2(c)(ii) below) to any Person, including without
limitation any Bank Lender, Note Holder, Parity Lender or the Administrative
Agent) promptly (x) execute and return to the Company any instruments or
documents prepared by the Company to release from the liens and security
interests created by the Security Documents any Security which is intended to be
sold, transferred or otherwise conveyed by the Company and (y) return to the
Company any such Security then in the Trustee's possession; provided that the
following conditions have been complied with:
1. The Trustee has received a certificate ("Certificate") from the
general partner of the Company providing a detailed description of the
Security to be released and certifying (A) that no Default, Potential Event
of Default or Event of Default exists or will exist by reason of such
release and sale, transfer or conveyances, (B) that such proposed release
and sale, transfer or conveyance is permitted pursuant to Section 6.07 of
the Credit Agreement and Section 10.7 of the Note Agreements, (C) the fair
market value of the Collateral or Security to be released and the fair
market value of the consideration to be received by the Company or the
Restricted Subsidiary, as the case may be, for such sale, transfer or
conveyance and (D) the aggregate fair market value at the time of release
of the Security which has been released pursuant to this Section 2(c)
during the period of 12 months immediately preceding the receipt of such
Certificate by the Trustee.
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2. (A) If the fair market value of the Security to be released as
evidenced by the Certificate exceeds $1,000,000 or if the total fair market
value of the Security which has been released without notice to the
Administrative Agent, the Note Holders and the Parity Lenders pursuant to
this Section 2(c) during the period of 12 months next preceding the receipt
of such Certificate by the Trustee (when aggregated with the fair market
value of the Security to be released, as evidenced by the Certificate)
exceeds $1,000,000, the Trustee shall, (x) except as provided in Section
2(c)(ii)(B) below, have mailed a copy of the Certificate to the
Administrative Agent, the Note Holders and Parity Lenders, if any, together
with a notice referencing this Section 2(c) of this Agreement pursuant to
which the notice is being sent and stating that the Trustee will execute
and return to the Company any instruments or documents prepared by the
Company to release the Security described in the Certificate as requested
by the Company and will return to the Company any such Security then in the
Trustee's possession, unless the Trustee receives a written objection to
such release from the Administrative Agent, any Note Holder or any Parity
Lender to the effect that such proposed release, sale, transfer or
conveyance does not comply with the terms of the Credit Agreement, the Note
Agreements or any other Loan Document (as such term is defined in the
Credit Agreement) within ten Business Days following the date of mailing of
such notice and (y) not have received written objection to such release
from the Administrative Agent, any Parity Lender or any Note Holder (each
an "Objecting Party") within ten Business Days following the date of
mailing of such notice; and
(B) If the fair market value of the Security to be released, as
evidenced by the Certificate, exceeds $3,750,000 or if the total fair
market value of the Security which has been released during the period of
12 months next preceding the receipt of the notice specified in clause (ii)
above (when aggregated with the fair market value of the Security to be
released as evidenced by the Certificate) exceeds $3,750,000, the Trustee
shall comply with the notice requirements under Section 2(c)(ii)(A)(x) and,
in addition, shall obtain the prior written consent of each Bank Lender and
each Note Holder which consent shall not be withheld if such proposed
release, sale, transfer or conveyance complies with the terms of the Credit
Agreement, the Note Agreements and the other Loan Documents before
executing and returning to the Company any instruments or documents
prepared by the Company to release the Security as requested by the
Company.
3. In each case under Section 2(c)(ii), the Trustee shall provide
prompt written notice to the Administrative Agent, each Note Holder and
each Parity Lender after the Trustee has released any Security.
4. If the Trustee shall have received a written objection pursuant to
clause (c)(ii)(A) above or shall not have received the consent of each Bank
Lender and
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each Note Holder pursuant to clause (c)(ii)(B) above, the Trustee shall
promptly notify the Company thereof.
D. Notwithstanding the provisions of Section 2(c)(ii)(A)(y), if an
Objecting Party shall withdraw in writing its objections to such release, then
such objections shall be deemed not to have been sent by such Objecting Party or
received by the Trustee.
III. Enforcement of Security by Trustee. A. The Trustee, for the benefit of
the Note Holders, the Bank Lenders and the Parity Lenders, shall from time to
time take such action for the protection and enforcement of its rights under
this Agreement, the Guarantee Agreements and the Security Documents as may be
necessary or appropriate in the interests of all of the Note Holders, the Bank
Lenders and the Parity Lenders, provided that:
1. unless and until the Trustee is notified in writing that an Event
of Default shall have occurred and be continuing, the Trustee shall not be
obligated to take any action under this Agreement, the Guarantee Agreements
or the Security Documents except for the performance of such duties as are
specifically set forth herein or therein and except as may be requested
from time to time in writing by the Requisite Percentage, and no implied
covenants or obligations shall be read into this Agreement against the
Trustee;
2. the Trustee shall not be deemed to have knowledge of the existence
of any condition or event which constitutes a Potential Event of Default,
Default or an Event of Default and may act as if no such Potential Event of
Default, Default or Event of Default exists, unless (A) notified in writing
by any Note Holder, Bank Lender or Parity Lender or by the Company, which
notice shall expressly indicate that the specified condition or event is a
"Potential Event of Default," "Default" or "Event of Default," as the case
may be, or (B) a Trust Officer has actual knowledge that a Potential Event
of Default, Default or Event of Default has occurred and is continuing; and
3. if and so long as an Event of Default shall have occurred and be
continuing and the Trustee shall have been notified in writing thereof, the
Trustee shall exercise such rights, powers and remedies (whether vested in
it by this Agreement, the Guarantee Agreements or any Security Document or
by law or in equity or by statute or otherwise) for the protection and
enforcement of its rights under this Agreement, the Guarantee Agreements
and the Security Documents as the Trustee (in the absence of written
instructions from the Requisite Percentage) may determine to be in the best
interests of all of the Note Holders, Bank Lenders and Parity Lenders, or
as the Trustee may be directed in writing by the Requisite Percentage. In
exercising any rights or remedies hereunder, the Trustee shall use
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the same degree of care and skill in such exercise as a prudent person
would use under the circumstances in the conduct of his own affairs; and
4. The Trustee will promptly and in any event within two Business Days
of the earlier of (A) the date it receives written notice of the occurrence
of an Event of Default or (B) the date any Trust Officer of the Trustee has
actual knowledge of the occurrence of an Event of Default, provide notice
to each Depository Bank to not permit the Company or any other Person or
entity to withdraw funds from the account of the Company at such Depository
Bank and to transfer no later than 2:00 p.m. (New York time) on each
Business Day the funds held in such Depository Account as required by the
Agency Account Agreement from such account by wire transfer (or other means
acceptable to the Trustee) to an account at the Trustee specified in the
Agency Account Agreement (the "Trustee Account"). The funds in such Trustee
Account shall be released to the Company upon the Trustee's receipt of a
written request from the Company, except, during any period in which an
Event of Default has occurred and is continuing, the Trustee shall not
release any funds in such Trustee Account to the Company or any other
Person, except for (x) distributions pursuant to Section 4(g) of this
Agreement pursuant to a Direction Notice and (y) distributions to the
Company of the amount specified in a written request of the chief financial
officer of the general partner of the Company (which request shall be made
no more frequently than once every five Business Days) (1) specifying the
amount of the requested distribution of funds to the Company and (2)
certifying that (a) such amount is necessary for the normal operations
(which shall not include the payment of any Obligations) of the Company,
(b) such amount shall be used solely in connection with the normal
operations (which shall not include the payment of any Obligations) of the
Company and (c) there are insufficient funds in the accounts of the Company
for the normal operations (which shall not include the payment of any
Obligations) of its business.
5. Upon the occurrence of a Partner Bankruptcy Event or an NPC
Bankruptcy Event (as such terms are defined in the Security Documents) when
an Event of Default shall not have occurred, the Trustee shall take such
actions with respect to the Security that are permitted under the Security
Documents as specified by the Requisite Percentage.
B. Whenever any action is required or proposed to be taken hereunder by the
Trustee at the direction, or subject to the approval or consent, of the
Requisite Percentage, including, without limitation, the exercise of any of the
rights or remedies of the Trustee under the Security Documents or the Guarantee
Agreements or the approval of any amendments to this Agreement, the Guarantee
Agreements or the Security Documents or the other matters set forth in Sections
8 or 20 hereof (the "Voting Actions"), the Trustee shall promptly notify each
Note Holder, Bank Lender and Parity Lender then a party to this Agreement of
such required or proposed action, shall collect
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instructions from the Note Holders, Bank Lenders and Parity Lenders regarding
such required or proposed action and shall notify the Note Holders, the Bank
Lenders and the Parity Lenders of the results thereof. If such Voting Action is
approved by the Requisite Percentage, such Voting Action shall constitute a
"Direction Notice". A Direction Notice may also be received by the Trustee
directly from the Requisite Percentage.
IV. Application of Moneys by Trustee. All moneys received by the Trustee in
respect of the Security, including all moneys received by the Trustee under the
Mortgages, the Guarantee Agreements, the Company Security Agreement, the
Partners Security Agreement, the Partnership Note or any other Security
Document, shall, promptly upon receipt, be applied as follows:
A. (i) All Net Insurance Proceeds received by the Trustee on account
of a Destruction, all payments in lieu of such Net Insurance Proceeds
received by the Trustee pursuant to Section 16.3 of any Mortgage, all Net
Awards received by the Trustee on account of a Taking, all proceeds
received under title insurance policies and all proceeds received from the
damage or destruction of the Collateral in each case which do not
constitute Excess Proceeds in accordance with Section 10.7(c)(iii)(B) of
the Note Agreements and Section 6.07(c)(iii)(B) of the Credit Agreement,
shall, unless a Potential Event of Default, Default or Event of Default
exists, be released to the Company upon the receipt by the Trustee of an
Officers' Certificate certifying that such funds are not Excess Proceeds
and that no Potential Event of Default, Default or Event of Default exists;
and (ii) if a Potential Event of Default, Default or Event of Default
exists, such Net Insurance Proceeds, payments in lieu of Net Insurance
Proceeds, Net Awards, proceeds received under title insurance policies or
proceeds received from damage or destruction of the Collateral shall be
held by the Trustee as part of the Security and applied as follows: (x) if
no Event of Default shall have occurred and be continuing and all Potential
Events of Default and Defaults shall have been cured or waived, then such
Net Insurance Proceeds, payments in lieu of Net Insurance Proceeds, Net
Awards, proceeds received under title insurance policies or all proceeds
received from the damage or destruction of the Collateral, shall be applied
as provided in subparagraph (i) above; or (y) if an Event of Default shall
have occurred and be continuing, then such Net Insurance Proceeds, payments
in lieu of Net Insurance Proceeds, Net Awards, proceeds received under
title insurance policies or proceeds received from damage or destruction of
the Collateral shall be applied in accordance with the priorities set forth
in subsection (g) below.
B. All Net Insurance Proceeds received by the Trustee on account of
any Destruction, all payments in lieu of such Net Insurance Proceeds
received by the Trustee pursuant to Section 16.3 of any Mortgage, all Net
Awards received on account of a Taking, all proceeds received under title
insurance policies and all proceeds received from the damage or destruction
of the Collateral in each case
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which constitute Excess Proceeds in accordance with Section 10.7(c)(iii)(B)
of the Note Agreements or Section 6.07(c)(iii)(B) of the Credit Agreement,
shall, unless a Potential Event of Default, Default or Event of Default
exists (in which event subparagraph (iii) below shall apply), be applied as
follows:
1. if the Company or a Restricted Subsidiary, as the case may be,
has elected to perform a Restoration, then, subject to the provisions
of Section 10.7(c)(iii)(B) and Section 10.20 of the Note Agreements,
Section 6.07(c)(iii)(B) of the Credit Agreement and the proviso to
Section 2.11(f) of the Credit Agreement, such Net Insurance Proceeds,
payments in lieu of Net Insurance Proceeds, Net Awards, proceeds
received under title insurance policies or proceeds received from the
damage or destruction of Collateral shall be paid over to the Company
or as it may direct from time to time as Restoration progresses to pay
the cost of Restoration, but only upon the written request of the
Company, accompanied by an Officers' Certificate or other appropriate
evidence satisfactory to the Trustee that the sum requested has been
paid or is then due and payable and is a proper item of such cost,
that there are no mechanics' or similar liens for labor or materials
supplied in connection therewith and that no Potential Event of
Default, Default or Event of Default exists; and upon the earlier to
occur of the (A) completion of such Restoration, or (B) expiration of
270 days (or 360 days if the Company has executed a binding contract
for such Restoration meeting the requirements of Section 10.7(c) of
the Note Agreements and Section 6.07(c) of the Credit Agreement) from
the date of the loss or Taking, the balance of such Net Insurance
Proceeds, payments in lieu of Net Insurance Proceeds, Net Awards,
proceeds received under title insurance policies or proceeds received
from damage or destruction of Collateral, if any, shall, unless a
Potential Event of Default, Default or Event of Default exists, be
applied (1) in the case of clause (A) above, as provided in subsection
(d) below, and (2) in the case of clause (B) above, to the prepayment
of the Notes, the Bank Notes, the Letter of Credit Exposure (for
purposes of this Section 4, the prepayment of Letter of Credit
Exposure includes the payment of amounts to the Trustee to be held as
cash collateral as provided in Section 2(b)(i)) and Parity Debt as
provided in Section 4(d)(ii) below;
2. if the Company or a Restricted Subsidiary, as the case may be,
has elected not to perform or is not permitted to perform a
Restoration, such Net Insurance Proceeds, payments in lieu of Net
Insurance Proceeds, Net Awards, proceeds of title insurance policies
or proceeds received from the damage or destruction of Collateral
shall be applied as set forth in subsection (d) below; and
3. if a Potential Event of Default, Default or Event of Default
exists, such Net Insurance Proceeds, payments in lieu of Net Insurance
Proceeds, Net
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Awards, proceeds received under title insurance policies or proceeds
received from the damage or destruction of Collateral shall be held by
the Trustee as part of the Security and applied as follows: (x) if no
Event of Default shall have occurred and be continuing and all
Potential Events of Default and Defaults shall have been cured or
waived, then such Net Insurance Proceeds, payments in lieu of Net
Insurance Proceeds, Net Awards, proceeds received under title
insurance policies or proceeds received from the damage or destruction
of Collateral shall be applied as provided in subparagraph (i) or (ii)
above, as the case may be; or (y) if an Event of Default shall have
occurred and be continuing, then such Net Insurance Proceeds, payments
in lieu of Net Insurance Proceeds, Net Awards, proceeds received under
title insurance policies or proceeds received from the damage or
destruction of the Collateral shall be applied in accordance with the
priorities set forth in subsection (g) below.
C. All proceeds of business interruption insurance maintained by the
Company or any Restricted Subsidiary, if any, received by the Trustee under
circumstances when subsection (b) above shall not be applicable shall be
applied as follows:
1. such proceeds shall, unless a Potential Event of Default,
Default or Event of Default exists, be paid over or assigned to the
Company or as it may direct; and
2. if a Potential Event of Default, Default or Event of Default
exists, such proceeds shall be held by the Trustee as part of the
Security and applied as follows: (x) if no Event of Default shall have
occurred and be continuing and all Potential Events of Default and
Defaults shall have been cured or waived, then such proceeds shall be
paid over to the Company or as it may direct in writing; or (y) if an
Event of Default shall have occurred and be continuing, then such
proceeds shall be applied in accordance with the priorities set forth
in subsection (g) below.
D. Subject to the foregoing provisions of this Section 4, all Excess
Proceeds received from the Company or any Restricted Subsidiary by the
Trustee on account of the sale, lease, abandonment or other disposition of
any of the Security in accordance with Section 10.7(c) of the Note
Agreements and Section 6.07(c) of the Credit Agreement, and all amounts
required by subsection (b) above to be applied in accordance with this
subsection (d), shall be applied as follows:
1. such Excess Proceeds shall, unless otherwise required by
Section 10.7(c)(iii)(B)(y) of the Note Agreements and Section
6.07(c)(iii)(B)(II) of the Credit Agreement or unless a Potential
Event of Default, Default or Event of Default exists, be paid over to
the Company or as it may direct in writing
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from time to time for the acquisition of replacement assets or other
productive assets in accordance with Section 10.7(c)(iii)(B)(x) of the
Note Agreements and Section 6.07(c)(iii)(B)(I) of the Credit
Agreement, but only upon (x) the written request of the Company,
accompanied by an Officers' Certificate or other appropriate evidence
satisfactory to the Trustee that the sum requested has been paid or is
then due and payable and is a proper item of such cost and (y) receipt
of (1) an Officers' Certificate certifying that the fair market value
(as determined in good faith by the Board of Directors of the general
partner of the Company) of such property or assets is at least equal
to the amount of such portions of such Excess Proceeds and (2) an
opinion of counsel reasonably satisfactory to the Requisite Percentage
(as certified in writing to the Trustee) to the effect that all
amendments to the Security Documents and all filings and recordations
of or with respect to such amendments and related supplements have
been made to cause such property or assets to be subject to the lien
of the Security Documents and as to such other matters as the Required
Holders or the Required Lenders might reasonably request;
2. if such Excess Proceeds are required by Section
10.7(c)(iii)(B)(y) of the Note Agreements or Section
6.07(c)(iii)(B)(II) of the Credit Agreement to be used to prepay the
Notes, the Bank Notes, the Letter of Credit Exposure and the Parity
Debt in accordance with Section 9.4 of the Note Agreements and Section
2.11 of the Credit Agreement, then, subject to the last paragraph of
Section 6.07 of the Credit Agreement and to Section
6.07(c)(iii)(A)(y)(5) of the Credit Agreement and unless a Potential
Event of Default, Default or Event of Default exists, such Excess
Proceeds shall be paid to the Note Holders (to be applied as set forth
in Section 9.4 of the Note Agreements), the Bank Lenders (to be
applied as set forth in Section 2.11 of the Credit Agreement) and the
Parity Lenders on account of the Notes, the Bank Notes, the Letter of
Credit Exposure and the Parity Debt, such payments to be made pro-rata
to the Note Holders, the Bank Lenders and the Parity Lenders entitled
thereto, with each Note Holder, Bank Lender or Parity Lender receiving
that fraction of the total of all such amounts paid to the Note
Holders, Bank Lenders and Parity Lenders as the aggregate principal
amount, premium (including, without limitation, Make Whole Amount and
Premium Amount) and interest of each such holder's Notes, Bank Notes,
Letter of Credit Exposure or Parity Debt bears to the sum of the
aggregate principal amounts, premiums (including, without limitation,
Make Whole Amount and Premium Amount) and interest of all Notes, Bank
Notes, Letter of Credit Exposure and Parity Debt at the time
outstanding, provided that for purposes of making such pro-rata
calculation the amount of any unfunded Tranche A Revolving Credit
Commitments under the Credit Agreement shall be deemed to be included
in the outstanding principal amount of the Bank Notes so long as the
inclusion of such unfunded Tranche A Revolving Credit Commitments will
not result in the Bank
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Lenders receiving distributions on account of the Bank Notes in an
amount greater than the actual outstanding amounts due under the Bank
Notes;
3. if any Excess Proceeds remain after the application of such
Excess Proceeds pursuant to subparagraph (ii) above, and no Potential
Event of Default, Default or Event of Default exists, the Trustee
shall deliver such remaining Excess Proceeds to the Company; and
4. if a Potential Event of Default, Default or Event of Default
exists, such Excess Proceeds shall be held by the Trustee as part of
the Security and applied as follows: (x) if no Event of Default shall
have occurred and be continuing and all Potential Events of Default
and Defaults shall have been cured or waived, then such Excess
Proceeds shall be applied as provided in subparagraphs (i), (ii) and
(iii) above; or (y) if an Event of Default shall have occurred and be
continuing, then such Excess Proceeds shall be applied in accordance
with the priorities set forth in subsection (g) below.
E. The proceeds of any sale or any other moneys at the time held by
the Trustee pursuant to Sections 21.1 and 21.2 of any Mortgage or Article
VI of the Company Security Agreement, Article VI of the Partners Security
Agreement or Section 3.4 of the Partnership Note shall be applied to pay:
First: the fees, costs and expenses, including, without limitation,
those of the Trustee (including, without limitation, attorneys' fees
and expenses), of the sale and of any receiver of the Security or any
part thereof appointed pursuant to Section 21.9 of the applicable
Mortgage or Article VI of the Company Security Agreement, Article VI
of the Partners Security Agreement or Section 3.4 of the Partnership
Note, and all other amounts due the Trustee under Section 10 hereof;
Second: all amounts of principal and interest at the time due and
payable on the Notes, the Bank Notes, the Letter of Credit Exposure
and the Parity Debt at the time outstanding (whether at stated
maturity or as an installment or by prepayment, declaration or
otherwise), including interest (to the extent permitted under
applicable law) on any overdue principal or interest on the Notes, the
Bank Notes, the Letter of Credit Exposure or the Parity Debt at the
rate provided therefor in the Note Agreements, the Credit Agreement or
the Parity Debt Agreements, as the case may be; and in case such
monies shall be insufficient to pay in full the amounts so due and
unpaid on all the Notes, the Bank Notes, the Letter of Credit Exposure
and the Parity Debt, then first, all amounts of interest at the time
due and payable on the Notes, the Bank Notes, the Letter of Credit
Exposure and the Parity Debt, and second, all amounts of principal at
the time due and payable on the Notes, the Bank Notes, the Letter of
Credit Exposure and the Parity Debt; and all such payments shall be
made pro-rata to the Note Holders, Bank Lenders and Parity Lenders
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entitled thereto, with each Note Holder, Bank Lender or Parity Lender
receiving that fraction of the total of all such amounts paid to the
Note Holders, Bank Lenders and Parity Lenders as the aggregate
principal amount and interest of each such holder's Notes, Bank Notes,
Letter of Credit Exposure or Parity Debt bears to the sum of the
aggregate principal amounts and interest of all Notes, Bank Notes,
Letter of Credit Exposure and Parity Debt at the time outstanding;
Third: all amounts of premium (including, without limitation, Make
Whole Amount and Premium Amount) due and payable on the Notes, the
Bank Notes, the Letter of Credit Exposure and the Parity Debt at the
time outstanding and all amounts due and payable on account of
Interest Rate Unwind Obligations, including interest (to the extent
permitted by applicable law) on any such amounts at the rate provided
therefor in the Note Agreements, the Credit Agreement, the Interest
Rate Agreements or the Parity Debt Agreements, as the case may be; and
all such payments shall be made pro-rata to the Note Holders, Bank
Lenders and Parity Lenders entitled thereto, with each Note Holder,
Bank Lender or Parity Lender receiving that fraction of the total of
all such amounts paid to the Note Holders, Bank Lenders and Parity
Lenders as the aggregate premium (including, without limitation, Make
Whole Amount and Premium Amount) and interest thereon of each such
holder's Notes, Bank Notes, Letter of Credit Exposure, Interest Rate
Unwind Obligations or Parity Debt bears to the sum of the aggregate
premiums (including, without limitation, Make Whole Amount and Premium
Amount) and interest thereon of all Notes, Bank Notes, Letter of
Credit Exposure, Interest Rate Unwind Obligations and Parity Debt at
the time outstanding;
Fourth: any obligations secured by any Security Document and at the
time due and owing, including, without limitation, any obligations
owing under the Note Agreements, the Credit Agreement, the Interest
Rate Agreements, the Guarantee Agreements, the Parity Debt Agreements
or the Security Documents, other than the amounts referred to in
subdivisions First through Third, inclusive, above; and in case such
monies shall be insufficient to pay in full the amounts so due and
unpaid, all such payments shall be made pro-rata to the Persons
entitled thereto, each Person receiving that fraction of the total of
all such amounts paid to all such Persons as the amount due to such
Person bears to the sum of the amounts due to all such Persons; and
Fifth: the balance, if any, to the Company or as it may direct in
writing if all conditions to the termination of this Agreement
specified in Section 17 shall have been fulfilled, but if any such
condition shall not have been fulfilled, to be held by the Trustee and
thereafter applied to any other payments required to be made in
accordance with subdivisions First through Fourth, inclusive, above.
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F. Any amounts received by the Trustee by reason of any taking of
possession, entry, removal or holding, operation or management of the
Security or any part thereof pursuant to Section 21.10 of any Mortgage or
Article VI of the Company Security Agreement, Article VI of the Partners
Security Agreement or Section 3.4 of the Partnership Note or by reason of
the collection of rents, issues or profits under Section 18 of any Mortgage
or under Article VI of the Company Security Agreement, Article VI of the
Partners Security Agreement or Section 3.4 of the Partnership Note shall be
applied to pay:
First: all fees, costs and expenses, including, without limitation,
those of the Trustee (including, without limitation, attorneys' fees
and expenses) of entering upon, taking possession of, holding,
operating and managing the Security, or any part thereof, and any
Impositions (as defined in the Mortgages) prior to the liens or
security interests of the Mortgages, which the Trustee may consider it
necessary or desirable to pay, and all amounts due to the Trustee
under Section 10 hereof;
Second: all amounts of principal and interest at the time due and
payable on the Notes, the Bank Notes, the Letter of Credit Exposure
and the Parity Debt at the time outstanding, including interest on any
overdue principal or interest on the Notes, the Bank Notes, the Letter
of Credit Exposure and the Parity Debt, all in accordance with the
priorities set forth in subdivision Second of subsection (e) of this
Section 4;
Third: all amounts of premium (including, without limitation, Make
Whole Amount and Premium Amount) due and payable on the Notes, the
Bank Notes, the Letter of Credit Exposure and the Parity Debt at the
time outstanding and all amounts due and payable on account of
Interest Rate Unwind Obligations, including interest (to the extent
permitted by applicable law) on any such amounts at the rate provided
therefor in the Note Agreements, the Credit Agreement, the Interest
Rate Agreements or the Parity Debt Agreements, as the case may be, all
in accordance with the priorities set forth in subdivision Third of
subsection (e) of this Section 4;
Fourth: any obligations secured by any Security Document and at the
time due and payable, including, without limitation, any obligations
due and payable under the Note Agreements, the Credit Agreement, the
Letter of Credit Exposure, the Interest Rate Agreements, the Guarantee
Agreements, the Parity Debt Agreements or the Security Documents,
other than the amounts referred to in subdivision First through Third,
inclusive, above; and in case such monies shall be insufficient to pay
in full the amounts so due and unpaid, all such payments shall be made
pro-rata to the Persons entitled thereto, each Person receiving that
fraction of the total of all such amounts paid to all such Persons as
the amount due to such Person bears to the sum of the amounts due to
all such Persons; and
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Fifth: the balance, if any, to the Company or as it may direct in
writing if all conditions to the termination of this Agreement
specified in Section 17 shall have been fulfilled, but if any such
condition shall not have been fulfilled, to be held by the Trustee and
thereafter applied to any other payments required to be made in
accordance with subdivisions First through Fourth, inclusive, above.
G. If an Event of Default shall have occurred and be continuing, the
proceeds of any sale or collection or any other monies received by the
Trustee under any Security Document (including all proceeds received by the
Trustee under title insurance policies) or any Guarantee Agreement, as to
which specific provision for the application of such monies has not
heretofore been made in this Section 4, shall be applied to pay:
First: all fees, costs and expenses, including, without limitation,
those of the Trustee (including, without limitation, attorneys' fees
and expenses) of the sale of the Security or any part thereof, and all
amounts due to the Trustee under Section 10 hereof;
Second: all amounts of principal and interest at the time due and
payable on the Notes, the Bank Notes, the Letter of Credit Exposure
and the Parity Debt at the time outstanding, including interest on
overdue principal and interest on the Notes, the Bank Notes, the
Letter of Credit Exposure and the Parity Debt, all in accordance with
the priorities set forth in subdivision Second of subsection (e) of
this Section 4;
Third: all amounts of premium (including, without limitation, Make
Whole Amount and Premium Amount) due and payable on the Notes, the
Bank Notes, the Letter of Credit Exposure and the Parity Debt at the
time outstanding and all amounts due and payable on account of
Interest Rate Unwind Obligations, including interest (to the extent
permitted by applicable law) on any such amounts at the rate provided
therefor in the Note Agreements, the Credit Agreement, the Interest
Rate Agreements or the Parity Debt Agreements, as the case may be, all
in accordance with the priorities set forth in subdivision Third of
subsection (e) of this Section 4;
Fourth: any obligations secured by any Security Document and at the
time due and payable, including, without limitation, any obligations
owing under the Note Agreements, the Credit Agreement, the Interest
Rate Agreements, the Guarantee Agreements, the Parity Debt Agreements
or the Security Documents, other than the amounts referred to in
subdivision First through Third, inclusive, above; and in case such
monies shall be insufficient to pay in full the amounts so due and
unpaid, all such payments shall be made pro-rata to the Persons
entitled thereto, each Person receiving that fraction of the total of
all such amounts paid to all such
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Persons as the amount due and payable to such Person bears to the sum
of the amounts due and payable to all such Persons; and
Fifth: the balance, if any, to the Company or as it may direct in
writing if all conditions to the termination of this Agreement
specified in Section 17 shall have been fulfilled, but if any such
condition shall not have been fulfilled, to be held by the Trustee and
thereafter applied to any other payments required to be made in
accordance with subdivisions First through Fourth, inclusive, above.
H. Pending application in accordance with subsections (a) through (g)
of this Section 4, all monies received by the Trustee hereunder shall be
invested at the written direction of the Company in accordance with the
investment guidelines set forth in Exhibit A hereto, provided that during
the existence of an Event of Default (and delivery to the Trustee of
written notice thereof) investments under such guidelines and definition
shall be limited to those set forth in clauses (1) through (4) of such
Exhibit A, provided further that any such investment shall be permitted
hereunder so long as the applicable investment satisfies such investment
guidelines at the time of such investment or of any contractual commitment
therefor.
I. It is understood and agreed that the Company, National Propane
Corp. and the Restricted Subsidiaries shall remain liable to the extent of
any deficiency between the amount of the proceeds of the Security and
amounts received under the Guarantee Agreements and the aggregate amount of
the obligations secured thereby.
J. Each of the Note Holders, Bank Lenders and Parity Lenders hereby
(i) acknowledges the existence and validity of the Facilities Obligations,
the Note Obligations and the Parity Debt and the obligations of the Company
in respect thereof, and (ii) agrees to refrain from making or asserting any
claim that any thereof or the instruments governing the terms thereof are
invalid or unenforceable in accordance with its or their terms as a result
of any claims under the fraudulent transfer, preference or similar
avoidance provisions of applicable bankruptcy, insolvency or other laws
affecting the rights of creditors generally. Each of the Trustee, the Note
Holders, Bank Lenders and Parity Lenders hereby further agrees that the
liens and security interest granted to the Trustee under the Security
Documents shall be treated, as among the Note Holders, Bank Lenders and
Parity Lenders, as having equal priority and shall at all times be shared
by the Note Holders, Bank Lenders and Parity Lenders as provided herein
regardless of any claim or defense (including, without limitation, any
claims under the fraudulent transfer, preference or similar avoidance
provisions of applicable bankruptcy, insolvency or other laws affecting the
rights of creditors generally) or any additional rights (including any
additional rights based on its providing purchase
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money financing to the Company) to which the Trustee or any Note Holder,
Bank Lender or Parity Lender may be entitled or subject.
K. If any Note Holder, Bank Lender or Parity Lender exercises any
right of set off or similar right with respect to any assets (whether or
not such assets constitute Security) of any Obligor for payment of any
Obligations (as opposed, for example, to the use of such set off amounts
for the payment of other obligations owing to any Note Holder, Bank Lender
or Parity Lender from the providing of banking services to any Obligor
which are not related to the Obligations) at any time that an Event of
Default has occurred and is continuing, the amounts so set off shall
constitute Security for purposes of this Agreement, and such Note Holder,
Bank Lender or Parity Lender shall promptly cause such amounts to be
delivered to or put in the custody, possession or control of the Trustee
for disposition or distribution in accordance with Section 4(g) of this
Agreement. Until such time as the provisions of the immediately preceding
sentence have been complied with, such Note Holder, Bank Lender or Parity
Lender shall be deemed to hold such Security in trust for the parties
entitled thereto hereunder.
V. Payments by Trustee, etc. All payments by the Trustee to be made to the
Note Holders, the Bank Lenders and the Parity Lenders as provided hereunder
shall be made as provided in Section 15 of the Note Agreements (to be applied as
set forth in the applicable provisions of the Note Agreements), Section 2.18 of
the Credit Agreement (to be applied as set forth in the applicable provisions of
the Credit Agreement) and in the payment provisions of the Parity Debt
Agreements.
VI. Certificates as to Issue of, Payments of Interest on, and Prepayments
of Notes, Bank Notes and Parity Debt. Upon the issue of any Note, Bank Note,
Letter of Credit or Parity Debt pursuant to the Note Agreements, the Credit
Agreement or the Parity Debt Agreements, respectively, or upon any substitution
for any such Notes, Bank Notes, Letter of Credit or Parity Debt, the Company
will deliver to the Trustee an Officers' Certificate of the Company specifying
the date and principal amount of such Note, Bank Note, Letter of Credit or
Parity Debt and the name, address and (except with respect to the issuance of
Letters of Credit) taxpayer identification number of the registered holder
thereof and stating that such Note, Bank Note, Letter of Credit or Parity Debt
is being issued pursuant to the Note Agreements, the Credit Agreement or Parity
Debt Agreements or in substitution for a previously issued Note, Bank Note,
Letter of Credit or Parity Debt (in which case such certificate shall also
identify such previously issued Note, Bank Note, Letter of Credit or Parity Debt
by reference to the prior certificate covering the same) and that such Note,
Bank Note, Letter of Credit or Parity Debt is entitled to the benefits of this
Agreement and of the Security and is subject to the terms hereof. The Company
will also deliver to the Trustee promptly upon request similar Officers'
Certificates confirming such data as to all Note Obligations, Facilities
Obligations and Parity Debt at the time outstanding and entitled to the benefits
of this
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Agreement and of the Security, and, in addition, setting forth, as of the date
of such Officers' Certificate, (a) with respect to any interest payment, the
name and address of each registered Note Holder, Bank Lender or Parity Lender,
together with the principal amount of all Note Obligations, Facilities
Obligations and Parity Debt held by each respective holder and (b) with respect
to any prepayment, the prepayment date, the aggregate principal amount of the
Notes, Bank Notes and Parity Debt prepaid on such date, the name of the
registered Note Holder, Bank Lender or Parity Lender prepaid, the amount of each
such Note, Bank Note and Parity Debt prepaid, the premium (including, without
limitation, Make Whole Amount and Premium Amount), if any, applicable to such
prepayment and the section of the Note Agreements, the Credit Agreement or
Parity Debt Agreements pursuant to which such prepayment was made.
VII. Notices, etc., under Security Documents. The Trustee shall deliver, at
the expense of the Company, to each Note Holder, Bank Lender or Parity Lender
promptly upon receipt thereof, duplicates or copies of all notices, requests and
other instruments received by the Trustee under or pursuant to the Security
Documents, the Guarantee Agreements or this Agreement, to the extent that the
same are not required by such document or agreement to have been furnished
pursuant thereto to such holder.
VIII. Amendments, etc., of Security Documents. In any case where the
agreement or consent of the Trustee is required to any amendment, modification,
cancellation or termination of any of the Guarantee Agreements or the Security
Documents, or in any case where the Trustee is required to give any consent,
waiver or approval under any of the Security Documents or the Guarantee
Agreements, the Trustee shall agree or consent to such amendment, modification,
cancellation or termination, or give such consent, waiver or approval, with (but
only with) the prior written consent of the Requisite Percentage, provided that
the Trustee shall not agree to (i) any change in the definition of Requisite
Percentage, (ii) any change in the manner in which the proceeds of any Security
or of any Guarantee Agreement are distributed, (iii) release all or
substantially all of the Security or release all or substantially all of the
guarantors under the Guarantee Agreements, or (iv) any change in this Section
without the prior written consent of all of the Note Holders, Bank Lenders and
Parity Lenders, and provided further, that such prior written consent of the
Requisite Percentage shall not be required with respect to a Mortgage Recording
Supplement or in connection with any amendment or modification which, as
evidenced by an opinion of counsel delivered to the Trustee, does not adversely
affect any right or interest of any Note Holder, Bank Lender or Parity Lender.
IX. Concerning the Trustee. A. The Trustee is hereby appointed as trustee
for, and hereby accepts, the trusts of this Agreement for the benefit of the
Note Holders, Bank Lenders or Parity Lenders from time to time, but only upon
the terms herein set forth, including the following:
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1. notwithstanding anything herein contained to the contrary, the
Trustee shall not be obligated to take any action hereunder which might in
its reasonable judgment involve it in any expense or liability unless
furnished with indemnity reasonably satisfactory to the Trustee;
2. the Trustee shall be under no liability with respect to any action
taken in accordance with a written request given as provided in Section 3
or Section 4 (in cluding on investments of funds), except that nothing
contained herein shall relieve the Trustee from liability for its own
negligence, willful misconduct or bad faith;
3. the Trustee makes no representation and has no responsibility as to
the validity or sufficiency of the Security Documents, the Guarantee
Agreements or this Agreement or the sufficiency of the Security;
4. in making any payment or in taking any other action hereunder in
respect of any Obligation, the Trustee may rely upon the Officers'
Certificate covering such Obligation delivered to it pursuant to Section 6
unless a Trust Officer shall have received actual knowledge of any transfer
of such Obligation, and the Trustee shall be protected in making any
payment in respect of any Obligation believed by the Trustee to be genuine;
5. in the absence of bad faith or willful misconduct on its part, the
Trustee may rely and shall be protected in acting upon any resolution,
certificate, opinion, consent or other document reasonably believed by it
to be genuine and to have been executed or presented by the proper party or
parties;
6. whenever in the administration of its duties hereunder or under the
Guarantee Agreements or the Security Documents the Trustee deems it
necessary for a matter to be proved or established prior to taking any
action hereunder, the Trustee may request and the Company shall, if
requested, promptly provide certification regarding such matter, upon which
the Trustee shall be protected in relying, absent actual knowledge of a
Trust Officer to the contrary;
7. the Trustee may act through agents, attorneys or consultants and
may rely on the advice and direction of such agents, attorneys or
consultants duly appointed by the Trustee and shall not be responsible for
the misconduct or negligence of any such agents or consultants appointed
with due care hereunder;
8. the Trustee shall not be liable for any error of judgment made in
good faith unless it is proved that the Trustee was negligent in
ascertaining the pertinent facts;
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9. the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with the direction of the
Requisite Percentage or greater percentage of holders of Obligations as may
be required;
10. money held in trust by the Trustee need not be segregated from
other funds held by the Trustee except to the extent required by law or the
terms of this Agreement;
11. the Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its
rights or powers, provided that such action or omission by the Trustee does
not constitute willful misconduct, negligence or bad faith; and
12. the Trustee may consult with counsel of its selection, and the
advice or opinion of counsel with respect to legal matters relating to this
Agreement, any Guarantee Agreement or any Security Document shall be full
and complete authorization and protection from liability in respect to any
action taken, omitted or suffered by it hereunder in good faith and in
accordance with the advice or opinion of such counsel, provided that such
action or omission by the Trustee does not constitute willful misconduct,
negligence or bad faith.
B. The Trustee shall not be responsible for any recital herein or in the
Notes, the Bank Notes or the Parity Debt or for insuring the Security or for the
validity or sufficiency of this Agreement, any Guarantee Agreement or any
Security Document or of any supplements thereto or instruments of further
assurance or for the sufficiency of the Security for the Obligations intended to
be secured by any Security Document, or for the value of the Security or the
title of the Company or any Restricted Subsidiary to the Security or the
maintenance of the Security. Except as otherwise expressly provided herein, the
Trustee shall not be bound to ascertain or inquire as to the performance or
observance of any covenants, conditions or agreements on the part of the Company
or any Restricted Subsidiary under the Note Agreements, the Credit Agreement or
Parity Debt Agreements or any of the Guarantee Agreements or the Security
Documents but the Trustee at the written direction of the Requisite Percentage
may require of the Company full performance of any such covenants.
C. The Trustee shall not be liable or responsible for any losses incurred
or suffered by the Company or any other Obligor or by any secured party, or any
decrease in the value of the Security, resulting from any investment made
pursuant to Section 4 hereof or from any other sale or disposition of Security
made in accordance with the terms hereof and the Security Documents. In no event
shall the Trustee be personally liable for any taxes or any other governmental
charges imposed upon or in respect of the Security or upon the income or other
distributions thereon.
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D. The Trustee shall be entitled to rely exclusively upon, and shall have
no duty or obligation to check, verify or otherwise assess the accuracy of, the
information or calculations provided to the Trustee by (i) the Company in any
Officers' Certificate delivered pursuant to Section 6, (ii) the Note Holders,
Bank Lenders or Parity Lenders in a certificate as provided in the definition of
Requisite Percentage, or (iii) the Administrative Agent as provided in Section
2(b)(i).
E. Except as specified in Section 12, the Trustee shall have no
responsibility for filing any Mortgage or other Security Document or any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder, under any Mortgage or under any other Security Document
or to prepare and file any filing, report or registration statement under any
federal or state securities or "blue sky" law or to record this Agreement.
F. The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Obligors, personally or by agent or attorney
at the sole cost of the Obligors and shall incur no liability or additional
liability of any kind by reason of such inquiry or investigation.
G. The Trustee undertakes to perform such duties and only such duties as
are specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee.
H. In the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement; but in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Agreement (but need not confirm or investigate the accuracy of mathematical
calculations or other facts stated therein).
I. The Trustee shall not be liable for any error of judgment made in good
faith by a Trust Officer, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts.
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J. Each of the Company and National Propane Corp. agree to promptly deliver
to the Trustee copies of any amendments, modifications or waivers to the Credit
Agreement, the Note Agreements or any other Loan Document (as defined in the
Credit Agreement) or Operative Agreement (as defined in the Note Agreements).
The Trustee shall be entitled to conclusively presume that those documents are
in the form delivered to the Trustee on the date of the closing of the
transactions contemplated hereby until it has received written notice to the
contrary by one of the parties hereto (and in the event of conflicting notices
from more than one party hereto, as specified by the Requisite Percentage).
X. Trustee's Compensation, Expenses, etc. The Company, from time to time
upon request, will pay the Trustee compensation for its services hereunder
(which compensation shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) and will pay or reimburse the
Trustee on a current basis for all its reasonable expenses and disbursements
hereunder, including, without limitation, the reasonable fees and disbursements
of its counsel and of its agents not regularly in its employ including
independent consultants retained by the Trustee in good faith. Notwithstanding
Section 10 of the Mortgages or the provisions of any other Security Documents or
the Guarantee Agreements, the Company hereby indemnifies the Trustee and agrees
to hold it harmless against any loss, expense, liability or obligation arising
out of or in connection with the acceptance and the performance of its duties
hereunder and under the Security Documents and the Guarantee Agreements,
including, without limitation, the costs and expenses of defending itself
against any claim or liability in connection with the exercise or performance of
any of its powers or duties hereunder, and the payment, failure to pay or delay
in payment of any stamp or other taxes (including interest and penalties) in
respect of the issue and sale of the Notes, the Bank Notes or Parity Debt, such
indemnity and compensation to survive payment of the Obligations and any
resignation, removal or replacement of the Trustee, provided that such indemnity
shall not apply to actions or inactions by the Trustee that constitute
negligence, wilful misconduct or bad faith.
When the Trustee incurs expenses or renders services in connection with any
bankruptcy proceeding involving any Obligor, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Agreement or the resignation and removal of the Trustee.
XI. Resignation, Removal and Replacement of Trustee. The Trustee or any
successor Trustee may resign at any time by giving at least 30 days' prior
written notice of resignation to the Company and each Note Holder, Bank Lender
and Parity Lender,
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such resignation to be effective on the later of (a) the date specified in such
notice and (b) the date on which a replacement trustee is appointed to act as
Trustee hereunder. The Requisite Percentage may at any time remove the Trustee
for or without cause by an instrument or instruments in writing delivered to the
Trustee and the Company. In case the office of Trustee shall become vacant for
any reason, the Requisite Percentage may appoint a successor Trustee (eligible
as provided in Section 13) to fill such vacancy by an instrument or instruments
in writing delivered to such successor Trustee, the retiring Trustee and the
Company. Until a new Trustee shall be so appointed by the Requisite Percentage,
the Company shall use reasonable efforts to appoint an interim Trustee (eligible
as provided in Section 13) to fill such vacancy by an instrument or instruments
in writing executed by order of its general partner and delivered to such
interim Trustee, the retiring Trustee and each Note Holder, Bank Lender and
Parity Lender at the time outstanding. Any interim Trustee so appointed by the
Company shall immediately and without any further action be superseded by a
successor Trustee appointed by the Requisite Percentage in the manner provided
in this Section 11. If a successor or interim Trustee does not take office
within 30 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Company or any Note Holder, Bank Lender or Parity Lender may
petition any court of competent jurisdiction for the appointment of a successor
Trustee. Upon the appointment of any successor or interim Trustee pursuant to
this Section 11, such successor or interim Trustee shall immediately and without
any further action succeed to all the rights and obligations of the retiring
Trustee hereunder, under the Guarantee Agreements and under the Security
Documents as if originally named herein and therein and the retiring Trustee, at
the expense of the Company, shall duly assign, transfer and deliver to such
successor or interim Trustee all the rights and moneys at the time held by the
retiring Trustee under the Security Documents, the Guarantee Agreements and
hereunder and shall execute and deliver such proper in struments as may be
reasonably requested to evidence such assignment, transfer and de livery.
XII. Successor Trustee by Merger, Consolidation, etc. Any corporation into
which the Trustee may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Trustee is a
party, or any state or national bank or trust company in any manner succeeding
to all or substantially all of the corporate trust business of the Trustee, if
eligible as provided in Section 13, shall automatically succeed to all of the
rights and obligations of the Trustee hereunder, under the Guarantee Agreements
and under the Security Documents without further action on the part of any of
the parties hereto. Such surviving or succeeding corporation (if other than the
Trustee) shall (a) forthwith deliver to each Note Holder, Bank Lender and Parity
Lender and the Company written notice of such succession to the rights and
obligations of the Trustee hereunder, under the Guarantee Agreements and under
the Security Documents and (b) execute, file and record all necessary filings,
notices and documents in each location a filing, notice, or document was filed
and recorded to perfect the lien and security interest granted to the Trustee
pursuant to the
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Security Documents (all within any temporal parameters required to continue the
perfection (and priority thereof) of such liens and security interests) and take
all such other actions necessary to maintain a perfected lien and security
interest in the Security.
XIII. Eligibility of Trustee. The Trustee shall always be a state or
national bank or trust company in good standing, organized under the laws of the
United States of America or one of the States thereof or the District of
Columbia, having a capital, surplus and undivided profits (as shown by its
latest annual report of condition) aggregating at least $250,000,000 and having
unsecured long-term debt obligations which are rated either AA or better (or
comparably if the rating system is changed) by Standard & Poor's Ratings Group
or Aa2 or better (or comparably if the rating system is changed) by Moody's
Investors Service, Inc. and shall not be a Note Holder, Bank Lender or Parity
Lender or any affiliate thereof, if there be such a bank or trust company
willing and able to accept such trust upon reasonable and customary terms. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section 13, the Trustee shall resign immediately in the
manner and with the effect specified in Section 11.
XIV. Appointment of Separate or Co-Trustee. A. The Trustee may and, upon
the request of the Requisite Percentage, shall by an instrument in writing
delivered to the Company and to each Note Holder, Bank Lender and Parity Lender
appoint a bank or trust company or an individual to act as separate trustee or
co-trustee with respect to the Obligations in a jurisdiction where the Trustee
is disqualified from acting or for any other purpose deemed by the Trustee or by
such holders to be advantageous to their respective interests, such separate
trustee or co-trustee to exercise only such rights and to have only such duties
as shall be specified in the instrument of appointment and shall not be an
affiliate of any Note Holder, Bank Lender or Parity Lender. The Company will pay
the reasonable compensation and expenses of any such separate trustee or
co-trustee and, if requested by the Trustee, such separate trustee or co-trustee
or the Requisite Percentage, the Company will enter into an amendment to this
Agreement, satisfactory in substance and form to the Trustee, such separate
trustee or co-trustee and each such holder, confirming the rights and duties of
such separate trustee or co-trustee.
B. Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
1. all rights, powers, duties and obligations conferred or imposed
upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly
(it being understood that such separate trustee or co-trustee shall not be
authorized to act separately without the Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such
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rights, powers, duties and obligations (including the holding of title to
the Security or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;
2. no trustee hereunder shall be personally liable by reason of any
act or omission of any other trustee hereunder; and
3. the Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
C. Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Section 14. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
D. Any separate trustee or co-trustee may at any time constitute the
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
(e) Upon the request of the Requisite Percentage, the Trustee shall
promptly remove any separate trustee or co-trustee.
XV. Obligations Absolute. The obligations of the Obligors under this
Agreement, the Guarantee Agreements and the Security Documents, to the fullest
extent permitted by applicable law, shall be absolute and unconditional and
shall remain in full force and effect without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation: (a) any
renewal, extension, amendment or modification of, or addition or supplement to,
or deletion from, this Agreement, the Note Agreements, the Notes, the Credit
Agreement, the Bank Notes, the Interest Rate Agreements, the Parity Debt, the
Parity Debt Agreements, the Guarantee Agreements or the Security Documents, or
any assignment or transfer of any thereof; (b) any waiver, consent, extension,
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indulgence or other action or inaction under or in respect of any such
instrument or any exercise or non-exercise of any right, remedy, power or
privilege under or in respect of any such instrument; (c) any furnishing of any
additional security to the Trustee or any acceptance thereof or any release of
any security or guaranty by the Trustee; (d) any limitation on any party's
liability or obligations under any such instrument or any invalidity or
unenforceability, in whole or in part, of any such instrument or any term
thereof; or (e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to any
Obligor or any action taken with respect to this Agreement by any trustee or
receiver, or by any court, in any such proceeding; whether or not any Obligor
shall have notice or knowledge of any of the foregoing.
XVI. Further Assurances. A. The Obligors at their expense will execute,
acknowledge and deliver all such agreements and instruments and take all such
action as the Trustee or the Requisite Percentage from time to time may
reasonably request in order further to effectuate the purposes of this Agreement
and to carry out the terms hereof. Each of the Obligors represents and warrants
that its office set forth in Section 18 is its principal place of business and
the office at which its records with respect to this Agreement and the Security
Documents are kept. In the event any of the Obligors proposes to change its
name, the location of its principal place of business or the location of such
office, such Obligor will, at least 90 days prior to any such proposed change,
de liver to the Trustee written notice of such proposed change.
B. Not more than 90 days nor less than 30 days prior to each date on which
any Obligor proposes to take any action contemplated by the last sentence of
Section 16(a), the Company shall, at its own cost and expense, furnish to each
Note Holder, each Bank Lender, each Parity Lender and the Trustee an opinion of
counsel either (a) stating that, in the opinion of such counsel, such action has
been taken with respect to the recording, filing, rerecording and refiling of
this Agreement, any Mortgage or other Security Document, any supplements and any
other requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to perfect,
maintain and protect the lien and security interest of the Trustee, on behalf of
the Note Holders, Bank Lenders and Parity Lenders, with respect to the Security
against all creditors of and purchasers from such Obligor, as the case may be,
and reciting the details of such action, or (b) stating that, in the opinion of
such counsel, no such action is necessary to maintain such perfected lien and
security interest. Such opinion of counsel shall describe each recording,
filing, rerecording and refiling of this Agreement, any Mortgage or other
Security Document, any supplements and any other requisite statements and
continuation statements that will, in the opinion of such counsel, be required
to perfect, maintain and protect the lien and security interest of the Trustee,
on behalf of the Note Holders, Bank Lenders and Parity Lenders, with respect to
the Security against all creditors of and purchasers from such Obligor for a
period, specified
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in such opinion, continuing until a date not earlier than fifteen months from
the date of such opinion.
XVII. Termination. A. Upon receipt by the Trustee of evidence satisfactory
to it of the indefeasible payment (or prepayment) in full in cash of the
principal of and premium (including, without limitation, Make Whole Amount and
Premium Amount), if any, and interest on all of the Notes, the Bank Notes, the
Interest Rate Agreements and Parity Debt in accordance with the terms thereof
and the indefeasible payment in full in cash of all other sums payable under the
Note Agreements, the Notes, the Credit Agreement, the Bank Notes, the Interest
Rate Agreements, the Parity Debt, the Parity Debt Agreements, the Guarantee
Agreements, the Security Documents and this Agreement (including, without
limitation, the reasonable compensation, expenses and disbursements of the
Trustee), and the termination of all obligations on the part of the Bank Lenders
to fund any Bank Loans, to issue any Letters of Credit or otherwise extend any
credit, and the termination of all Letters of Credit issued under the Credit
Agreement, this Agreement shall terminate and the Trustee, at the request and
expense of the Company, will execute and deliver to the Company a proper
instrument or instruments prepared by the Company acknowledging the satisfaction
and termination of the Security Documents and of this Agreement, and will duly
assign, transfer and deliver to the Company all of the rights and moneys at the
time held by the Trustee under the Security Documents and hereunder.
Notwithstanding the satisfaction and termination of this Agreement, the
Guarantee Agreements or the Security Documents, the obligation of the Company to
the Trustee under Section 10 of this Agreement and Section 10 of each of the
Mortgages shall survive.
B. Prior to satisfaction and discharge of this Agreement, the Trustee shall
be entitled to receive an opinion of counsel stating that the conditions to
satisfaction and discharge have been complied with under this Agreement.
XVIII. Notices, etc. All notices and other communications under this
Agreement shall be in writing and shall be delivered by hand, by express courier
service or by registered or certified mail, return-receipt requested, postage
prepaid, addressed (a) if to any Obligor, at Suite 1700, IES Tower, 200 1st
Street, S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067, Attention: Senior
Vice President-Chief Financial Officer, or at such other address, or to the
attention of such other officer, as the Com pany, shall have furnished to the
Trustee and each Note Holder, Bank Lender or Parity Lender in writing, or (b) if
to the Trustee, at 101 Barclay Street, 12th Floor East, New York, NY 10286,
Attention: Corporate Trust Department, or to such other address as the Trustee
shall have furnished to the Company and each Note Holder, Bank Lender or Parity
Lender in writing, or (c) if to any Note Holder, at the address of such Note
Holder specified in Schedule A of the Note Agreements or at such other address
as such Note Holder shall have furnished to the Company and the Trustee in
writing, or (d) if to any Bank Lender, at the address of such Bank Lender
specified in the Credit Agreement or at
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such other address as such Bank Lender shall have furnished to the Company and
the Trustee in writing, or (e) if to any Parity Lender, to such Parity Lender at
the most recent address of such Parity Lender provided in the Parity Debt
Agreements. Any notice so addressed and mailed shall be deemed to be given three
Business Days (as defined in the Note Agreements and the Credit Agreement) after
being so mailed, provided that any such notice to the Trustee shall be deemed to
be given only upon receipt by the Trustee.
XIX. Amendment of Certain Provisions of the Credit Agreement and the Note
Agreement. A. The Bank Lenders and the Company agree that, after the date
hereof, they shall not, without the prior written consent of the holders of more
than 66-2/3% in aggregate principal amount of all Notes at the time outstanding,
amend or revise the Credit Agreement in any manner which would:
1. shorten the maturity of any scheduled principal payment date;
2. adjust the method or formula by which the interest due on the Bank
Notes or the participation fees on the Letters of Credit are determined so
as to increase the effective interest rate;
3. adjust the method of calculating any fee provided for in the Credit
Agreement so as to increase the amount thereof (other than the adjustment
of any administrative or other miscellaneous fees to the extent consistent
with the prevailing fees for similar services);
4. alter any of the covenants set forth in Section 6 of the Credit
Agreement in a manner which would make it materially more difficult for the
Company to comply with or remain in compliance with those covenants, or add
any similar business or financial covenants to the Credit Agreement;
5. place restrictions upon the Company making any payment or
prepayment on the Notes;
6. alter Section 7.01 of the Credit Agreement in a manner which would
make it materially more likely that any of the events set forth therein
will occur or which would add additional events thereto; or
7. alter the definition of Required Lenders to increase the percentage
set forth therein.
B. The Company and the Note Holders agree that, after the date hereof, they
shall not, without the prior written consent of the Required Lenders (as defined
in the Credit Agreement) amend or revise the Note Agreements in any manner which
would:
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1. shorten the maturity of any scheduled principal payment;
2. increase the interest rate or premium due on the Notes or any fees
as set forth in the Note Agreements (other than the adjustment of any
administrative or other miscellaneous fees to the extent consistent with
the prevailing fees for similar services);
3. alter the calculation of the Make Whole Amount provided for in any
Note Agreements in any manner that would have the effect of increasing the
amount thereof;
4. alter any of the covenants set forth in Section 10 of any Note
Agreement in a manner which would make it materially more difficult for the
Company to comply with or remain in compliance with those covenants or add
any similar business or financial covenants to the Note Agreements;
5. place restrictions upon the Company making any payment or
prepayment on the Facilities Obligations;
6. alter Section 11 of the Note Agreements in a manner which would
make it materially more likely that any of the events set forth therein
will occur or which would add additional events thereto; or
7. alter the definition of Required Holders to increase the percentage
set forth therein.
C. The amendment or revision of the Note Agreements or the Credit Agreement
to alter any of the definitions contained therein which are referred to in this
Agreement or in the Guarantee Agreements or any Security Document shall not
affect the meaning of such definition for purposes of such other documents
unless such amendment or revision is approved pursuant to Section 20 as if it
were an amendment to this Agreement.
XX. Miscellaneous. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns of the
parties hereto, and, in addition, shall inure to the benefit of and be
enforceable by any Note Holder, Bank Lender or Parity Lender. Any person or
entity that becomes a Note Holder, Bank Lender or Parity Lender (including any
party refunding the Note Agreements, the Credit Agreement or the Parity Debt
Agreements) after the date hereof shall be bound by the terms hereof and, in
order to be entitled to the benefits of any of the Security, shall agree in
writing to be bound by the terms of this Agreement. The Company shall cause any
party refunding any of the Note Agreements, the Credit Agreement or the Parity
Debt Agreements to execute and deliver to each of the other parties hereto a
counterpart of this
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Agreement. This Agreement may be changed, waived, discharged or terminated
(other than by operation of Section 17) only by an instrument in writing signed
by the Obligors, by the Trustee and by the Requisite Percentage, provided that
this Agreement shall not be changed, waived, discharged or terminated in such a
manner that (i) the definition of Requisite Percentage is changed, (ii) the
manner in which proceeds of any Security or of any Guarantee Agreements are
distributed is changed, (iii) all or substantially all of the Security is
released or all or substantially all of the guarantors under the Guarantee
Agreements are released, or (iv) this Section is changed or modified in any
respect, without the prior written consent of all of the Note Holders, Bank
Lenders and Parity Lenders and further provided that the consent of the Trustee
and the Obligors shall not be required for the amendment of any of the
provisions hereof which relate solely to the arrangements between the Note
Holders, the Bank Lenders and the Parity Lenders.
THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW YORK,
STATE OF NEW YORK, UNITED STATES OF AMERICA. THIS AGREEMENT AND (UNLESS
OTHERWISE EXPRESSLY PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL
CONSENTS AND WAIVERS PURSUANT TO, THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES
THE RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE INITIAL NOTES, THE NOTES OR
ANY OTHER OPERATIVE AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY
OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.
Each Obligor, for itself and its successors and assigns, hereby, to the
fullest extent permitted by applicable law, irrevocably (a) agrees that any
legal or equitable action, suit or proceeding brought against it arising out of
or relating to this Agreement, or any transaction contemplated hereby or the
subject matter of any of the foregoing or for recognition or enforcement of any
judgment rendered in any such action, suit or proceeding may be instituted in
any state or federal court sitting in the Borough of Manhattan in the State of
New York, (b) waives any objection which it may now or hereafter have to the
laying of venue of any such action, suit or proceeding brought in any such
court, and hereby further irrevocably and unconditionally waives and agrees not
to plead or claim that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum, or any right to require the
proceeding to be conducted in any other jurisdiction by reason of its present or
future domicile, (c) irrevocably submits itself to the non-exclusive
jurisdiction of any state or federal court of competent jurisdiction sitting in
the Borough of Manhattan in the State of New York for
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purposes of any such action, suit or proceeding, and (d) irrevocably waives any
immunity from jurisdiction to which it might otherwise be entitled in any such
action, suit or proceeding which may be instituted in any state or federal court
sitting in the Borough of Manhattan in the State of New York, and irrevocably
waives any immunity from, or objection to, the maintaining of an action against
it to enforce any judgment for money obtained in any such action, suit or
proceeding and any immunity from execution. The headings in this Agreement are
for the purpose of reference only and shall not limit or define the meaning
hereof. This Agreement may be executed in several counterparts, each of which
shall be an original, but all of which shall constitute one instrument. If any
term of this Agreement or any application thereof shall be held to be invalid,
illegal or unenforceable, the validity of other terms of this Agreement or any
other application of such term shall in no way be affected thereby.
XXI. Legends. A. The Company and the holders of the Notes hereby agree that
(i) the Note Agreements shall contain an appropriate provision therein to the
effect that such agreement, and the Notes issued thereunder, are subject to the
terms of this Agreement and (ii) each Note issued pursuant to the Note
Agreements shall contain a legend substantially as follows (which shall be
printed thereon in bold face):
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE TRUST
AGREEMENT (AS DEFINED IN THE NOTE AGREEMENTS), WHICH TRUST AGREEMENT, AMONG
OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS
NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS.
COPIES OF SUCH TRUST AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS NOTE UPON
REQUEST TO THE COMPANY.
B. The Company and the Bank Lenders hereby agree that (i) the Credit
Agreement shall contain an appropriate provision therein to the effect that such
agreement, and the Bank Notes issued thereunder, are subject to the terms of
this Agreement and (ii) each Bank Note issued pursuant to the Credit Agreement
shall contain a legend substantially as follows (which shall be printed thereon
in bold face):
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE TRUST
AGREEMENT (AS DEFINED IN THE CREDIT AGREEMENT), WHICH TRUST AGREEMENT, AMONG
OTHER THINGS, ESTABLISHES CERTAIN RIGHTS WITH RESPECT TO THE SECURITY FOR THIS
NOTE AND THE SHARING OF PROCEEDS THEREOF WITH CERTAIN OTHER SECURED CREDITORS.
COPIES OF SUCH TRUST AGREEMENT WILL BE FURNISHED TO ANY HOLDER OF THIS NOTE UPON
REQUEST TO THE COMPANY.
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XXII. Restricted Subsidiaries. Upon execution and delivery by the Trustee
and a Restricted Subsidiary of a Supplemental Agreement substantially in the
form of Exhibit L to the Credit Agreement and Exhibit Q to the Note Agreements,
such Restricted Subsidiary shall become a party hereunder with the same force
and effect as if originally named as a party herein. The execution and delivery
of any such instrument shall not require the consent of any other party
hereunder. The rights and obligations of each party hereunder shall remain in
full force and effect notwithstanding the addition of any new Restricted
Subsidiary as a party to this Agreement.
XXIII.Obligations held by Affiliates. For all purposes hereunder, other
than rights to receive distributions pursuant to Section 4 hereof, all
Obligations held by any Obligor, National Propane SPG, any Subsidiary thereof or
any Restricted Affiliate shall be deemed canceled.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their respective representatives thereunto duly
authorized as of the date first above written.
NATIONAL PROPANE, L.P.,
a Delaware limited partnership
By: NATIONAL PROPANE CORPORATION,
its general partner
By___________________________
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
its general partner
By___________________________
Name:
Title:
NATIONAL PROPANE PARTNERS, L.P.
By: NATIONAL PROPANE CORPORATION,
its general partner
By___________________________
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
its general partner
By___________________________
Name:
Title:
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<PAGE>
NATIONAL PROPANE CORPORATION
By___________________________
Name:
Title:
40
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<PAGE>
THE FIRST NATIONAL BANK OF BOSTON,
as Administrative Agent
By___________________________
Name:
Title:
NOTE HOLDERS
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By___________________________
Name:
Title:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By___________________________
Name:
Title:
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<PAGE>
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By___________________________
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of its Separate Account
By: CIGNA INVESTMENTS, INC.
By___________________________
Name:
Title:
LIFE INSURANCE COMPANY OF NORTH
AMERICA
By: CIGNA INVESTMENTS, INC.
By___________________________
Name:
Title:
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<PAGE>
SECURITY LIFE OF DENVER INSURANCE
COMPANY
By: ING Investment Management, Inc.
By___________________________
Its: Senior Vice President
and Managing Director
MIDWESTERN UNITED LIFE INSURANCE
COMPANY
By: ING Investment Management, Inc.
By___________________________
Its: Senior Vice President
and Managing Director
PEERLESS INSURANCE COMPANY
By: ING Investment Management, Inc.
By___________________________
Its: Senior Vice President
and Managing Director
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<PAGE>
JEFFERSON-PILOT LIFE INSURANCE
COMPANY
By___________________________
Name:
Title:
GENERAL AMERICAN LIFE INSURANCE
COMPANY
By___________________________
Name:
Title:
KEYPORT LIFE INSURANCE COMPANY
By Stein Roe & Farnham Incorporated, as agent
By___________________________
Name:
Title: Senior Vice President
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<PAGE>
PACIFIC MUTUAL LIFE INSURANCE
COMPANY
By___________________________
Name:
Title:
By___________________________
Name:
Title:
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By___________________________
Name:
Title:
By___________________________
Name:
Title:
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<PAGE>
TMG LIFE INSURANCE COMPANY
by The Mutual Group (U.S.),
Inc., its agent
By___________________________
Name: Robert R. Lapointe
Title: Vice President
By___________________________
Name: Michael J. Carew
Title: Assistant Vice President
NORTHERN LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
NORTHWESTERN NATIONAL LIFE
INSURANCE COMPANY
By___________________________
Name:
Title:
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<PAGE>
BANK LENDERS
BANK OF AMERICA NT & SA
By___________________________
Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON
By___________________________
Name:
Title:
THE BANK OF NEW YORK, as Trustee
By___________________________
Name:
Title:
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Schedule I
Note Holders
The Northwestern Mutual Life Insurance Company
Teachers Insurance and Annuity Association of America
Connecticut General Life Insurance Company
Connecticut General Life Insurance Company,
on behalf of its Separate Account 66
Life Insurance Company of North America
Security Life of Denver Insurance Company
Midwestern United Life Insurance Company
Peerless Insurance Company
Jefferson-Pilot Life Insurance Company
General American Life Insurance Company
Keyport Life Insurance Company
Pacific Mutual Life Insurance Company
Principal Mutual Life Insurance Company
TMG Life Insurance Company
Northern Life Insurance Company
Northwestern National Life Insurance Company
<PAGE>
<PAGE>
Schedule II
Bank Lenders
The First National Bank of Boston
Bank of America National Trust And Savings Association
<PAGE>
<PAGE>
Investment Guidelines
(1) marketable obligations issued or unconditionally guaranteed by the
United States of America, or issued by any agency thereof and backed by the full
faith and credit of the United States of America in each case maturing within
one year from the date of acquisition thereof,
(2) marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and having as at any date of determination the highest rating obtainable
from either Standard & Poor's Ratings Group or Moody's Investors Service, Inc.,
(3) commercial paper maturing no more than 270 days from the date of
creation thereof and having as at any date of determination one of the two
highest ratings obtainable from either Standard & Poor's Ratings Group or
Moody's Investors Service, Inc.,
(4) certificates of deposit maturing one year or less from the date of
acquisition thereof issued by commercial banks incorporated under the laws of
the United States of America or any state thereof or the District of Columbia or
Canada, (A) the commercial paper or other short-term unsecured debt obligations
of which are rated either A-2 or better (or comparably if the rating system is
changed) by Standard & Poor's Ratings Group or Prime-2 or better (or comparably
if the rating system is changed) by Moody's Investors Service, Inc. or (B) the
long-term debt obligations of which are rated either AA- or better (or
comparably if the rating system is changed) by Standard & Poor's Ratings Group
or Aa3 or better (or comparably if the rating system is changed) by Moody's
Investors Service, Inc. ("Permitted Banks"),
(5) bankers' acceptances eligible for rediscount under requirements of The
Board of Governors of the Federal Reserve System and accepted by Permitted
Banks, and
(6) obligations of the type described in clause (1), (2), (3) or (4) above
purchased from a securities dealer designated as a "primary dealer" by the
Federal Reserve Bank of New York or from a Permitted Bank as counterparty to a
written repurchase agreement obligating such counterparty to repurchase such
obligations not later than 14 days after the purchase thereof and which provides
that the obligations which are the subject thereof are held for the benefit of
the Company or a Restricted Subsidiary by a custodian which is a Permitted Bank.
<PAGE>
<PAGE>
================================================================================
NATIONAL PROPANE CORPORATION,
NATIONAL PROPANE SGP, INC.
AND
NATIONAL PROPANE, L.P.
$125,000,000
8.54% First Mortgage Notes due June 30, 2010
(Private Placement Number: 63725# AA 6)
-------------------------
NOTE AGREEMENT
-------------------------
Dated as of June 26, 1996
================================================================================
<PAGE>
<PAGE>
TABLE OF CONTENTS
Section Page
1. AUTHORIZATION OF INITIAL NOTES AND NOTES...........................1
2. SALE AND PURCHASE OF INITIAL NOTES AND ISSUANCE OF
NOTES..............................................................2
3. CLOSING............................................................3
4. CONDITIONS TO CLOSING..............................................3
4.1. Representations and Warranties..............................3
4.2. Performance; No Default.....................................4
4.3. Compliance Certificates.....................................4
4.4. Opinions of Counsel.........................................4
4.5. Legal Investment............................................5
4.6. Trust Agreement.............................................6
4.7. Security Documents..........................................6
4.8. Conveyance; Recordation; Taxes, etc.........................7
4.9. Operative Agreements........................................7
4.10. Sale of Other Initial Notes; Issuance of Other Notes........8
4.11. Sale of Units...............................................8
4.12. Proceedings and Documents...................................8
4.13. Rating......................................................9
4.14. Insurance Broker's Certificate..............................9
4.15. Title Insurance; Survey.....................................9
4.16. Payment of Closing Fees.....................................9
4.17. Private Placement Number....................................9
4.18. Environmental Audit........................................10
4.19. Appraisal..................................................10
4.20. Other Agreements...........................................10
<PAGE>
<PAGE>
5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE GENERAL
PARTNERS AND THE COMPANY..........................................10
5.1. Organization, Standing, etc................................10
5.2. Partnership Interests......................................11
5.3. Qualification..............................................11
5.4. Business; Financial Statements.............................12
5.5. Changes, etc...............................................13
5.6. Tax Returns and Payments...................................14
5.7. Indebtedness...............................................14
5.8. Transfer of Assets and Business............................14
5.9. Litigation, etc............................................16
5.10. Compliance with Other Instruments, etc.....................17
5.11. Governmental Consent.......................................17
5.12. Offer of Initial Notes and Notes...........................17
5.13. Use of Proceeds............................................18
5.14. Federal Reserve Regulations................................18
5.15. Investment Company Act.....................................19
5.16. Public Utility Holding Company Act; Federal Power Act......19
5.17. ERISA......................................................19
5.18. Environmental Matters......................................21
5.19. Foreign Assets Control Regulations, etc....................22
5.20. Disclosure.................................................23
5.21. Chief Executive Office.....................................23
5.22. Solvency...................................................23
6. PURCHASER'S REPRESENTATIONS; SOURCE OF FUNDS......................24
7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER
INFORMATION.......................................................26
8. INSPECTION........................................................33
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9. PREPAYMENT OF NOTES...............................................34
9.1. Required Prepayments of the Notes..........................34
9.2. Optional Prepayments of the Notes with Make Whole Amount...34
9.3. Prepayment on Change of Control............................35
9.4. Contingent Prepayments on Disposition of Property, Taking or
Destruction................................................36
9.5. Notice of Prepayments; Officers' Certificate...............37
9.6. Allocation of Partial Prepayments..........................37
9.7. Maturity; Surrender, etc...................................37
9.8. Acquisition of Notes.......................................38
10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY...................38
10.1. Indebtedness...............................................38
10.2. Liens, etc.................................................45
10.3. Investments, Guaranties, etc...............................48
10.4. Restricted Payments........................................50
10.5. Transactions with Affiliates...............................51
10.6. Subsidiary Stock and Indebtedness..........................51
10.7. Consolidation, Merger, Sale of Assets, etc.................52
10.8. Partnership or Corporate Existence, etc.; Business.........57
10.9. Payment of Taxes and Claims................................58
10.10. Compliance with ERISA......................................58
10.11. Maintenance of Properties; Insurance.......................60
10.12. Operative Agreements; Security Documents...................60
10.13. Chief Executive Office.....................................61
10.14. Recordation; Opinions......................................61
10.15. Information Required by Rule 144A..........................62
10.16. Covenant to Secure Notes Equally...........................62
10.17. Compliance with Laws.......................................62
10.18. Further Assurances.........................................63
10.19. Subsidiaries...............................................64
10.20. Damage, Destruction, Taking, etc...........................66
10.21. Accounting Changes.........................................66
10.22. Certain Real Property......................................66
10.23. Sale and Lease-Back Transactions...........................68
10.24. Acquisitions...............................................68
10.25. Impairment of Security Interests...........................69
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10.26. Limitation on Restrictions on Subsidiary Dividends, etc....69
10.27. No Other Negative Pledges..................................69
10.28. Sales of Receivables.......................................69
10.29. Fixed Price Supply Contracts; Certain Policies.............70
10.30. Certain Operations.........................................70
10.31. Independent Corporate Existence............................71
10.32. Environmental Matters......................................72
10.33. Other Debt.................................................72
10.34. Restriction on General Partners............................73
11. EVENTS OF DEFAULT; ACCELERATION...................................74
12. REMEDIES ON DEFAULT; RECOURSE, ETC................................79
13. DEFINITIONS.......................................................80
14. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTES.................104
14.1. Note Register; Ownership of Notes.........................104
14.2. Transfer and Exchange of Notes............................105
14.3. Replacement of Notes......................................105
14.4. Notes Held by Company, etc., Deemed Not Outstanding.......106
15. PAYMENTS ON NOTES................................................106
15.1. Place of Payment..........................................106
15.2. Home Office Payment.......................................106
16. EXPENSES, INDEMNIFICATION, ETC...................................107
17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.......................110
18. AMENDMENTS AND WAIVERS...........................................110
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19. NOTICES, ETC.....................................................111
20. REPRODUCTION OF DOCUMENTS........................................111
21. MISCELLANEOUS....................................................112
22. SUBMISSION TO JURISDICTION.......................................112
23. WAIVER OF JURY TRIAL.............................................113
24. GOVERNING LAW....................................................113
25. CONFIDENTIAL INFORMATION.........................................113
26. LIMITATION OF RECOURSE AGAINST NATIONAL PROPANE SGP..............115
27. SIDE LETTER......................................................115
Schedule A -- Schedule of Purchasers
Schedule 4.15 -- Schedule of Pre-Closing Title Insurance Requirements
Schedule 5.2 -- Subsidiaries and Investments
Schedule 5.3 -- Jurisdiction of Qualification
Schedule 5.4(c) -- Certain Changes
Schedule 5.7 -- Indebtedness
Schedule 5.8(a) -- List of Assets
Schedule 5.8(b) -- List of Non-Mortgage Jurisdictions; List of Counties
Schedule 5.8(b)(i) -- List of Required Consents
Schedule 5.9 -- Litigation
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Schedule 5.18 -- Environmental Notices
Schedule 10.2 -- Liens
Exhibit A1 -- Form of Initial Note
Exhibit A2 -- Form of Note
Exhibit B1 -- Form of Opinion of Company Counsel
Exhibit B2 -- Form of Opinion of Local Counsel for the Company
Exhibit B3 -- Form of Opinion of Trustee's Counsel
Exhibit B4 -- Form of Opinion of Debevoise & Plimpton
Exhibit C -- Form of Trust Agreement
Exhibit D1 -- Form of Mortgage, Security Agreement and Fixture
Filing
Exhibit D2 -- Form of Deed of Trust, Security Agreement and Fixture
Filing
Exhibit E -- Form of Subordination Provisions
Exhibit F -- Form of Cash Collateral Agreement
Exhibit G -- Form of Company Security Agreement
Exhibit H -- Form of General Partner's Guarantee Agreement
Exhibit I -- Form of Intercompany Note
Exhibit J -- Form of Agency Account Agreement
Exhibit K -- Form of Partnership Agreement
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Exhibit L -- Form of Partnership Note
Exhibit M -- Form of Partners Security Agreement
Exhibit N -- Form of Perfection Certificate
Exhibit O -- Restricted Subsidiaries
Exhibit P -- Form of Subsidiary Guarantee Agreement
Exhibit Q -- Form of Supplemental Agreement
Exhibit R -- Side Letter
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NATIONAL PROPANE CORPORATION
NATIONAL PROPANE SGP, INC.
NATIONAL PROPANE, L.P.
Suite 1700, IES Tower 200 1st Street, S.E.
P.O. Box 2067
Cedar Rapids, Iowa 52401-2067
8.54% First Mortgage Notes due June 30, 2010
Dated as of June 26, 1996
TO EACH OF THE PURCHASERS LISTED
IN THE ATTACHED SCHEDULE A
Dear Purchaser:
National Propane Corporation, a Delaware corporation ("National Propane
Corp."), National Propane SGP, Inc., a Delaware corporation formerly known as
All Seasons Acquisition Corp. ("National Propane SGP," and together with
National Propane Corp., collectively the "General Partners") and National
Propane, L.P., a Delaware limited partnership (the "Company"), having been
formed to acquire from National Propane Corp. and National Propane SGP and to
operate the Assets, hereby agree with you as follows:
SECTION 1. AUTHORIZATION OF INITIAL NOTES AND NOTES.
National Propane Corp. will authorize the issue and sale of $125,000,000
aggregate principal amount of its 8.54% First Mortgage Notes due June 30, 2010
(the "Initial Notes"). The Company will authorize the issue and delivery, in
exchange for the Initial Notes, of $125,000,000 aggregate principal amount of
its 8.54% First Mortgage Notes due June 30, 2010 (the "Notes", such term to
include any Notes issued in substitution therefor or replacement thereof
pursuant to Section 14). The Initial Notes and the Notes shall be substantially
in the form of Exhibit A1 and Exhibit A2, respectively, with such changes
therefrom, if any, as may be approved by you and
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National Propane Corp. or the Company, as the case may be. Certain capitalized
terms used in this Note Agreement (the "Agreement") are defined in Section 13;
references to a "Section" or a "Schedule" or an "Exhibit" are, unless otherwise
specified, to a Section of this Agreement or to a Schedule or an Exhibit
attached to this Agreement.
SECTION 2. SALE AND PURCHASE OF INITIAL NOTES AND
ISSUANCE OF NOTES.
Subject to the terms and conditions of this Agreement, National Propane
Corp. will issue and sell to you and you will purchase from National Propane
Corp., at the Closing provided for in Section 3, Initial Notes in the principal
amount specified opposite your name for purchase by you at the Closing in
Schedule A, at the purchase price of 100% of the principal amount thereof. At
the Closing provided for in Section 3, the General Partners will then convey all
of their assets (other than an existing intercompany note from Triarc to
National Propane Corp. in the principal amount of approximately $81,400,000,
approximately $59,300,000 in cash and certain other assets of National Propane
Corp. identified in the Conveyance Agreements) to the Company pursuant to the
Conveyance Agreements in exchange for general and limited partner interests in
the Company and the assumption by the Company of substantially all the
liabilities of the General Partners (excluding certain income tax liabilities),
including the Initial Notes and certain intercompany debt. Contemporaneously
therewith, the Company will issue to you and you will accept from the Company,
at the Closing provided for in Section 3, Notes in the principal amount
specified opposite your name in Schedule A in exchange for the Initial Notes you
purchased from National Propane Corp. pursuant to this Agreement. Upon such
exchange, such Initial Notes shall be deemed to be canceled and no longer be
outstanding.
Contemporaneously with entering into this Agreement, the General Partners
and the Company are entering into identical Note Agreements (the "Other
Agreements") with each of the other purchasers named in Schedule A (the "Other
Purchasers"), providing for the sale to the Other Purchasers, at the Closing, of
Initial Notes in the principal amount specified opposite its name in Schedule A
and the issuance to the Other Purchasers, at the Closing, of Notes in the
principal amount specified opposite its name in Schedule A in exchange for such
Initial Notes. The sale of Initial Notes, and the issuance of the Notes in
exchange for the Initial Notes, to you and the Other Purchasers are to be
separate sales, and this Agreement and the Other Agreements constitute separate
agreements.
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SECTION 3. CLOSING.
The sale of the Initial Notes, and the issuance of the Notes in exchange
for the Initial Notes, to you and the Other Purchasers shall take place at the
offices of Paul, Weiss, Rifkind, Wharton & Garrison, 1285 Avenue of the
Americas, New York, New York 10019, at 10:00 a.m., New York City time, at a
closing (the "Closing") on July 2, 1996, or such later date as may be agreed
upon by the General Partners, the Company, you and the Other Purchasers. At the
Closing, (i) National Propane Corp. will deliver to you Initial Notes in the
principal amount to be purchased by you, in the form of a single Initial Note
(or such greater number of Initial Notes as you may re quest), each dated the
date of the Closing and registered in your name (or in the name of your nominee
as indicated in Schedule A), against payment of the purchase price therefor on
the date of Closing by transfer of immediately available funds to National
Propane Corp., or as otherwise directed by National Propane Corp. in writing (at
least two days prior to the date of the Closing) and (ii) contemporaneously
therewith, the Company will deliver to you Notes in the principal amount of the
Initial Notes pur chased by you, in the form of a single Note (or such greater
number of Notes as you may request), each dated the date of the Closing and
registered in your name (or in the name of your nominee as indicated in Schedule
A), in exchange for the Initial Notes purchased by you under this Agreement. If
at the Closing National Propane Corp. or the Company shall fail to tender such
Initial Notes or Notes, as the case may be, to you as provided above in this
Section 3 or if any of the conditions specified in Section 4 shall not have been
fulfilled to your satisfaction, you shall, at your election, be relieved of all
further obligations under this Agreement, without thereby waiving any other
rights you may have by reason of such failure or such nonfulfillment. If the
Closing shall not have occurred on or prior to July 31, 1996, you will promptly
thereafter instruct the Trustee to release its lien on, and its security
interest in, all of the Mortgaged Property.
SECTION 4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Initial Notes to be sold to
you at the Closing is subject to the fulfillment to your satisfaction, prior to
or at the Closing, of the following conditions:
4.1. Representations and Warranties. The representations and warranties of
the Company and its Affiliates contained in this Agreement, the other Operative
Agree-
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ments, and those otherwise made in writing by or on behalf of the Company or any
Affiliate of the Company in connection with the transactions contemplated by
this Agreement, shall be true and correct when made and at the time of the
Closing, except as affected by the consummation of such transactions and except
for any representation and warranty that is expressly stated to relate to a
specific date, in which case any such representation and warranty shall be true
and correct as of such earlier date.
4.2. Performance; No Default. Each of the Company and its Affiliates shall
have performed and complied with all agreements and conditions contained in this
Agreement or any other Operative Agreement required to be performed or complied
with by it prior to or at the Closing, and at the time of the Closing no Event
of Default or Potential Event of Default under this Agreement or default by any
party under any other Operative Agreement shall have occurred and be continuing.
4.3. Compliance Certificates. You shall have received Officers'
Certificates of the Company, Triarc, each General Partner and the Public
Partnership, each dated the date of the Closing and satisfactory in substance
and form to you, certifying that the conditions specified in Sections 4.1 and
4.2 have been fulfilled in all material respects insofar as the relevant
representation or warranty is made by, or the relevant agreement or condition is
required to be performed or complied with by, or the relevant Event of Default,
Potential Event of Default or default has been caused by or relates to, each of
such entities and, with respect to the Officers' Certificate of the Company, its
Subsidiaries, and, in the case of the Officers' Certificate of National Propane
Corp. and the Company, certifying that no material adverse change has occurred
in the financial condition of the Business subsequent to the date of the
financial statements delivered pursuant to Section 5.4(c) and, in the case of
the Officers' Certificate of Triarc, certifying that neither the Memorandum (as
of the date thereof) nor the Registration Statement contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading.
4.4. Opinions of Counsel. You shall have received favorable opinions from
(a) Paul, Weiss, Rifkind, Wharton & Garrison, special counsel for the Company
and its Affiliates, substantially in the form of Exhibit B1, (b) Andrews &
Kurth, special tax counsel to the Company and its Affiliates, in form and
substance satisfactory to you and your special counsel, (c) (i) Friday, Eldridge
& Clarke, special Arkansas counsel for the Company and its Affiliates, (ii)
Snell & Wilmer, special Arizona counsel for
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the Company and its Affiliates, (iii) Parcel, Mauro, Hultin & Spaanstra, special
Colorado counsel for the Company and its Affiliates, (iv) Pepe & Hazard, special
Connecticut counsel for the Company and its Affiliates, (v) Fowler, White,
Burnett, Hurley, Banick & Strickroot, special Florida counsel for the Company
and its Affiliates, (vi) Keck, Mehin & Cate, special Illinois counsel for the
Company and its Affiliates, (vii) Simmons Perrine Albright & Ellwood, special
Iowa counsel for the Company and its Affiliates, (viii) Pierce, Atwood,
Scribner, Allen, Smith & Lancaster, special Maine counsel for the Company and
its Affiliates, (ix) Stinson, Mag & Fizzell, special Kansas counsel to the
Company and its Affiliates, (x) Palmer & Dodge, LLP, special Massachusetts
counsel for the Company and its Affiliates, (xi) Jaffe, Raitt, Heuer & Weiss,
special Michigan counsel for the Company and its Affiliates, (xii) Stinson, Mag
& Fizzell, special Missouri counsel to the Company and its Affiliates, (xiii)
Gray, Plant, Mooty, Mooty & Bennett, special Minnesota counsel for the Company
and its Affiliates, (xiv) Sheehan, Phinney, Bass & Green, special New Hampshire
counsel for the Company and its Affiliates, (xv) Modrall, Sperling, Roehl,
Harris & Sisk, P.A., special New Mexico counsel for the Company and its
Affiliates, (xvi) Schupbach, Williams & Pavone, special New York counsel for the
Company and its Affiliates, (xvii) Steven B. McInnis, special Rhode Island
counsel for the Company and its Affiliates, (xviii) Darby Laundon Stearns
Thorndike & Kolter, special Vermont counsel for the Company and its Affiliates,
and (xix) Godfrey & Kahn S.C., special Wisconsin counsel for the Company and its
Affiliates, each substantially in the form of Exhibit B2, (d) Emmet, Marvin &
Martin, LLP, counsel for the Trustee, substantially in the form of Exhibit B3
and (e) Debevoise & Plimpton, your special counsel in connection with the
transactions contemplated by this Agreement, substantially in the form of
Exhibit B4, and in each case covering such other matters incident to such
transactions as you may reasonably request, each addressed to you, dated the
date of the Closing and otherwise reasonably satisfactory in substance and form
to you. You shall have received copies of each of the opinions delivered
pursuant to the Underwriting Agreement (other than the opinion of counsel to
the underwriters), accompanied by letters, dated the date of the Closing and
addressed to you, from the counsel rendering such opinions, stating that you are
entitled to rely on such opinions as if they were addressed to you. The Company
and the General Partners hereby direct each of their counsel referred to in
clauses (a) and (b) of this Section 4.4, and each of its counsel who deliver
opinions pursuant to the Underwriting Agreement, to deliver to you such opinions
and letters to be delivered by it and authorizes you to rely thereon.
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4.5. Legal Investment. On the date of the Closing your purchase of Initial
Notes and acceptance of Notes in exchange therefor shall be permitted by the
laws and regulations of each jurisdiction to which your investments are subject,
but without recourse to provisions (such as section 1404(b) or 1405(a)(8) of the
New York Insurance Law) permitting limited investments by insurance companies in
securities not otherwise legally eligible for investment. If requested by you by
prior written request to the Company or the General Partners, you shall have
received, at least five Business Days prior to the Closing, an Officers'
Certificate of the Company or one or both of the General Partners, as the case
may be, certifying as to such matters of fact as you may reasonably specify to
enable you to determine whether such purchase is so permitted.
4.6. Trust Agreement. The Company, National Propane Corp., the Public
Partnership, the Qualifying Restricted Subsidiaries, if any, and the Trustee
shall have duly authorized, executed and delivered the Trust Agreement. The
Trust Agreement shall be in full force and effect and shall constitute the
valid, binding and enforceable obligation of the Company, National Propane
Corp., the Public Partnership, the Qualifying Restricted Subsidiaries, if any,
and the Trustee, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting the rights and remedies of creditors, and
no default on the part of the Company, National Propane Corp., the Public
Partnership or the Qualifying Restricted Subsidiaries shall exist thereunder.
4.7. Security Documents. (a) National Propane Corp. and the Company shall
have duly authorized, executed and delivered the Mortgages relating to the
Mortgaged Property located in Arkansas, Arizona, Colorado, Connecticut, Florida,
Illinois, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, Missouri, New
Hampshire, New Mexico, New York, Rhode Island, Vermont, and Wisconsin
substantially in the form of Exhibit D1 or D2, as the case may be. Each Mortgage
shall be in full force and effect and shall (i) constitute the valid, binding
and enforceable obligation of National Propane Corp. and the Company, except
that such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors, and (ii) to the extent duly
recorded pursuant to Section 4.8 (x) constitute a valid first mortgage lien or
deed of trust lien, as the case may be, of record on the real property and all
other interests described therein which may be subjected to a mortgage lien or
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deed of trust lien, as the case may be, subject only to Permitted Encumbrances,
and (y) constitute a valid assignment of, and create a valid, presently
effective security interest of record in, equipment and all other interests
(other than real property interests) described therein, subject to no prior
security interest in any such property other than as specifically permitted
therein, and no default on the part of National Propane Corp. or the Company
shall exist thereunder.
(b) Each of the Security Documents shall have been duly authorized,
executed and delivered by each of the Company and/or its Affiliates party
thereto, shall be in full force and effect and shall (i) constitute the valid,
binding and enforceable obligation of each such party, except that such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws of general application relating to
or affecting the rights and remedies of creditors, and (ii) to the extent duly
recorded pursuant to Section 4.8, constitute a valid assignment of, and create a
valid, presently effective security interest of record in, property covered by
such Security Document and all other interests described therein, subject to no
prior security interest in any such personal property other than as specifically
permitted therein, and no default on the part of any such party shall exist
thereunder.
4.8. Conveyance; Recordation; Taxes, etc. Prior to the Closing, the
Conveyance Agreements referred to in clause (b) of the definition of such term,
the Mortgages, the Company Security Agreement, the Partners Security Agreement
and the Partnership Note, or proper notices, statements or other instruments in
respect thereof, covering all of the Assets covered by such Conveyance
Agreements, such Mortgages and such other Security Documents, shall have been
duly recorded, published, regis tered and filed, and all other actions deemed
necessary by your special counsel shall have been duly performed or taken, in
such manner and in such places as is required by applicable law (a) to convey to
the Company record and beneficial ownership of the Assets referred to in Section
5.8(c)(ii) purported to be conveyed by such Conveyance Agreements, (b) to
establish, perfect, preserve and protect the rights and first priority Liens
purported to be granted by each such Security Document to the Trustee with
respect to the Assets referred to in Section 5.8(c)(ii) for the benefit of the
holders of the Notes and their respective successors and assigns, and (c) to
establish, perfect, preserve and protect the rights and first priority Liens
purported to be granted by such Partnership Note to the Company with respect to
the assets specified therein, and all taxes, fees and other charges then due in
connection with the execution, delivery,
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recording, publishing, registration and filing of such documents or instruments
shall have been paid in full.
4.9. Operative Agreements. Each of the Operative Agreements shall have
been duly authorized, executed and delivered by the respective parties thereto,
in form and substance satisfactory to you, shall be in full force and effect,
and shall constitute the legal, valid and binding obligations of the respective
parties thereto, except that such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and similar laws of general
application relating to or affecting the rights and remedies of creditors, and
all actions required to be performed or taken thereunder on or prior to the date
of the Closing shall have been duly taken and no default or accrued right of
termination on the part of any of the parties thereto shall exist thereunder as
of the date of the Closing, and you and the Trustee shall have received a fully
executed original, or a true and correct copy, of each such document.
4.10. Sale of Other Initial Notes; Issuance of Other Notes.
Contemporaneously with the Closing, (i) National Propane Corp. shall sell to the
Other Purchasers the Initial Notes to be purchased by them at the Closing as
specified in Schedule A and (ii) the Company shall issue to each Other
Purchaser, and such Other Purchaser will accept from the Company, the Notes in
the principal amount specified opposite such Other Purchaser's name in Schedule
A in exchange for the Initial Notes such Other Purchaser purchases from National
Propane Corp.
4.11. Sale of Units. At the time of the Closing, (a) the Underwriting
Agreement shall be in full force and effect, (b) all conditions to closing
contained in the Underwriting Agreement shall have been fulfilled or waived in a
manner acceptable to you, (c) your special counsel shall have received a copy of
each agreement, document, opinion (as specified in Section 4.4) and certificate
delivered in connection with the closing under the Underwriting Agreement, and
(d) substantially simultaneously with the receipt of the proceeds of the sale of
the Initial Notes to you and the Other Purchasers at the Closing and in the
order contemplated by the Registration Statement, (i) the Public Partnership
shall sell to the Underwriters the Units provided to be sold under the
Underwriting Agreement for an aggregate gross purchase price of not less than
$130,000,000, (ii) National Propane Corp. shall transfer its 97.9798% limited
partner interest in the Company to the Public Partnership in exchange for a
40.6% subordinated general partner interest in the Public Partnership and the
Company on a combined basis (37.5%, if the Overallotment Option is exercised in
full) and a 1%
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unsubordinated general partner interest in the Public Partnership, and (iii) all
transactions contemplated by the Registration Statement and the Memorandum to be
completed by the General Partners, the Company and their Affiliates prior to or
substantially simultaneously with the issuance of the Notes shall have been
completed substantially as contemplated therein and in a manner acceptable to
you.
4.12. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
4.13. Rating. Prior to the Closing, the Notes shall have received a rating
of at least BBB from Fitch Investors Service, Inc., which rating remains in
effect as of the Closing.
4.14. Insurance Broker's Certificate. Insurance complying with the
provisions of Section 15 of the Mortgage and Section 10.11 hereof shall be in
full force and effect and you, the Other Purchasers and the Trustee shall have
received a certificate from Kaye Insurance Associates, Inc. or such other
independent insurance brokers or consultants as shall be reasonably satisfactory
to you, dated the date of the Closing, which certificate shall satisfy the
requirements set forth in Section 15.3 of the Mortgage.
4.15. Title Insurance; Survey. (a) The Trustee shall have received a
mortgagee's policy of title insurance, including mechanic's lien coverage, with
respect to the properties and facilities listed on Schedule 4.15, issued by a
title insurance company or companies authorized to issue title insurance in the
states in which such properties or facilities are located with provisions for
coinsurance or reinsurance satisfactory to you, dated the date of the Closing
and satisfactory in substance and form to you and your special counsel, insuring
the interest of the Trustee under the Security Documents, subject only to
Permitted Encumbrances, such policies to be in an amount at least equal to the
amounts set forth opposite each of the individual properties and facilities
listed on Schedule 4.15.
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(b) The Trustee shall have received copies of ALTA surveys with respect to
the properties and facilities listed on Schedule 4.15, certified to the Trustee
and the title company or companies and satisfactory to you and your special
counsel.
4.16. Payment of Closing Fees. The Company shall have paid the fees and
disbursements required by Section 16 to be paid by the Company on the date of
the Closing.
4.17. Private Placement Number. The Company shall have obtained for the
Notes a Private Placement Number issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners).
4.18. Environmental Audit. The Company shall have delivered to you, a true
and complete copy of the environmental reports relating to the properties listed
on Schedule 4.15, dated a recent date, prepared by Environmental Strategies
Corporation, and the results of such reports shall be satisfactory to you, your
special counsel and your independent environmental consultant.
4.19. Appraisal. The Company shall have delivered to you a true and
complete copy of an appraisal report of Valuation Research, dated as of April 1,
1996, setting forth their appraisal of certain of the Assets, and the contents
of such report shall be satisfactory to you and your special counsel.
4.20. Other Agreements. The Company shall have delivered to you a true and
complete copy of the Bank Credit Facilities, the Registration Statement and the
Underwriting Agreement.
SECTION 5. REPRESENTATIONS AND WARRANTIES, ETC. OF THE GENERAL PARTNERS AND THE
COMPANY.
Each of the General Partners and the Company represents and warrants that:
5.1. Organization, Standing, etc. (a) The Company is a limited partnership
duly organized, validly existing and in good standing under the Delaware Revised
Uniform Limited Partnership Act and has all requisite partnership power and
authority to own and operate its properties (including, without limitation, the
Assets), to conduct
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its business as described in the Registration Statement after giving effect to
the transfer of the Assets, to enter into this Agreement and the other Operative
Agreements to which it is a party, to issue and deliver the Notes and to carry
out the terms of this Agreement, such other Operative Agreements and the Notes.
(b) Each General Partner is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own and operate its properties, to
conduct its business as described in the Registration Statement, to enter into
and carry out the terms of this Agreement and the other Operative Agreements to
which it is a party, and in the case of National Propane Corp., to issue and
sell the Initial Notes, and to execute and deliver as a general partner of the
Company this Agreement, the Notes and the other Operative Agreements to which
the Company is a party.
(c) Each Restricted Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the state of its incorporation
and has all requisite corporate power and authority to own and operate its
properties, to conduct its business as described in the Registration Statement
after giving effect to the transfer of the Assets, and to execute, deliver and
perform the other Operative Agreements to which it is a party.
(d) The Public Partnership is a limited partnership duly organized,
validly existing and in good standing under the Delaware Revised Uniform Limited
Partnership Act and has all requisite partnership power and authority to own and
operate its proper ties, to conduct its business as described in the
Registration Statement, and to execute, deliver and carry out the terms of the
Operative Agreements to which it is a party.
5.2. Partnership Interests. The only general partners of the Company are
the General Partners, each of which upon the consummation of the Closing will
own a 1.0101% general partner interest in the Company. Upon the consummation of
the Closing the only limited partner of the Company will be the Public
Partnership, which will own a 97.9798% limited partner interest in the Company
acquired as provided in the Registration Statement. The Company will not have
any other partners upon the consummation of the Closing. Except as disclosed in
Schedule 5.2, the Company does not have, and immediately after giving effect to
the transactions contemplated by the Conveyance Agreements will not have, any
Subsidiaries or any Investments in any Person (other than Investments of the
types described in Section 10.3(a)).
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5.3. Qualification. The Company is duly qualified or registered and is in
good standing as a foreign limited partnership for the transaction of business,
and each General Partner and each Restricted Subsidiary is qualified or
registered and is in good standing as a foreign corporation for the transaction
of business, in the jurisdictions set forth in Schedule 5.3 which are the only
jurisdictions in which, after giving effect to the conveyance to the Company of
the Assets, the nature of their respective activities or the character of the
properties they own, lease or use makes such qualification or registration
necessary and in which the failure so to qualify or to be so registered would
have a Material Adverse Effect. Each of the General Partners, Triarc, the
Restricted Subsidiaries and the Company has taken all necessary partnership or
corporate action to authorize the execution, delivery and performance by it of
this Agreement, the Initial Notes or the Notes, as the case may be, and each
other Operative Agreement to which it is a party. Each of the General Partners,
Triarc, the Restricted Subsidiaries and the Company has duly executed and
delivered each of this Agreement, the Initial Notes or the Notes, as the case
may be, and the other Operative Agreements to which it is a party, and each of
them constitutes its legal, valid, binding and enforceable obligation in
accordance with its terms, except that such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium and similar laws
of general application relating to or affecting the rights and remedies of
creditors.
5.4. Business; Financial Statements. (a) The Company has not engaged in
any business or activities prior to the date of this Agreement, except for
activities related to its formation, organization and prospective operations,
and will not have any significant assets or liabilities prior to its acquisition
of the Assets and assumption of liabilities, as contemplated by this Agreement
and the Registration Statement.
(b) The Company has delivered to you complete and correct copies of (i)
the Registration Statement, and (ii) a memorandum dated May 1996 prepared by
Donaldson, Lufkin & Jenrette Securities Corporation and Merrill Lynch & Co. for
use in connection with National Propane Corp.'s private placement of the Initial
Notes and the Notes (the "Memorandum"). The pro forma consolidated financial
statements of the Public Partnership set forth in the Registration Statement
comply in all respects with the applicable accounting requirements of the
Securities Act of 1933, as amended, and the published rules and regulations
thereunder and, in the opinion of the Company, the assumptions on which the pro
forma adjustments to such pro forma consolidated financial statements of the
Public Partnership are based provide a reasonable basis for presenting the
significant effects of the transactions contemplated by such pro forma
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consolidated financial statements and such pro forma adjustments give
appropriate effect to such assumptions and are properly applied in such pro
forma consolidated financial statements. The financial statements and schedules
included in the Registration Statement (other than with respect to pro forma
matters) have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods specified and present fairly the financial position
of the corporation or partnership to which they relate as of the respective
dates specified and the results of their operations and cash flows for the
respective periods specified. Since December 31, 1995 to the date of the
Closing, there has been no material adverse change in the business, financial
condition, or results of operations of Triarc, the General Partners and their
consolidated subsidiaries taken as a whole. The financial data included under
the caption "Selected Historical and Pro Forma Consolidated Financial and
Operating Data" for National Propane Corp. and for the Public Partnership in the
Registration Statement present fairly, on the basis stated in the Registration
Statement, the information set forth therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
Registration Statement. The historical aspects of the financial data included
under the caption "Capitalization" in the Registration Statement present fairly,
on the basis stated in the Registration Statement, the information set forth
therein and have been compiled on a basis consistent with that of the audited
financial statements included in the Registration Statement; the pro forma
aspects of such financial data included under the caption "Capitalization" have
been prepared in all material respects in accordance with all applicable rules
and guidelines of the Securities and Exchange Commission with respect to pro
forma financial information; and the assumptions on which the pro forma
adjustments to the pro forma aspects of the financial data included under the
caption "Capitalization" are based provide a reasonable basis for presenting all
of the significant effects of the transactions contemplated by such pro forma
financial data and such pro forma adjustments give appropriate effect to such
assumptions and are properly applied in such pro forma financial data.
(c) The unaudited pro forma balance sheets of National Propane Corp. as of
March 31, 1996 present fairly the financial condition of National Propane Corp.
as of that date. Except as disclosed on Schedule 5.4(c), since March 31, 1996 to
the date of the Closing, there has been no change or event which could
reasonably be expected to have a Material Adverse Effect. The financial data for
National Propane Corp. in the Memorandum present fairly, on the basis stated in
the Memorandum, the information set forth therein and have been compiled based
on the audited financial statements
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included in the Registration Statement. The financial data identified as
historical included in the Memorandum present fairly, on the basis stated in
the Memorandum, the information set forth therein and have been compiled on a
basis consistent with that of the audited financial statements included in the
Registration Statement; the pro forma financial data included in the Memorandum
represent, in all material respects and on the basis stated in the Memorandum,
National Propane Corp.'s best estimate at such time with respect to pro forma
financial information; and the assumptions on which the pro forma adjustments to
the pro forma aspects of the financial data included in the Memorandum are based
provide a reasonable basis for presenting all of the significant effects of the
transactions contemplated by such pro forma financial data and such pro forma
adjustments give appropriate effect to such assumptions and are properly applied
in such pro forma financial data.
5.5. Changes, etc. Except as contemplated by this Agreement, the other
Operative Agreements, the Registration Statement or the Memorandum, subsequent
to the respective dates as of which information is given in the Registration
Statement or the Memorandum, the Company and its Affiliates have not incurred
any material liabilities or obligations, direct or contingent, or entered into
any material transaction not in the ordinary course of business, no events have
occurred, which individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, and there has not been (a) any Restricted
Payment of any kind declared, paid or made by the Company or either General
Partner (other than those referred to in Section 5.13) or (b) any incurrence of
Indebtedness under the Bank Credit Facilities.
5.6. Tax Returns and Payments. Each of the Company and its Affiliates has
filed all tax returns required by law to be filed by it or has properly filed
for an extension of time for the filing thereof and has paid all, taxes,
assessments and other governmental charges levied upon it or any of its
properties, assets, income or franchises which are due and payable, except those
which are not past due or are presently being contested in good faith by
appropriate proceedings diligently conducted for which such reserves or other
appropriate provisions, if any, as shall be required by GAAP have been made. The
Company is a limited partnership that is treated as a pass-through entity for
federal income tax purposes.
5.7. Indebtedness. At the time of the Closing, other than the Indebtedness
represented by the Notes and the Indebtedness listed in Schedule 5.7, none of
Company, either General Partner or any Subsidiary will have any secured or
unsecured
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Indebtedness outstanding. At the time of the Closing, no instrument or agreement
to which the Company or, other than Section 7.5(a) of the MLP Agreement, either
General Partner is a party or by which the Company or either General Partner is
bound or which is applicable to the Company or either General Partner (other
than this Agreement and the Bank Credit Facilities) contains any restrictions on
the incurrence by the Company or either General Partner of additional
Indebtedness.
5.8. Transfer of Assets and Business. (a) The Company and its
Subsidiaries, will at the Closing, after giving effect to the transfer of the
Assets on or prior to the date of the Closing as described in the Registration
Statement, be in possession of and operating in compliance in all respects with
all franchises, grants, authorizations, approvals, licenses, permits, easements,
rights-of-way, consents, certificates and orders required to own, lease or use
its properties (including, without limitation, to own, lease or use the Assets
and to assume certain liabilities relating to the Assets as described in the
Registration Statement and the Operative Agreements) and to permit the conduct
of the Business as now conducted and proposed to be conducted, except for those
franchises, grants, authorizations, approvals, licenses, permits, easements,
rights-of-way, consents, certificates and orders (collectively, "Permitted
Exceptions") (i) which are not required at such time and are routine or
administrative in nature and are expected in the reasonable judgment of National
Propane Corp. to be obtained or given in the ordinary course of business after
the date of the Closing, or (ii) which, if not obtained or given, would not,
individually or in the aggregate, have a Material Adverse Effect. At the time of
the Closing and after giving effect to the transfer of the Assets on or prior to
the date of the Closing as described in the Registration Statement, the Company
does not own or lease any real property in the jurisdictions set forth on
Schedule 5.8(a), other than such owned or leased property that, in the
aggregate, have minimal value and generate only a small fraction of the
Company's revenues and the information in Schedule 5.8(a) is true and correct as
of the date of Closing.
(b) National Propane Corp. has, and upon the consummation of the Closing
the Company will have, (i) good and marketable title to the portion of the
Assets constituting real property owned in fee simple, (ii) good and valid
leasehold interests in the portion of the Assets constituting real property and
leased, other than certain immaterial leased property (for which consents listed
on Schedule 5.8(b)(i) are required) subject to the Agency Agreement pursuant to
which the Company shall enjoy undisturbed possession thereof and (iii) good and
sufficient title to the portion of the Assets constituting personal property for
the use and operation of such personal property as it
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has been used in the past and as it is proposed to be used in the Business other
than certain immaterial personal property (for which consents listed on Schedule
5.8(b)(i) are required) which will be subject to the Agency Agreement, in each
case subject to no Liens except Permitted Encumbrances. The Assets are all of
the assets and properties necessary to enable the Company to conduct the
Business in the same manner as previously conducted by the General Partners and
include all options to purchase or rights of first refusal granted to or for the
General Partners with respect to any of the Assets leased by either General
Partner. The Assets constituting an interest in real property to be conveyed to
the Company pursuant to the Conveyance Agreements are located in the counties
listed in Schedule 5.8(b). The General Partners enjoy, and upon execution and
delivery of the Operative Agreements and the consummation of the Conveyance
Agreements the Company will enjoy, peaceful and undisturbed possession under all
leases necessary for the operation of its properties and assets, other than
certain immaterial leased property of which the Company shall enjoy undisturbed
possession, and all such leases are valid and subsisting and are in full force
and effect. Except to perfect and to protect security interests permitted by
Section 10.2, (x) at the time of the Closing, no effective financing statement
under the Uniform Commercial Code which names the Company, Triarc, any
Restricted Subsidiary or either General Partner as debtor, which individually or
in the aggregate relates to any part of the Assets or other assets pledged
pursuant to any Security Document, will be on file in any jurisdiction and (y)
at the time of the Closing, none of the Company, Triarc, any Restricted
Subsidiary or either General Partner will have signed any effective financing
statement (other than financing statements in favor of The Bank of New York, as
administrative agent, for which executed termination statements will be
delivered at the Closing) or any effective security agreement, which relates to
any part of the Assets or other assets pledged pursuant to any Security
Document, authorizing any secured party thereunder to file any such financing
statement, except for financing statements to be executed and filed in
connection with the Closing.
(c) Upon the consummation of the Closing, (i) the General Partners will
have transferred to the Company beneficial and (except in the case of motor
vehicles covered by certificates of title where the certificates of title will
have been duly executed in favor of the Company, the Lien of the Trustee will
have been duly noted thereon and such certificates of title will have been
delivered to the Company and/or the Trustee, but will not have yet been
submitted to the appropriate governmental agency for re-issuance) record
ownership of properties, easements and licenses comprising the
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Assets, (ii) the Conveyance Agreements referred to in clause (b) of the
definition of such term (except in the case of motor vehicles covered by
certificates of title) will have been duly recorded, published, registered and
filed as required by Section 4.8 with respect to the Assets, (iii) the
Mortgages, the Company Security Agreement and the Partners Security Agreement or
proper notices, statements or other instruments in respect thereof, will have
been duly recorded, published, registered and filed as required by Section 4.8
with respect to Assets covering at least 80% of the value of the personal
property and mortgaged real property included in the Assets, and (iv) the
Partnership Note or proper notices, statements or other instruments in respect
thereof, covering all of the assets covered by such Partnership Note, shall have
been duly executed, and all other actions deemed necessary by your special
counsel shall have been duly performed or taken, in such manner as is required
by applicable law to establish, perfect, preserve and protect the rights and
first priority Liens purported to be granted by such Partnership Note to the
Company and its respective successors and assigns.
5.9. Litigation, etc. Except as set forth on Schedule 5.9, there is no
action, proceeding or investigation pending or, to the best knowledge of the
Company and the General Partners upon reasonable inquiry, threatened (or any
basis therefor known to the Company or either General Partner) which questions
the validity of this Agreement, any other Operative Agreement or the Initial
Notes or any action taken or to be taken pursuant to this Agreement, any other
Operative Agreement or the Initial Notes, or which could reasonably be expected
to have, either in any case or in the aggregate, a Material Adverse Effect.
5.10. Compliance with Other Instruments, etc. Neither the Company, any
Restricted Subsidiary nor either General Partner (i) is in violation of any term
of the Partnership Agreement or, in the case of the Restricted Subsidiaries and
the General Partners, of their respective certificates of incorporation or
by-laws, or (ii) is in violation of any term of any other agreement or
instrument to which the Company, any Restricted Subsidiary or either General
Partner is a party or by which any of them or any of their properties is bound
or any term of any applicable law, ordinance, rule or regulation of any
governmental authority or any term of any applicable order, judgment or decree
of any court, arbitrator or governmental authority, the consequences of which,
in the case of clause (ii), would have a Material Adverse Effect; the execution,
delivery and performance by each of the General Partners, the Restricted
Subsidiaries and the Company of this Agreement and the other Operative
Agreements to which it is
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a party and the Initial Notes or the Notes, as the case may be, will not result
in any violation of or be in conflict with or constitute a default under any
such term or result in the creation of (or impose any obligation on the Company,
any Restricted Subsidiary or either General Partner to create) any Lien upon any
of the properties or assets of the Company, any Restricted Subsidiary or either
General Partner prohibited by any such term, except for any such term relating
to Indebtedness to be repaid in full at the time of the Closing; and there is no
such term the compliance with which would have, or in the future may in the
reasonable judgment of either General Partner or the Company be likely to have,
a Material Adverse Effect.
5.11. Governmental Consent. No consent, approval or authorization of, or
declaration or filing with, any governmental authority is required for the valid
execution, delivery and performance of this Agreement or the other Operative
Agreements (other than Permitted Exceptions), and no such consent, approval,
authorization, declaration or filing is required for the valid offer, issue,
sale and delivery of the Initial Notes and the Notes pursuant to this Agreement
and the Other Agreements.
5.12. Offer of Initial Notes and Notes. Neither the Company nor any of its
Affiliates nor anyone acting on its or their behalf has directly or indirectly
offered the Initial Notes or the Notes or any part thereof or any similar
securities for sale to, or solicited any offer to buy any of the same from, or
otherwise approached or negotiated in respect thereof with, anyone other than
you, the Other Purchasers and not more than 40 other institutional investors.
Neither the General Partners nor the Company nor anyone authorized to act on
their behalf has taken or will take any action which would subject the issuance
and sale of the Initial Notes or issuance and delivery of the Notes to the
registration and prospectus delivery provisions of the Securities Act of 1933,
as amended, or to the registration or qualification provisions of any securities
or Blue Sky law of any applicable jurisdiction or require registration of any
Security Document under the Trust Indenture Act of 1939, as amended; provided,
however, that it is understood that any action taken by you or any Other
Purchaser shall not have been taken on behalf of the Company or the General
Partners.
5.13. Use of Proceeds. The proceeds of the sale of the Units by the Public
Partnership will be used by the Public Partnership and the Company as
contemplated by the Registration Statement. Of the proceeds of the sale of the
Initial Notes to you and the Other Purchasers, approximately $59,300,000 will be
paid by National Propane Corp. as dividends to Triarc, approximately $3,500,000
will be used to pay transaction
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costs and expenses and approximately $62,200,000 will be contributed by National
Propane Corp. to the Company under the Conveyance Agreements and will be used by
the Company to repay certain Indebtedness (including, without limitation, the
Refunding Notes (as such term is defined in the Registration Statement) assumed
by the Company under the Conveyance Agreements.
5.14. Federal Reserve Regulations. Neither National Propane Corp. nor the
Company will, directly or indirectly, use any of the proceeds of the sale of the
Initial Notes or the Notes for the purpose, whether immediate, incidental or
ultimate, of buying a "margin stock" or of maintaining, reducing or retiring any
indebtedness originally incurred to purchase a stock that is currently a "margin
stock", or for any other purpose which might constitute this transaction a
"purpose credit", in each case within the meaning of Regulation G of the Board
of Governors of the Federal Reserve System (12 C.F.R. 207, as amended), or
otherwise take or permit to be taken any action which would involve a violation
of such Regulation G or of Regulation X (12 C.F.R. 224, as amended) or any other
applicable regulation of such Board. No indebtedness being reduced or retired,
directly or indirectly, out of the proceeds of the sale of the Initial Notes was
incurred for the purpose of purchasing or carrying any stock which is currently
a "margin stock", and none of either General Partner, the Public Partnership or
the Company owns or has any present intention of acquiring with the proceeds
thereof any amount of such "margin stock".
5.15. Investment Company Act. None of the General Partners or the Company
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
5.16. Public Utility Holding Company Act; Federal Power Act. None of the
General Partners or the Company is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended; each of the General
Partners, the Company, the issue and sale of the Initial Notes by National
Propane Corp. and the issue and delivery of the Notes by the Company is not
subject to regulation under such Act; and none of the General Partners or the
Company is a "public utility" as such term is defined in the Federal Power Act,
as amended.
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5.17. ERISA. (a) None of the General Partners, the Company, any Subsidiary
of the Company or any Related Person of either of the General Partners or the
Company (other than Triarc and any Subsidiaries of Triarc (except for the
General Partners and any Subsidiary of either of the General Partners that is a
Related Person of the Company)) is obligated to contribute to, and none of the
General Partners, the Company or any Related Person of the Company has any
liability or obligation with respect to, any Plan that is subject to Section 302
or Title IV of ERISA or Section 412 of the Code (other than a Multiemployer
Plan). None of the Company, any Subsidiary of the Company or any Related Person
of the Company has any liability or obligation to provide any amount or type of
compensation or benefit in respect of any employee or former employee of the
Business which relates to periods, services performed or benefits or amounts
accrued prior to the transfer of the Business or the Assets pursuant to the
Operative Agreements and the transactions contemplated thereby (other than
pursuant to a Multiemployer Plan), continuation coverage provided pursuant to
Section 4980B of the Code or Section 601, et seq., of ERISA, or any liability or
obligation for contributions pursuant to a Plan not yet required to be paid.
None of the General Partners, the Company, any Subsidiary of the Company or any
Related Person of the Company has incurred any material liability under Title IV
of ERISA with respect to any such Plan and no event or condition exists or has
occurred as a result of which such a liability would reasonably be expected to
be incurred. None of the General Partners, the Company, any Subsidiary of the
Company or any Related Person of the Company has engaged in any transaction,
including the transactions contemplated hereunder which could subject the
Company or any Related Person of the Company to a material liability pursuant to
Section 4069(a) or 4212(c) of ERISA. There has been no reportable event (within
the meaning of Section 4043(b) of ERISA other than one for which the applicable
notice requirements have been waived by PBGC regulation) or any other event or
condition with respect to any Plan which presents a risk of the termination of,
or the appointment of a trustee to administer, any such Plan (other than a
Multiemployer Plan) by the PBGC. No prohibited transaction (within the meaning
of Section 406(a) of ERISA or Section 4975 of the Code) exists or has occurred
with respect to any Plan which has subjected or could reasonably be expected to
subject either General Partner, the Company or any Subsidiary of the Company to
a material liability under Section 502(i) or 502(l) of ERISA or Section 4975 of
the Code. No material liability to the PBGC (other than liability for premiums
not yet due) has been or is expected to be incurred with regard to any Plan by
the General Partners, the Company, any Subsidiary of the Company or any Related
Person of the Company. None of the General Partners, the Company, any Subsidiary
of the Company or any
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Related Person of the Company contributes or is obligated to contribute or has
ever contributed or been obligated to contribute to any single employer plan
that has at least two contributing sponsors not under common control (other than
the National Propane Corporation 401(k) Plan). Timely payment has been made of
all amounts which the General Partners, the Company, any Subsidiary of the
Company or any Related Person of the Company is required under applicable law,
the terms of each Plan or any collective bargaining agreement to have paid as
contributions to each such Plan except to the extent that failure to do so would
not have a Material Adverse Effect. To the knowledge of the General Partners and
the Company, no Multiemployer Plan has been terminated or presents a material
risk of termination, is insolvent or is in reorganization within the meaning of
Section 4241 or 4245 of ERISA and the transactions contemplated hereby will not
result in a withdrawal from any Multiemployer Plan that would have a Material
Adverse Effect. None of the General Partners, the Company or any Subsidiary of
the Company has any obligation to provide any material amount of post-employment
welfare benefits or coverage (other than continuation coverage provided pursuant
to Section 4980B of the Code or Section 601, et seq., of ERISA).
(b) The execution and delivery of this Agreement and the Other Agreements
and the issue and sale of the Initial Notes, the exchange of the Initial Notes
and the issue and delivery of the Notes hereunder and thereunder will not
involve any non-exempt "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code. The representations by the Company and
the General Partners in the immediately preceding sentence are made in reliance
upon and subject to the accuracy of your representation in Section 6.2 of this
Agreement and the representations of the Other Purchasers in Section 6.2 of the
Other Agreements as to the source of the funds to be used to pay the purchase
price of the Initial Notes to be purchased by you and the Other Purchasers,
respectively. With respect to each employee benefit plan identified to the
Company in accordance with clause (c) of Section 6.2 of this Agreement or of
any of the Other Agreements, none of the General Partners, the Company or any
"affiliate" (as defined in Section V(c) of the QPAM Exemption) of either General
Partner or the Company has at this time, and has not exercised at any time
within the one year period preceding the date of the Closing, the authority to
appoint or terminate you or any Other Purchaser as manager of any of the assets
of any such plan or to negotiate the terms of any management agreement with you
or any Other Purchaser on behalf of any such plan.
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5.18. Environmental Matters. (a) Except as disclosed in Schedule 5.18 each
of the Company, each Restricted Subsidiary and each General Partner is, and
after giving effect to the transfer to the Company of the Assets will be, in
compliance with all Environmental Laws applicable to it or to the Business or
Assets except where such noncompliance would not have a Material Adverse Effect.
Each of the Company and the Restricted Subsidiaries has timely and properly
applied for renewal of all environmental permits or licenses that have expired
or are about to expire and are necessary for the conduct of the Business as now
conducted and as proposed to be conducted, except where the failure to timely
and properly reapply would not have a Material Adverse Effect. Schedule 5.18
lists (i) all notices from Federal, state or local environmental agencies to the
Company, any Restricted Subsidiary or either General Partner citing
environmental violations that have not been finally resolved and disposed of,
and no such violation, whether or not notice regarding such violation is listed
on Schedule 5.18, if ultimately resolved against the Company, any Restricted
Subsidiary or either General Partner, as the case may be, individually or in the
aggregate, would have a Material Adverse Effect, and (ii) all current reports
filed by the Company, each Restricted Subsidiary or either General Partner with
any Federal, state or local environmental agency having jurisdiction over the
Assets, true and complete copies of which reports have been made available to
you, your special counsel and your environmental advisor. Notwithstanding any
such notice, the Company, each Restricted Subsidiary and each General Partner
are currently operating in all material respects within the limits set forth in
such environmental permits or licenses and any current noncompliance with such
permits or licenses will not result in any material liability or penalty to the
Company, any Restricted Subsidiary or either General Partner or in the
revocation, loss or termination of any such environmental permits or licenses,
the revocation, loss or termination of which would have a Material Adverse
Effect.
(b) Except as disclosed in Schedule 5.18, all facilities located on the
real property included in the Assets which are subject to regulation by RCRA are
and have been operated in compliance with RCRA, except where such noncompliance
would not have a Material Adverse Effect and none of the Company, any Restricted
Subsidiary or either General Partner has received, or, to the knowledge of the
Company and each General Partner been threatened with, a notice of violation of
RCRA regarding such facilities.
(c) Except as disclosed in Schedule 5.18, no hazardous substance (as
defined in CERCLA) or hazardous waste (as defined in RCRA) is located or present
at any of the
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real property included in the Assets in violation of any Environmental Law,
which violation will have a Material Adverse Effect, and with respect to such
real property there has not occurred (i) any release or threatened release of
any such hazardous substance, (ii) any discharge or threatened discharge of any
substance into ground, surface, or navigable waters which violates any Federal,
state, local or foreign laws, rules or regulations concerning water pollution,
or (iii) any assertion of any Lien pursuant to Environmental Laws resulting from
any use, spill, discharge or clean-up of any hazardous or toxic substance or
waste, which occurrence will have a Material Adverse Effect.
5.19. Foreign Assets Control Regulations, etc. The issue and sale of the
Initial Notes by National Propane Corp. and its use of the proceeds thereof as
contemplated by this Agreement, and the issue and delivery of the Notes by the
Company, will not violate any of the regulations (other than those regulations,
if any, that are implicated solely as a result of the actions of the purchasers
of the Notes) administered by the Office of Foreign Assets Control, the United
States Department of the Treasury, including, without limitation, the Foreign
Assets Control Regulations, the Transaction Control Regulations, the Cuban
Assets Control Regulations, the Foreign Funds Control Regulations, the Iranian
Assets Control Regulations, the Iranian Transactions Regulations, the Iraqi
Sanctions Regulations, the Libyan Sanctions Regulations, and the Soviet Gold
Coin Regulations of the United States Treasury Department (31 C.F.R., Subtitle
B, Chapter V, as amended) or the restrictions set forth in Executive Orders No.
8389, 9193, 12543 (Libya), 12544 (Libya), 12801 (Libya), 12722 (Iraq), 12724
(Iraq), 12775 (Haiti), 12779 (Haiti), 12808 (Yugoslavia), 12810 (Yugoslavia) or
12831 (Yugoslavia), as amended, of the President of the United States of America
or of any rules or regulations issued thereunder.
5.20. Disclosure. Neither this Agreement, the other Operative Agreements,
the Memorandum, the Registration Statement, nor any other historical financial
statement, document, certificate or instrument delivered to you by or on behalf
of the Company, any Restricted Subsidiary, any General Partner or any of their
Affiliates (as amended, updated or revised by any subsequent delivery) in
connection with the transactions contemplated by this Agreement, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained therein, in light of the circumstances
under which they were made, not misleading (other than the statements made
regarding general economic conditions relating to national or local economies
and except for projections made and delivered in
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good faith and on the basis of reasonable assumptions). There is no fact
actually known to the Company or either General Partner which has or in the
future would (so far as the Company or either General Partner can now reasonably
foresee) have a Material Adverse Effect which has not been set forth or referred
to in this Agreement, the Memorandum or the Registration Statement. You and the
Other Purchasers shall be entitled to rely on the statements and disclosures set
forth in the Registration Statement.
5.21. Chief Executive Office. The chief executive office of the Company
and National Propane Corp. and the office where each maintains its records
relating to the transactions contemplated by the Operative Agreements is located
at Suite 1700, IES Tower, 200 1st Street S.E., P.O. Box 2067, Cedar Rapids, Iowa
52401-2067.
5.22. Solvency. Upon the sale of the Initial Notes and the concurrent or
prior consummation of the transactions contemplated hereby, National Propane
Corp. will be Solvent. Upon the issuance of the Notes by the Company in exchange
for the Initial Notes and the concurrent or prior consummation of the
transactions contemplated hereby, the Company and its Restricted Subsidiaries
will be Solvent. "Solvent" means, with respect to any Person, that (a) the sum
of the assets of such Person, both at a fair valuation and at present fair
saleable value, will exceed the liabilities of such Person, (b) such Person will
have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (c) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of the foregoing definition, "debts" means any
liabilities or claims, and "claim" means (i) a right to payment, whether or not
such right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (ii) a right to an equitable remedy for breach of performance if such breach
gives rise to a payment, whether or not such right to an equitable remedy is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured. With
respect to any contingent liabilities, such liabilities shall be computed at the
amount which, in light of all the facts and circumstances existing at the time,
represents the amount which can reasonably be expected to become an actual or
matured liability.
SECTION 6. PURCHASER'S REPRESENTATIONS; SOURCE OF FUNDS.
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6.1. You represent that you are purchasing the Initial Notes and accepting
the Notes in exchange for the Initial Notes for your own account or for one or
more separate accounts maintained by you or for the account of one or more
pension or trust funds, in each case not with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act of 1933, as amended, or with any present intention of distributing or
selling any of the Notes, provided that the disposition of your property shall
at all times be within your control. If you are purchasing for the account of
one or more pension or trust funds (other than pension or trust funds included
in the general account of an insurance company), you represent that (except to
the extent that you have otherwise advised Debevoise & Plimpton and the Company
in writing) you have sole investment discretion with respect to the acquisition
of the Initial Notes to be issued to you pursuant to this Agreement and the
Notes to be issued upon exchange thereof and the determination and decision on
your behalf to purchase such Initial Notes and the Notes to be issued upon
exchange thereof for such pension or trust funds is being made by the same
individual or group of individuals who customarily pass on such investments.
6.2. You represent that at least one of the following statements is an
accurate representation as to the source of funds to be used by you to pay the
purchase price of the Initial Notes purchased by you hereunder:
(a) if you are an insurance company, no part of such funds
constitutes assets allocated to any separate account maintained by you in
which an employee benefit plan (or its related trust) has any interest; or
(b) if you are an insurance company, to the extent that any of such
funds constitutes assets allocated to any separate account maintained by
you, (i) such separate account is a "pooled separate account" within the
meaning of Prohibited Transaction Class Exemption 90-1, in which case you
have disclosed to the Company the names of each employee benefit plan
whose assets in such separate account exceed 10% of the total assets or
are expected to exceed 10% of the total assets of such account as of the
date of such purchase (and for the purposes of this subdivision (b), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan), or (ii) such separate
account contains only the assets of a specific employee benefit plan,
complete and accurate information as to the identity of which you have
delivered to the Company in writing; or
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(c) if you are a "qualified professional asset manager" or "QPAM"
(as defined in Part V of Prohibited Transaction Class Exemption 84-14,
issued March 13, 1984 (the "QPAM Exemption")), all of such funds
constitute assets of an "investment fund" (as defined in Part V of the
QPAM Exemption) managed by you, no employee benefit plan assets which are
included in such investment fund, when combined with the assets of all
other employee benefit plans (i) established or maintained by the same
employer or an affiliate (as defined in Part V of the QPAM Exemption) of
such employer or by the same employee organization and (ii) managed by
you, exceed 20% of the total client assets managed by you, the conditions
of the QPAM Exemption (other than Section I(a) thereof) are satisfied and
you have disclosed to the Company the names of all employee benefit plans
whose assets are included in such investment fund; or
(d) if you are other than an insurance company, all or a portion of
such funds consists of funds which do not constitute assets of any
employee benefit plan (other than a governmental plan exempt from the
coverage of ERISA) and the remaining portion, if any, of such funds
consists of funds which may be deemed to constitute assets of one or more
specific employee benefit plans, complete and accurate information as to
the identity of each of which you have delivered to the Company in
writing; or
(e) if you are an insurance company, the source of the funds is an
insurance company general account in respect of which the reserves and
liabilities for the general account contract(s) held by or on behalf of
any benefit plan (as defined by the annual statement for life insurance
companies approved by the National Association of Insurance Commissioners
(the "NAIC Annual Statement"), determined before reduction for credits on
account of any reinsurance ceded on a coinsurance basis) together with the
amount of the reserves and liabilities for the general account contract(s)
held by or on behalf of any other benefit plans (as defined by the NAIC
Annual Statement) maintained by the same employer (or affiliate thereof as
defined in Prohibited Transaction Class Exemption 95-60) or by the same
employee organization (as defined by the NAIC Annual Statement) in the
general account do not exceed 10% of the total reserves and liabilities of
the general account (exclusive of separate account liabilities) plus
surplus as set forth in the NAIC Annual Statement filed with the state of
domicile of the insurance company.
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As used in this Section 6.2, the terms "employee benefit plan", "governmental
plan" and "separate account" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
SECTION 7. ACCOUNTING; FINANCIAL STATEMENTS AND OTHER INFORMATION.
The Company will maintain, and will cause each Restricted Subsidiary to
maintain, a system of accounting established and administered in accordance with
GAAP, and will accrue, and will cause each Restricted Subsidiary to accrue, all
such liabilities as shall be required by GAAP. The Company will deliver (in
duplicate, unless you have advised us otherwise) to you, so long as you shall be
entitled to purchase Initial Notes under this Agreement or you or your nominee
shall be the holder of any Notes, and to each other Institutional Investor
holding any Notes (other than a Competitor of the Company):
(a) as soon as practicable, but in any event within 60 days after
the end of each of the first three quarterly fiscal periods in each fiscal
year of the Company, consolidated (and (i) if the Restricted Subsidiaries
or a Restricted Subsidiary constitutes a Substantial Portion, then as to
the Restricted Subsidiaries or (ii) if the Restricted Subsidiaries do not
or a Restricted Subsidiary does not constitute a Substantial Portion, but
one or more Restricted Subsidiaries have outstanding Indebtedness owing to
Persons other than the Company or any Restricted Subsidiary and other than
pursuant to any Security Document, then as to the Restricted Subsidiaries,
consolidating) balance sheets of the Company and the Restricted
Subsidiaries as at the end of such period and the related consolidated
(and, as to statements of income and cash flows, if applicable and as
appropriate, consolidating) statements of income, surplus or partners'
capital, cash flows and stockholders' equity of the Company and the
Restricted Subsidiaries (i) for such period and (ii) (in the case of the
second and third quarterly periods) for the period from the beginning of
the current fiscal year to the end of such quarterly period, setting forth
in each case (except in the case of financial statements with respect to
the fiscal year of the Company beginning March 15, 1996 or if
consolidating balance sheets of the Restricted Subsidiaries were not
required to be delivered pursuant to this subdivision (a) for the previous
corresponding period) in comparative form the consolidated and, where
applicable and as appropriate, consolidating figures for the corresponding
periods of the previous fiscal year, all in reasonable
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detail and certified by the principal financial officer of the general
partner of the Company as presenting fairly, in all material respects, the
information contained therein (subject to changes resulting from normal
year-end adjustments), in accordance with GAAP applied on a basis
consistent with prior fiscal periods, provided that delivery within the
time period specified above of copies of the Company's Quarterly Report on
Form 10-Q prepared in compliance with the requirements therefor and filed
with the Securities and Exchange Commission shall be deemed to satisfy the
requirements hereof to the extent such reports otherwise satisfy such
requirements (for purposes of this Section 7, "Substantial Portion" shall
mean that either (x) either (A) the book value of the assets of the
Restricted Subsidiaries exceeds 10% of the book value of the consolidated
assets of the Company and the Restricted Subsidiaries, or (B) the
Restricted Subsidiaries account for more than 10% of the Consolidated Net
Income of the Company and the Restricted Subsidiaries, in each case in
respect of the four fiscal quarters ended as of the date of the applicable
financial statement) or (y) either (A) the book value of the assets of any
Restricted Subsidiary exceeds 5% of the book value of the consolidated
assets of the Company and the Restricted Subsidiaries, or (B) any
Restricted Subsidiary accounts for more than 5% of the Consolidated Net
Income of the Company and its Restricted Subsidiaries, in each case in
respect of the four fiscal quarters ended as of the date of the applicable
financial statement);
(b) as soon as practicable, but in any event within 120 days after
the end of each fiscal year of the Company beginning with the fiscal year
beginning March 15, 1996, consolidated (and (i) if the Restricted
Subsidiaries or a Restricted Subsidiary constitutes a Substantial Portion,
then as to the Restricted Subsidiaries or (ii) if the Restricted
Subsidiaries do not or a Restricted Subsidiary does not constitute a
Substantial Portion, but one or more Restricted Subsidiaries have
outstanding Indebtedness owing to Persons other than the Company or any
Restricted Subsidiary and other than pursuant to any Security Document,
then as to the Restricted Subsidiaries, consolidating) balance sheets of
the Company and the Restricted Subsidiaries and the consolidated balance
sheets of each General Partner as at the end of such year and the related
consolidated (and, as to statements of income and cash flows, if
applicable and as appropriate, consolidating) statements of income,
partners' capital, cash flows and stockholders' equity of the Company and
the Restricted Subsidiaries and the consolidated statements of income,
surplus, cash flow and stockholders' equity of each General Partner for
such fiscal year, setting forth in each case (except in the case of the
financial statements with respect
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to the fiscal year of the Company beginning March 15, 1996 or if
consolidating balance sheets of the Restricted Subsidiaries were not
required to be delivered pursuant to this subdivision (b) for the
preceding corresponding period) in comparative form the consolidated and,
where applicable and as appropriate, consolidating figures for the
previous fiscal year, all in reasonable detail, provided that delivery
within the time periods specified above of copies of the Company's Annual
Report on Form 10-K prepared in compliance with the requirements therefor
and filed with the Securities and Exchange Commission shall be deemed to
satisfy the requirements hereof to the extent such reports otherwise
satisfy such requirements, and (i) in the case of such consolidated
financial statements of the Company, accompanied by a report thereon of
Deloitte & Touche LLP or other independent public accountants of
recognized national standing selected by the Company, which report shall
state that such consolidated financial statements present fairly in all
material respects the financial position of the Company and the Restricted
Subsidiaries as at the dates indicated and the results of their operations
and cash flows for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years and that the audit by such
accountants in connection with such consolidated financial statements has
been made in accordance with generally accepted auditing standards in
effect in the United States from time to time, and (ii) in the case of
such consolidated financial statements of each General Partner and such
consolidating financial statements of the Company, certified by the
principal financial officer of the general partner of the Company, as
presenting fairly in all material respects the information contained
therein, in accordance with GAAP applied on a basis consistent with prior
fiscal periods;
(c) together with each delivery of financial statements pursuant to
subdivisions (a) and (b) of this Section 7, an Officers' Certificate of
the Company (i) stating that the signers have reviewed the terms of this
Agreement and the other Operative Agreements and have made, or caused to
be made under their supervision, a review in reasonable detail of the
transactions and condition of the Company and the Restricted Subsidiaries
during the accounting period covered by such financial statements and that
the signers do not have knowledge of the existence and continuance as at
the date of such Officers' Certificate of any condition or event which
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event exists, specifying the nature and period of
existence thereof and what action the Company has taken or is taking or
proposes to take with respect thereto, (ii) specifying the amount
available at the end of such
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accounting period for Restricted Payments in compliance with Section 10.4
and showing in reasonable detail all calculations required in arriving at
such amount, (iii) demonstrating in reasonable detail, if applicable,
compliance during and at the end of such accounting period with the
restrictions contained in Sections 10.1(b), (d), (e), (f), (g), (h), (i)
and (o), 10.3(c), 10.7(a)(ii), 10.7(a)(iii), 10.7(c)(iii), 10.19 and
10.30, (iv) if not specified in the related financial statements being
delivered pursuant to subdivisions (a) and (b) above, specifying the
aggregate amount of interest paid or accrued by the Company and the
Restricted Subsidiaries, and the aggregate amount of depreciation,
depletion and amortization charged on the books of the Company and the
Restricted Subsidiaries, during the fiscal period covered by such
financial statements and describing in reasonable detail the number and
nature of the parcels of real property, or rights thereto or interests
therein, caused to be released by the Company from the Liens of the
Security Documents pursuant to the Trust Agreement and in the case of the
fee owned property, the value of the fee owned property caused to be
released by the Company during such accounting period;
(d) together with each delivery of consolidated financial statements
pursuant to subdivision (b) of this Section 7, a written statement by the
independent public accountants giving the report thereon (i) stating that
in connection with their audit examination, the terms of this Agreement
and the other Operative Agreements were reviewed to the extent considered
necessary for the purpose of expressing an opinion on the consolidated
financial statements and for making the statement contained in clause (ii)
hereof (it being understood that no special audit procedures in addition
to those required by generally accepted auditing standards then in effect
in the United States shall be required) and (ii) stating whether, in the
course of their audit examination, they obtained knowledge (and whether,
as of the date of such written statement, they have knowledge) of the
existence and continuance of any condition or event which constitutes an
Event of Default or Potential Event of Default insofar as such Event of
Default or Potential Event of Default relates to accounting or financial
matters, and, if so, specifying the nature and period of existence
thereof;
(e) promptly upon their becoming publicly available, copies of (i)
all financial statements, reports, notices and proxy statements sent or
made available by the Company, either General Partner or the Public
Partnership to all of its security holders in compliance with the
Securities Exchange Act of 1934, as amended from
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time to time, or any comparable Federal or state laws relating to the
disclosure by any Person of information to its security holders, (ii) all
regular and periodic reports and all registration statements and
prospectuses filed by the Company, either General Partner or the Public
Partnership with any securities exchange or with the Securities and
Exchange Commission or any governmental authority succeeding to any of its
functions (other than Registration Statements on Form S-8), and (iii) all
press releases and other statements made available by the Company, either
General Partner or the Public Partnership to the public concerning
material developments in the business of the Company, either General
Partner of the Company or the Public Partnership, as the case may be;
(f) promptly, but in any event (i) within five days after any
Responsible Officer of the Company knows or (ii) within ten days after any
Responsible Officer should (in the course of the normal performance of his
or her duties) know, that (x) any condition or event which constitutes an
Event of Default or Potential Event of Default has occurred or exists, or
is expected to occur or exist, (y) the holder of any Note has given any
notice or taken any other action with respect to a claimed Event of
Default or Potential Event of Default under this Agreement or default
under any other Operative Agreement or (z) any Person has given any notice
to the Company, either General Partner or any Restricted Subsidiary or
taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 11(f), an Officers'
Certificate of the Company describing the same and the period of existence
thereof and what action the Company has taken, is taking and proposes to
take with respect thereto;
(g) promptly, and in any event within five Business Days after a
Responsible Officer of the Company obtains knowledge of (i) the occurrence
of an adverse development with respect to any litigation or proceeding
involving the Company, any of its Subsidiaries or either General Partner
which in the reasonable judgment of the Company presents a reasonable
likelihood of having a Material Adverse Effect or (ii) the commencement of
any litigation or proceeding involving the Company, any of the
Subsidiaries or either General Partner which in the reasonable judgment of
the Company presents a reasonable likelihood of having a Material Adverse
Effect, a written notice of such Responsible Officer describing in
reasonable detail such commencement of, or adverse development with
respect to, such litigation or proceeding;
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(h) promptly, but in any event (i) within five days after any
Responsible Officer of the Company knows, or (ii) within ten days after
any Responsible Officer of the Company should (in the course of the normal
performance of his or her duties) know, that any of the events or
conditions specified below with respect to any Plan has occurred or
exists, or is expected to occur or exist, a statement setting forth
details respecting such event or condition and the action, if any, that
the Company or any Related Person of the Company has taken, is taking and
proposes to take or cause to be taken with respect thereto (and a copy of
any notice or report filed with or given to or communication received from
the PBGC, the Internal Revenue Service or the Department of Labor with
respect to such event or condition):
(A) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder;
(B) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan;
(C) a substantial cessation of operations within the meaning
of Section 4062(e) of ERISA under circumstances which could result in the
treatment of the Company or any Related Person of the Company as a
substantial employer under a "multiple employer plan" or the application
of the provisions of Section 4062, 4063 or 4064 of ERISA to the Company or
any Related Person of the Company;
(D) the taking of any steps by the PBGC or the institution by
the PBGC of proceedings under Section 4042 of ERISA for the termination
of, or the appointment of a trustee to administer, any Plan, or the
receipt by the Company or any Related Person of the Company of a notice
from a Multiemployer Plan that such action has been taken by the PBGC with
respect to such Multiemployer Plan;
(E) the complete or partial withdrawal by the Company or any
Related Person of the Company under Section 4063, 4203 or 4205 of ERISA
from a Plan which is a "multiple employer plan" or a Multiemployer Plan,
or the receipt by the Company or any Related Person of the Company of
notice from a Multiemployer Plan regarding any alleged withdrawal or that
it intends to
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impose withdrawal liability on the Company or any Related Person of the
Company or that it is in reorganization or is insolvent within the meaning
of Section 4241 or 4245 of ERISA or that it intends to terminate under
Section 4041A of ERISA or from a "multiple employer plan" that it intends
to terminate;
(F) the taking of any steps concerning the threat or the
institution of a proceeding against the Company or any Related Person of
the Company to enforce Section 515 of ERISA;
(G) the occurrence or existence of any event or series of
events which could result in a liability to the Company or any Related
Person of the Company pursuant to Section 4069(a) or 4212(c) of ERISA;
(H) the failure to make a contribution to any Plan, which
failure, either alone or when taken together with any other such failure,
is sufficient to result in the imposition of a lien on any property of the
Company or any Related Person of the Company pursuant to Section 302(f) of
ERISA or Section 412(n) of the Code or could result in the imposition of a
material tax or material penalty pursuant to Section 4971 of the Code on
the Company or any Related Person of the Company;
(I) the amendment of any Plan in a manner which would be
treated as a termination of such Plan under Section 4041(e) of ERISA or
require the Company or any Related Person of the Company to provide
security to such Plan pursuant to Section 307 of ERISA or Section
401(a)(29) of the Code; or
(J) the incurrence of liability in connection with the
occurrence of a "prohibited transaction" (within the meaning of Section
406 of ERISA or Section 4975 of the Code);
(i) promptly, but in any event within five days, after an officer of
any of the Company, any Subsidiary or either General Partner receives any
notice or request from any Person (other than any Affiliate or any agent,
attorney or similar party employed by the Company or either General
Partner) for information, or if the Company, any Subsidiary or either
General Partner provides any notice or information to any such Person
(other than any Affiliate or any agent, attorney or
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similar party employed by the Company or either General Partner),
concerning the presence or release of any hazardous substance (as defined
in CERCLA) or hazardous waste (as defined in RCRA) or other contaminants
(as defined by any applicable federal, state, local or foreign laws)
within, on, from, relating to or affecting any property owned, leased, or
subleased by the Company, any Subsidiary or either General Partner, copies
of each such notice, request or information, except such notices or
requests for information received or filings made in the normal course of
business which do not pertain to the violation by the Company, any
Subsidiary or either General Partner of an Environmental Law; and
(j) with reasonable promptness, such other financial reports and
information and data (including, without limitation, any management letter
issued or provided by independent public accountants of the Company or any
Restricted Subsidiary) with respect to the Company, any Restricted
Subsidiary, any Subsidiary (to the extent such reports, information and
data relate to environmental matters or any material litigation or
proceeding) or either General Partner as from time to time may be
requested by you (so long as you hold a Note), or by any holder of any
Note other than a Competitor of the Company.
SECTION 8. INSPECTION.
The Company will permit or cause the general partner of the Company to
permit (a) at any time when an Event of Default or Potential Event of Default
shall have occurred and be continuing, any authorized representatives designated
by you, so long as you shall be entitled to purchase the Initial Notes under
this Agreement or you or your nominee shall be the holder of any Notes, or by
any other institutional holder of any Notes (other than a Competitor of the
Company), and (b) at any other time, any authorized representative designated by
any Purchaser or Purchasers holding at least 5% of the principal amount of the
Notes, or by any other holder or holders of at least 5% of the principal amount
of the Notes (other than a Competitor of the Company) then outstanding and an
authorized representative of all of the holders of the Notes, in each case, upon
prior written notice and as may be reasonably requested, to visit during normal
business hours and inspect any of the properties of the Company, any Restricted
Subsidiary and any other Subsidiary (to the extent relating to environmental or
litigation matters) and, to the extent relating to the Business, any properties
of either General Partner or of such General Partner's Subsidiaries, including
the books of account of the Company, the Restricted Subsidiaries, such other
Subsidiaries, either
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General Partner and such General Partner's Subsidiaries, and to make copies and
take extracts therefrom, and to discuss its and their affairs, finances and
accounts with its and their senior officers and (with reasonable prior written
notice) independent public accountants (and by this provision each of the
Company and each General Partner authorizes such accountants to discuss with
such representatives the affairs, finances and accounts of the Company, any
Restricted Subsidiary, such other Subsidiaries, such General Partner or any of
such General Partner's Subsidiaries, as the case may be) all at such times and
as often as may be requested, provided that you shall bear the expenses of your
authorized representative, except the Company will bear the expenses of such
authorized representatives if an Event of Default or Potential Event of Default
has occurred and is continuing; and the Company shall at all times bear the
expenses of its and its Affiliates' officers and independent public accountants.
SECTION 9. PREPAYMENT OF NOTES.
9.1. Required Prepayments of the Notes. On each of the dates set forth in
the following table, the Company will prepay the principal amount of the Notes
set forth opposite such date in such table (or such lesser principal amount of
the Notes as shall at the time be outstanding), at the principal amount of the
Notes so prepaid, without premium, together with interest accrued thereon:
Principal Amount
Date of Prepayment of Prepayment
- ------------------------------------------ -------------------
June 30, 2003 $15,625,000
June 30, 2004 15,625,000
June 30, 2005 15,625,000
June 30, 2006 15,625,000
June 30, 2007 15,625,000
June 30, 2008 15,625,000
June 30, 2009 15,625,000
Any partial prepayment of the Notes pursuant to Section 9.2, 9.3 or 9.4
(to the extent not applied to satisfy a prepayment required under this Section
9.1) shall be applied to reduce each prepayment thereafter required to be made
pro rata, but no acquisition of the Notes by the Company or any of its
Affiliates, otherwise shall relieve
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the Company from its obligation to make the required prepayments provided for in
this Section 9.1. The Company shall notify the holders of the Notes of any
application provided for in the immediately preceding sentence five days prior
to such application. On the maturity date, the Company will pay the then
outstanding principal amount of the Notes together with interest accrued
thereon.
9.2. Optional Prepayments of the Notes with Make Whole Amount. The Notes
shall be subject to prepayment, in whole at any time or from time to time in
part (in an amount of not less than $5,000,000), at the option of the Company,
upon notice as provided in Section 9.5 at 100% of the principal amount of the
Notes so prepaid plus interest thereon to the prepayment date and the Make Whole
Amount.
9.3. Prepayment on Change of Control. (a) The Company will, within 90 days
after any Change of Control give written notice of such Change of Control to
each holder of Notes. Such notice shall contain and constitute an offer to
prepay the Notes as described in subdivision (b) of this Section 9.3 and shall
be accompanied by the certificate described in subdivision (e) of this Section
9.3.
(b) The offer to prepay Notes contemplated by subdivision (a) of this
Section 9.3 shall be an offer to prepay, in accordance with and subject to this
Section 9.3, all, but not less than all, the Notes held by each holder (in this
case only, "holder" in respect of any Note registered in the name of a nominee
for a disclosed beneficial owner shall mean such beneficial owner) on a date
specified in such offer (the "Proposed Prepayment Date") that is not less than
20 days and not more than 30 days after the date of such offer (if the Proposed
Prepayment Date shall not be specified in such offer, the Proposed Prepayment
Date shall be the 20th day after the date of such offer).
(c) A holder of Notes may accept the offer to prepay made pursuant to this
Section 9.3 by causing a notice of such acceptance to be delivered to the
Company at least 5 days prior to the Proposed Prepayment Date. A failure by a
holder of Notes to respond to an offer to prepay made pursuant to this Section
9.3 shall be deemed to constitute a rejection of such offer by such holder.
(d) Prepayment of the Notes to be prepaid pursuant to this Section 9.3
shall be at 100% of the principal amount of such Notes, plus a premium equal to
1% of such principal amount (the "Premium Amount"), together with interest on
such Notes
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accrued to the date of prepayment. The principal amount and the Premium Amount
shall, with respect to all Notes the holder of which accepted the offer to
prepay pursuant to subdivision (c), become due and payable on the Proposed
Prepayment Date.
(e) Each offer to prepay the Notes pursuant to this Section 9.3 shall be
accompanied by an Officers' Certificate, executed by a senior financial officer
and a Responsible Officer of the Company and dated the date of such offer,
specifying: (i) the Proposed Prepayment Date; (ii) that such offer is made
pursuant to this Section 9.3; (iii) the principal amount of each Note offered to
be prepaid; (iv) the premium due in connection with such prepayment; (v) the
interest that would be due on each Note offered to be prepaid, accrued to the
Proposed Prepayment Date; (vi) that the conditions of this Section 9.3 have been
fulfilled; (vii) in reasonable detail, the nature and date of the Change of
Control; and (viii) that a failure to respond to such notice shall be deemed a
rejection of such offer to prepay the Notes.
9.4. Contingent Prepayments on Disposition of Property, Taking or
Destruction. (a) If at any time the Company or any of the Restricted
Subsidiaries disposes of property or such property shall be damaged, destroyed
or taken in eminent domain or there shall be title insurance proceeds with
respect to such property, in any such case, with the result that there are
Excess Proceeds, and the Company does not apply such Excess Proceeds in the
manner described in Section 10.7(c)(iii)(B)(x), and if the next scheduled date
of prepayment of the Notes pursuant to Section 9.1 occurs within 270 days after
receipt of such Excess Proceeds, such Excess Proceeds may be applied to such
prepayment required under Section 9.1 (unless such scheduled prepayment has been
paid by the Company). To the extent that there are such Excess Proceeds
remaining after application in accordance with the first sentence of this
Section 9.4(a), the Company shall prepay, upon notice as provided in Section 9.5
(which notice shall be given not later than 270 days after the date of such sale
of property), a principal amount of the outstanding Notes equal to the amount of
such remaining Excess Proceeds allocable to the Notes, determined by allocating
such remaining Excess Proceeds pro rata among the holders of all Notes and
Parity Debt, if any, outstanding on the date such prepayment is to be made,
according to the aggregate then unpaid principal amounts of the Notes (and the
Make Whole Amount on the principal amount of the Notes to be prepaid) and Parity
Debt, respectively. Each prepayment of Notes pursuant to this Section 9.4(a)
shall be made at 100% of the principal amount of the Notes to be prepaid, plus
interest thereon to the prepayment
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date plus, to the extent the prepayment is not made in satisfaction of a
required prepayment in accordance with Section 9.1, the Make Whole Amount
thereon.
(b) In the event that damage, destruction or a taking shall occur in
respect of all or a portion of the properties subject to any of the Security
Documents, or there shall be proceeds under title insurance policies with
respect to any real property, all Net Insurance Proceeds (as defined in the
Mortgage), self-insurance amounts, Net Awards (as defined in the Mortgage) or
title insurance proceeds which, as of any date, shall not theretofore have been
applied to the cost of Restoration (as defined in the Mortgage) shall be deemed
to be proceeds of property disposed of voluntarily, shall be subject to the
provisions of Section 10.7(c) and, if subdivision (iii)(B)(y) of Section 10.7(c)
is applicable thereto, shall be subject to the prepayment provisions of Section
9.4(a). Any amounts prepaid pursuant to this Section 9.4(b) on the date on which
a prepayment is required under Section 9.1 may be applied to satisfy such
prepayment required under Section 9.1.
9.5. Notice of Prepayments; Officers' Certificate. The Company will give
each holder of any Notes irrevocable written notice of each prepayment under
Section 9.2 or 9.4 not less than 10 days and not more than 30 days prior to the
date fixed for such prepayment, in each case specifying such prepayment date,
the aggregate principal amount of the Notes and the principal amount of each
Note held by such holder to be prepaid and the Section under which such
prepayment is to be made. Notice of prepayment having been given as aforesaid,
the principal amount of the Notes specified in such notice, together with
interest thereon to the prepayment date and together with the Make Whole Amount,
if any, with respect thereto, shall become due and payable on such prepayment
date. The Company shall, on or before the Business Day next succeeding the date
which the Company sends such written notice, give telephonic notice of the
principal amount of the Notes to be prepaid and the prepayment date to each
holder of any Notes which shall have designated a recipient of such notices in
the Schedule of Purchasers attached hereto or by notice in writing to the
Company. Each holder of a Note shall receive, on the Business Day immediately
preceding the date scheduled for any such prepayment, an Officers' Certificate
certifying that the conditions of the Section under which such prepayment is to
be made have been fulfilled and specifying the particulars of such fulfillment.
In the event that there shall have been a partial prepayment of the Notes under
Section 9.2, 9.3 or 9.4, the Company shall promptly give notice to the holders
of the Notes, accompanied by an Officers' Certificate setting forth the
principal amount of each of the Notes that was
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prepaid and specifying how each such amount was determined, setting forth the
reduced amount of each required prepayment thereafter becoming due with respect
to the Notes under Section 9.1, and certifying that such reduction has been
computed in accordance with such Section.
9.6. Allocation of Partial Prepayments. Upon any partial prepayment of the
Notes pursuant to Section 9.1, 9.2 or 9.4 the principal amount so prepaid shall
be allocated (in integral multiples of $1,000 as nearly as practicable) to all
Notes at the time outstanding in proportion to the respective outstanding
principal amounts thereof not theretofore called for prepayment, with
adjustments, to the extent practicable, to compensate for any prior prepayments
not made exactly in such proportion.
9.7. Maturity; Surrender, etc. In the case of each prepayment, the
principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make Whole Amount or
other premium, if any. From and after such date, unless the Company shall fail
to pay such principal amount when so due and payable, together with the interest
and Make Whole Amount or other premium, if any, as aforesaid, interest on such
principal amount shall cease to accrue. Any Note paid or prepaid in full shall,
after such payment or prepayment in full, be surrendered to the Company and
canceled and shall not be reissued, and no Note shall be issued in lieu of any
prepaid principal amount of any Note.
9.8. Acquisition of Notes. None of the General Partners or the Company
shall, nor shall any permit any of their respective Subsidiaries or any
Restricted Affiliate to, prepay or otherwise retire in whole or in part prior to
their stated final maturity (other than by prepayment pursuant to Section 9.1,
9.2, 9.3 or 9.4 or upon acceleration of such final maturity pursuant to Section
11), or purchase or otherwise acquire, directly or indirectly, Notes held by any
holder, except, pursuant to an offer to purchase made pro rata to the holders of
all of the Notes on the same terms and conditions. Any Notes prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or either General Partner shall not be deemed to be outstanding
for any purpose under this Agreement or any other Operative Agreement. Any notes
prepaid or otherwise purchased or otherwise acquired by any Affiliate of the
Company (other than any of its Subsidiaries or either General Partner) shall not
be deemed outstanding for the purpose of any vote of the holders of the Notes
(including, without limitation, the calculation of any percentage of principal
amount of
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the Notes outstanding with respect to any such vote) pursuant to this Agreement
or any other Operative Agreement but shall be deemed outstanding with respect to
the payment of principal, premium and interest on the Notes.
SECTION 10. BUSINESS AND FINANCIAL COVENANTS OF THE COMPANY.
The Company covenants that from the date of this Agreement through the
Closing and thereafter so long as any of the Notes are outstanding:
10.1. Indebtedness. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except that:
(a) the Company may become and remain liable with respect to the
Indebtedness evidenced by the Notes;
(b) the Company and the Restricted Subsidiaries may become and
remain liable with respect to Indebtedness incurred by the Company and the
Restricted Subsidiaries to finance the making of expenditures for the
improvement or repair of or additions to the Assets, provided that (i) the
aggregate principal amount of Indebtedness incurred under this Section
10.1(b) and outstanding at any time shall not exceed an amount equal to
the sum of (x) the net cash proceeds received by the Company from the
general partner of the Company or from the Public Partnership as a capital
contribution or as consideration for the issuance by the Company of
additional partnership interests, in each case for the sole purpose of
financing such expenditures, and (y) the fair market value of the Units
contributed to the Company by the Public Partnership or issued directly to
the Person selling such asset or making such repair or improvement by the
Public Partnership for the sole purpose of financing such expenditures,
only to the extent, however, that such Units are used to pay,
substantially concurrently with the date of contribution, at least 50% of
the purchase price or cost of such improvements, repairs or additions, and
(ii) if such Indebtedness is to be secured under the Security Documents as
provided in Section 10.2(i), the agreement or instrument pursuant to which
such Indebtedness is incurred (A) contains no financial or business
covenants that are more restrictive on the Company or its Subsidiaries
than or that are in addition to those contained in this Section 10 (unless
prior to or simultaneously
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with the incurrence of such Indebtedness this Agreement and the Other
Agreements are amended to provide the benefits of such more restrictive
covenants to the holders of the Notes) and (B) specifies no events of
default (other than with respect to the payment of principal and interest
on such Indebtedness or the accuracy of representations and warranties
made in connection with such agreement or instrument) which are capable
of occurring prior to the occurrence of the Events of Default specified in
Section 11 (unless prior to or simultaneously with the incurrence of such
Indebtedness this Agreement and the Other Agreements are amended to
provide the benefit of such events of default to the holders of the
Notes);
(c) any Restricted Subsidiary may become and remain liable with
respect to Indebtedness of such Restricted Subsidiary owing to the Company
or to another Restricted Subsidiary, provided that such Indebtedness is
created and is outstanding under an agreement or instrument pursuant to
which such Indebtedness is subordinated to the Notes and to Indebtedness
secured under the Security Documents at least to the extent provided in
the subordination provisions set forth in Exhibit E and provided further
that such Indebtedness is evidenced by an Intercompany Note pledged to the
Trustee;
(d) the Company and the Restricted Subsidiaries may become and
remain liable with respect to unsecured Indebtedness owing to the general
partner of the Company or an Affiliate of the general partner of the
Company, provided that (i) the aggregate principal amount of such
Indebtedness of the Company and the Restricted Subsidiaries outstanding at
any time shall not be in excess of $20,000,000 and (ii) such Indebtedness
is created and is outstanding under an agreement or instrument pursuant to
which such Indebtedness is subordinated to the Notes and to Indebtedness
secured under the Security Documents at least to the extent provided in
the subordination provisions set forth in Exhibit E;
(e) the Company may become and remain liable with respect to
Indebtedness incurred under the Bank Credit Facilities, provided that
(i) the aggregate principal amount outstanding under the Initial
Acquisition Facility, together with amounts outstanding pursuant to
Indebtedness permitted by subdivisions (h)(3)(i) and (o) of Section
10.1, will be in an aggregate principal amount not in excess of
$40,000,000 outstanding at any time, and
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(ii) in respect of the Working Capital Facility:
(1) there shall be a period of at least 30 consecutive days
during each fiscal year of the Company on each day of which there
shall be no such Indebtedness outstanding under the Working Capital
Facility, and
(2) the aggregate principal amount of loans, exposure under
letters of credit in respect of the Working Capital Facility and the
unfunded commitments thereunder at any time outstanding thereunder
shall not be in excess of $15,000,000;
(f) the Company and the Restricted Subsidiaries may become and
remain liable with respect to Indebtedness, in addition to that otherwise
permitted by the foregoing subdivisions of this Section 10.1, if on the
date the Company or any Restricted Subsidiary becomes liable with respect
to any such additional Indebtedness and immediately after giving effect
thereto and to the substantially concurrent repayment of any other
Indebtedness (i) the ratio of Consolidated Cash Flow to Consolidated Pro
Forma Debt Service is greater than 2.50 to 1.0 and (ii) the ratio of
Consolidated Cash Flow to Maximum Consolidated Pro Forma Debt Service is
greater than 1.25 to 1.0, provided that, in addition to the foregoing, if
such Indebtedness is incurred by the Company or any Restricted Subsidiary
to finance the making of expenditures for the improvement or repair of or
additions to the Assets, and if such Indebtedness is to be secured under
the Security Documents as provided in Section 10.2(i), such Indebtedness
shall be incurred pursuant to an agreement or instrument which complies
with the requirements set forth in clause (ii) of the proviso to Section
10.1(b);
(g) the Company may become and remain liable with respect to the
Indebtedness referred to in Schedule 5.7, provided that all the aggregate
principal amount of such Indebtedness at any time outstanding shall not
exceed $1,500,000;
(h) the Company and any Restricted Subsidiary may become and remain
liable with respect to pre-existing Indebtedness relating to any Person,
business or assets acquired by the Company or such Restricted Subsidiary,
as the case may be, provided that (1) no condition or event shall exist
which constitutes an Event of Default or Potential Event of Default, (2)
such Indebtedness was not incurred in anticipation of the acquisition of
such Person, business or assets and (3) after
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giving effect to such Person becoming a Restricted Subsidiary, or the
acquisition of such business or assets, either (i) the sum of (A) such
Indebtedness, (B) the then aggregate principal amount of outstanding
Indebtedness under the Initial Acquisition Facility and (C) the then
outstanding principal amount of any Indebtedness permitted by Section
10.1(o), does not exceed $40,000,000, or (ii) the Company or such
Restricted Subsidiary could incur at least $1 of additional Indebtedness
in compliance with the requirements set forth in clauses (i) and (ii) of
Section 10.1(f);
(i) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to Indebtedness secured equally
and ratably with the Notes incurred for any extension, renewal, refunding
or refinancing of Indebtedness permitted pursuant to subdivisions (a),
(b), (e)(i) and (f) of this Section 10.1, provided that (i) the principal
amount (including any exposure under letters of credit and any unfunded
commitments) of such Indebtedness shall not exceed the principal amount
(including any exposure under letters of credit and any unfunded
commitments) of such Indebtedness being extended, renewed, refunded or
refinanced together with any accrued interest and Make Whole Amount,
Premium Amount or other premium with respect thereto and any costs and
expenses related to such extension, renewal, refunding or refinancing,
(ii) the maturity date of such Indebtedness shall not be sooner than the
maturity date of such Indebtedness being extended, renewed, refunded or
refinanced, (iii) the average life to maturity of such Indebtedness shall
be equal to or greater than the remaining average life to maturity of such
Indebtedness being extended, renewed, refunded or refinanced and (iv) if
such Indebtedness is incurred for any extension, renewal, refunding or
refinancing of Indebtedness permitted pursuant to (A) subdivision (b) or
(f), such Indebtedness satisfies the conditions specified in clause (ii)
of the proviso to subdivision (b) or (B) subdivision (e)(i), the financial
and business covenants of such Indebtedness are no more restrictive on the
Company and its Subsidiaries and there are no additional covenants than
those contained in the Bank Credit Facilities as of the date of this
Agreement and such Indebtedness specifies no events of default (other than
with respect to the payment of principal and interest on such Indebtedness
or the accuracy of representations and warranties made in connection with
such agreement or instrument) which are capable of occurring prior to the
occurrence of the events of default specified in the Bank Credit
Facilities as of the date of this Agreement (unless prior to or
simultaneously with
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the incurrence of such Indebtedness this Agreement and the Other
Agreements are amended to provide the benefit of such more restrictive
covenants and events of default to the holders of the Notes);
(j) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to Indebtedness secured equally
and ratably with the Notes, incurred for any extension, renewal, refunding
or refinancing of Indebtedness permitted pursuant to subdivision (e)(ii)
of this Section 10.1, provided that (i) the aggregate principal amount of
such Indebtedness, any exposure under letters of credit issued pursuant to
such a working capital facility and the amount of the unfunded commitments
thereunder, shall not exceed $15,000,000, and (ii) such Indebtedness, any
such letters of credit and commitments shall be incurred pursuant to a
working capital facility (A) which complies with the requirements set
forth in clause (ii)(1) of Section 10.1(e) and (B) the financial and
business covenants of such Indebtedness are no more restrictive on the
Company and its Subsidiaries and there are no additional covenants than
those contained in the Bank Credit Facilities as of the date of this
Agreement and such Indebtedness specifies no events of default (other than
with respect to the payment of principal and interest on such Indebtedness
or the accuracy of representations and warranties made in connection with
such agreement or instrument) which are capable of occurring prior to the
occurrence of the events of default specified in the Bank Credit
Facilities as of the date of this Agreement (unless prior to or
simultaneously with the incurrence of such Indebtedness this Agreement and
the Other Agreements are amended to provide the benefit of such more
restrictive covenants and events of default to the holders of the Notes);
(k) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to unsecured Indebtedness
incurred for any extension, renewal, refunding or refinancing of
Indebtedness otherwise permitted by this Section 10.1, provided that (i)
the principal amount of such unsecured Indebtedness to be incurred shall
not exceed the principal amount of such Indebtedness being extended,
renewed, refunded or refinanced together with any accrued interest and
Make Whole Amount, Premium Amount or other premium with respect thereto
and any costs and expenses related to such extension, renewal, refunding
or refinancing, (ii) the maturity date of such unsecured Indebtedness
shall not be
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sooner than the maturity date of such Indebtedness being extended,
renewed, refunded or refinanced and (iii) the average life to maturity of
such unsecured Indebtedness shall be equal to or greater than the
remaining average life to maturity of such Indebtedness being extended,
renewed, refunded or refinanced;
(l) so long as no Event of Default or Potential Event of Default has
occurred and is continuing, the Company and the Restricted Subsidiaries
may become and remain liable with respect to secured Indebtedness incurred
for any extension, renewal, refunding or refinancing of secured
Indebtedness (other than Indebtedness permitted by subdivisions (a), (b),
(e) or (f)) otherwise permitted pursuant to this Section 10.1, provided
that (i) the principal amount of such Indebtedness to be incurred shall
not exceed the principal amount of such Indebtedness being extended,
renewed, refunded or refinanced together with any accrued interest and
premium with respect thereto and any and all costs and expenses related to
such extension, renewal, refunding or refinancing, (ii) the maturity date
of such Indebtedness shall not be sooner than the maturity date of such
Indebtedness being extended, renewed, refunded or refinanced, and (iii)
the average life to maturity of such Indebtedness to be incurred shall be
equal to or greater than the remaining average life to maturity of such
Indebtedness being extended, renewed, refunded or refinanced;
(m) the Company and any Restricted Subsidiaries may become and
remain liable with respect to any Interest Rate Agreement;
(n) any Restricted Subsidiary may become and remain liable with
respect to Indebtedness evidenced by the Subsidiary Guarantee Agreements;
and
(o) the Company or any Restricted Subsidiary may become and remain
liable with respect to Indebtedness issued to a seller of assets or stock
purchased by the Company or such Restricted Subsidiary in an amount not
exceeding the sum of (i) $40,000,000, less (ii) the principal amount of
any Indebtedness outstanding under subdivision (h)(3)(i) and subdivision
(e)(i), provided that the agreement or instrument pursuant to which such
Indebtedness is incurred (A) contains no financial or business covenants
that are more restrictive on the Company or its Subsidiaries than or that
are in addition to those contained in this Section 10 (unless prior to or
simultaneously with the incurrence of such Indebtedness this Agreement and
the Other Agreements are amended to provide the benefits of such more
restrictive
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covenants to the holders of the Notes), and (B) specifies no events of
default (other than with respect to the payment of principal and interest
on such Indebtedness or the accuracy of representations and warranties
made in connection with such agreement or instrument) which are capable of
occurring prior to the occurrence of the Events of Default specified in
Section 11 (unless prior to or simultaneously with the incurrence of such
Indebtedness this Agreement and the Other Agreements are amended to
provide the benefit of such events of default to the holders of the
Notes).
Notwithstanding the foregoing, the aggregate principal amount of all
Indebtedness of all Restricted Subsidiaries at any time outstanding (other than
Indebtedness permitted by Section 10.1(n) or Section 10.1(m) but only to the
extent such Restricted Subsidiary is a party to Interest Rate Agreements with
respect to Indebtedness for which it is directly liable) shall not exceed $10
million. For the purpose of this Section 10.1, any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have become
liable with respect to all of its then outstanding Indebtedness at the time it
becomes a Restricted Subsidiary, and any Person extending, renewing or refunding
any Indebtedness shall be deemed to have become liable with respect to such
Indebtedness at the time of such extension, renewal or refunding. The Company or
any Restricted Subsidiary shall be deemed to have become liable with respect to
any Indebtedness securing any real property acquired by the Company or such
Restricted Subsidiary, as the case may be, at the time of such acquisition. Any
amendment of the terms of this Agreement required by clause (ii) of the proviso
to Section 10.1(b) shall provide that such amendment shall only be effective
until the date the Indebtedness (the incurrence of which required the amendment
of this Agreement) is paid in full and all commitments to lend and letters of
credit outstanding under such facility are canceled or terminated. The Company
shall provide written notice to each holder of the repayment in full in cash of
such Indebtedness and the cancellation of all commitments and letters of credit
pursuant to any such facility, which notice shall provide that the amendments to
this Agreement required by clause (ii) of the proviso to Section 10.1(b) with
respect to such facility, are no longer effective.
10.2. Liens, etc. The Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any property or asset (including any document or
instrument in respect of goods or accounts receivable) of the Company or any
Restricted Subsidiary,
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whether now owned or held or hereafter acquired, or any income or profits
therefrom (whether or not provision is made for the equal and ratable securing
of the Notes in accordance with the provisions of Section 10.16), except:
(a) Liens for taxes, assessments or other governmental charges the
payment of which is not at the time required by Section 10.9;
(b) Liens of landlords and carriers, vendors, warehousemen,
mechanics, materialmen, repairmen and other like Liens incurred in the
ordinary course of business for sums not yet due or the payment of which
is not at the time required by Section 10.9, in each case not incurred or
made in connection with the borrowing of money, the obtaining of advances
or credit or the payment of the deferred purchase price of property;
(c) Liens (other than any Lien imposed by ERISA) incurred or
deposits made in the ordinary course of business (i) in connection with
workers' compensation, unemployment insurance and other types of social
security, or (ii) to secure (or to obtain letters of credit that secure)
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, performance bonds, purchase, construction or sales
contracts and other similar obligations, in each case not incurred or made
in connection with the borrowing of money, the obtaining of advances or
credit or the payment of the deferred purchase price of property;
(d) any attachment or judgment Lien, unless the judgment it secures
shall not, within 60 days after the entry thereof, have been discharged or
execution thereof stayed pending appeal, or shall not have been discharged
within 60 days after expiration of any such stay;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, which, in each
case are granted, entered into or created in the ordinary course of the
business of the Company or any Restricted Subsidiary and which do not
materially interfere with the ordinary conduct of the business of the
Company or any Restricted Subsidiary;
(f) Liens on property or assets of any Restricted Subsidiary
securing Indebtedness of such Restricted Subsidiary owing to the Company
or any other Restricted Subsidiary;
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(g) Liens existing on the Assets at the time of the acquisition
thereof by the Company and described in Schedule 10.2;
(h) Liens created by any of the Security Documents securing
Indebtedness incurred in accordance with Section 10.1(a) or Section
10.1(e);
(i) Liens created by any of the Security Documents securing
Indebtedness incurred in accordance with Section 10.1(b) or, to the extent
incurred to finance the making of capital improvements, repairs and
additions to the Company's Assets, Section 10.1(f) (but only to the extent
it complies with the requirements thereof), provided that (1) such Liens
are effected through an amendment to the Security Documents to the extent
necessary to provide the holders of such Indebtedness equal and ratable
security in the property and assets subject to the Security Documents with
the holders of the Notes and of other Indebtedness secured under the
Security Documents as provided in Section 10.1(b) or 10.1(f), (2) the
Security Documents are amended to the extent necessary to extend the Lien
thereof to any property or assets acquired or otherwise financed with the
proceeds of such Indebtedness, (3) the Company has delivered to the
Trustee an Officers' Certificate demonstrating that the principal amount
of such Indebtedness does not exceed the lesser of the cost to the Company
of such property or assets and the fair market value of such property or
assets (as determined in good faith by the general partner of the
Company), that such incurrence of Indebtedness pursuant to Section 10.1(b)
or 10.1(f), as the case may be, complies in all respects with the
requirements of such Section and that the amendments to the Security
Documents required by this Section 10.2(i) and the filing and recordation
of such amendments and related supplements will not have a Material
Adverse Effect, and (4) the Company has delivered to the Trustee an
opinion of counsel reasonably satisfactory to the Trustee to the effect
that the Lien of the Security Documents has attached and is perfected with
respect to such additional property and assets;
(j) Liens existing on any property of any Person at the time it
becomes a Restricted Subsidiary, or existing prior to the time of
acquisition (and not created in anticipation of such acquisition) upon any
property acquired by the Company or any Restricted Subsidiary through
purchase, merger or consolidation or otherwise, whether or not assumed by
the Company or such Restricted Subsidiary, or created to secure
Indebtedness incurred under Section 10.1(f) or Section 10.1(o) to pay all
or any part of the purchase price ("Purchase Money Lien") of property
acquired by
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the Company or a Restricted Subsidiary or to pay the cost of an
improvement (other than improvements to property subject to the Lien of
the Security Documents), provided that (i) any such Lien shall be confined
solely to the item or items of property so acquired and, if required by
the terms of the instrument originally creating such Lien, other property
which is an improvement to or is acquired for specific use in connection
with such acquired property, (ii) such item or items of property so
acquired (other than property (which may include stock or other equity
interests) subject to Liens existing prior to the time of acquisition and
not created in anticipation of such acquisition) are not required to
become part of the Mortgaged Property under the terms of the Security
Documents, (iii) the principal amount of the Indebtedness secured by any
such Lien shall at no time exceed an amount equal to the lesser of (A) the
cost of such property to the Company or such Restricted Subsidiary, as the
case may be, and (B) the fair market value of such property (as determined
in good faith by the general partner of the Company) at the time such
Person owning such property becomes a Restricted Subsidiary or at the time
of such acquisition by the Company or such Restricted Subsidiary, as the
case may be, (iv) any such Purchase Money Lien shall be created not later
than 90 days after, in the case of property, its acquisition, or, in the
case of improvements, their completion and (v) any such Lien (other than a
Purchase Money Lien) shall not have been created or assumed in
contemplation of such Person's becoming a Restricted Subsidiary or such
acquisition of property by the Company or any Subsidiary;
(k) Liens in amounts not exceeding $100,000 incurred, required or
provided for under state law in connection with self-insurance
arrangements;
(l) Liens arising from or constituting Permitted Encumbrances; and
(m) any Lien securing Indebtedness referred to in Section 10.1(i),
(j) or (l) renewing or extending any Lien permitted by the foregoing
subdivisions of this Section 10.2, provided that (i) the Indebtedness
secured by any such Lien shall not exceed the principal amount of such
Indebtedness outstanding (including any exposure under letters of credit
and any unfunded commitments) immediately prior to the renewal or
extension of such Lien, (ii) no assets encumbered by any such Lien other
than the assets encumbered immediately prior to such renewal or extension
shall be encumbered thereby or with respect to any Indebtedness extending,
renewing, refunding or refinancing any Indebtedness secured pursuant
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to the Security Documents, the assets specified therein and (iii) the
maturity date of the Indebtedness secured by any such Lien shall not be
sooner than the maturity date of such Indebtedness outstanding immediately
prior to the renewal or extension of such Lien.
10.3. Investments, Guaranties, etc. The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly (i) make or own any
Investment in any Person, or (ii) create or become liable with respect to any
Guaranty, except:
(a) the Company or any Restricted Subsidiary may make and own
Investments in
(1) marketable obligations issued or unconditionally
guaranteed by the United States of America, or issued by any agency
thereof and backed by the full faith and credit of the United States
of America in each case maturing within one year from the date of
acquisition thereof,
(2) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within one
year from the date of acquisition thereof and having as at any date
of determination the highest rating obtainable from either Standard
& Poor's Ratings Group or Moody's Investors Service, Inc.,
(3) commercial paper maturing no more than 270 days from the
date of creation thereof and having as at any date of determination
one of the two highest ratings obtainable from either Standard &
Poor's Ratings Group or Moody's Investors Service, Inc.,
(4) certificates of deposit maturing one year or less from the
date of acquisition thereof issued by commercial banks incorporated
under the laws of the United States of America or any state thereof
or the District of Columbia or Canada, (A) the commercial paper or
other short-term unsecured debt obligations of which are rated
either A-2 or better (or comparably if the rating system is changed)
by Standard & Poor's Ratings Group or Prime-2 or better (or
comparably if the rating system is changed) by Moody's Investors
Service, Inc. or (B) the long-term debt obligations of which are
rated either AA- or better (or comparably if the rating system is
changed) by Standard & Poor's
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Ratings Group or Aa3 or better (or comparably if the rating system
is changed) by Moody's Investors Service, Inc. ("Permitted Banks"),
(5) bankers' acceptances eligible for rediscount under
requirements of The Board of Governors of the Federal Reserve System
and accepted by Permitted Banks, and
(6) obligations of the type described in clause (1), (2), (3)
or (4) above purchased from a securities dealer designated as a
"primary dealer" by the Federal Reserve Bank of New York or from a
Permitted Bank as counterparty to a written repurchase agreement
obligating such counterparty to repurchase such obligations not
later than 14 days after the purchase thereof and which provides
that the obligations which are the subject thereof are held for the
benefit of the Company or a Restricted Subsidiary by a custodian
which is a Permitted Bank;
(b) the Company and any Restricted Subsidiary may make and own
Investments in any Restricted Subsidiary or Investments in capital stock
of, or other equity interests in, any Person which simultaneously
therewith becomes a Restricted Subsidiary, and any Restricted Subsidiary
may make and permit to be outstanding Investments in the Company and may
create or become liable with respect to the Subsidiary Guarantee Agreement
in respect of the Company's obligations under the Notes or under Parity
Debt;
(c) the Company or any Restricted Subsidiary may make and own
Investments in the capital stock of, or joint venture, partnership or
other equity interests in, or the contributions to capital in the ordinary
course of business of, any Unrestricted Subsidiary if immediately after
giving effect to the making of any such Investment, (A) the aggregate
amount of all such Investments made and outstanding pursuant to this
subdivision (c) shall not at any time exceed $20,000,000 and (B) the
aggregate amount of all Investments made and outstanding pursuant to this
subdivision (c) as at the end of any fiscal quarter of the Company shall
not exceed by more than $10,000,000 the amount of such Investments
outstanding as at the end of the corresponding fiscal quarter of the
immediately preceding fiscal year of the Company, and in the case of both
clauses (A) and (B) of this subdivision (c), (i) the amounts specified
therein may be increased by an amount equal to the net cash proceeds
received by the Company from the general partner of the Company or from
the Public Partnership as a capital contribution or as consideration for
the issuance by the Company of
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additional partnership interests for the sole purpose of making an
Investment in an Unrestricted Subsidiary, such amount not to exceed
$10,000,000 in the aggregate and (ii) net of cash distributions received
from all Unrestricted Subsidiaries for such period;
(d) the Company or any Restricted Subsidiary may make and own
Investments (x) constituting trade credits or advances to any Person
incurred in the ordinary course of business, (y) arising out of loans and
advances to employees for travel, entertainment and relocation expenses,
in each case incurred in the ordinary course of business or (z) acquired
by reason of the exercise of customary creditors' rights upon default or
pursuant to the bankruptcy, insolvency or reorganization of a debtor;
(e) the Company or any Restricted Subsidiary may create or become
liable with respect to any Guaranty constituting an obligation, warranty
or indemnity, not guaranteeing Indebtedness of any Person, which is
undertaken or made in the ordinary course of business;
(f) the Company or any Restricted Subsidiary may create and become
liable with respect to any Interest Rate Agreements; and
(g) the Company may create and become liable with respect to
Commodity Hedging Agreements.
10.4. Restricted Payments. The Company will not directly or indirectly,
nor will it permit any Subsidiary to, declare, order, pay, make or set apart any
sum for any Restricted Payment, except that (a) the Company may make, pay or set
apart once during each calendar quarter a Restricted Payment in cash if (i) such
Restricted Payment is in an amount not exceeding Available Cash for the
immediately preceding calendar quarter, (ii) prior to and immediately after
giving effect to any such proposed action no condition or event shall exist
which constitutes a Potential Event of Default under Section 11(b) or an Event
of Default, (iii) the ratio of Consolidated Cash Flow to Consolidated Interest
Expense is greater than 1.75 to 1.00 and (iv) the Company shall have given to
each holder of a Note written notice thereof on the date such Restricted Payment
is declared, which date shall be at least 10 days prior to the date such
Restricted Payment is made and (b) any Subsidiary may make, pay or set apart
dividends and distributions so long as such dividends or distributions are made,
paid or
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set apart for each holder of such Person's capital stock or other equity on a
pro-rata basis. The Company will not, in any event, directly or indirectly
declare, order, pay or make any Restricted Payment except in cash.
10.5. Transactions with Affiliates. Except for the transactions or conduct
effected pursuant to the Operative Agreements as in effect on the date of the
Closing or any other transactions or conduct described in or contemplated by the
Registration Statement, the Company will not, and will not permit any Restricted
Subsidiary to, directly or indirectly, engage in any transaction with any
Affiliate of the Company, including, without limitation, the purchase, sale or
exchange of assets or the rendering of any service, to the Company's or such
Restricted Subsidiary's business except upon fair and reasonable terms that are
no less favorable to the Company or such Restricted Subsidiary, as the case may
be, than those which might be obtained in an arm's-length transaction at the
time such transaction is agreed upon from Persons which are not such an
Affiliate, provided that the foregoing limitations and restrictions shall not
apply to any transaction between the Company and any Restricted Subsidiary or
between Restricted Subsidiaries.
10.6. Subsidiary Stock and Indebtedness. The Company will not:
(a) directly or indirectly sell, assign, pledge or otherwise dispose
of any Indebtedness of or any shares of stock or similar interests of (or
warrants, rights or options to acquire stock or similar interests of) any
Subsidiary, except to a Restricted Subsidiary;
(b) permit any Restricted Subsidiary directly or indirectly to sell,
assign, pledge or otherwise dispose of any Indebtedness of (i) the Company
or (ii) any other Restricted Subsidiary, or any shares of stock or similar
interests of (or warrants, rights or options to acquire stock or similar
interests of) any other Subsidiary, except to, in the case of clause (i),
the Company or, in all other cases, a Restricted Subsidiary;
(c) permit any Restricted Subsidiary to have outstanding any shares
of stock or similar interests which are preferred over any other shares of
stock or similar interests owned by the Company unless such shares of
preferred stock or similar interests are owned by the Company; or
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(d) permit any Restricted Subsidiary directly or indirectly to issue
or sell (including, without limitation, in connection with a merger or
consolidation of a Restricted Subsidiary otherwise permitted by Section
10.7(a)) any shares of its stock or similar interests (or warrants, rights
or options to acquire its stock or similar interests) except to the
Company or a Restricted Subsidiary;
provided that, (i) any Restricted Subsidiary may sell, assign or otherwise
dispose of Indebtedness of the Company or a Restricted Subsidiary if, assuming
such Indebtedness were incurred immediately after such sale, assignment or
disposition, such Indebtedness would be permitted under Section 10.1 (and if
such Indebtedness is secured, such Lien would be permitted pursuant to Section
10.2) or (ii) subject to compliance with Section 10.7(c), all Indebtedness and
shares of stock or partnership interests of any Restricted Subsidiary owned by
the Company or by another Restricted Subsidiary may be simultaneously sold as an
entirety for consideration at least equal to the fair value thereof (as
determined in good faith by the general partner of the Company) at the time of
such sale if such Restricted Subsidiary does not at the time own (A) any
Indebtedness of the Company (other than Indebtedness which, if incurred
immediately after such transaction, would be permitted under Section 10.1) or
(B) any Indebtedness, stock or other interest in any other Restricted Subsidiary
which is not also being simultaneously sold as an entirety in compliance with
this proviso or Section 10.7(b)(ii).
10.7. Consolidation, Merger, Sale of Assets, etc. The Company will not,
and will not permit any Restricted Subsidiary to, directly or indirectly,
(a) consolidate with or merge into any other Person or permit any
other Person to consolidate with or merge into it, except that:
(i) any Restricted Subsidiary may consolidate with or merge
into the Company or a Restricted Subsidiary if, in the case of a
consolidation with or merger into the Company, the Company shall be
the surviving Person and if, immediately after giving effect to such
transaction, no condition or event shall exist which constitutes an
Event of Default or Potential Event of Default; and
(ii) any entity (other than a Restricted Subsidiary) may
consolidate with or merge into the Company or a Restricted
Subsidiary if the Company or such Restricted Subsidiary, as the case
may be, shall be the surviving Person and if,
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immediately after giving effect to such transaction, (w) the Company
(1) shall not have a Consolidated Net Worth (but without giving
effect to any write-up in assets or amounts attributable to goodwill
pursuant to purchase accounting methods) of less than the
Consolidated Net Worth of the Company immediately prior to the
effectiveness of such transaction, (2) shall not be liable with
respect to any Indebtedness or allow its property to be subject to
any Lien which it could not become liable with respect to or allow
its property to become subject to under this Agreement on the date
of such transaction, and (3) could incur, if the consolidating or
merging entity has outstanding Indebtedness, at least $1 of
additional Indebtedness in compliance with Section 10.1(f) after
giving effect to such transaction, (x) substantially all of the
assets of the Company and the Restricted Subsidiaries shall be
located and substantially all of their business shall be conducted
within the United States of America, and (y) no condition or event
shall exist which constitutes an Event of Default or Potential Event
of Default; and
(iii) the Company may consolidate with or merge into any other
entity if (v) the surviving entity is a corporation, limited
partnership, limited liability company or business trust organized
and existing under the laws of the United States of America or a
state thereof or the District of Columbia, with substantially all of
its properties located and its business conducted within the United
States of America, (w) such corporation, limited partnership,
limited liability company or business trust expressly and
unconditionally assumes the obligations of the Company under this
Agreement and each of the other Operative Agreements and delivers to
each holder of a Note at the time outstanding in connection with
such assumption an opinion of counsel reasonably satisfactory to the
Required Holders with respect to such matters incident to such
assumption as may be reasonably requested by such holders,
including, without limitation, as to the due authorization and
execution of the related agreement of assumption and the
enforceability of such agreement against such corporation, limited
partnership, limited liability company or business trust, (x)
immediately after giving effect to such transaction, such
corporation, limited partnership, limited liability company or
business trust (1) shall not have a Consolidated Net Worth (but
without giving effect to any write-up in assets or amounts
attributable to goodwill pursuant to purchase accounting methods) of
less than the Consolidated Net Worth of the Company immediately
prior to the effectiveness of such transaction, (2) shall not be
liable
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with respect to any Indebtedness or allow its property to be subject
to any Lien which it could not become liable with respect to or
allow its property to become subject to under this Agreement on the
date of such transaction and (3) could incur, if the consolidating
or merging entity had outstanding Indebtedness, at least $1 of
additional Indebtedness in compliance with Section 10.1(f) after
giving effect to such transaction, and (y) immediately after giving
effect to such transaction no condition or event shall exist which
constitutes an Event of Default or a Potential Event of Default; or
(b) sell, lease, abandon or otherwise dispose of all or
substantially all its assets, except that:
(i) any Restricted Subsidiary may sell, lease or otherwise
dispose of all or substantially all its assets to the Company or to
a Restricted Subsidiary; and
(ii) the Company may sell, lease or otherwise dispose of all
or substantially all its assets to any corporation, limited
partnership, limited liability company or business trust into which
the Company could be consolidated or merged in compliance with
clause (a)(iii) of this Section 10.7, provided that each of the
conditions set forth in such subdivision (a)(iii) shall have been
fulfilled; or
(c) sell, lease, abandon or otherwise dispose of any property to any
Person other than the Company or any Restricted Subsidiary (except in a
transaction permitted by subdivision (a)(iii) or (b)(ii) of this Section
10.7, an Investment in an Unrestricted Subsidiary permitted by Section
10.3(c), sales of Obsolete Assets during any calendar year having a fair
market value in an aggregate amount not exceeding $150,000 or an
abandonment or other disposition of Inventory in the ordinary course of
business) unless:
(i) at least 80% of the consideration therefor shall be in the
form of cash consideration or marketable securities that are
promptly converted into cash, provided, that the amount of (A) any
liabilities (as shown on the Company's or such Restricted
Subsidiary's most recent balance sheet or in the notes thereto) of
the Company or any Restricted Subsidiary (other than liabilities
that are by their terms subordinated in right of payment to the
Notes) that are assumed by the transferee of any such assets and (B)
any notes or other obligations received by the Company or any such
Restricted Subsidiary from such transferee that are
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promptly converted into cash (to the extent of the cash received),
shall be deemed to be cash for the purposes of this Section
10.7(c)(i),
(ii) immediately after giving effect to such proposed
disposition no condition or event shall exist which constitutes an
Event of Default or Potential Event of Default,
(iii) either
(A) the aggregate net after-tax proceeds of all property so
disposed of (whether or not leased back) by the Company and all
Restricted Subsidiaries during the current fiscal year (including
property disposed of through dispositions of shares pursuant to
Section 10.6 or sales of assets pursuant to Section 10.7(b) and
including all proceeds under title insurance policies with respect
to real property and all Net Insurance Proceeds (as defined in the
Mortgage), self-insurance amounts and Net Awards (as defined in the
Mortgage) with respect to property lost as a result of damage,
destruction or a taking which have not been applied to the cost of
Restoration (as defined in the Mortgage)), less the amount of all
such net after-tax proceeds previously applied in accordance with
subdivision (iii)(B) of this Section 10.7(c) and the amount of such
net after-tax proceeds equal to the purchase price of any assets
acquired to the extent that (1) such assets were acquired within 90
days prior to the date of such disposal of property, (2) the
purchase price of such assets was not previously applied to reduce
the amount of net after-tax proceeds of property disposed of under
this Section 10.7(c), (3) such assets were acquired for subsequent
replacement of the property so disposed of or may be productively
used in the United States of America in the conduct of the Business,
(4) such assets are subject to the Lien of the Security Documents,
and (5) to the extent such assets were acquired (in whole or in
part) with borrowed money, such borrowing has been repaid in full,
(x) shall not exceed $5,000,000 during such fiscal year and (y) when
aggregated with such net after-tax proceeds of all prior
transactions under this Section 10.7(c), shall not exceed
$20,000,000; or
(B) in the event that such net after-tax proceeds (less the
amount thereof previously applied in accordance with this
subdivision (iii)(B) and the amount thereof equal to the purchase
price of any assets acquired to the extent that (1)
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such assets were acquired within 90 days prior to the date of such
disposal of property, (2) the purchase price of such assets was not
previously applied to reduce the amount of net after-tax proceeds of
property disposed of under this Section 10.7(c), (3) such assets
were acquired for subsequent replacement of the property so disposed
of or may be productively used in the United States of America in
the conduct of the Business, (4) such assets are subject to the Lien
of the Security Documents, and (5) to the extent such assets were
acquired (in whole or in part) with borrowed money, such borrowing
has been repaid in full) during the current fiscal year exceed
$5,000,000 or, when aggregated with such net after-tax proceeds of
all prior transactions under this Section 10.7(c), exceed
$20,000,000 (the larger amount of such excess net after-tax proceeds
actually realized being herein called "Excess Proceeds"), the
Company shall promptly pay over to the Trustee under the Trust
Agreement such Excess Proceeds not at the time held by the Trustee
for application by the Trustee (x) within 270 days (or 360 days if
the Company has executed a binding contract for acquisition or
replacement of assets meeting the requirements specified in this
clause (iii) within 270 days) of the date of the disposal or loss of
property to the acquisition of assets in replacement of the property
so disposed of or lost or of assets which may be used in the United
States of America in the conduct of the Business (and such newly
acquired assets shall be subjected to the Lien of the Security
Documents) or to the cost of Restoration (as defined in the
Mortgage), or (y) to the extent of Excess Proceeds not applied
pursuant to the immediately preceding clause (x), to the payment
and/or prepayment of the Notes and Parity Debt, if any, pursuant to
Section 9.1 and/or 9.4(a), all as provided in Section 4(d) of the
Trust Agreement and such Section 9.1 and/or 9.4(a), and the Trustee
shall have received an Officers' Certificate from the general
partner of the Company certifying that the consideration received
for such property is at least equal to its fair value (as determined
in good faith by the general partner of the Company) and that such
consideration has been applied in accordance with the terms of this
Agreement, and
(iv) in the case of any sale, lease or other disposition of
Mortgaged Property which includes real property (or any interest
therein), or any sale, lease or other disposition of Mortgaged
Property resulting in the aggregate net after-tax proceeds of all
such sales, leases or other dispositions exceeding $10,000,000, the
Trustee shall have received an Officers' Certificate from the
general partner
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of the Company certifying that such sale, lease or other disposition
is in the best interest of the Company and will not have a Material
Adverse Effect.
Notwithstanding the foregoing, the Company and any Restricted Subsidiary
may sell or dispose of (i) real property assets sold or disposed of within 12
months of the acquisition of such assets, and (ii) all other assets sold or
disposed of within 6 months of the acquisition of such assets, in each case
constituting a portion of an acquired business, if (y) such assets are
specifically designated to the holders of any Notes in writing prior to such
acquisition or within 30 Business Days thereafter as assets to be disposed of,
and (z) the Trustee shall have received an Officers' Certificate from the
general partner of the Company certifying that the consideration received for
such property is at least equal to its fair value (as determined in good faith
by the general partner of the Company). Such sales under this paragraph will not
be applied towards the annual or cumulative limitations in subdivision (c) of
this Section 10.7. In addition, notwithstanding the foregoing, the Company may,
at any time, exchange assets for other like assets which may be used in the
conduct of the Business, provided (1) the fair value of the assets so acquired
is substantially equivalent to the fair value of the assets so exchanged (as
determined in good faith by the general partner of the Company), (2) such
acquired assets are subject to the Lien of the Security Documents and (3) the
total value of the assets so exchanged shall not in the aggregate exceed 15% of
the total assets of the Company. The holders of Notes agree to take all actions
reasonably requested by the Company (and at the expense of the Company) to cause
dispositions of Mortgaged Property made in compliance with this Section 10.7 to
be made free and clear of the Liens created by the Security Documents.
10.8. Partnership or Corporate Existence, etc.; Business. (a) (i) The
Company will at all times preserve and keep in full force and effect its
partnership existence and (subject to the provisions of subdivision (b) of this
Section 10.8) its status as a partnership not taxable as a corporation for
federal income tax purposes; (ii) the Company will cause each Restricted
Subsidiary to keep in full force and effect its partnership or corporate
existence; and (iii) the Company will, and will cause each Restricted Subsidiary
to, at all times preserve and keep in full force and effect all of its material
rights and franchises (in each case except as otherwise specifically permitted
in Sections 10.6 and 10.7 and except that the partnership or corporate existence
of any Restricted Subsidiary, and any right or franchise of the Company or any
Restricted Subsidiary, may be terminated if, in the good faith judgment of the
general partner of the Company, such termination is in the best interest of the
Company, is not
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disadvantageous to the holders of the Notes in any material respect and would
not have a Material Adverse Effect).
(b) The Company shall not be obligated to preserve its status as a
partnership not taxable as a corporation for federal income tax purposes if (i)
the Company's failure to preserve such status shall be the result of an
amendment to the tax laws enacted by the Congress of the United States and (ii)
after giving effect to the loss of such status the ratio of Consolidated Cash
Flow to Maximum Consolidated Pro Forma Debt Service, determined as of the date
of the loss of such status, would be greater than 1.1 to 1.0, assuming, for the
purposes of the computation of Consolidated Cash Flow, that Consolidated Cash
Flow would be reduced by taxes at the applicable tax rate of the Company for
such period had the Company been taxable as a corporation.
(c) The Company will not, and will not permit any Restricted Subsidiary
to, engage in any material lines of business other than the Business as
described in the Registration Statement and other activities incidental or
related to the Business; provided that, the Company will not permit National
Sales and Service, Inc. to exist for any purpose, or to carry on any business,
other than the ownership and operation of the Service Assets (as defined in the
Conveyance Agreements) and other assets of that type.
10.9. Payment of Taxes and Claims. The Company will, and will cause each
Subsidiary to, pay all taxes, assessments and other governmental charges or
levies imposed upon it or any of its properties or assets or in respect of any
of its franchises, business, income or profits when the same become due and
payable, but in any event before any penalty or interest accrues thereon, and
all claims (including, without limitation, claims for labor, services, materials
and supplies) for sums which have become due and payable and which by law have
or might become a Lien upon any of its properties or assets, and promptly
reimburse the holders of the Notes for any such taxes, assessments, charges or
claims paid by them, provided that no such tax, assessment, charge or claim need
be paid or reimbursed if the failure to pay would not have a Material Adverse
Effect or if it is being contested in good faith by appropriate proceedings
promptly initiated and diligently conducted and if such reserves or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor and be adequate in the good faith judgment of the general partner of
the Company.
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10.10. Compliance with ERISA. The Company will not, and will not permit
any Subsidiary or Related Person of the Company to:
(a) (i) engage in any transaction in connection with which the
Company or any Subsidiary could be subject to either a civil penalty
assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section
4975 of the Code, (ii) terminate (within the meaning of Title IV of ERISA)
or withdraw from any Plan in a manner, or take, or fail to take, any
other action with respect to any Plan (including, without limitation, a
substantial cessation of operations within the meaning of Section 4062(e)
of ERISA), (iii) establish, maintain, contribute to or become obligated to
contribute to any welfare benefit plan (as defined in Section 3(1) of
ERISA) or other welfare benefit arrangement which provides post-employment
benefits, which cannot be unilaterally terminated by the Company, (iv)
fail to make full payment when due of all amounts which, under the
provisions of any Plan or applicable law, the Company or any Subsidiary or
Related Person of the Company is required to pay as contributions or
permit to exist any material accumulated funding deficiency, whether or
not waived, with respect to any Plan or (v) engage in any transaction in
connection with which the Company, any Subsidiary or any Related Person of
the Company could be subject to liability pursuant to Section 4069(a) or
4212(c) of ERISA, if any such event, condition or transaction described in
clauses (i) through (v) above, either individually or together with any
other such event, condition or transaction, could reasonably be expected
to result in (x) the imposition of a Lien in a material amount on any
assets or property of the Company or any Subsidiary of the Company
pursuant to Section 302(f) of ERISA or Section 412(n) of the Code or (y)
any liability to the Company, any Subsidiary of the Company or any Related
Person of the Company, which liability could have a Material Adverse
Effect; or
(b) as of any date of determination (i) permit the amount of
unfunded benefit liabilities under any Plan (other than a Multiemployer
Plan) maintained at such time by the Company or any Subsidiary or Related
Persons of the Company to exceed the current value of the assets of any
such Plan by more than $1,000,000 or (ii) permit the aggregate liability
incurred by the Company and any Subsidiary of the Company and Related
Persons of the Company pursuant to Title IV of ERISA with respect to one
or more terminations of, or one or more complete or partial withdrawals
from, any Plan to exceed $1,000,000.
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As used in this Section 10.10, the term "accumulated funding deficiency" has the
meaning specified in Section 302 of ERISA and Section 412 of the Code, the term
"current value" has the meaning specified in Section 3 of ERISA and the terms
"benefit liabilities" and "amount of unfunded benefit liabilities" have the
meanings specified in Section 4001 of ERISA.
10.11. Maintenance of Properties; Insurance. (a) The Company will maintain
or cause to be maintained in working order and condition, in accordance with
normal industry standards and as otherwise required by the Security Documents,
all material properties used or useful in the business of the Company and the
Restricted Subsidiaries and from time to time will make or cause to be made all
appropriate repairs, renewals and replacements thereof.
(b) The Company will, and will cause each of the Restricted Subsidiaries
to, keep its insurable properties adequately insured at all times by Permitted
Insurers; maintain such other insurance, to such extent and against such risks,
including fire and other risks insured against by extended coverage, as is
customary with companies in the same or similar businesses, including public
liability insurance against claims for personal injury or death or property
damage occurring upon, in, about or in connection with the use of any properties
owned, occupied or controlled by it; maintain such other insurance policy as may
be required by law or any Security Document; and cause each such insurance
policy to name the Trustee, as an additional insured or loss payee thereunder.
The Company will permit the holders of the Notes and an insurance consultant
retained by the Required Holders, at the expense of the Company, to review the
insurance policies maintained by the Company on an annual basis and will
implement any changes to such policies reasonably recommended by such consultant
if available on a commercially reasonable basis.
10.12. Operative Agreements; Security Documents. The Company will, and
will cause each Restricted Subsidiary to, perform and comply with all of its
obligations under each of the Operative Agreements to which it is a party, will
enforce each such Operative Agreement against each other party thereto and will
not accept the termination of any such Operative Agreement, unless the taking of
or omitting to take any such action would not have a Material Adverse Effect
(any termination of the Partnership Note other than its prepayment or payment at
maturity of the principal amount thereof as specified in the Partnership Note
shall be deemed a Material Adverse Effect), and will not amend, modify or
supplement any Operative Agreement without
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the prior written consent of the Required Holders (or with respect to this
Agreement as specified in Section 18), provided that (i) the MLP Agreement and
the Partnership Agreement (other than Sections 4.5, 6.3, and 7.5(a) of the
Partnership Agreement the amendment of which requires the consent of the
Required Holders) may be amended, modified or supplemented without the prior
written consent of the Required Holders if such amendment, modification or
supplement would not have a Material Adverse Effect and the Company shall have
delivered to each holder of any Notes a copy of such proposed amendment,
modification or supplement together with an Officers' Certificate describing
such proposed amendment, modification or supplement and stating that to the best
of the Company's knowledge (after due inquiry) that such proposed amendment,
modification or supplement would not have a Material Adverse Effect and (ii) the
Bank Credit Facilities may be amended, modified or supplemented without the
prior written consent of the Required Holders if such amendment, modification or
supplement may be made without the written consent of any holders of the Notes
under the Trust Agreement.
10.13. Chief Executive Office. The Company will not move its chief
executive office and the office at which it maintains its records relating to
the transactions contemplated by this Agreement and the Security Documents
unless (a) not less than 45 days' prior written notice of its intention to do
so, clearly describing the new location, shall have been given to the Trustee
and each holder of a Note and (b) such action, reasonably satisfactory to the
Trustee and each holder of a Note, to maintain any security interest in the
property subject to the Security Documents at all times fully perfected and in
full force and effect shall have been taken.
10.14. Recordation; Opinions. (a) The Company will promptly, but in any
event within 30 days from the date of the Closing, cause to be duly recorded,
published, registered and filed all Conveyance Agreements (as set forth in
paragraph (b) of the definition of such term) and the Security Documents (in
each case, not previously recorded, published, registered or filed in accordance
with Section 4.8), in such manner and in such places as is required by law to
establish, perfect, preserve and protect the rights and first priority security
interests of the parties thereto and their respective successors and assigns in
all of the Mortgaged Property and shall deliver to the Trustee and your special
counsel within six calendar months of the date of the Closing copies (originals
with respect to certificates of title for motor vehicles and other rolling
stock) of such duly recorded, published, registered and filed Security
Documents. The Company will pay all taxes, fees and other charges then due in
connection with the
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execution, delivery, recording, publishing, registration and filing of such
documents or instruments in such places.
(b) The Company, at its expense, will furnish to the Trustee and each
holder of a Note during the period commencing April 1 to May 1 of the years 2001
and 2006 and at such other times as the Trustee may reasonably request in
connection with the perfection of Liens granted pursuant to the Security
Documents an opinion of counsel satisfactory to the Trustee stating that in the
opinion of such counsel such action has been taken with respect to the
recording, filing, re-recording and re-filing of the Security Documents and any
financing statements necessary to maintain the Lien or security interest created
thereby and reciting the details of such action or stating that in the opinion
of such counsel no such action is necessary to maintain such lien or security
interest.
10.15. Information Required by Rule 144A. The Company covenants that it
will, upon the prior written request of the holder of any Note, provide such
holder, and any qualified institutional buyer designated by such holder, such
financial and other information as such holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act of 1933, as amended, in connection with the
resale of Notes, except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended. For the purpose of this Section 10.15, the term "qualified
institutional buyer" shall have the meaning specified in Rule 144A under the
Securities Act of 1933, as amended.
10.16. Covenant to Secure Notes Equally. The Company covenants that, if it
or any Restricted Subsidiary shall create or assume any Lien upon any of its
property or assets, whether now owned or hereafter acquired, other than Liens
permitted by the provisions of Section 10.2 (unless prior written consent to the
creation or assumption thereof shall have been obtained pursuant to Section 18),
it will make or cause to be made effective provision whereby the Notes will be
secured by such Lien equally and ratably with any and all other Indebtedness
thereby secured so long as any such other Indebtedness shall be so secured, it
being understood that the provision of such equal and ratable security shall not
constitute a cure or waiver of any related Event of Default.
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10.17. Compliance with Laws. (a) The Company will, and will cause each
Subsidiary to, comply with all applicable statutes, rules, regulations, and
orders of, and all applicable restrictions imposed by, the United States of
America, foreign countries, states, provinces and municipalities, and of or by
any governmental department, commission, board, regulatory authority, bureau,
agency and instrumentality of the foregoing, and of or by any court, arbitrator
or grand jury, in respect of the conduct of their respective businesses and the
ownership of their respective properties or business (including, without
limitation, Environmental Laws), except such as are being contested in good
faith by appropriate proceedings promptly initiated and diligently conducted and
if such reserve or other appropriate provision, if any, as shall be required by
GAAP shall have been made therefor or the failure to so comply could not
reasonably be expected to have a Material Adverse Effect.
(b) The Company will, and will cause each Restricted Subsidiary to, comply
with all Environmental Laws, other than noncompliance which could not reasonably
be expected to result in a Material Adverse Effect, individually or in the
aggregate, with any other liability under any Environmental Laws.
(c) The Company will, and will cause each Restricted Subsidiary to,
promptly give notice to each holder of a Note upon becoming aware of (i) any
material violation of or notice of potential liability under any Environmental
Law or (ii) any release or threatened release of any Hazardous Material at, on,
into, under or from any real property of any facility or equipment thereat in
excess of reportable or allowable standards or levels under any Environmental
Law, or in a manner and/or amount which could reasonably be expected to result
in liability under any Environmental Law, which liability would result in a
Material Adverse Effect.
(d) The Company will, and will cause each Restricted Subsidiary to,
promptly, provide each holder of a Note with copies of any notice, submission or
documentation provided by the Company or any Restricted Subsidiary to any
governmental authority or third party under any Environmental Law if the matter
which is the subject of the notice, submission or other documentation could
reasonably be expected to have a Material Adverse Effect. Such notice,
submission or documentation shall be provided to each holder of a Note promptly
and, in any event, within 30 days after such material is provided to the
governmental authority or third party.
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10.18. Further Assurances. (a) At any time and from to time promptly, the
Company shall, at its expense, execute and deliver to each holder of a Note and
to the Trustee such further instruments and documents, and take such further
action, as the holders of the Notes may from time to time reasonably request, in
order to further carry out the intent and purpose of this Agreement and to
establish and protect the rights, interests and remedies created, or intended to
be created, in favor of the holders of the Notes, including, without limitation,
the execution, delivery and recordation and filing of security agreements and
financing statements and continuation statements under the Uniform Commercial
Code of any applicable jurisdiction.
(b) The Company will use its reasonable best efforts to promptly cause all
property and assets covered by the Agency Agreement to be conveyed to the
Company in the same manner as the conveyance of the Assets on the date of the
Closing, to be pledged and mortgaged under the Security Documents in the same
manner as the pledges and mortgages of the Assets on the date of the Closing,
and generally to do all things necessary to give the holders of the Notes the
same rights, benefits, certificates, opinions and the like, as if such
properties and assets had been conveyed on the date of the Closing.
10.19. Subsidiaries. (a) The Company may designate any Restricted
Subsidiary or newly acquired or formed Subsidiary as an Unrestricted Subsidiary
or any Unrestricted Subsidiary or newly acquired or formed Subsidiary as a
Restricted Subsidiary, in each case subject to satisfaction of the following
conditions:
(i) immediately before and after giving effect to such designation
no condition or event shall exist which constitutes an Event of Default or
Potential Event of Default;
(ii) immediately after giving effect to such designation, (1) (other
than in the case of a designation of an Unrestricted Subsidiary that does
not have any Indebtedness as a Restricted Subsidiary), the Company would
be permitted to incur at least $1 of additional Indebtedness in compliance
with subdivisions (i) and (ii) of Section 10.1(f), (2) the Company and the
Restricted Subsidiaries would not be liable with respect to Indebtedness
or any Guaranty, would not own any Investments and their property would
not be subject to any Lien which is not permitted by this Agreement and
(3) substantially all of the Company's and the Restricted Subsidiaries'
assets will be located, and substantially all of
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the Company's and the Restricted Subsidiaries' business will be conducted,
in the United States of America;
(iii) in the case of a designation as an Unrestricted Subsidiary, if
such designation (and all other prior designations of Restricted
Subsidiaries or newly acquired or formed Subsidiaries as Unrestricted
Subsidiaries during the current fiscal year) were deemed to constitute an
Investment by the Company in respect of all the assets of the Subsidiary
so designated, such Investment would be in compliance with Section
10.3(c), with the amount of such Investment being deemed to equal the fair
market value of such assets (as determined in good faith by the board of
directors of the general partner of the Company) in the case of a
Restricted Subsidiary or the cost of acquisition or formation in the case
of a newly acquired or formed Subsidiary, provided, that this subdivision
(iii) of this Section 10.19(a) shall not apply to an acquisition or
formation by the Company or a Restricted Subsidiary of a newly acquired or
formed Unrestricted Subsidiary to the extent such acquisition or formation
(1) is funded solely by the net cash proceeds received by the Company from
the general partner of the Company or from the Public Partnership as a
capital contribution or as consideration for the issuance by the Company
of additional partnership interests or (2) the assets involved in such
acquisition are acquired in exchange for additional partnership interests
of the Company or the Public Partnership provided, further, the fair
market value of the Restricted Subsidiary designated an Unrestricted
Subsidiary and the cost (other than the amount paid in cash) of the
acquisition or formation of a newly acquired or formed Subsidiary shall be
deemed proceeds from the sale of assets of the Company for purposes of
Section 10.7 and Section 9.4.;
(iv) in the case of a designation of a Restricted Subsidiary as an
Unrestricted Subsidiary, such Restricted Subsidiary shall not have been an
Unrestricted Subsidiary prior to being designated a Restricted Subsidiary;
(v) in the case of a designation of an Unrestricted Subsidiary as a
Restricted Subsidiary, such Unrestricted Subsidiary at the time of such
designation has a positive Consolidated Net Worth; and
(vi) the Company shall deliver to each holder of Notes, within 20
Business Days after any such designation, an Officers' Certificate stating
the effective
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date of such designation and confirming compliance with the provisions of
this Section 10.19.
In the case of the designation of any Unrestricted Subsidiary as a
Restricted Subsidiary, such new Restricted Subsidiary shall be deemed to have
(a) made or acquired all Investments owned by it, and (b) incurred all
Indebtedness owing by it and all Liens to which it or any of its properties are
subject, on the date of such designation.
(b) The Company will cause each Restricted Subsidiary, at the time it is
or is deemed to be designated as a Restricted Subsidiary, to (i) become a party
to the Company Security Agreement, the Trust Agreement and the Subsidiary
Guarantee Agreement by execution of a Supplemental Agreement and (ii) enter into
such documents as may be necessary or as you may request in form and substance
satisfactory to the Required Holders in order to secure such Restricted
Subsidiary's obligations under the Subsidiary Guarantee Agreement with all or
substantially all of the assets of such Restricted Subsidiary. Prior to the
designation of a Subsidiary as a Restricted Subsidiary, the Company shall
deliver to the holders of the Notes an opinion of counsel with respect to the
due execution and delivery of the Supplemental Agreement by such Subsidiary and
as to the enforceability of the Company Security Agreement, the Trust Agreement,
the Supplemental Agreement and the Subsidiary Guarantee Agreement with respect
to such Subsidiary, such opinion to be in form and substance satisfactory to the
Required Holders.
(c) The Company will not own any Subsidiaries other than Wholly Owned
Subsidiaries satisfying the requirements in clauses (a), (b) and (c) of the
definition of Restricted Subsidiary.
10.20. Damage, Destruction, Taking, etc.: In the event of any damage,
destruction or a taking in respect of all or a portion of the properties subject
to any of the Security Documents or in the event there shall be proceeds under
title insurance policies with respect to any real property, the Company will not
apply any Net Insurance Proceeds (as defined in the Mortgage), self-insurance
amounts, Net Awards (as defined in the Mortgage) or title insurance proceeds, if
such proceeds (whether resulting from one or a series of events or
circumstances) exceed $25,000,000 in the aggregate, to the cost of Restoration
(as defined in the Mortgage) or to replacements or other assets without the
prior written consent of the Required Holders.
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10.21. Accounting Changes. The Company will not, and will not suffer or
permit any Restricted Subsidiary to, make any significant change in accounting
treatment or reporting practices, except as required by GAAP. The Company will,
and will cause each Restricted Subsidiary to, cause its fiscal year to end on
December 31 in each year, except, the Company may change its fiscal year end to
June 30 or September 30, provided, that (a) the fiscal year end of each
Restricted Subsidiary shall be the same as the fiscal year end of the Company
and (b) references in this Agreement which provide dollar amount limits during a
fiscal year shall be reduced (only for the year of the change in fiscal years)
by (i) 25% if the fiscal year end is September 30, and (ii) 50% if the fiscal
year end is June 30. All references in this Agreement which provide dollar
amount limits during a fiscal year, shall with respect to the first fiscal year
of the Company be reduced by 50%.
10.22. Certain Real Property. Without affecting the obligations of the
Company or any of the Qualifying Restricted Subsidiaries under any of the
Security Documents, in the event that the Company or any Qualifying Restricted
Subsidiary, at any time after the date hereof, whether directly or indirectly,
acquires any interest in any one real property, including any fee or other
ownership interest with an aggregate cost in excess of $50,000, or any interest
under any lease of real property for a term in excess of three years and
involving aggregate average payments in excess of $100,000 per annum (each such
interest, an "After Acquired Property"), the Company will, or will cause such
Qualifying Restricted Subsidiary to, as soon as practical provide written notice
thereof to each holder of a Note, setting forth with specificity a description
of such After Acquired Property, the location of such After Acquired Property,
any structures or improvements thereon and an appraisal or its good-faith
estimate of the current value of such real property ("Current Value"). The
Required Holders may require the Company or the applicable Qualifying Restricted
Subsidiary to grant and record a mortgage or deed of trust in favor of the
Trustee on such After Acquired Property, provided that no new mortgage or deed
of trust on such After Acquired Property shall be required if in the reasonable
judgment of the Company (taking into account in connection with any acquisition
the relative value of the leasehold interest and other assets to be acquired),
the costs that would be incurred as a result thereof are excessive in relation
to the benefits that would be conferred thereby. In the event a mortgage is
granted, the Company or such Qualifying Restricted Subsidiary shall execute and
deliver to the Trustee a Mortgage, together with such documents or instruments
as the Required Holders shall require. In no event shall any title insurance
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policy for any such After Acquired Property be in an amount which is less than
the Current Value of such After Acquired Property.
If, at any time, the aggregate cost to the Company and the Qualifying
Restricted Subsidiaries of their interests in real property acquired after the
date hereof for which a mortgage in favor of the Trustee is not in effect (the
"Aggregate Cost of Unmortgaged Property") exceeds $500,000, the Company will as
soon as practical provide written notice thereof to each holder of a Note,
setting forth with specificity a description of each such interest in real
property, the location of such real property and an appraisal or its good-faith
estimate of the then current value of each such real property. The Required
Holders may require the Company or the applicable Qualifying Restricted
Subsidiary to grant and record a mortgage or deed of trust in favor of the
Trustee on one or more of such interests in real property so that the Aggregate
Cost of Unmortgaged Property does not exceed $500,000, provided that no new
mortgage on any such real property shall be required if, in the reasonable
judgment of the Company, the costs that would be incurred as a result thereof
are excessive in relation to the benefits that would be conferred thereby. In
the event a mortgage is granted, the Company or such Qualifying Restricted
Subsidiary shall execute and deliver to the Trustee a Mortgage, together with
such documents or instruments as the Required Holders shall require.
Further, with regard to any interest in real property, including any fee
or other ownership interest in real property or any material lease of real
property, currently owned or held by the Company or any Qualifying Restricted
Subsidiary and which is not being encumbered by a mortgage or deed of trust of
even date herewith with a fair market value in excess of $50,000 or any interest
under a lease of real property for a term in excess of three years and involving
aggregate payments in excess of $100,000 per annum (each such interest, an
"Existing Unmortgaged Property"), upon the written request of the Required
Holders, the Company will, or will cause any applicable Qualifying Restricted
Subsidiary to, execute and deliver to the Trustee a mortgage or deed of trust,
together with such documents or instruments as the Required Holders shall
require, provided, that a title insurance policy, survey and environmental
report shall only be delivered if the fair market value of such interest in real
property exceeds $250,000. In no event shall the title insurance policy for any
such Existing Unmortgaged Property be in an amount which is less than the
Current Value of such Existing Unmortgaged Property.
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The Company shall pay all fees and expenses, including reasonable
attorneys' fees and expenses and expenses of any customary environmental due
diligence, and all title insurance charges and premiums, in connection with the
obligations of the Company and the Qualifying Restricted Subsidiaries under this
Section 10.22.
10.23. Sale and Lease-Back Transactions. The Company will not, and will
not cause or permit any of the Restricted Subsidiaries to, enter into any
arrangement, directly or indirectly, with any Person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred.
10.24. Acquisitions. Except as otherwise permitted by Section 10.7, the
Company will not, and will not cause or permit any of the Restricted
Subsidiaries to, purchase, lease or otherwise acquire (in one transaction or a
series of transactions) all or any substantial part of the assets of any other
Person, except that (a) the Company and any of the Restricted Subsidiaries may
purchase Inventory in the ordinary course of business and (b) the Company or any
Restricted Subsidiary may engage in any such acquisition if no Event of Default
or Potential Event of Default has occurred and is continuing at the time of any
such acquisition or would occur immediately after giving effect thereto.
10.25. Impairment of Security Interests. The Company will not, and will
not permit any of the Subsidiaries to, take or omit to take any action, which
action or omission might or would have the result of materially impairing the
security interests in favor of the Trustee with respect to the Mortgaged
Property, and the Company will not, and will not permit any of the Subsidiaries
to, grant to any Person (other than the Trustee) any interest whatsoever in the
Mortgaged Property.
10.26. Limitation on Restrictions on Subsidiary Dividends, etc. The
Company will not, and will not cause or permit any of the Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any consensual encumbrance or restriction on the
ability of any Restricted Subsidiary to (a) pay dividends or make any other
distributions on or in respect of its capital stock, or pay any Indebtedness
owed to the Company or any Restricted Subsidiary, (b) make loans or advances to
the Company or any Restricted Subsidiary or (c) transfer any of its
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properties or assets to the Company or any Restricted Subsidiary, except for
such encumbrances or restrictions existing under or by reason of (i) customary
non-assignment provisions in any lease governing a leasehold interest or other
contract entered into in the ordinary course of business consistent with past
practices, (ii) restrictions on the payment of dividends and distributions
pursuant to the terms of Indebtedness incurred by such Restricted Subsidiary in
accordance with Section 10.1 or (iii) this Agreement or any other Operative
Agreement.
10.27. No Other Negative Pledges. The Company will not, and will not cause
or permit any of the Restricted Subsidiaries to, directly or indirectly, enter
into any agreement prohibiting the creation or assumption of any Lien upon the
properties or assets of the Company or any Restricted Subsidiary, whether now
owned or hereafter acquired, or requiring an obligation to be secured if some
other obligation is secured, except for this Agreement, the Other Agreements,
the Bank Credit Facilities and the terms of any other Indebtedness incurred in
accordance with Section 10.1 (provided that the terms of such agreement for such
other Indebtedness are no more onerous to the Company and its Subsidiaries than
those set forth in Section 10.2); provided that no such agreement shall prohibit
the granting of Liens on assets of the Company and its Restricted Subsidiaries
as contemplated by the terms of this Agreement, the Security Documents and any
documents evidencing or creating any other Parity Debt.
10.28. Sales of Receivables. The Company will not, and will not cause or
permit any of the Restricted Subsidiaries to, sell with recourse, discount or
otherwise sell or dispose of its notes or accounts receivable, except for
accounts receivable consisting of assets of an operating unit sold as a going
concern in accordance with all other provisions of this Agreement.
10.29. Fixed Price Supply Contracts; Certain Policies. (a) The Company
will not, and will not permit any of the Restricted Subsidiaries to, at any time
be a party or subject to any contract for the purchase or supply by such parties
of propane or other product except where (i) the purchase price is set with
reference to a spot index or indices substantially contemporaneously with the
delivery of such product or (ii) delivery of such propane or other product is to
be made no more than one year after the purchase price is agreed to.
(b) The Company will not amend, modify or waive the trading policy or
supply inventory position policy existing as of the date of Closing, except that
the Company
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may amend its supply inventory position policy such that such policy provides
that neither it nor any of the Restricted Subsidiaries will hold on hand more
than 90 days' of commodities inventory. The Company will provide each holder of
a Note with prompt written notice of any such new commodity hedging agreement or
any such change in such policy. Subject to the foregoing exception, the Company
and the Restricted Subsidiaries will comply in all material respects with such
policies at all times.
10.30. Certain Operations. The Company shall not permit Triarc, any of its
Subsidiaries, any other Persons which Triarc, directly or indirectly, controls,
or any of Triarc's Restricted Affiliates (other than the Company and the
Restricted Subsidiaries) (collectively, the "Triarc Parties") to acquire a
business which derives any revenues from the sale of propane if, after giving
effect to such acquisition, Triarc's Pro Forma Propane Volumes would equal or
exceed the lesser of (a) 15% of the Company's reported propane volumes sold for
the most recently completed four fiscal quarters which ended at least 90 days
prior to the date of such acquisition and (b) 15 million gallons of propane
(such lesser amount, the "maximum permitted amount"). If as a result of an
acquisition, Triarc's Pro Forma Propane Volumes exceeds the maximum permitted
amount, Triarc shall not be in violation of this Section 10.30 if within the
period of 90 days following such acquisition it completes the disposition of
sufficient propane volume (based on the most recently completed four fiscal
quarters of the business sold) to reduce Triarc's Pro Forma Propane Volumes
below the maximum permitted amount. For purposes of this Section 10.30,
"Triarc's Pro Forma Propane Volumes" shall mean the actual propane volumes sold
by the Triarc Parties for the most recently completed four fiscal quarters which
ended at least 90 days prior to the date of determination plus the propane
volumes sold of the propane business to be acquired for the most recently
completed four fiscal quarters which ended at least 90 days prior to the date of
determination. In addition, in the event any Triarc Party owns a propane
business, the Company shall not permit any Triarc Party to accept as a customer
(except for de minimis, unintentional and isolated acceptances) any Person who
is (or was during the last billing cycle of the Company and the Restricted
Subsidiaries) a customer of the Company and the Restricted Subsidiaries.
10.31. Independent Corporate Existence. (a) The Company shall maintain,
and shall cause each of its Subsidiaries to maintain, books, records and
accounts that are separate from the books, records and accounts of Triarc,
either General Partner or any of their respective Subsidiaries (other than the
Company and its Subsidiaries) such that:
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(i) the revenues of the Company and its Subsidiaries will be credited to the
accounts of the Company and its Subsidiaries only; (ii) all expenses incurred by
the Company and its Subsidiaries shall be paid only from the accounts of the
Company and its Subsidiaries (other than those paid by Triarc and allocated to
the Company in the manner set forth in subdivision (c) of this Section); (iii)
only officers and employees of the general partner of the Company, the Company
and its Subsidiaries in their capacity as such shall have the authority to make
disbursements with respect to the accounts of the Company and its Subsidiaries;
(iv) there shall occur no sharing of accounts or funds between the Company and
its Subsidiaries, on the one hand, and Triarc, either General Partner or any of
their respective Subsidiaries (other than the Company and its Subsidiaries), on
the other hand; and (v) all cash and funds of the Company and its Subsidiaries
shall be managed separately from the cash and funds of Triarc, either General
Partner or any of their respective Subsidiaries (other than the Company and its
Subsidiaries), and there shall not occur any commingling, including for
investment purposes, of funds or assets of the Company and its Subsidiaries with
the funds or assets of Triarc, either General Partner or any of their respective
Subsidiaries (other than the Company and its Subsidiaries).
(b) All full-time employees, consultants and agents of the Company and its
Subsidiaries shall be compensated directly from the bank accounts of the general
partner of the Company, the Company and such Subsidiaries for services provided
by such employees, consultants and agents and, to the extent any employee,
consultant or agent is also an employee, consultant or agent of Triarc, either
General Partner or any of their respective Subsidiaries (other than the Company
and its Subsidiaries), the compensation of such employee, consultant or agent
shall be allocated in accordance with subdivision (c) of this Section among the
Company and its Subsidiaries, on the one hand, and Triarc, either General
Partner and any of their respective Subsidiaries (other than the Company and its
Subsidiaries), on the other hand, on a basis which reasonably reflects the
services rendered to the Company and its Subsidiaries.
(c) All overhead expenses (including telephone and other utility charges)
for items shared by the Company and its Subsidiaries, on the one hand, and
Triarc, either General Partner or any of their respective Subsidiaries (other
than the Company and its Subsidiaries), on the other hand, shall be allocated on
the basis of actual use to the extent practicable and, to the extent such
allocation is not practicable, on a basis reasonably related to actual use.
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(d) The Company shall not permit Triarc, either General Partner or any of
their respective Subsidiaries (other than the Company and its Subsidiaries) to
be named as a loss payee or additional insured on the insurance policy covering
the property of the Company or any of its Subsidiaries, or enter into an
agreement with the holder of such policy whereby in the event of a loss in
connection with such property, proceeds are paid to Triarc, either General
Partner and their respective Subsidiaries (other than the Company and its
Subsidiaries).
10.32. Environmental Matters. The Company shall perform all of the
investigatory and remedial work recommended in the Environmental Assessment
Reports prepared by Environmental Strategies Corporation and in the report
prepared by ENSR dated June 25, 1996 (collectively, the "Environmental Report"),
covering the properties owned or to be transferred to the Company. All remedial
work and additional investigation recommended by the Environmental Report shall
be commenced within thirty (30) days from the date hereof, and shall be
performed in accordance with applicable laws. The Company agrees to diligently
pursue the completion of such remedial work and additional investigation. To the
extent that any such additional investigation recommended by the Environmental
Report indicates that any additional work or remediation is required by
applicable laws, or if required by the Required Holders in their reasonable
discretion, then the Company agrees to immediately commence such additional work
or remediation and thereafter diligently pursue such additional work or
remediation until completed.
10.33. Other Debt. (a) The Company shall ensure that the lenders from time
to time in respect of any Parity Debt or any other Indebtedness in the aggregate
principal amount of at least $2,500,000 outstanding as permitted by paragraphs
(b) through (f), (i) through (l) and (o) of Section 10.1, in the documents
governing the terms of such Indebtedness, (i) recognize the existence and
validity of the obligations represented by the Notes and (ii) agree to refrain
from making or asserting any claim that this Agreement or the obligations
represented by the Notes are invalid or not enforceable in accordance with its
and their terms as a result of the circumstances surrounding the incurrence of
such obligations.
(b) Each holder of Notes from time to time, as evidenced by its acceptance
of such Notes, (i) acknowledges the existence and validity of the obligations of
the Company under the Bank Credit Facilities (and any extension, renewal,
refunding or refinancing thereof permitted by Section 10.1) and (ii) agrees to
refrain from making or
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asserting any claim that such obligations or the instruments governing the terms
thereof are invalid or not enforceable in accordance with its and their terms as
a result of the circumstances surrounding the incurrence of such obligations.
10.34.Restriction on General Partners. Neither National Propane Corp.
(prior to any merger or consolidation with Triarc) nor National Propane SGP
shall (i) exist for any purpose or engage in any business or business activity
except (a) to serve as a General Partner of the Company and the Public
Partnership, including serving as the Managing General Partner (as defined in
the Credit Agreement) thereof in the circumstances provided in the Partnership
Agreement and Public Partnership Agreement, (b) for the purpose of owning and
operating the Excluded Assets (as defined in the Conveyance Agreements) and the
Assets covered by the Agency Agreement (as defined in the Credit Agreement) and
(c) with respect to the National Propane Corp., to own (i) the Capital Stock of
National Propane SGP, (ii) the Retained Assets (as that term is defined in the
Partnership Note), (iii) a wholly-owned corporate Subsidiary, the sole asset of
which shall be a note from Triarc and which shall not engage in any business or
incur any liabilities (other than tax liabilities) and (iv) other wholly-owned
corporate Subsidiaries, provided that, in the case of this clause (iv), National
Propane Corp. shall have agreed (w) at the time of formation or acquisition of
any wholly-owned corporate Subsidiary thereof that National Propane Corp. will
not merge or consolidate with Triarc, (x) that it will not guaranty or otherwise
agree to be liable with respect to any Indebtedness incurred by such Subsidiary
and at the time of formation or acquisition thereof and in connection therewith,
the assets of National Propane Corp. are not and will not be subject to any
Liens relating to and Indebtedness or other obligations of such Subsidiaries and
(y) to be bound by the provisions of Section 10.31 (all references therein to
the Company to be deemed references to National Propane Corp. and all references
therein to Subsidiaries to be deemed references to Subsidiaries of National
Propane Corp.) and (z) National Propane Corp. shall confirm with an Approved
Rating Agency (as defined below) that its rating on the Notes in effect at such
time will not be downgraded solely as a result thereof, and (d) with respect to
National Propane Corp., to lease the Marshfield, Wisconsin facility to the
Company (collectively, the "Permitted Activities") or (ii) incur any
Indebtedness or, except with respect to the Permitted Activities, other
liabilities (other than tax liabilities). Notwithstanding the foregoing,
National Propane SGP shall not be permitted to conduct any other business or
business activity directly or incur any Indebtedness or other liabilities (other
than tax liabilities and liabilities related to the Permitted Activities).
"Approved Rating Agency" shall mean any of Fitch Investors
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Services, Inc., Standard & Poor's Ratings Group, Moody's Investor Service, Inc.
or Duff and Phelps Credit Rating Co. National Propane SGP shall not sell,
transfer, pledge, convey or otherwise dispose of any or all of its partnership
interests in the Company or the Public Partnership without the prior written
consent of the Required Holders, provided that National Propane SGP may convert
a portion of its general partner interest in the Company or the Public
Partnership to a limited partner interest in accordance with the terms of the
respective Partnership Agreement or MLP Agreement; provided further that
National Propane SGP shall always own a general partner interest in each of the
Company and the Public Partnership. National Propane Corp. shall not sell,
transfer, pledge, convey or otherwise dispose of any or all of its ownership of
capital stock of National Propane SGP, except for the pledge to the Trustee
pursuant to the Partners Security Agreement.
SECTION 11. EVENTS OF DEFAULT; ACCELERATION.
If any of the following conditions or events ("Events of Default") shall
occur and be continuing:
(a) the Company shall default in the payment of any principal of or
Make Whole Amount, Premium Amount or premium, if any, on any Note when the
same becomes due and payable, whether at maturity or at a date fixed for
prepayment or by declaration or otherwise; or
(b) the Company shall default in the payment of any interest on any
Note or any amount due and payable under any Operative Agreement for more
than 5 Business Days after the same becomes due and payable; or
(c) the Company or any Restricted Subsidiary shall default in the
performance of or compliance with any term contained in Section 7(f), any
of Sections 10.1 through 10.8 (other than Section 10.8(c)), inclusive, or
Section 10.10(b) or the Dedicated Funds are not used to repay Indebtedness
as specified in the pro forma calculations set forth in the definition of
Consolidated Pro Forma Debt Service or the definition of Maximum
Consolidated Pro Forma Debt Service, as the case may be; or
(d) the Company, either General Partner, Triarc, the Public
Partnership or any Restricted Subsidiary shall default in the performance
of or compliance with
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any other term contained in this Agreement or any other Operative
Agreement and such default shall not have been remedied within 30 Business
Days after the earlier of the date such default shall first have become
actually known to any Responsible Officer of such Person or the date
written notice thereof shall have been received by the Company; or
(e) any representation or warranty made in writing by or on behalf
of the Company or any of its Affiliates in this Agreement, any other
Operative Agreement or in any instrument furnished in connection with the
transactions contemplated by this Agreement shall prove to have been false
or incorrect in any material respect on the date as of which made or
deemed made; or
(f) (i) the Company or any Restricted Subsidiary (as principal or
guarantor or other surety) shall default (after receiving notice, if any,
and/or the expiration of any applicable grace period) in the payment of
any amount of principal of or premium or interest on the Bank Credit
Facilities or any facility extending, renewing or refinancing the Bank
Credit Facilities (including any prior extension, renewal or refinancing
thereof); or any event shall occur or condition shall exist in respect of
the Bank Credit Facilities or any facility extending, renewing or
refinancing the Bank Credit Facilities, or of any mortgage, indenture or
other agreement relating to the Bank Credit Facilities or any facility
extending, renewing or refinancing the Bank Credit Facilities the effect
of which is to cause (or to permit one or more Persons to cause) such Bank
Credit Facilities or any facility extending, renewing or refinancing the
Bank Credit Facilities (including any prior extension, renewal or
refinancing thereof), to become due before its stated maturity or before
its regularly scheduled dates of payment or to permit the holders thereof
to cause the Company or any Restricted Subsidiary to repurchase or repay
such Bank Credit Facilities or any facility extending, renewing or
refinancing the Bank Credit Facilities (including any prior extension,
renewal or refinancing thereof), and such default, event or condition
shall continue for more than the period of grace, if any, specified
therein and shall not have been waived pursuant thereto;
(ii) the Company or any Restricted Subsidiary (as principal or
guarantor or other surety) shall default (after receiving notice, if any,
and/or the expiration of any applicable grace period) in the payment of
any amount of principal of or premium or interest on any Indebtedness in
an amount at least equal to $5,000,000 (other than the Bank Credit
Facilities or any facility extending, renewing or refinancing
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the Bank Credit Facilities and the Notes); or any event shall occur or
condition shall exist in respect of such other Indebtedness which is
outstanding in a principal amount of at least $5,000,000 or under any
evidence of any such Indebtedness or of any mortgage, indenture or other
agreement relating to such other Indebtedness, the effect of which is to
cause such other Indebtedness to become due before its stated maturity or
before its regularly scheduled dates of payment; or
(g) filing by or on the behalf of the Company or the general partner
of the Company of a voluntary petition or an answer seeking
reorganization, arrangement, readjustment of its debts or for any other
relief under any bankruptcy, reorganization, compromise, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar
act or law, state or federal, now or hereafter existing ("Bankruptcy
Law"), or any action by the Company or the general partner of the Company
for, or consent or acquiescence to, the appointment of a receiver, trustee
or other custodian of the Company or the general partner of the Company,
or of all or a substantial part of its property; or the making by the
Company or the general partner of the Company of any assignment for the
benefit of creditors; or the admission by the Company or the general
partner of the Company in writing of its inability to pay its debts as
they become due; or
(h) filing of any involuntary petition against the Company or the
general partner of the Company in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts or for any other relief under any
Bankruptcy Law and an order for relief by a court having jurisdiction in
the premises shall have been issued or entered therein; or any other
similar relief shall be granted under any applicable Federal or state law;
or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee or other
officer having similar powers over the Company or the general partner of
the Company or over all or a part of its property shall have been entered;
or the involuntary appointment of an interim receiver, trustee or other
custodian of the Company or the general partner of the Company or of all
or a substantial part of its property; or the issuance of a warrant of
attachment, execution or similar process against any substantial part of
the property of the Company or the general partner of the Company; and
continuance of any such event for 60 consecutive days unless dismissed,
bonded to the satisfaction of the court having jurisdiction in the
premises or discharged; or
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(i) filing by or on the behalf of any Material Restricted Subsidiary
of a voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under any Bankruptcy
Law, or any action by any Material Restricted Subsidiary for, or consent
or acquiescence to, the appointment of a receiver, trustee or other
custodian of such Material Restricted Subsidiary or of all or a
substantial part of its property; or the making by any Material Restricted
Subsidiary of any assignment for the benefit of creditors; or the
admission by any Material Restricted Subsidiary in writing of its
inability to pay its debts as they become due; or
(j) filing of any involuntary petition against any Material
Restricted Subsidiary in bankruptcy or seeking reorganization,
arrangement, readjustment of its debts or for any other relief under any
Bankruptcy Law and an order for relief by a court having jurisdiction in
the premises shall have been issued or entered therein; or any other
similar relief shall be granted under any applicable Federal or state law;
or a decree or order of a court having jurisdiction in the premises for
the appointment of a receiver, liquidator, sequestrator, trustee or other
officer having similar powers over any Material Restricted Subsidiary or
over all or a part of its property shall have been entered; or the
involuntary appointment of an interim receiver, trustee or other custodian
of any Material Restricted Subsidiary or of all or a substantial part of
its property; or the issuance of a warrant of attachment, execution or
similar process against any substantial part of the property of any
Material Restricted Subsidiary; and continuance of any such event for 60
consecutive days unless dismissed, bonded to the satisfaction of the court
having jurisdiction in the premises or discharged; or
(k) a final judgment or judgments (which is or are non-appealable or
which has or have not been stayed pending appeal or as to which all rights
to appeal have expired or been exhausted) shall be rendered against the
Company or any Restricted Subsidiary for the payment of money in excess of
$5,000,000 in the aggregate and any one of such judgments shall not be
discharged or execution thereon stayed pending appeal within 60 days after
the date due, or, in the event of such a stay, such judgment shall not be
discharged within 60 days after such stay expires or any action shall be
legally taken by a judgment creditor to levy upon the assets or properties
of the Company or any Restricted Subsidiary to enforce any such judgment;
or
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(l) any of the Security Documents shall at any time, for any reason,
cease in any material respect to be in full force and effect or shall be
declared to be null and void in whole or in any material part by the final
judgment (which is non-appealable or has not been stayed pending appeal or
as to which all rights to appeal have expired or been exhausted) of any
court or other governmental or regulatory authority having jurisdiction in
respect thereof, or if the validity or the enforceability of any of the
Security Documents shall be contested by or on behalf of the Company,
either General Partner, the general partner of the Company, the Public
Partnership, Triarc or any Restricted Subsidiary, or the Company, either
General Partner, the general partner of the Company, the Public
Partnership, Triarc or any Restricted Subsidiary shall renounce any of the
Security Documents or deny that it is bound by the terms of any of the
Security Documents; or
(m) any order, judgment or decree is entered in any proceedings
against the Company or any Restricted Subsidiary decreeing a split-up of
the Company or such Restricted Subsidiary which requires the divestiture
of assets representing a substantial part, or the divestiture of the stock
of a Restricted Subsidiary whose assets represent a substantial part, of
the consolidated assets of the Company and its Restricted Subsidiaries
(determined in accordance with GAAP) or which requires the divestiture of
assets, or stock of a Restricted Subsidiary, which shall have contributed
a substantial part of the Consolidated Net Income of the Company and its
Restricted Subsidiaries for any of the three fiscal years then most
recently ended, and such order, judgment or decree shall not be dismissed
or execution thereon stayed pending appeal or review within 30 days after
entry thereof, or in the event of such a stay, such order, judgment or
decree shall not be dismissed within 30 days after such stay expires;
then, (x) upon the occurrence of any Event of Default described in subdivision
(g) or (h) of this Section 11, the unpaid principal amount of and accrued
interest on the Notes shall automatically become due and payable (without Make
Whole Amount), or, (y) upon the occurrence and continuance of any other Event of
Default, any holder or holders of more than 50% in principal amount of the Notes
at the time outstanding, may at any time (unless all defaults shall theretofore
have been remedied in accordance with the terms hereof) at its or their option,
by written notice or notices to the Company, declare all the Notes to be due and
payable, whereupon the same shall forthwith mature and become due and payable,
together with interest accrued thereon and, to the extent permitted by
applicable law, the applicable Make Whole Amount, if
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any, with respect to such Notes, all without presentment, demand, protest or
further notice, which are hereby waived, provided that during the existence of
an Event of Default described in subdivision (a) or (b) (insofar as subdivision
(b) relates to interest on any Note) of this Section 11, any holder of the Notes
at the time outstanding may, at its option, by notice in writing to the Company,
declare the Notes then held by such holder to be due and payable, whereupon the
Notes then held by such holder shall forthwith mature and become due and
payable, together with interest accrued thereon and, to the extent permitted by
applicable law, the applicable Make Whole Amount with respect to such Notes.
At any time after the principal of, and interest accrued on, all the Notes
are declared due and payable, the Required Holders, by written notice to the
Company, may rescind and annul any such declaration and its consequences (other
than in respect of any Note which has been individually accelerated pursuant to
the proviso contained in the immediately preceding paragraph) if (x) the Company
has paid all overdue interest on the Notes, the principal of and Make Whole
Amount, if any, on any such Notes which have become due otherwise than by reason
of such declaration, and interest on such overdue principal and the applicable
Make Whole Amount and (to the extent permitted by applicable law) overdue
interest, at a rate per annum equal to the rate of interest stated on the face
of the Notes plus 2.0%, (y) all Events of Default, other than nonpayment of
amounts which have become due solely by reason of such declaration, and all
conditions and events which constitute Events of Default or Potential Events of
Default have been cured or waived, and (z) no judgment or decree has been
entered for the payment of any monies due pursuant to the Notes or this
Agreement; but no such rescission and annulment shall extend to or affect any
subsequent Event of Default or Potential Event of Default or impair any right
consequent thereon.
SECTION 12. REMEDIES ON DEFAULT; RECOURSE, ETC.
In case any one or more Events of Default or Potential Events of Default
shall occur and be continuing, (i) the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in such Note, or for
an injunction against a violation of any of the terms hereof or thereof, or in
aid of the exercise of any power granted hereby or thereby or by law or
otherwise, and (ii) the Trustee and the holders of the
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Notes may exercise any rights or remedies in their respective capacities under
the Security Documents in accordance with the provisions thereof. In case of a
default in the payment or performance of any provision hereof or of the Notes or
of the Security Documents, the Company will pay to the holder of each Note such
further amount as shall be sufficient to cover the cost and expenses of
collection, including, without limitation, reasonable attorneys' fees, expenses
and disbursements, and any out-of-pocket costs and expenses of any such holder
incurred in connection with analyzing, evaluating, protecting, ascertaining,
defending or enforcing any of its rights as set forth herein or in any of the
Security Documents. No course of dealing and no delay on the part of any holder
of any Note in exercising any right, power or remedy shall operate as a waiver
thereof or otherwise prejudice such holder's rights, powers or remedies. No
right, power or remedy conferred by this Agreement or by any Note upon any
holder thereof shall be exclusive of any other right, power or remedy referred
to herein or therein or now or hereafter available at law, in equity, by statute
or otherwise.
SECTION 13. DEFINITIONS.
As used herein the following terms have the following respective meanings:
Administrative Agent: The First National Bank of Boston, in its capacity
as administrative agent for the Banks under the Bank Credit Facilities, and its
successors in such capacity.
Affiliate: as applied to any Person, any other Person directly or
indirectly controlling or controlled by or under common control with such
Person, provided that (i) for purposes of this definition, "control" (including,
with correlative meanings, the terms "controlled by" and "under common control
with") as used with respect to any Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such Person, whether as a general partner or through the ownership
of voting securities or by contract or otherwise, (ii) as applied to the
Company, the term "Affiliate" shall include each General Partner and the Public
Partnership, and (iii) neither you nor any other Person which is an institution
shall be deemed to be an Affiliate of the Company solely by reason of ownership
of the Notes or other securities issued in exchange for the Notes or by reason
of having the benefits of any agreements or covenants contained in this
Agreement or the other Operative Agreements.
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Agency Account Agreement: any and all agreements among any bank, in its
capacity as the depository bank, the Company or a Restricted Subsidiary and the
Trustee in substantially the form attached hereto as Exhibit J, as amended from
time to time.
Agency Agreement: means an agreement or agreements between National
Propane Corp. and/or National Propane SGP, on the one hand, and the Company, on
the other hand, dated as of the date of the Closing, in form and substance
satisfactory in all respects to the Required Holders.
Agreement: the meaning specified in Section 1.
Assets: the assets conveyed to the Company pursuant to the Conveyance
Agreements.
Available Cash: with respect to any calendar quarter, (a) the sum of (i)
all cash of the Company and the Restricted Subsidiaries on hand at the end of
such quarter and (ii) all additional cash of the Company and the Restricted
Subsidiaries on hand on the date of determination of Available Cash with respect
to such quarter obtained through available borrowings under the Working Capital
Facility made after the end of such quarter (provided that such borrowings under
the Working Capital Facility shall in no event exceed available borrowings under
the Working Capital Facility as of the end of such quarter), less (b) (i) any
cash reserves in such amounts as the general partner of the Company shall
determine to be necessary or appropriate in its reasonable discretion to (A)
provide for the proper conduct of the business of the Company and the Restricted
Subsidiaries (including, without limitation, cash reserves for future capital
expenditures) or (B) provide funds for distributions under Sections 6.4(a)(i),
(ii), and (iii) or 6.4(b)(i) of the MLP Agreement in respect of any one or more
of next four quarters or (C) comply with applicable law or any loan agreement
(including this Agreement), mortgage, security agreement, debt instrument or
other agreement or obligation to which the Company or any Restricted Subsidiary
is a party or its assets are subject, (including the payment of principal, Make
Whole Amount, Premium Amount or premium, if applicable, and interest) in respect
of the Notes, (ii) all Dedicated Funds and (iii) all amounts which a Restricted
Subsidiary is prohibited from dividending or distributing to the Company;
provided that Available Cash shall not include amounts received as prepayments
on the Partnership Note other than amounts scheduled to have been received on or
prior to the end of such calendar quarter
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pursuant to the terms of Section 1 of the Partnership Note; provided further
that Available Cash shall exclude without duplication (x) in each calendar
quarter a reserve equal to at least 50% of the aggregate amount of all interest
payments in respect of all Indebtedness of the Company and the Restricted
Subsidiaries upon which interest is due semiannually or less frequently to be
made in the next quarter (assuming, in the case of Indebtedness incurred under
the Bank Credit Facilities and other Indebtedness bearing interest at
fluctuating interest rates which cannot be determined in advance, that the
interest rate in effect on the last Business Day of the immediately preceding
calendar quarter will remain in effect until such Indebtedness is due to be
paid), (y) with respect to any Indebtedness secured equally and ratably with the
Notes of which principal is payable annually, in the third calendar quarter
immediately preceding each calendar quarter in which any scheduled principal
payment is due with respect to such Notes and other Indebtedness (a "principal
payment quarter"), a reserve equal to at least 25% of the aggregate amount of
all principal to be paid in respect of such Notes and other such Indebtedness
secured equally and ratably with the Notes in such principal payment quarter; in
the second calendar quarter immediately preceding a principal payment quarter, a
reserve equal to at least 50% of the aggregate amount of all principal to be
paid in respect of such Notes and other such Indebtedness in such principal
payment quarter; and in the calendar quarter immediately preceding a principal
payment quarter, a reserve equal to at least 75% of the aggregate amount of all
principal to be paid in respect of such Notes and other such Indebtedness in
such principal payment quarter, and (z) with respect to the Notes and any other
Indebtedness secured equally and ratably with the 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 Notes and such
Indebtedness a reserve equal to at least 50% of the aggregate amount of all
principal to be paid in respect of such Notes and other such Indebtedness in the
next quarter; provided further that the amount of such reserve specified in
clauses (y) and (z) of this definition 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.
Bank Credit Facilities: that Credit Agreement, dated as of June 26, 1996,
among the Company, The First National Bank of Boston, as administrative agent,
BA Securities, Inc., as syndication agent, and the Banks, and any extension,
renewal, refunding or replacement thereof otherwise permitted to be incurred and
outstanding under Section 10.1, pursuant to which the Initial Acquisition
Facility and the Working Capital Facility will be made available to the Company.
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Bankruptcy Law: the meaning specified in Section 11(g).
Banks: the financial institutions listed in the signature pages of the
Bank Credit Facilities, each assignee which becomes a lender under the Bank
Credit Facilities pursuant to the terms thereof and their respective successors.
Business: the operation by the Company and its Subsidiaries (and prior to
the consummation of the Conveyance Agreements by National Propane Corp. and its
Affiliates) of the wholesale and retail sale, distribution and storage of
propane gas and related petroleum derivative products, the leasing of propane
storage tanks and the related retail sale of supplies and equipment, including
home appliances, and such other businesses in which the Company and its
Restricted Subsidiaries were engaged on the date of Closing as described in the
Registration Statement.
Business Day: any day other than a Saturday, a Sunday or a day on which
commercial banks in New York City are required or authorized by law to be
closed.
Called Principal: with respect to any Note, the principal of such Note
that is to be prepaid pursuant to Section 9.2, 9.3 or 9.4 or becomes or is
declared to be immediately due and payable pursuant to Section 11, as the
context requires.
Capital Lease: as applied to any Person, any lease of any property
(whether real, personal or mixed) by such Person (as lessee or guarantor or
other surety) which would, in accordance with GAAP, be required to be classified
and accounted for as a capital lease on a balance sheet of such Person.
Cash Collateral Agreement: the Cash Collateral Agreement among the
Company, the Trustee and the Administrative Agent, substantially in the form
attached hereto as Exhibit F, as amended from time to time.
CERCLA: the Federal Comprehensive Environmental Response, Compensation and
Liability Act, as amended.
Change of Control: any of the following:
(a) the liquidation or dissolution of the general partner of the Company;
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(b) any merger or consolidation of the general partner of the Company with
or into any Person (other than Triarc or any of its Affiliates, including,
without limitation, Nelson Peltz, Peter W. May, DWG Acquisition Group, L.P. or
any of their respective Affiliates (each a "Permitted Holder")) if the general
partner of the Company is not the surviving entity thereof, or any sale, whether
direct or indirect, of all or substantially all of the assets of the general
partner of the Company to any Person or "group" (as used in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended), other than to a
Permitted Holder;
(c) any Person or "group" (other than a Permitted Holder) is or becomes,
directly or indirectly, the beneficial owner of more than 50% of the then
outstanding total voting power of all classes of stock (or other securities) of
the general partner of the Company, the holders of which are ordinarily, in the
absence of contingencies, entitled to elect a majority of the directors (or
Persons performing similar functions) of the general partner of the Company; or
(d) during any period of twelve consecutive months after the date of
Closing, individuals who at the beginning of such twelve month period (or
Persons nominated by such members of the Board of Directors of the general
partner of the Company to succeed them) constitute the Board of Directors of the
general partner of the Company cease, for any reason, to constitute a majority
of the Board of Directors of the general partner of the Company then in office;
provided it shall not be a Change of Control pursuant to paragraphs (b), (c) or
(d), if any two of the persons employed for six months, three months and three
months, respectively, as Chief Executive Officer, Chief Financial Officer or
Chief Operating Officer of the Company immediately prior to the events specified
therein, serve as Chief Executive Officer, Chief Financial Officer or Chief
Operating Officer (but not necessarily in the same position as employed prior to
such events) for at least six and three months, respectively, after the
occurrence of such an event.
Closing: the meaning specified in Section 3.
Code: the Internal Revenue Code of 1986, as amended from time to time.
Commodity Hedging Agreement(s): any agreement or arrangement designed
solely to protect the Company against fluctuations in the price of propane with
respect to quantities of propane that the Company reasonably expects to purchase
from
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suppliers, sell to its customers or need for its inventory during the period
covered by such agreement or arrangement.
Company: the meaning specified in the Introduction and, for the purposes
of calculating any financial test or financial covenant under this Agreement
with respect to the period prior to the date of the Closing, "Company" shall
mean the General Partners and their Affiliates (to the extent that any such
Affiliate operated a portion of the Business).
Company Security Agreement: the Pledge and Security Agreement among the
Company, National Propane Corp., the Qualifying Restricted Subsidiaries and the
Trustee substantially in the form attached hereto as Exhibit G, as amended from
time to time.
Competitor: any Person engaged primarily in the wholesale and retail sale,
distribution and storage of propane gas and related petroleum derivative
products.
Consolidated Cash Flow: at any date of determination, for the period of
four consecutive fiscal quarters most recently completed at least 45 days
(except that, in connection with any calculation required pursuant to Section
10.4, for the period of four consecutive fiscal quarters most recently
completed) prior to such date of determination,
(a) the sum of, without duplication, the amounts for such period, taken as
a single accounting period, (i) Consolidated Net Income and (ii) all
amounts deducted in the determination of such Consolidated Net Income for
such period in respect of (v) interest charges (including amortization of
debt discount and expense and imputed interest on Capital Lease
obligations), (x) provisions for all income taxes and reserves (including
reserves for deferred income taxes), (y) non-cash items, and (z) all fees,
cost and expenses with respect to the retirement or repayment of
Indebtedness of the general partner of the Company existing immediately
prior to the Closing, less
(b) without duplication, all amounts added in the determination of such
Consolidated Net Income for such period in respect of (i) non-cash items
and (ii) interest income received by the Company in connection with the
Partnership Note.
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Consolidated Cash Flow shall be calculated after giving effect, on a pro forma
basis for the four consecutive fiscal quarters most recently completed at least
45 days (except that, in connection with any calculation required pursuant to
Section 10.4, for the period of four consecutive fiscal quarters most recently
completed) prior to such date of determination to, without duplication, any
asset sales or asset acquisitions (including, without limitation, any asset
acquisition giving rise to the need to make such calculation as a result of the
Company or any Restricted Subsidiary (including any Person who becomes a
Restricted Subsidiary as a result of such asset acquisition) incurring, assuming
or otherwise being liable for acquired Indebtedness) occurring during the period
commencing on the first day of such four fiscal quarter period to and including
the date of determination (the "Reference Period"), as if such asset sale or
asset acquisition occurred on the first day of the Reference Period; provided,
that with respect to an acquired business or asset (other than the acquisition
of the Business by the Company), if the applicable Reference Period for any
calculation of Consolidated Cash Flow shall include any fiscal quarters prior to
the date of acquisition (the "Preceding Fiscal Quarters"), Consolidated Cash
Flow generated by such acquired business or asset shall be determined for any
such Preceding Fiscal Quarters on the basis of, without duplication, (a) the
actual gross profit (revenues minus cost of goods sold) of the acquired business
or asset during such Preceding Fiscal Quarters, and (b) the pro forma expenses
that would have been incurred by the Company in the operation of such acquired
business or asset during such period computed on the basis of personnel expenses
for employees retained or to be retained by the Company in the operation of such
acquired business or asset and non-personnel costs and expenses incurred by the
Company or the general partner of the Company in the operation of the Company's
business at similarly situated Company facilities or Restricted Subsidiary
facilities. If the applicable Reference Period for any calculation of
Consolidated Cash Flow shall include a partial period occurring prior to the
Closing, then such Consolidated Cash Flow shall be calculated based upon the
Consolidated Cash Flow on a pro forma basis for such portion of the Reference
Period prior to the Closing (giving effect to the transactions occurring on the
date of Closing) and the Consolidated Cash Flow for the remaining portion of the
Reference Period occurring on and after the Closing, giving pro forma effect, as
described in the preceding sentences, to all applicable transactions occurring
on the date of Closing or otherwise.
Consolidated Interest Expense: as of any date of determination, the total
amount payable by the Company and the Restricted Subsidiaries on a consolidated
basis, during the period of twelve consecutive months immediately following such
date
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of determination in respect of all interest charges (including amortization of
debt discount and expense and imputed interest on payments under Capital Lease
obligations) with respect to Indebtedness of the Company and the Restricted
Subsidiaries outstanding on the date of determination, assuming for such purpose
(a) the amount of such Indebtedness is not reduced or increased during such
twelve month period, and (b) that interest expense for such twelve month period
with respect to Indebtedness of a revolving nature shall equal the actual
interest expense for Indebtedness of a revolving nature during the most recently
completed twelve month period .
Consolidated Net Income: with reference to any period, the net income (or
deficit) of the Company and the Restricted Subsidiaries for such period (taken
as a cumulative whole), after deducting all operating expenses, provisions for
all taxes and reserves (including reserves for deferred income taxes) and all
other proper deductions, all determined in accordance with GAAP on a
consolidated basis, after eliminating all intercompany transactions and after
deducting portions of income properly attributable to minority interests, if
any, in the stock and surplus of Restricted Subsidiaries, provided that there
shall be excluded (a) the income (or deficit) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or consolidated with
the Company or a Restricted Subsidiary, (b) the income (or deficit) of any
Person (other than a Restricted Subsidiary) in which the Company or any
Restricted Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such Restricted
Subsidiary in the form of dividends or similar distributions, (c) the
undistributed earnings of any Restricted Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Restricted
Subsidiary is not at the time permitted by the terms of its charter or any
agreement, instrument, judgment, decree, order, statute, rule or governmental
regulation applicable to such Restricted Subsidiary, (d) any restoration to
income of any contingency reserve, except to the extent that provision for such
reserve was made out of income accrued during such period, (e) any aggregate net
gain (but not any aggregate net loss) during such period arising from the sale,
exchange or other disposition of capital assets (such term to include all fixed
assets, whether tangible or intangible, all Inventory sold in conjunction with
the disposition of fixed assets, and all securities), (f) any write-up of any
asset, (g) any net gain from the collection of the proceeds of life insurance
policies, (h) any gain arising from the acquisition of any securities, or the
extinguishment, under GAAP, of any Indebtedness, of the Company or any
Restricted Subsidiary, (i) any net income or gain (but not any net loss) during
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such period from any change in accounting, from any discontinued operations or
the disposition thereof, from any extraordinary events or from any prior period
adjustments, (j) any deferred credit representing the excess of equity in any
Restricted Subsidiary at the date of acquisition over the cost of the investment
in such Restricted Subsidiary, and (k) in the case of a successor to the Company
by consolidation or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer of assets.
Consolidated Net Worth: as to the Company, the amount by which
(i) the total assets of the Company and the Restricted Subsidiaries
appearing on a consolidated balance sheet of the Company and the
Restricted Subsidiaries prepared in accordance with GAAP as of the date of
determination (after eliminating all amounts properly attributable to
minority interests in the stock and surplus, if any, of the Restricted
Subsidiaries) exceeds
(ii) total liabilities of the Company and the Restricted
Subsidiaries appearing on a consolidated balance sheet of the Company and
the Restricted Subsidiaries prepared in accordance with GAAP as of the
date of determination on a consolidated basis,
in each case after eliminating all intercompany transactions; and as to any
other Person, the amount by which
(i) the total assets of such Person and its Subsidiaries appearing
on a consolidated balance sheet of such Person and its Subsidiaries
prepared in accordance with GAAP as of the date of determination (after
eliminating all amounts properly attributable to minority interests in the
stock and surplus, if any, of its Subsidiaries) exceeds
(ii) total liabilities of such Person and its Subsidiaries appearing
on a consolidated balance sheet of such Person and its Subsidiaries
prepared in accordance with GAAP as of the date of determination on a
consolidated basis,
in each case after eliminating all intercompany transactions.
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Consolidated Pro Forma Debt Service: as of any date of determination, the
total amount payable by the Company and the Restricted Subsidiaries on a
consolidated basis, during the four consecutive calendar quarters next
succeeding the date of determination, in respect of scheduled principal payments
and all cash interest charges with respect to Indebtedness of the Company and
the Restricted Subsidiaries outstanding on such date of determination, after
giving effect to any Indebtedness proposed to be incurred on such date (the
"Incurrence Date") and to any Indebtedness proposed to be repaid from funds of
such newly incurred Indebtedness (x) within 30 days of the Incurrence Date, or
(y) within the twelve months following such Incurrence Date which funds for such
payments have been within 30 days of the Incurrence Date irrevocably placed in
escrow with the Trustee with irrevocable instructions to the Trustee to make
such repayments (such funds pursuant to clauses (x) and (y) collectively, the
"Dedicated Funds") and (a) including actual payments under Capital Lease
obligations, (b) assuming, in the case of Indebtedness (other than Indebtedness
incurred under the Bank Credit Facilities) bearing interest at fluctuating
interest rates which cannot be determined in advance, that the rate in effect on
such date will remain in effect throughout such period, (c) assuming in the case
of Indebtedness incurred under the Bank Credit Facilities, that (1) the interest
payments payable during such four consecutive calendar quarters next succeeding
the date of determination will equal the actual interest payments associated
with the Bank Credit Facilities during the most recent four fiscal quarters, (2)
except for the twelve-month period immediately prior to the termination or final
maturity thereof (unless extended, renewed or refinanced), no principal payments
will be made under the Working Capital Facility and (3) principal payments
relating to the Initial Acquisition Facility will (unless already converted to a
fixed amortization schedule) become due based on the assumption that the
conversion to the fixed amortization schedule pursuant to Section 2.11(c) of the
Bank Credit Facilities is effected on the dates set forth therein, (d) treating
the principal amount of all Indebtedness outstanding as of such date of
determination under a revolving credit or similar agreement (other than the Bank
Credit Facilities) as maturing and becoming due and payable on the scheduled
maturity date or dates thereof (including the maturity of any payment required
by any commitment reduction or similar amortization provision), without regard
to any provision permitting such maturity date to be extended and (e) including
any other designated repayments of Indebtedness due within twelve months from
such date of determination.
Conveyance Agreements: (a) (i) the Contribution and Assumption Agreement,
dated as of the date of the Closing, among the Company and the General Partners
and
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National Sales and Service, Inc., and (ii) the Conveyance, Contribution and
Assumption Agreement, dated as of the date of the Closing, among the Public
Partnership, the Company and the General Partners, and (b) each of the
individual conveyances, assignments and bills of sale delivered to the Company
pursuant to the agreements referred to in the foregoing clause (a).
Dedicated Funds: the meaning specified in the definition of "Consolidated
Pro Forma Debt Service."
Discounted Value: with respect to the Called Principal of any Note, the
amount obtained by discounting all Remaining Scheduled Payments with respect to
such Called Principal from their respective scheduled due dates to the
Settlement Date with respect to such Called Principal, in accordance with
accepted financial practice and at a discount factor (applied on a semi-annual
basis) equal to the Reinvestment Yield plus 50 basis points with respect to such
Called Principal.
Dollar and sign "$": lawful money of the United States of America.
Environmental Laws: applicable federal, state, local and foreign laws,
rules or regulations relating to emissions, discharges, releases or threatened
releases of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes into the environment (including, without
limitation, air, surface water, ground water or land), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, chemicals or industrial,
toxic or hazardous substances or wastes.
ERISA: the Employee Retirement Income Security Act of 1974, as amended
from time to time.
Event of Default: the meaning specified in Section 11.
Excess Proceeds: the meaning specified in Section 10.7(c).
GAAP: generally accepted accounting principles in effect in the United
States from time to time.
General Partner(s): the meaning specified in the Introduction.
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General Partner's Guarantee Agreement: the Guarantee Agreement between
National Propane Corp. and the Trustee substantially in the form attached hereto
as Exhibit H, as amended from time to time.
general partner of the Company: National Propane Corp., so long as it
holds a general partner interest in the Company and shall be the managing
general partner as provided in the Partnership Agreement, and any successor to
such interest or any part thereof, so long as such successor shall hold such
interest or part thereof or, if National Propane Corp. shall no longer be such
managing general partner, then National Propane SGP, so long as it holds a
general partner interest in the Company and shall be the managing general
partner as provided in the Partnership Agreement, and any successor to such
interest or part thereof, so long as such successor shall hold such interest or
part thereof.
Guarantee Agreements: means the General Partner's Guarantee Agreement and
the Subsidiary Guarantee Agreement.
Guaranty: as applied to any Person, any direct or indirect liability,
contingent or otherwise, of such Person with respect to any indebtedness, lease
(other than operating leases under which the Company or a Restricted Subsidiary
is the lessee), dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable or any other obligation under
any contract which, in economic effect, is substantially equivalent to a
guaranty, including, without limitation, any such obligation of a partnership in
which such Person is a general partner or of a joint venture in which such
Person is a joint venturer, and any such obligation in effect guaranteed by such
Person through any agreement (contingent or otherwise) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet or other financial condition of the
obligor of such obligation, or to make payment for any products, materials or
supplies or for any transportation or services regardless of the non-delivery or
nonfurnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
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discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof.
Hazardous Materials: any gasoline or petroleum (including crude oil or any
fraction thereof) or petroleum products, polychlorinated biphenyls,
urea-formaldehyde insulation, asbestos or asbestos-containing materials,
pollutants, contaminants, radioactivity, and any other materials or substances
of any kind, whether or not any such substance is defined as hazardous under any
Environmental Law, that is regulated pursuant to any Environmental Law or that
could give rise to liability under any Environmental Law.
Incurrence Date: the meaning specified in the definition of "Consolidated
Pro Forma Debt Service".
Indebtedness: as applied to any Person (without duplication):
(a) any indebtedness for borrowed money which such Person has
directly or indirectly created, incurred or assumed;
(b) any indebtedness, whether or not for borrowed money, with
respect to which such Person has become directly or indirectly liable and
which represents the deferred purchase price (or a portion thereof) or has
been incurred to finance the purchase price (or a portion thereof) of any
property or service or business acquired by such Person, whether by
purchase, consolidation, merger or otherwise;
(c) all obligations evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in connection
with the acquisition or property, assets or businesses;
(d) all indebtedness created or arising under any conditional sale
or other title retention agreement, or incurred as financing, in either
case with respect to property acquired by the Person (even though the
rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property);
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(e) any obligations under Capital Leases to the extent such
obligations would, in accordance with GAAP, appear on a balance sheet of
such Person;
(f) any indebtedness, whether or not for borrowed money, secured by
(or for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien in respect of property
owned by such Person, whether or not such Person has assumed or become
liable for the payment of such indebtedness, provided that the amount of
such Indebtedness if not so assumed shall in no event be deemed to be
greater than the fair market value from time to time (as determined in
good faith by such Person) of the property subject to such Lien;
(g) all capital stock of such Person redeemable at the option of the
holder prior to the final maturity of the Notes, valued at the greater of
its voluntary or involuntary maximum fixed repurchase price or any
mandatory redemption payment obligations in respect thereon plus, in
either case, accrued dividends thereon;
(h) any preferred stock of any Restricted Subsidiary of such Person
redeemable at the option of the holder prior to the final maturity of the
Notes, valued at the sum of the liquidation preference thereof or any
mandatory redemption payment obligations in respect thereof plus, in
either case, accrued dividends thereon;
(i) all liabilities of such Person in respect of letters of credit
or instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money);
(j) any indebtedness of the character referred to in clause (a)
through (i) of this definition deemed to be extinguished under GAAP but
for which such Person remains legally liable; and
(k) any indebtedness of any other Person of the character referred
to in clause (a) through (j) of this definition with respect to which the
Person whose Indebtedness is being determined has become liable by way of
a Guaranty.
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Notwithstanding the foregoing, in determining the Indebtedness of the Company
and the Restricted Subsidiaries, there shall be excluded all undrawn letters of
credit (not yet due and payable), trade accounts payable, accrued interest and
other accrued expenses and customer credit balances arising in the ordinary
course of business on ordinary terms.
Initial Acquisition Facility: that Initial Acquisition Facility under the
Bank Credit Facilities which shall permit borrowings thereunder in an aggregate
amount at any time no greater than as permitted by Section 10.1(e) and which
shall be secured by the Mortgaged Property pursuant to the Security Documents,
and any extension, renewal, refunding or replacement thereof otherwise permitted
to be incurred and outstanding under Section 10.1.
Initial Notes: the meaning specified in Section 1.
Institutional Investor: means (a) any original purchaser of a Note, (b)
any holder of a Note holding $1,000,000 or more of the aggregate principal
amount of the Notes then outstanding, and (c) any bank, trust company, savings
and loan association or other financial institution, any pension plan, any
investment company, any insurance company, any broker or dealer, or any other
similar financial institution or entity, regardless of legal form.
Intercompany Notes: any and all promissory notes of a Restricted
Subsidiary issued to the Company or to another Restricted Subsidiary, in the
form attached hereto as Exhibit I or such other form as may be satisfactory to
the Required Holders, representing all Indebtedness of such Restricted
Subsidiary to the Company or such other Restricted Subsidiary, as the case may
be.
Interest Rate Agreement: any interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement or other similar agreement or
arrangement designed solely to protect the Company against fluctuations in
interest rates on Indebtedness.
Inventory: goods held by a Person for sale or lease and accounted for as
inventory under GAAP.
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Investment: as applied to any Person, any direct or indirect purchase or
other acquisition by such Person of stock or other securities of any other
Person, or any direct or indirect loan, advance or capital contribution by such
Person to any other Person, and any other item which would be classified as an
"investment" on a balance sheet of such Person prepared in accordance with GAAP,
including, without limitation, any direct or indirect contribution by such
Person of property or assets to a joint venture, partnership or other business
entity in which such Person retains an interest. For the purposes of Section
10.3(b), the amount involved in Investments made during any period shall be the
aggregate cost to the Company of all such Investments made during such period,
determined in accordance with GAAP, but without regard to unrealized increases
or decreases in value, or write-ups, write-downs or write-offs, of such
investments and without regard to the existence of any undistributed earnings or
accrued interest with respect thereto accrued after the respective dates on
which such Investments were made, less any net return of capital realized during
such period upon the sale, repayment or other liquidation of such Investment
(determined in accordance with GAAP, but without regard to any amounts received
during such period as earnings (in the form of dividends not constituting a
return of capital, interest or otherwise) on such Investment or as loans from
any Person in whom such Investments have been made).
Legal Requirement: any law, statute, ordinance, decree, requirement,
order, judgment, rule or regulation (or published official interpretation by any
governmental authority of any of the foregoing) of any governmental authority.
Lien: as to any Person, any mortgage, lien (statutory or otherwise),
pledge, reservation, right of entry, encroachment, easement, right of way,
restrictive covenant, license, charge, security interest or other encumbrance in
or on, or any interest or title of any vendor, lessor, lender or other secured
party to or of such Person under any conditional sale or other title retention
agreement or Capital Lease with respect to, any property or asset owned or held
by such Person, or the signing or filing of a financing statement with respect
to any of the foregoing which names such Person as debtor, or the signing of any
security agreement with respect to any of the foregoing authorizing any other
party as the secured party thereunder to file any financing statement or any
other agreement to give or grant any of the foregoing. For the purposes of this
Agreement, a Person shall be deemed to be the owner of any asset which it has
placed in trust for the benefit of the holders of Indebtedness of such Person
and such trust shall
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be deemed to be a Lien if such Person remains legally liable therefor,
notwithstanding that such Indebtedness is or may be deemed to be extinguished
under GAAP.
Make Whole Amount: with respect to any Note, an amount equal to the
excess, if any, of the Discounted Value of the Remaining Scheduled Payments of
the Called Principal of such Note over such Called Principal. The Make Whole
Amount shall in no event be less than zero.
Material Adverse Effect: a material adverse effect on (a) the business,
operations, property, condition (financial or otherwise) or prospects (financial
or otherwise) of the Company and the Restricted Subsidiaries, taken a whole or
the Business, (b) the ability of the Company, either General Partner or any
Restricted Subsidiary to perform its obligations under this Agreement or any
other Operative Agreement, or (c) the validity, enforceability, perfection or
priority of this Agreement or any other Operative Agreement or of the rights or
remedies of the holder of any Notes or the Trustee.
Material Restricted Subsidiary: with respect to any Restricted Subsidiary,
a Restricted Subsidiary which, at the date of any determination, has assets with
a net book value in excess of 5% of the aggregate net book value of all assets
of the Company and the Restricted Subsidiaries at the end of the most recently
completed fiscal year of the Company, or which is more than 5% of Consolidated
Net Income for such fiscal year.
Maximum Consolidated Pro Forma Debt Service: as of any date of
determination, the highest total amount payable by the Company and the
Restricted Subsidiaries on a consolidated basis, during any period of four
consecutive fiscal quarters, commencing with the fiscal quarter in which such
date of determination occurs and ending on the maturity date of the Notes, in
respect of scheduled principal payments and all cash interest charges with
respect to all Indebtedness of the Company and the Restricted Subsidiaries
outstanding or to be outstanding, after giving effect to any Indebtedness to be
incurred on the Incurrence Date and to any Indebtedness proposed to be repaid
from Dedicated Funds and (a) including actual payments under Capital Lease
obligations, (b) assuming, in the case of Indebtedness (other than Indebtedness
incurred under the Bank Credit Facilities) bearing interest at fluctuating
interest rates which cannot be determined in advance, that the rate in effect on
such date will remain in effect throughout such period, (c) assuming in the case
of Indebtedness incurred under
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the Bank Credit Facilities, that (1) the interest payments payable during such
four consecutive calendar quarters will equal the actual interest payments
associated with the Bank Credit Facilities during the most recent four fiscal
quarters, (2) except for the twelve-month period immediately prior to the
termination or final maturity thereof (unless extended, renewed or refinanced)
no principal payments will be made under the Working Capital Facility and (3)
principal payments relating to the Initial Acquisition Facility will (unless
already converted to a fixed amortization schedule) become due based on the
assumption that the conversion to the fixed amortization schedule pursuant to
Section 2.11(c) of the Bank Credit Facilities is effected on the dates set forth
therein, (d) treating the principal amount of all Indebtedness outstanding as of
such date of determination under a revolving credit or similar agreement (other
than the Bank Credit Facilities) as maturing and becoming due and payable on the
scheduled maturity date or dates thereof (including the maturity of any payment
required by any commitment reduction or similar amortization provision), without
regard to any provision permitting such maturity date to be extended and (e)
including any other designated repayments of Indebtedness.
Memorandum: the meaning specified in Section 5.4(b).
MLP Agreement: the Amended and Restated Agreement of Limited Partnership
of the Public Partnership.
Mortgages: the separate mortgage, security agreement and fixture filings
and the separate deed of trust, security agreement and fixture filings, each
among the Company, National Propane Corp. and the Trustee, dated as of the date
hereof, and any mortgage, security agreement and fixture filing or deed of
trust, security agreement and fixture filing between any Restricted Subsidiary,
National Propane Corp. or the Company and the Trustee securing the Company's and
National Propane Corp.'s obligations under the Notes, the Initial Notes and the
Agreements and Parity Debt substantially in the forms of Exhibit D1 or D2, as
the case may be, with any changes therein required to refer to the mortgagor or
trustee thereunder as the respective Restricted Subsidiary.
Mortgaged Property: collectively, the properties referred to as the
"Mortgaged Property" in the Mortgages, as the "Collateral" under the Company
Security Agreement and as the "Security" in the Trust Agreement.
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Multiemployer Plan: a Plan which is a "multiemployer plan" within the
meaning of Section 4001(a)(3) of ERISA.
National Propane Corp.: the meaning specified in the Introduction.
National Propane SGP: the meaning specified in the Introduction.
Non-Related Subsidiaries: Subsidiaries of Triarc other than (i) the
General Partners and (ii) any such Subsidiary which is a Related Person.
Notes: the meaning specified in Section 1.
Obsolete Assets: means assets, property or equipment that have been
determined by the Company, in good faith, to no longer be useful in the
operations or the business of the Company or a Restricted Subsidiary.
Officers' Certificate: as to any corporation, a certificate executed on
its behalf by the Chairman of the Board of Directors (if an officer) or its
President or one of its Vice Presidents and its Treasurer, or Controller, or one
of its Assistant Treasurers or Assistant Controllers, and, as to any
partnership, a certificate executed on behalf of such partnership by its general
partner in a manner which would qualify such certificate as an Officers'
Certificate of such general partner hereunder.
Operative Agreements: this Agreement, the Other Agreements, the Agency
Agreement, the Notes, the Bank Credit Facilities, the Security Documents, the
Intercompany Notes, the Partnership Note, the Underwriting Agreement, the
Conveyance Agreements, the MLP Agreement and the Partnership Agreement.
Other Agreements: the meaning specified in Section 2.
Other Purchasers: the meaning specified in Section 2.
Overallotment Option: the overallotment option granted to the Underwriters
by the Public Partnership pursuant to the Underwriting Agreement.
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Parity Debt: Indebtedness of the Company incurred in accordance with
Section 10.1(b), 10.1(e), 10.1(f), 10.1(i) or 10.1(j) and secured by the lien of
the Security Documents in accordance with Section 10.2(h), 10.2(i) or 10.2(m).
Partnership Agreement: the Amended and Restated Agreement of Limited
Partnership of the Company, as in effect on the date of the Closing, and as the
same may from time to time be amended, modified or supplemented in accordance
with the terms thereof and Section 10.12 hereof, in the form of Exhibit K.
Partnership Note: the note issued by Triarc in favor of the Company in an
amount of approximately $40,700,000, which note is secured by a pledge by Triarc
to the Company of, among other things, all of the shares of National Propane
Corp. owned by Triarc, in the form of Exhibit L.
Partners Security Agreement: the Pledge and Security Agreement among the
Public Partnership, National Propane Corp. and the Trustee substantially in the
form attached hereto as Exhibit M, as amended from time to time.
PBGC: the Pension Benefit Guaranty Corporation or any governmental
authority succeeding to any of its functions.
Perfection Certificate: a certificate from the Company in substantially
the form attached hereto as Exhibit N.
Permitted Banks: the meaning specified in Section 10.3(a).
Permitted Encumbrances: the encumbrances and exceptions to title to the
Assets (a) described in the Security Documents or (b) existing on the date of
Closing as permitted by the applicable provisions hereof with respect to real
property owned or leased by the Company and not subject to a Lien of a Mortgage.
Permitted Exceptions: the meaning specified in Section 5.8(a).
Permitted Insurers: insurers with ratings of A or better according to
Best's Insurance Reports or a comparable rating agency for insurance companies
located outside of the United States of America and Canada and with assets of no
less than $500 million.
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Person: a corporation, a limited liability company, a firm, a joint
venture, an association, a partnership, an organization, a business, a trust or
other entity or enterprise, an individual, a government or political subdivision
thereof or a governmental agency, department or instrumentality.
Plan: an "employee pension benefit plan" (as defined in Section 3(2) of
ERISA) which is or has been established or maintained, or to which contributions
are or have been made, by either General Partner, the Company or any Related
Person of the Company or either General Partner or to which either General
Partner, the Company or any Related Person of the Company or either General
Partner is or has been obligated to contribute, or an employee benefit plan as
to which either General Partner, the Company or any Related Person of the
Company or either General Partner could be treated as a contributory sponsor
under Section 4069 or Section 4212 of ERISA if such plan were terminated.
Potential Event of Default: any condition or event which, with notice or
lapse of time or both, would become an Event of Default.
Premium Amount: the meaning specified in Section 9.3(d).
Public Partnership: National Propane Partners, L.P., a Delaware limited
partnership.
Purchase Money Lien: the meaning specified in Section 10.2(j).
QPAM Exemption: the meaning specified in Section 6.2(c).
Qualifying Restricted Subsidiaries: the Restricted Subsidiaries other than
National Sales and Service, Inc.
RCRA: the Federal Resource Conservation and Recovery Act, as amended.
Registration Statement: the Registration Statement on Form S-1 under the
Securities Act of 1933, as amended, of the Public Partnership (Registration
Number 33-2768), as initially filed with the Securities and Exchange Commission
on March 26, 1996, as amended by Amendment No. 1 thereto filed with the
Securities and Exchange Commission on May 14, 1996, Amendment No. 2 thereto
filed with the Securities and
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Exchange Commission on May 31, 1996 and Amendment No. 3 thereto filed with the
Securities and Exchange Commission on June 11, 1996.
Reinvestment Yield: with respect to the Called Principal of any Note, the
yield to maturity implied by (i) the yields reported, as of 10:00 a.m. (New York
City time) on the Business Day next preceding the Settlement Date with respect
to such Called Principal, on the display designated as "USD" on the Bloomberg
Financial Markets (or such other display as may replace USD on the Bloomberg
Financial Markets) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of such
Settlement Date, or if such yields shall not be reported as of such time or the
yields reported as of such time shall not be ascertainable, (ii) the Treasury
constant maturity series yields reported, for the latest day for which such
yields shall have been so reported as of the Business Date next preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between (1) the actively traded U.S.
Treasury security with the duration closest to and equal to or greater than the
Remaining Average Life and (2) the actively traded U.S. Treasury security with
the duration closest to and equal to or less than the Remaining Average Life.
Related Person: with respect to a Person, any trade or business, whether
or not incorporated, which, as of any date of determination, would be treated as
a single employer together with such Person under Section 414 of the Code.
Remaining Average Life: with respect to the Called Principal of any Note,
the number of years (calculated to the nearest one-twelfth year) obtained by
dividing (i) such Called Principal into (ii) the sum of the products obtained by
multiplying (a) each Remaining Scheduled Payment of such Called Principal (but
not of interest thereon) by (b) the number of years (calculated to the nearest
one-twelfth year) which will elapse between the Settlement Date with respect to
such Called Principal and the scheduled due date of such Remaining Scheduled
Payment.
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Remaining Scheduled Payments: with respect to the Called Principal of any
Note, all payments of such Called Principal and interest thereon that would be
due on or after the Settlement Date with respect to such Called Principal if no
payment of such Called Principal were made prior to its scheduled due date,
provided that if such Settlement Date is not a date on which interest payments
are due to be made under the terms of the Notes, then the amount of the next
succeeding scheduled interest payment will be reduced by the amount of interest
accrued to such Settlement Date and required to be paid on such Settlement Date
pursuant to Sections 9 or 11.
Required Holders: the holders of at least 66-2/3% in principal amount of
the Notes at the time outstanding.
Responsible Officer: with respect to any Person, the President, any Senior
Vice President, the Chief Financial Officer, the Treasurer and the Secretary of
such Person and any other officer of such Person who is responsible for
compliance with or performance of any obligation under this Agreement or the
other Operative Agreements, with respect to the Company, any such officer of the
general partner of the Company and, in any case, any employee of the Company
performing any of the above functions.
Restricted Affiliate: any of Triarc, DWG Acquisition Group, L.P. or any of
their respective Subsidiaries or Nelson Peltz or Peter W. May as long as any
such Person would otherwise be an Affiliate of the Company.
Restricted Payment: as to any Person, (a) any payment, dividend or other
distribution, direct or indirect, in respect of any partnership interest
(general or limited) in, or on account of any shares of any class of stock of,
such Person, except a distribution payable solely in additional partnership
interests in, or shares of stock of, such Person, and (b) any payment, direct or
indirect, on account of the redemption, retirement, purchase or other
acquisition of any partnership interest in, or any shares of any class of stock
of, such Person now or hereafter outstanding or of any warrants, rights or
options to acquire any such shares, except to the extent that the consideration
therefor consists of shares of stock of such Person, provided payments by the
Company or a Restricted Subsidiary of the Company to any General Partner or any
of its Affiliates for services rendered to or on behalf of the Company or any
Restricted Subsidiary of the Company or expenses incurred in connection with the
operation of the business of the Company or any Restricted Subsidiary of the
Company (including,
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without limitation, reimbursement of expenses incurred under any employee
benefit plan, including plans providing for the issuance of Units or options to
acquire Units in the Public Partnership) shall not be deemed to be Restricted
Payments.
Restricted Subsidiary: any Wholly Owned Subsidiary of the Company (a)
organized under the laws of the United States of America or any state thereof or
the District of Columbia, (b) none of the capital stock or ownership interests
of which is owned by Unrestricted Subsidiaries, (c) substantially all of the
operating assets of which are located in, and substantially all of the business
of which is conducted within the United States of America and which business
consists of the wholesale and retail sale, distribution and storage of propane
gas and related petroleum derivative products and/or the related retail sale of
supplies and equipment, including home appliances, and for the provision of
related services and (d) designated by the Company as a Restricted Subsidiary in
Exhibit O or at a subsequent date, provided that (i) to the extent a newly
formed or acquired Wholly Owned Subsidiary satisfying the requirements of the
foregoing clauses (a), (b) and (c) is not declared either a Restricted
Subsidiary or an Unrestricted Subsidiary within 90 days of its formation or
acquisition, such Wholly Owned Subsidiary shall be deemed a Restricted
Subsidiary and (ii) a Restricted Subsidiary may be designated as an Unrestricted
Subsidiary in accordance with the provisions of Section 10.19(a).
Security Documents: the Trust Agreement, the Mortgage(s), the Company
Security Agreement, the General Partner's Guarantee Agreement, the Subsidiary
Guarantee Agreement, the Partners Security Agreement, the Partnership Note, the
Perfection Certificate, the Agency Account Agreement, the Cash Collateral
Agreement, and all other security agreements and documents and instruments
executed and delivered in order to secure the Indebtedness and/or perfect the
Liens referred to in the Trust Agreement or to guarantee the Company's and the
General Partners' obligations hereunder and under the Notes and the Initial
Notes.
Settlement Date: shall mean, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 9.2, 9.3 or 9.4 or is declared to be or becomes immediately due and
payable pursuant to Section 11, as the context requires.
Subsidiary: of any Person, means any corporation, limited liability
company, business trust, association, partnership, joint venture or other
business entity at least a
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majority (by number of votes) of the stock of any class or classes (or
equivalent interests) of which is at the time owned by such Person or by one or
more Subsidiaries of such Person or by such Person and one or more Subsidiaries
of such Person, if the holders of the stock of such class or classes (or
equivalent interests) (a) are ordinarily, in the absence of contingencies,
entitled to vote for the election of a majority of the directors (or Persons
performing similar functions) of such business entity, even though the right so
to vote has been suspended by the happening of such a contingency, or (b) are at
the time entitled, as such holders, to vote for the election of the majority of
the directors (or Persons performing similar functions) of such business entity,
whether or not the right so to vote exists by reason of the happening of a
contingency. Unless the context otherwise requires, any reference to a
Subsidiary shall mean a Subsidiary of the Company.
Subsidiary Guarantee Agreement: the Guarantee Agreement among the
Qualifying Restricted Subsidiaries and the Trustee substantially in the form
attached hereto as Exhibit P, as amended from time to time.
Substantial Portion: the meaning specified in Section 7(a).
Supplemental Agreement: an agreement between a Restricted Subsidiary and
the Trustee substantially in the form attached hereto as Exhibit Q, as amended
from time to time.
Triarc: Triarc Companies, Inc., a Delaware corporation.
Trust Agreement: the Intercreditor and Trust Agreement, dated as of June
26, 1996, among the Company, National Propane Corp., the Public Partnership, the
Qualifying Restricted Subsidiaries, the Trustee, the holders of the Notes, the
Administrative Agent and the Banks, substantially in the form attached hereto as
Exhibit C, as amended from time to time.
Trustee: The Bank of New York, as Trustee under the Trust Agreement and
its successors and assigns thereunder.
Underwriters: the underwriters named in the Underwriting Agreement.
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Underwriting Agreement: the Purchase Agreement, dated June 26, 1996, among
the Public Partnership, National Propane Corp., National Propane SGP, the
Company, Triarc and the Underwriters, relating to securities of the Public
Partnership registered under the Registration Statement.
Uniform Commercial Code: the Uniform Commercial Code or similar statute in
effect from time to time in any jurisdiction.
Units: the units to be issued and sold by the Public Partnership pursuant
to the Underwriting Agreement, representing preference limited partnership
interests in the Public Partnership.
Unrestricted Subsidiary: any Subsidiary other than a Restricted Subsidiary
which is organized under the laws of the United States of America or any state
thereof or the District of Columbia and substantially all of the operating
assets of which are located in, and substantially all of the business of which
is conducted within the United States of America and which business consists
principally of the distribution of propane gas or related supplies and
equipment.
Wholly Owned: as applied to any Subsidiary, a Subsidiary all of the
outstanding shares (other than directors' qualifying shares, if required by law)
of every class of stock or other equity interests of which are at the time owned
by the Company or by one or more Wholly Owned Restricted Subsidiaries or by the
Company and one or more Wholly Owned Restricted Subsidiaries.
Working Capital Facility: that Working Capital Facility under the Bank
Credit Facilities which shall permit borrowings thereunder in an aggregate
amount outstanding at any time no greater than as permitted by Section 10.1(e)
and which shall be secured by the Mortgaged Property pursuant to the Security
Documents and any extension, renewal, refunding or replacement thereof otherwise
permitted to be incurred and outstanding under Section 10.1.
SECTION 14. REGISTRATION, TRANSFER AND SUBSTITUTION OF NOTES.
14.1. Note Register; Ownership of Notes. Any Notes issued in substantially
the form of Exhibit A2 are in "registered form". The Company will keep at its
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principal office a register in which the Company will provide for the
registration of Notes in registered form and the registration of transfers of
Notes in registered form. The Company may treat the Person in whose name any
Note is registered on such register as the owner thereof for the purpose of
receiving payment of the principal of and the Make Whole Amount or premium, if
any, and interest on such Note and for all other purposes, whether or not such
Note shall be overdue, and the Company shall not be affected by any notice to
the contrary. All references in this Agreement or in a Note to a "holder" of any
Note shall mean the Person in whose name such Note is at the time registered on
such register.
14.2. Transfer and Exchange of Notes. Upon surrender of any Note for
registration of transfer or for exchange to the Company at its principal office,
the Com pany at its expense will execute and deliver in exchange therefor a new
Note or Notes in denominations of at least $250,000 (except one Note may be
issued in a lesser prin cipal amount if the unpaid principal amount of the
surrendered Note is not evenly divisible by, or is less than, $250,000), as
requested by the holder or transferee, which aggregate the unpaid principal
amount of such surrendered Note. Each such new Note shall be in registered form.
Each such Note shall be dated so that there will be no loss of interest on such
surrendered Note and otherwise of like tenor, and shall be registered in the
name or names of such Person as such holder or transferee may request. Any Note
in lieu of which any such new Note has been executed and delivered shall not be
deemed to be an outstanding Note for any purpose of this Agreement.
14.3. Replacement of Notes. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of any
Note and, in the case of any such loss, theft or destruction of any Note, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of any Note held by you or another institutional
holder or your or its nominee, of an unsecured indemnity agreement from you or
such other holder), or, in the case of any such mutilation, upon the surrender
of such Note for cancellation to the Company at its principal office, the
Company at its expense will execute and deliver, in lieu thereof, a new Note in
the unpaid principal amount of such lost, stolen, destroyed or mutilated Note,
dated so that there will be no loss of interest on such Note and otherwise of
like tenor. Any Note in lieu of which any such new Note has been so executed and
delivered by the Company shall not be deemed to be an outstanding Note for any
purpose of this Agreement.
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14.4. Notes Held by Company, etc., Deemed Not Outstanding. For the
purposes of determining whether the holders of the Notes of the requisite
principal amount at the time outstanding have taken any action authorized by
this Agreement or any other Operative Agreement with respect to the giving of
consents or approvals or with respect to the acceleration upon an Event of
Default, any Notes directly or indirectly owned by the Company, either General
Partner, the general partner of the Company or any of their respective
Affiliates shall be disregarded and deemed not to be outstanding.
SECTION 15. PAYMENTS ON NOTES.
15.1. Place of Payment. Payments of principal, Make Whole Amount, Premium
Amount or premium, if any, and interest becoming due and payable on the Notes
shall be made at the principal office of the Trustee, in the Borough of Manhat
tan, the City and State of New York by 12:00 noon, unless the Company, by
written notice to each holder of any Notes, shall designate the principal office
of another bank or trust company in such Borough as such place of payment, in
which case the principal office of such other bank or trust company shall
thereafter be such place of payment.
15.2. Home Office Payment. So long as you or your nominee shall be the
holder of any Note, and notwithstanding anything contained in Section 15.1 or in
such Note to the contrary, the Company will pay all sums becoming due on such
Note for principal, Make Whole Amount, Premium Amount or premium, if any, and
interest no later than 12:00 noon (New York City time) and by the method and at
the address specified for such purpose in Schedule A, or by such other
reasonable method or at such other address as you shall have from time to time
specified to the Company in writing for such purpose, without the presentation
or surrender of such Note or the making of any notation thereon, except that any
Note paid or prepaid in full shall, after such payment or prepayment in full, be
surrendered to the Company at its principal office or at the place of payment
maintained by the Company pursuant to Section 15.1 for cancellation. Prior to
any sale or other disposition of any Note held by you or your nominee you will,
at your election, either endorse thereon the amount of principal paid thereon
and the last date to which interest has been paid thereon or surrender such Note
to the Company in exchange for a new Note or Notes pursuant to Section 14.2. The
Company will afford the benefits of this Section 15.2 to any institutional
investor which is the direct or indirect transferee of any Note purchased by you
under this Agreement
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and which has made the same agreement relating to such Note as you have made in
this Section 15.2.
SECTION 16. EXPENSES, INDEMNIFICATION, ETC.
(a) Whether or not the transactions contemplated hereby shall be
consummated, the Company will pay all expenses in connection with such
transactions and in connection with any amendments or waivers (whether or not
the same become effective) under or in respect of this Agreement, the other
Operative Agreements or the Initial Notes, including, without limitation: (i)
the cost and expenses of preparing and reproducing this Agreement, the other
Operative Agreements and the Initial Notes, of furnishing all opinions by
counsel for the Company, the Restricted Subsidiaries, Triarc or the General
Partners (including any opinions requested by your special counsel, Debevoise &
Plimpton, as to any legal matter arising hereunder) and all certificates on
behalf of the Company, either General Partner, Triarc or any Restricted
Subsidiary, and of the Company's, either General Partner's, Triarc's or any
Restricted Subsidiary's performance of and compliance with all agreements and
conditions contained herein on its part to be performed or complied with; (ii)
the cost of delivering to your principal office, insured to your satisfaction,
the Notes issued in exchange for the Initial Notes sold to you hereunder and any
Notes delivered to you upon any substitution thereof pursuant to Section 14 and
of your delivering any Notes, insured to your satisfaction, upon any such
substitution; (iii) the fees, expenses and disbursements of your special
counsel, Debevoise & Plimpton and your local counsel in connection with such
transac tions and any such amendments or waivers; (iv) the costs and expenses,
including attorneys' fees, incurred by you or any subsequent holder of a Note in
enforcing (or determining whether or how to enforce) any rights under this
Agreement, any other Operative Agreement or the Initial Notes or in responding
to any subpoena or other legal process in connection with this Agreement, any
other Operative Agreement or the Initial Notes or the transactions contemplated
hereby or by reason of you or any subsequent holder of Notes having acquired any
Note, including without limitation costs and expenses incurred in any bankruptcy
case; (v) the cost and expenses of obtaining a Private Placement Number for the
Notes; and (vi) the reasonable out-of-pocket expenses incurred by you in
connection with such transactions and any such amendments or waivers, provided
that the Company shall be required to pay the cost and expenses of only one firm
(and any local counsel) retained by the Noteholders in connection with any
waivers or amendments. The Company also will pay, and will save you and each
holder of any Notes harmless from, all claims in respect of the fees,
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if any, of brokers and finders (unless engaged by you) and any and all
liabilities with respect to any taxes (including interest and penalties) (other
than income taxes) which may be payable in respect of the execution and delivery
hereof, the issue of the Initial Notes or the Notes hereunder and any amendment
or waiver under or in respect hereof or of the Initial Notes or the Notes. In
furtherance of the foregoing, on the date of the Closing the Company will pay
(a) the fees and disbursements of your special counsel which are reflected as
unpaid in the statement of Debevoise & Plimpton, your special counsel, delivered
to the Company prior to the date of the Closing and (b) the fees and
disbursements of your environmental consultant; and thereafter the Company will
pay, promptly upon receipt of supplemental statements therefor from time to
time, additional fees, if any, and disbursements of your special counsel in
connection with the transactions hereby contemplated (including unposted
disbursements as of the date of the Closing).
(b) The Company will protect, indemnify and save harmless the Trustee and
each present, future and former holder of any Note and their respective
officers, di rectors, trustees, employees, agents and representatives
(individually, an "Indemnified Party" and collectively, the "Indemnified
Parties") from and against all losses, liabil ities, obligations, claims,
damages, penalties, causes of action, costs and expenses (including, without
limitation, attorneys' fees and expenses) imposed upon or incurred by or
asserted against any Indemnified Party by reason of (a) ownership of the
Mortgaged Property, or any interest therein, or receipt of any rent or other sum
therefrom, (b) any accident or injury to or death of persons or loss of or
damage to property occurring on or about the Mortgaged Property or any part
thereof, (c) any use, non-use or condition of the Mortgaged Property or any part
thereof, (d) any failure on the part of the Company, either General Partner or
any of their respective Subsidiaries or Affiliates to perform or comply with any
of the terms of this Agreement or any other Operative Agreement, (e) the
performance of any labor or services or the furnishing of any materials or other
property in respect of the Mortgaged Property or any part thereof, (f) any
negligence or tortious act on the part of the Company, either General Partner,
any of their respective Subsidiaries or Affiliates or any of their respective
agents, contractors, sublessees, licensees or invitees, (g) any work in
connection with any alterations, changes or construction of the Mortgaged
Property, (h) any other relationship that has arisen or may arise between the
Company, either General Partner or any of their respective Subsidiaries or
Affiliates and the Indemnified Parties or the Mortgaged Property as a result of
the delivery or performance of this Agreement, any other Operative Agreement or
any action contemplated hereby or
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thereby or by any other document executed in connection herewith or therewith,
(i) the presence or removal, or the discharge, spillage, leakage, emission,
release, threat of release or disposal, of any Hazardous Substances on, under,
about or from the Mortgaged Property or the noncompliance with any Legal
Requirement relating thereto, whether arising prior to the issuance of the
Initial Notes or at any time thereafter and whether or not the Company, either
General Partner or any of their respective Subsidiaries or Affiliates is
responsible therefor or (j) the holding of, or any interest in, any sum
deposited or paid under this Agreement, the Notes or any other Operative
Agreement, provided that nothing contained herein shall be deemed to require the
Company to indemnify the Indemnified Parties for conditions (other than matters
covered by clause (f) above) first occurring subsequent to the earlier of (x)
the taking of exclusive possession and control of the Mortgaged Property for
operational purposes pursuant to Section 21.10 of the Mortgage or Section 6.03
of the Company Security Agreement, (y) the foreclosure of the Lien under any
Security Document and the transfer of title to the Trustee, or (z) for their
respective gross negligence or willful misconduct, or for their breach of their
respective obligations under this Agreement or the other Operative Agreements.
In case any action, claim, suit or proceeding is brought against an
Indemnified Party by reason of any such occurrence, the Company may, and upon
the request of such Indemnified Party will, at the Company's expense resist and
defend such action, suit or proceeding or cause the same to be resisted and
defended by counsel for the insurer of the liability or by counsel designated
by the Company and reasonably satisfactory to the Indemnified Party, as the case
may be, provided that any Indemnified Party shall be entitled to participate in
any such action, suit or proceeding with counsel of its own choice but at its
own expense, and provided further that if any Indemnified Party reasonably
determines that a conflict of interest exists with respect to the representation
by such counsel of such Indemnified Party, the Company shall pay the fees and
expenses of counsel selected by such Indemnified Party. In any event, if the
Company fails to assume the defense within a reasonable time after any such
request, the Indemnified Party may assume such defense or other indemnification
obligation and the fees and expenses of its attorney will be paid by the
Company. The obligations of the Company under this Section 16 shall survive any
termination or satisfaction of this Agreement. Any amounts payable to any
Indemnified Party under this Section 16 which are not paid within 15 days after
written demand therefor by any Indemnified Party shall bear interest at the rate
of 10.54% per annum from the date of such demand. In the event that the Company
shall be required to pay any indemnity
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under this Section 16, the Company shall pay the Indemnified Party an amount
which, after deduction of all taxes required to be paid by such Indemnified
Party in respect of the receipt or accrual thereof (but not for any taxes
payable with respect to amounts received for the payment of income taxes), shall
be equal to the amount of such indemnity.
(c) In connection with the Closing, the General Partners and the Company
are requesting that you make available for funding an amount equal to the
principal amount specified opposite your name in Schedule A. If, for any reason,
on the date scheduled by the General Partners and the Company as the date for
the Closing, (i) the closing conditions are not satisfied by 11:00 a.m. on such
scheduled date, (ii) the General Partners and the Company do not, by 11:00 a.m.
on such scheduled date reschedule such Closing for a subsequent date, and (iii)
the Closing in fact does not occur on such scheduled date, the General Partners
and the Company will protect, indemnify and hold you harmless from and against
any and all losses resulting from your failure or inability to invest on the
scheduled date for the Closing the purchase price of the Initial Notes to be
purchased by you, for the period ending on the next following Business Day at a
rate of interest equal to or greater than the rate of interest on the Initial
Notes.
SECTION 17. SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties contained in this Agreement or the
other Operative Agreements, or made in writing by or on behalf of either General
Partner, the Company, any Restricted Subsidiary or any of their Affiliates in
connection with the transactions contemplated by this Agreement or the other
Operative Agreements, shall survive the execution and delivery of this Agreement
and the other Operative Agreements, any investigation at any time made by you or
on your behalf, the purchase of the Initial Notes or acceptance of the Notes in
exchange for the Initial Notes by you under this Agreement and any disposition
or payment of the Initial Notes or the Notes. All statements contained in any
certificate or other instrument delivered by or on behalf of the General
Partners, the Company, any Restricted Subsidiary or the general partner of the
Company pursuant to this Agreement and/or the other Operative Agreements or in
connection with any amendment, waiver or modification of this Agreement or any
of the other Operative Agreements shall be deemed representations and warranties
of the Company under this Agreement.
SECTION 18. AMENDMENTS AND WAIVERS.
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Any term of this Agreement or of the Notes may be amended and the
observance of any term of this Agreement or of the Notes may be waived (either
generally or in a particular instance and either retroactively or prospectively)
only with the written consent of the Company and the Required Holders, provided
that, without the prior written consent of the holders of all the Notes at the
time outstanding, no such amendment or waiver shall (a) change the maturity or
the principal amount of, or change the rate of interest or the time of payment
of interest on, or change the amount or the time of payment of any principal or
Make Whole Amount, Premium Amount or premium payable on any prepayment of, any
Note, (b), subject to other requirements set forth in the Trust Agreement,
release any Lien against the Mortgaged Property for the benefit of the holders
of the Notes, (c) reduce the aforesaid percentage of the principal amount of the
Notes the holders of which are required to consent to any such amendment or
waiver or change the rights of the holders of a Note with respect thereto, (d)
change the percentage of the principal amount of the Notes the holders of which
may declare the Notes to be due and payable as provided in Section 11 or change
the rights of the holders of a Note with respect thereto, (e) decrease the
percentage of the principal amount of the Notes the holders of which may rescind
and annul any such declaration as provided in Section 11 or (f) modify the
provisions of Section 9.8. Any amendment or waiver effected in accordance with
this Section 18 shall be binding upon each holder of any Note at the time
outstanding, each future holder of any Note, each General Partner and the
Company.
SECTION 19. NOTICES, ETC.
Except as otherwise provided in this Agreement, notices and other
communications under this Agreement shall be in writing and shall be delivered
by hand, by express courier service or by registered or certified mail, return
receipt requested, postage prepaid, addressed, (a) if to you, at the address set
forth in Sched ule A or at such other address as you shall have furnished to the
Company in writing, except as otherwise provided in Section 15.2 with respect to
payments on Notes held by you or your nominee, or (b) if to any other holder of
any Note, at such address as such other holder shall have furnished to the
Company in writing, or, until any such other holder so furnishes to the Company
an address, then to and at the address of the last holder of such Note who has
furnished an address to the Company, or (c) if to the Company or either General
Partner, at the address set forth at the beginning of this Agreement to the
attention of Senior Vice President and Chief Financial Officer, or at
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such other address, or to the attention of such other officer, as the Company
shall have furnished to you and each such other holder in writing.
SECTION 20. REPRODUCTION OF DOCUMENTS.
This Agreement, each Operative Agreement and all documents relating
thereto, including, without limitation, (a) consents, waivers and notifications
which may hereafter be executed, (b) documents received by you at the Closing
(except the Notes themselves), and (c) financial statements, certificates and
other information previously or hereafter furnished to you, may be reproduced by
you by any photographic, photo static, microfilm, microcard, miniature
photographic or other similar process and you may destroy any original document
so reproduced. Each General Partner and the Company agrees and stipulates that,
to the extent permitted by applicable law, any such reproduction shall be
admissible in evidence as the original itself in any judicial or administrative
proceeding (whether or not the original is in existence and whether or not such
reproduction was made by you in the regular course of business) and any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
SECTION 21. MISCELLANEOUS.
This Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto,
whether so expressed or not, and, in particular, shall inure to the benefit of
and be enforceable by any holder or holders at the time of the Notes or any part
thereof. Except as stated in Section 17, this Agreement embodies the entire
agreement and understanding among you, the General Partners and the Company and
supersedes all prior agreements and understandings relating to the subject
matter hereof. The headings in this Agreement are for purposes of reference only
and shall not limit or otherwise affect the meaning hereof. This Agreement may
be executed in any number of counterparts, each of which shall be an original,
but all of which together shall constitute one instrument.
SECTION 22. SUBMISSION TO JURISDICTION.
For the purpose of assuring that any holder of Notes may enforce its
rights under this Agreement, the Initial Notes, the Notes and the other
Operative Agreements, each General Partner and the Company, for itself and its
successors and assigns,
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<PAGE>
hereby, to the fullest extent permitted by applicable law, irrevocably (a)
agrees that any legal or equitable action, suit or proceeding brought against it
arising out of or relating to this Agreement, any other Operative Agreement and
the Initial Notes, or any transaction contemplated hereby or the subject matter
of any of the foregoing or for recognition or enforcement of any judgment
rendered in any such action, suit or proceeding may be instituted in any state
or federal court sitting in the Borough of Manhattan in the State of New York,
(b) waives any objection which it may now or hereafter have to the laying of
venue of any such action, suit or proceeding brought in any such court, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim that any such action, suit or proceeding brought in any such court has
been brought in an inconvenient forum, or any right to require the proceeding to
be conducted in any other jurisdiction by reason of its present or future
domicile, (c) irrevocably submits itself to the non-exclusive jurisdiction of
any state or federal court of competent jurisdiction sitting in the Borough of
Manhattan in the State of New York for purposes of any such action, suit or
proceeding, and (d) irrevocably waives any immunity from jurisdiction to which
it might otherwise be entitled in any such action, suit or proceeding which may
be instituted in any state or federal court sitting in the Borough of Manhattan
in the State of New York, and irrevocably waives any immunity from, or objection
to, the maintaining of an action against it to enforce any judgment for money
obtained in any such action, suit or proceeding and any immunity from execution.
SECTION 23. WAIVER OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES THE
RIGHT TO TRIAL BY JURY IN ANY LEGAL OR EQUITABLE ACTION, SUIT OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE INITIAL NOTES, THE NOTES OR
ANY OTHER OPERATIVE AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY OR THEREBY
OR THE SUBJECT MATTER OF ANY OF THE FOREGOING.
SECTION 24. GOVERNING LAW.
THIS AGREEMENT HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW YORK,
STATE OF NEW YORK, UNITED STATES OF AMERICA. THIS AGREEMENT AND (UNLESS
OTHERWISE EXPRESSLY
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<PAGE>
PROVIDED) ALL AMENDMENTS AND SUPPLEMENTS TO, AND ALL CONSENTS AND WAIVERS
PURSUANT TO, THIS AGREEMENT SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
SECTION 25. CONFIDENTIAL INFORMATION.
For the purposes of this Section 25, "Confidential Information" means
information delivered to you by or on behalf of the Company or any Restricted
Subsidiary in connection with the transactions contemplated by or otherwise
pursuant to this Agreement that is proprietary in nature and that was clearly
marked or labeled or otherwise adequately identified when received by you as
being confidential information of the Company or such Restricted Subsidiary,
provided that such term does not include information that (a) was publicly known
or otherwise known to you prior to the time of such disclosure, (b) subsequently
becomes publicly known through no act or omission by you or any person acting on
your behalf, (c) otherwise becomes known to you other than through disclosure by
the Company or any Restricted Subsidiary or (d) constitutes financial statements
delivered to you under Section 7 that are otherwise publicly available. You will
maintain the confidentiality of such Confidential Information in accordance with
procedures adopted by you in good faith to protect confidential information of
third parties delivered to you, provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers, employees,
agents, attorneys and affiliates (to the extent such disclosure reasonably
relates to the administration of the investment represented by your Notes), (ii)
your financial advisors and other professional advisors who agree to hold
confidential the Confidential Information substantially in accordance with the
terms of this Section 25, (iii) any other holder of any Note, (iv) any
Institutional Investor to which you sell or offer to sell such Note or any part
thereof or any participation therein (if such Person has agreed in writing prior
to its receipt of such Confidential Information to be bound by the provisions of
this Section 25), (v) any Person from which you offer to purchase any security
of the Company (if such Person has agreed in writing prior to its receipt of
such Confidential Information to be bound by the provisions of this Section 25),
(vi) any federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any similar
organization, or any nationally recognized rating agency that requires access to
information about your
118
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<PAGE>
investment portfolio or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (w) to effect compliance with any
law, rule, regulation or order applicable to you, (x) in response to any
subpoena or other legal process, (y) in connection with any litigation to which
you are a party or (z) if an Event of Default has occurred and is continuing, to
the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 25 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 25.
SECTION 26. LIMITATION OF RECOURSE AGAINST NATIONAL PROPANE SGP.
Notwithstanding anything to the contrary contained in any of the Operative
Agreements, it is expressly understood and agreed that National Propane SGP is
not and shall not be liable (a) for the payment of any amount due, or the
performance of any obligations of the Company or the Public Partnership or
National Propane Corp. arising, hereunder or under any Security Document or (b)
for monetary damages for the breach of performance by the Company or the Public
Partnership or National Propane Corp. of any of the covenants, obligations or
indemnifications, or for the breach of any warranty or representation, contained
herein or in any of the Security Documents, provided, that the foregoing shall
not under any circumstances limit the ability of any holder of a Note or the
Trustee from naming National Propane SGP a party to, or otherwise joining
National Propane SGP in, any action, suit or proceeding with respect to this
Agreement or any other Operative Agreement or any of the transactions
contemplated hereby or thereby if naming or joining National Propane SGP is
required to bring any action, suit or proceeding against the Company.
SECTION 27. SIDE LETTER.
119
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<PAGE>
The parties hereto hereby agree that the letter agreement attached hereto
as Exhibit R is incorporated herein in all respects as if set forth herein in
full.
120
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<PAGE>
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterpart of this Agreement and return the same to
the undersigned, whereupon this Agreement shall become a binding agreement
between you and the undersigned.
Very truly yours,
NATIONAL PROPANE, L.P.
By: NATIONAL PROPANE CORPORATION,
a General Partner
By
--------------------------
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
a General Partner
By
--------------------------
Name:
Title:
NATIONAL PROPANE SGP, INC.
By
--------------------------
Name:
Title:
121
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<PAGE>
NATIONAL PROPANE CORPORATION
By
--------------------------
Name:
Title:
The foregoing Agreement is
hereby accepted and agreed to
as of the date first above
written.
THE NORTHWESTERN MUTUAL LIFE
INSURANCE COMPANY
By
-------------------------
Name:
Title:
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By
---------------------------
Name:
Title:
122
<PAGE>
<PAGE>
CONNECTICUT GENERAL LIFE
INSURANCE COMPANY
By: CIGNA INVESTMENTS, INC.
By
-------------------------
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY, on behalf of its Separate Account 66
By: CIGNA INVESTMENTS, INC.
By
-------------------------
Name:
Title:
LIFE INSURANCE COMPANY OF NORTH AMERICA
By: CIGNA INVESTMENTS, INC.
By
-------------------------
Name:
Title:
123
<PAGE>
<PAGE>
SECURITY LIFE OF DENVER INSURANCE COMPANY
By: ING Investment Management, Inc.
By
-------------------------
Its: Senior Vice President
and Managing Director
MIDWESTERN UNITED LIFE INSURANCE COMPANY
By: ING Investment Management, Inc.
By
----------------------------
Its: Senior Vice President
and Managing Director
PEERLESS INSURANCE COMPANY
By: ING Investment Management, Inc.
By
----------------------------
Its: Senior Vice President
and Managing Director
124
<PAGE>
<PAGE>
JEFFERSON-PILOT LIFE INSURANCE COMPANY
By
-------------------------
Name:
Title:
GENERAL AMERICAN LIFE INSURANCE COMPANY
By
-------------------------
Name:
Title:
KEYPORT LIFE INSURANCE COMPANY
By Stein Roe & Farnham Incorporated, as agent
By
-------------------------
Name:
Title: Senior Vice President
125
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<PAGE>
PACIFIC MUTUAL LIFE INSURANCE COMPANY
By___________________________
Name:
Title:
By___________________________
Name:
Title:
PRINCIPAL MUTUAL LIFE
INSURANCE COMPANY
By
-------------------------
Name:
Title:
By
-------------------------
Name:
Title:
126
<PAGE>
<PAGE>
TMG LIFE INSURANCE COMPANY
by The Mutual Group (U.S.),
Inc., its agent
By
-------------------------
Name: Robert R. Lapointe
Title: Vice President
By
-------------------------
Name: Michael J. Carew
Title: Assistant Vice President
NORTHERN LIFE INSURANCE COMPANY
By
-------------------------
Name:
Title:
NORTHWESTERN NATIONAL LIFE INSURANCE COMPANY
By
-------------------------
Name:
Title:
127
<PAGE>
<PAGE>
Schedule A
The Northwestern Mutual Life Insurance Company
Teachers Insurance and Annuity Association of America
Connecticut General Life Insurance Company
Connecticut General Life Insurance Company,
on behalf of its Separate Account 66
Life Insurance Company of North America
Security Life of Denver Insurance Company
Midwestern United Life Insurance Company
Peerless Insurance Company
Jefferson-Pilot Life Insurance Company
General American Life Insurance Company
Keyport Life Insurance Company
Pacific Mutual Life Insurance Company
Principal Mutual Life Insurance Company
TMG Life Insurance Company
Northern Life Insurance Company
Northwestern National Life Insurance Company
<PAGE>
<PAGE>
EXHIBIT 1 TO 10.2 EXH
Exhibit A1
Form of Initial Note
NATIONAL PROPANE CORPORATION
8.54% FIRST MORTGAGE NOTES DUE JUNE 30, 2010
Private Placement No.: 637249 B@ 1
No. R- 1 New York, N.Y.
$2 July 1, 1996
National Propane Corporation, a Delaware corporation ("National Propane
Corp."), for value received, hereby promises to pay to 3, or registered assigns,
the principal amount of $2 on June 30, 2010, with interest (computed on the
basis of a 360-day year of twelve 30-day months) on the unpaid balance of such
principal amount at a rate equal to 8.54 % per annum, from the date hereof
through and including June 30, 2010, such interest to be payable semiannually on
each June 30 and December 30 after the date hereof, commencing on December 30,
1996, until such unpaid balance shall become due and payable (whether at
maturity or at a date fixed for prepayment or by declaration or otherwise), and
with interest on any overdue principal (including any overdue prepayment of
principal) and Make Whole Amount (as defined in the Note Agreements referred to
below), if any, Premium Amount (as defined in the Note Agreements referred to
below), if any, and (to the extent permitted by applicable law) on any overdue
interest, at a rate equal to 10.54% per annum, until paid, payable semiannually
as aforesaid or, at the option of the holder hereof, on demand. Subject to
Section 15.2 of the Note Agreements, payments of principal, Make Whole Amount,
if any, Premium Amount, if any, and interest on this Note shall be made in
lawful money of the United States of America at the principal office of The Bank
of New York, in the Borough of Manhattan, the City and State of New York, or at
such other office or agency in such Borough as National Propane Corp. shall have
designated by written notice to the holder of this Note as provided in the Note
Agreements.
This Note is one of National Propane Corp.'s 8.54% First Mortgage Notes
due June 30, 2010 (the "Notes"), originally issued in the aggregate principal
amount of $125,000,000 pursuant to the separate Note Agreements, each dated as
of June 26, 1996, among National Propane Corp., National Propane, L.P., a
Delaware limited partnership (the "Company"), National Propane SGP, Inc., a
Delaware corporation ("National Propane SGP") and certain institutional
investors named therein, as amended, modified or supplemented from time to time
(the "Note Agreements").
<PAGE>
<PAGE>
The holder of this Note is entitled to the benefits of such Note Agreements and
the holder may enforce the agreements of National Propane Corp. contained
therein and exercise the remedies provided for thereby or otherwise available in
respect thereof.
The Notes are entitled to the benefits of certain security held by The
Bank of New York (the "Trustee") or its successors acting as trustee under the
Intercreditor and Trust Agreement, dated as of June 26, 1996, among the Trustee,
the holders of the Notes, National Propane Corp., the Company, the Qualifying
Restricted Subsidiaries (as such term is defined in the Note Agreements), the
Administrative Agent (as defined in the Note Agreements) and the Banks (as
defined in the Note Agreements), as amended, modified or supplemented from time
to time (the "Trust Agreement"). Reference is made to the Trust Agreement for a
description of such security.
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE TRUST
AGREEMENT, WHICH TRUST AGREEMENT, AMONG OTHER THINGS, ESTABLISHES CERTAIN RIGHTS
WITH RESPECT TO THE SECURITY FOR THIS NOTE AND THE SHARING OF PROCEEDS THEREOF
WITH CERTAIN OTHER SECURED CREDITORS. COPIES OF SUCH TRUST AGREEMENT WILL BE
FURNISHED TO ANY HOLDER OF THIS NOTE UPON REQUEST TO THE COMPANY.
This Note is a Note in registered form and is transferable only upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the registered
holder hereof or its attorney duly authorized in writing. National Propane Corp.
may treat the person in whose name this Note is registered on the register kept
by National Propane Corp. as provided in the Note Agreements as the owner of
this Note for the purpose of receiving payment and for all other purposes, and
National Propane Corp. shall not be affected by any notice to the contrary.
The Notes are subject to required and optional prepayment, in whole or in
part, in certain cases with a Make Whole Amount or a Premium Amount all as
specified in the Note Agreements.
In case an Event of Default, as defined in the Note Agreements, shall
occur and be continuing, the unpaid balance of the principal of this Note may
become due and payable in the manner and with the effect provided in the Note
Agreements.
THIS NOTE HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW YORK, STATE
OF NEW YORK, UNITED STATES OF AMERICA. THIS NOTE SHALL IN ALL RESPECTS BE
GOVERNED BY,
2
<PAGE>
<PAGE>
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
NATIONAL PROPANE CORPORATION
By_________________________
Name:
Title:
3
<PAGE>
<PAGE>
Exhibit A2
NATIONAL PROPANE, L.P.
8.54% FIRST MORTGAGE NOTES DUE JUNE 30, 2010
Private Placement No.: 63725# AA 6
No. R- 1 New York, N.Y.
$2 July 1, 1996
National Propane, L.P., a Delaware limited partnership (the "Company"),
for value received, hereby promises to pay to 3, or registered assigns, the
principal amount of $2 on June 30, 2010, with interest (computed on the basis of
a 360-day year of twelve 30-day months) on the unpaid balance of such principal
amount at a rate equal to 8.54% per annum, from the date hereof through and
including June 30, 2010, such interest to be payable semiannually on each June
30 and December 30 after the date hereof, commencing on December 30, 1996, until
such unpaid balance shall become due and payable (whether at maturity or at a
date fixed for prepayment or by declaration or otherwise), and with interest on
any overdue principal (including any overdue prepayment of principal) and Make
Whole Amount (as defined in the Note Agreements referred to below), if any,
Premium Amount (as defined in the Note Agreements referred to below), if any,
and (to the extent permitted by applicable law) on any overdue interest, at a
rate equal to 10.54% per annum, until paid, payable semiannually as aforesaid
or, at the option of the holder hereof, on demand. Subject to Section 15.2 of
the Note Agreements, payments of principal, Make Whole Amount, if any, Premium
Amount, if any, and interest on this Note shall be made in lawful money of the
United States of America at the principal office of The Bank of New York, in the
Borough of Manhattan, the City and State of New York, or at such other office or
agency in such Borough as the Company shall have designated by written notice to
the holder of this Note as provided in such Note Agreements.
This Note is one of the Company's 8.54 % First Mortgage Notes due June 30,
2010 (the "Notes"), originally issued in the aggregate principal amount of
$125,000,000 pursuant to the separate Note Agreements, each dated as of June 26,
1996, among the Company, National Propane Corporation, a Delaware corporation
("National Propane Corp."), National Propane SGP, Inc. a Delaware corporation
("National Propane SGP") and certain institutional investors named therein, as
amended, modified or supplemented from time to time (the "Note Agreements"). The
holder of this Note is entitled to the benefits of such Note Agreements and the
holder may enforce the agreements
<PAGE>
<PAGE>
of the Company contained therein and exercise the remedies provided for thereby
or otherwise available in respect thereof.
The Notes are entitled to the benefits of certain security held by The
Bank of New York (the "Trustee") or its successors acting as trustee under the
Intercreditor and Trust Agreement, dated as of June 26, 1996, among the Trustee,
the holders of the Notes, the Company, National Propane Corp., Qualifying
Restricted Subsidiaries (as such term is defined in the Note Agreements), the
Administrative Agent (as defined in the Note Agreements) and the Banks (as
defined in the Note Agreements), as amended, modified or supplemented from time
to time (the "Trust Agreement"). Reference is made to the Trust Agreement for a
description of such security.
THIS NOTE IS SUBJECT TO THE TERMS AND CONDITIONS CONTAINED IN THE TRUST
AGREEMENT, WHICH TRUST AGREEMENT, AMONG OTHER THINGS, ESTABLISHES CERTAIN RIGHTS
WITH RESPECT TO THE SECURITY FOR THIS NOTE AND THE SHARING OF PROCEEDS THEREOF
WITH CERTAIN OTHER SECURED CREDITORS. COPIES OF SUCH TRUST AGREEMENT WILL BE
FURNISHED TO ANY HOLDER OF THIS NOTE UPON REQUEST TO THE COMPANY.
This Note is a Note in registered form and is transferable only upon sur
render of this Note for registration of transfer, duly endorsed, or accompanied
by a written instrument of transfer duly executed, by the registered holder
hereof or its attorney duly authorized in writing. The Company may treat the
person in whose name this Note is registered on the register kept by the Company
as provided in the Note Agreements as the owner of this Note for the purpose of
receiving payment and for all other purposes, and the Company shall not be
affected by any notice to the contrary.
The Notes are subject to required and optional prepayment, in whole or in
part, in certain cases with a Make Whole Amount or Premium Amount all as
specified in the Note Agreements.
In case an Event of Default, as defined in the Note Agreements, shall
occur and be continuing, the unpaid balance of the principal of this Note may
become due and payable in the manner and with the effect provided in the Note
Agreements.
2
<PAGE>
<PAGE>
It is expressly understood and agreed that National Propane SGP is not and
shall not be liable for the payment of any amount due, or the performance of any
obligations of the Company arising, hereunder, provided, that the foregoing
shall not under any circumstances limit the ability of any holder of this Note
or the Trustee from naming National Propane SGP a party to, or otherwise joining
National Propane SGP in, any action, suit or proceeding with respect to this
Note if naming or joining National Propane SGP is required to bring any action,
suit or proceeding against the Company.
THIS NOTE HAS BEEN EXECUTED AND DELIVERED IN THE CITY OF NEW YORK, STATE
OF NEW YORK, UNITED STATES OF AMERICA. THIS NOTE SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEW YORK.
NATIONAL PROPANE, L.P.,
By: NATIONAL PROPANE
CORPORATION, its general partner
By:
-----------------------------
Name:
Title:
By: NATIONAL PROPANE SGP, INC.,
its general partner
By:
-----------------------------
Name:
Title:
3
<PAGE>
<PAGE>
Exhibit C
Form of Trust Agreement
Filed as Exhibit P to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
4
<PAGE>
<PAGE>
Exhibit D1
Form of Mortgage, Security Agreement and Fixture Filings
Filed as Exhibit G-1 to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
5
<PAGE>
<PAGE>
Exhibit D2
Form of Deed of Trust, Security Agreement and Fixture Filing
Filed as Exhibit G-2 to the Credit Agreement
6
<PAGE>
<PAGE>
Exhibit E
Form of Subordination Provisions
Set forth in the form of Intercompany Note attached
to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
7
<PAGE>
<PAGE>
Exhibit F
Form of Cash Collateral Agreement
Filed as Exhibit J to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
8
<PAGE>
<PAGE>
Exhibit G
Form of Company Security Agreement
Filed as Exhibit D-2 to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
9
<PAGE>
<PAGE>
Exhibit H
Form of General Partner's Guarantee Agreement
Filed as Exhibit C-1 to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
10
<PAGE>
<PAGE>
Exhibit I
Form of Intercompany Note
Filed as Exhibit E to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
11
<PAGE>
<PAGE>
Exhibit J
Form of Agency Account Agreement
Filed as Exhibit F to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
12
<PAGE>
<PAGE>
Exhibit M
Form of Partners Security Agreement
Filed as Exhibit D-1 to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
13
<PAGE>
<PAGE>
Exhibit O
Restricted Subsidiaries
National Sales and Service, Inc.
14
<PAGE>
<PAGE>
Exhibit P
Form of Subsidiay Guarantee Agreement
Filed as Exhibit C-2 to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
15
<PAGE>
<PAGE>
Exhibit Q
Form of Supplemental Agreement
Filed as Exhibit L to the Credit Agreement (Exhibit 10.1 to this Form 8-K)
16
<PAGE>
<PAGE>
__________________________________________________
CONVEYANCE, CONTRIBUTION AND ASSUMPTION
AGREEMENT
by and among
NATIONAL PROPANE PARTNERS, L.P.,
NATIONAL PROPANE, L.P.,
NATIONAL PROPANE CORPORATION,
and
NATIONAL PROPANE SGP, INC.
Dated as of July 2, 1996
__________________________________________________
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions......................................................2
2. Contribution Transactions........................................6
2.1 Contribution to the Master Partnership.....................6
2.2 Contribution to the Operating Partnership..................7
2.3 Overallotment Option.......................................7
2.4 Effect of Contributions....................................8
2.5 Order of Contributions.....................................8
3. Matters Relating to Debt.........................................9
3.1 Issuance of Notes..........................................9
3.2 Repayment of the Assumed Existing Bank Debt................9
3.3 The Bank Credit Facility...................................9
4. Miscellaneous....................................................9
4.1 Costs......................................................9
4.2 Headings; References; Interpretation......................10
4.3 Successors and Assigns....................................10
4.4 No Third Party Rights.....................................10
4.5 Counterparts..............................................10
4.6 Governing Law.............................................10
4.7 Severability..............................................11
4.8 Deed; Bill of Sale; Assignment............................11
4.9 Amendment or Modification.................................11
4.10 Integration...............................................11
<PAGE>
<PAGE>
This CONVEYANCE, CONTRIBUTION AND ASSUMPTION AGREEMENT, dated as of
July 2, 1996, is entered into by and among NATIONAL PROPANE PARTNERS, L.P., a
Delaware limited partnership (the "Master Partnership"), NATIONAL PROPANE, L.P.,
a Delaware limited partnership (the "Operating Partnership"), NATIONAL PROPANE
CORPORATION, a Delaware corporation (the "Managing General Partner"), and
NATIONAL PROPANE SGP, INC., a Delaware corporation and formerly known as All
Seasons Acquisition Corp. (the "Special General Partner").
RECITALS
WHEREAS, the Managing General Partner and the Special General
Partner, as the general partners, and Triarc Companies, Inc., a Delaware
corporation ("Triarc"), as the organizational limited partner, have heretofore
formed the Master Partnership pursuant to the Delaware Revised Uniform Limited
Partnership Act (the "Delaware Act");
WHEREAS, the Managing General Partner and the Special General
Partner each has heretofore contributed $10.00 to the Master Partnership in
exchange for a 1.0% general partner interest issued to each in the Master
Partnership; and Triarc has heretofore contributed $980.00 to the Master
Partnership in exchange for a 98.0% organizational limited partner interest in
the Master Partnership;
WHEREAS, the Managing General Partner and the Special General
Partner, as the general partners and limited partners, and the Master
Partnership, as limited partner, have heretofore formed the Operating
Partnership pursuant to the Delaware Act for the purpose of acquiring, owning
and operating the Assets and the Business (as hereinafter defined);
WHEREAS, the Managing General Partner and the Special General
Partner have each heretofore contributed $20.96 to the Operating Partnership in
exchange for a 2.0956% general partner interest therein issued to each, the
Managing General Partner and the Special General Partner have heretofore
contributed an aggregate of $958.07 to the Operating Partnership in exchange for
a 95.8087% limited partner interest therein, and the Master Partnership has
heretofore contributed $.01 to the Operating Partnership in exchange for a
0.0001% limited partner interest therein;
WHEREAS, as of June 26, 1996, the Underwriting Agreement (as
hereinafter defined) was entered into by the parties thereto;
WHEREAS, as of the date hereof, the Public Offering was consummated
and the Master Partnership issued 6,190,476 Common Units for total Gross Public
Offering Proceeds of $129,999,996;
<PAGE>
<PAGE>
2
WHEREAS, as of the date hereof, the Managing General Partner and the
Special General Partner, as the general partners, and Triarc, as the
organizational limited partner, have entered into that certain Amended and
Restated Agreement of Limited Partnership of the Master Partnership (as it may
be amended, supplemented or restated from time to time, the "Master Partnership
Agreement");
WHEREAS, as of the date hereof, the Managing General Partner and the
Special General Partner, as the general partners and the limited partners, and
the Master Partnership, as the limited partner, have entered into that certain
Amended and Restated Agreement of Limited Partnership of the Operating
Partnership (as it may be amended, supplemented or restated from time to time,
the "Operating Partnership Agreement"); and
NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the parties to this Agreement undertake and agree as
follows:
1. Definitions.
The following capitalized terms shall have the meanings given below.
"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, 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. Notwithstanding anything contained in this definition to the
contrary, the term Affiliate, (i) with respect to the Operating Partnership and
the Master Partnership, shall not include the Managing General Partner, the
Special General Partner or Triarc (or their respective Affiliates determined
without regard to the Operating Partnership or the Master Partnership), and (ii)
with respect to the Managing General Partner, the Special General Partner or
Triarc, shall not include the Operating Partnership or the Master Partnership
(or their respective Affiliates determined without regard to the Managing
General Partner, the Special General Partner or Triarc).
"Agreement" means this Conveyance, Contribution and Assumption
Agreement, as it may be amended, supplemented or restated from time to time.
"Assumed Existing Bank Debt" means the aggregate principal amount,
accrued interest and other amounts, fees and expenses payable under the Existing
Credit Facility.
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3
"Bank Credit Facility" means the Credit Agreement, dated as of June
26, 1996, by and among the Operating Partnership and The First National Bank of
Boston, as administrative agent, BA Securities, Inc., as syndication agent, and
the financial institutions listed therein, providing for borrowings under the
working capital facility in an aggregate principal amount of up to $15 million
and borrowings under the acquisition and expansion facility in an aggregate
principal amount of up to $40 million.
"Bank Credit Facility Expenses" means all commissions, fees and
other out-of-pocket expenses (including fees and expenses of accountants,
attorneys, consultants or other agents) incurred, paid or payable by the
Operating Partnership to the administrative agent, co-agent, syndication agent,
lenders or other Persons in connection with the Bank Credit Facility.
"Business" means the businesses currently or previously conducted by
the Managing General Partner or the Special General Partner (including any
businesses conducted by any predecessor of the Managing General Partner or the
Special General Partner).
"Common Units" means an LP Interest having the rights and
obligations specified with respect to Common Units in the Master Partnership
Agreement.
"Delaware Act" has the meaning assigned to such term in the Recitals
to this Agreement.
"Effective Time" means a time mutually agreed upon among the Master
Partnership, Operating Partnership, the Special General Partner and Managing
General Partner, but not later than the effective date of the Public Offering.
"Existing Credit Facility" means 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.
"General Partner Interest" shall mean, with respect to the Operating
Partnership or the Master Partnership, an interest in the profits, losses and
capital of the Operating Partnership or the Master Partnership, as the case may
be, that provides the holder thereof with the rights and obligations of a
general partner in accordance with the Operating Partnership Agreement or the
Master Partnership Agreement, as the case may be.
"General Partner Parties" means the Managing General Partner, the
Special General Partner and any of their Affiliates (including, without
limitation,
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4
Triarc), and (unless such Persons are Operating Partnership Parties) any of
their respective directors, shareholders, partners, members, officers,
employees, agents, consultants, customers, representatives, successors,
transferees or assignees.
"Gross Overallotment Proceeds" means the gross proceeds received by
the Master Partnership in connection with the exercise of the Overallotment
Option.
"Gross Public Offering Proceeds" means the gross proceeds received
by the Master Partnership in connection with the Public Offering (excluding any
proceeds in respect of the exercise of the Overallotment Option).
"Incentive Distribution Rights" has the meaning assigned to such
term in the Master Partnership Agreement.
"LP Interest" shall mean, with respect to the Operating Partnership
or the Master Partnership, an interest in the profits, losses and capital of the
Operating Partnership or the Master Partnership, as the case may be, that
provides the holder thereof with the rights and obligations of a limited partner
in accordance with the Operating Partnership Agreement or the Master Partnership
Agreement, as the case may be.
"Managing General Partner" has the meaning assigned to such term in
the opening paragraph of this Agreement.
"Master Partnership" has the meaning assigned to such term in the
opening paragraph of this Agreement.
"Master Partnership Agreement" has the meaning assigned to such term
in the Recitals to this Agreement.
"Net Note Proceeds" means the $125 million in gross proceeds
received by the Managing General Partner in connection with the Note Offering,
less the Note Offering Expenses and less $59.3 million that is distributed by
the Managing General Partner to its shareholder.
"Note Offering" means the offer and sale of the Notes pursuant to
the Note Purchase Agreements.
"Note Offering Expenses" means all commissions, fees and other
out-of-pocket expenses (including fees and expenses of accountants, attorneys,
consultants or other agents) incurred, paid or payable by the Managing General
Partner or the Operating Partnership to the placement agent or other Persons in
connection with the Note Offering.
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5
"Note Purchase Agreements" means the note agreements, each dated as
of June 26, 1996, between the Managing General Partner, the Special General
Partner, the Partnership and the respective lenders named therein, relating to
the Note Offering, as assigned to and assumed by the Operating Partnership.
"Notes" means the First Mortgage Notes issued by the Managing
General Partner in the Note Offering pursuant to the Note Purchase Agreements.
"OLP Contribution and Assumption Agreement" means the Contribution
and Assumption Agreement, dated as of the date hereof, among the Managing
General Partner, the Special General Partner, the Operating Partnership and
National Sales & Service, Inc. (the "Operating Partnership Subsidiary"),
pursuant to which the Managing General Partner and the Special General Partner
shall convey substantially all of their assets to the Operating Partnership and
the Operating Partnership Subsidiary.
"Operating Partnership" has the meaning assigned to such term in the
opening paragraph of this Agreement.
"Operating Partnership Agreement" has the meaning assigned to such
term in the Recitals to this Agreement.
"Operating Partnership Parties" means the Operating Partnership and
any direct or indirect subsidiary or Affiliate of the Operating Partnership, and
any of their respective directors, shareholders, partners, members, officers,
employees, agents, consultants, customers, representatives, successors,
transferees or assignees.
"Overallotment Option" means the overallotment option granted to the
Underwriters under the Underwriting Agreement.
"Party" means each of the Persons who are signatories to this
Agreement.
"Person" means an individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.
"Public Offering" means the initial public offering by the Master
Partnership of up to 7,119,047 Common Units (including 928,571 Common Units
issuable upon exercise of the Overallotment Option).
"Public Offering Expenses" means all underwriting discounts,
commissions, fees and other out-of-pocket expenses (including an investment
banking advisory fee payable under a letter agreement dated June 26, 1996
between the Master
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<PAGE>
6
Partnership and Merrill Lynch, Pierce, Fenner & Smith Incorporated, and fees and
expenses of accountants, attorneys, printers, consultants or other agents)
incurred, paid, payable or provided by the Operating Partnership to the
Underwriters or other Persons in connection with the Public Offering.
"Representatives" means Merrill Lynch, Pierce, Fenner & Smith
Incorporated, Donaldson, Lufkin & Jenrette Securities Corporation, Jamey
Montgomery Scott Inc., Raucher Pierce Refsnes, Inc. and The Robinson-Humphrey
Company, Inc. as the representatives for the Underwriters.
"Special General Partner" has the meaning assigned to such term in
the opening paragraph of this Agreement.
"Subordinated Units" means a General Partner Interest having the
rights and obligations specified with respect to Subordinated Units in the
Master Partnership Agreement.
"Transaction Documents" means this Agreement, the OLP Contribution
and Assumption Agreement, the Underwriting Agreement, the Master Partnership
Agreement, the Operating Partnership Agreement, the Subsidiary Services
Agreement, the Note Purchase Agreements and the Bank Credit Facility.
"Underwriters" means the several Underwriters listed in Exhibit A to
the Underwriting Agreement.
"Underwriting Agreement" means the Purchase Agreement dated as of
June 26, 1996, by and among the Master Partnership, the Operating Partnership,
the Managing General Partner, the Special General Partner, Triarc Companies,
Inc. and each of the Representatives, as representatives of the Underwriters,
relating to the Public Offering.
2. Contribution Transactions.
2.1 Contribution to the Master Partnership. Immediately after
the completion of the transactions provided for in OLP Contribution and
Assumption Agreement,
(a) the Managing General Partner hereby grants,
contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to the Master Partnership, its successors and assigns, for its and
their own use forever, all of its right, title and interest in and to its LP
Interest in the Operating Partnership in exchange for (i) maintaining its
unsubordinated General Partner Interest in the Master Partnership with a
percentage interest of 1.0%, (ii) 4,533,638 Subordinated Units,
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7
(iii) the Incentive Distribution Rights and (iv) other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged; and
(b) the Special General Partner hereby grants,
contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to the Master Partnership, its successors and assigns, for its and
their own use forever, all of its right, title and interest in and to its LP
interest in the Operating Partnership in exchange for maintaining its
unsubordinated General Partner Interest in the Master Partnership with a
percentage interest of 1.0% and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
TO HAVE AND TO HOLD the LP Interests in the Operating
Partnership unto the Master Partnership, its successors and assigns, together
with all and singular the rights and appurtenances thereto in any way belonging,
subject, however, to the terms and conditions stated in this Agreement, forever.
2.2 Contribution to the Operating Partnership.
(a) Immediately after the completion of the transactions
provided for in Section 2.1 and the Public Offering, the Master Partnership
hereby grants, contributes, bargains, sells, conveys, assigns, transfers, sets
over and delivers to the Operating Partnership, its successors and assigns, for
its and their own use forever, all of its right, title and interest in and to
the Gross Public Offering Proceeds in exchange for (A) the consideration stated
in Section 2.2(b) and (B) other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and
TO HAVE AND TO HOLD the Gross Public Offering Proceeds unto the
Operating Partnership, its successors and assigns, together with all and
singular the rights and appurtenances thereto in any way belonging, subject,
however, to the terms and conditions stated in this Agreement, forever.
(b) In consideration for the contribution of the Gross
Public Offering Proceeds to the Operating Partnership, the Operating Partnership
(i) hereby increases the percentage interest of the LP Interest in the Operating
Partnership held by the Master Partnership to 97.9798% and (ii) agrees to duly
and timely pay, perform and discharge the Public Offering Expenses.
(c) Upon completion of the contributions referred to in
paragraph (a) above, Triarc shall withdraw as organizational limited partner of
the Operating Partnership and (i) the percentage interest of the Master
Partnership's LP Interest in the Operating Partnership shall equal 97.9798%,
(ii) the percentage interest of the Managing General Partner's General Partner
Interest in the Operating
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8
Partnership shall equal 1.0101% and (iii) the percentage interest of the Special
General Partner's General Partner Interest in the Operating Partnership shall
equal 1.0101%.
2.3 Overallotment Option.
(a) Upon exercise of the Overallotment Option, each
Underwriter shall contribute to the Master Partnership cash in an amount equal
to the purchase price for the Common Units so purchased in exchange for the
issuance by the Master Partnership of such Common Units, as more fully provided
in and pursuant to the Master Partnership Agreement; provided however, that the
percentage interest of the unsubordinated General Partner Interest in the Master
Partnership held by each of the Managing General Partner and the Special General
Partner shall nonetheless immediately thereafter remain 1.0%.
(b) Upon exercise of the Overallotment Option, the
Master Partnership shall contribute to the Operating Partnership the Gross
Overallotment Proceeds in exchange for the assumption by the Operating
Partnership of the obligation to duly and timely pay, perform and discharge the
Public Offering Expenses related thereto and for other good and valuable
consideration, the receipt and sufficiency are hereby acknowledged; provided
however, that the percentage interest of the General Partner Interest in the
Operating Partnership held by each of the Managing General Partner and the
Special General Partner shall nonetheless immediately thereafter remain 1.0101%
and the percentage interest of the Master Partnership's LP Interest in the
Operating Partnership shall nonetheless immediately thereafter remain 97.9798%.
2.4 Effect of Contributions. The contributions provided for in
this Section 2 and in the OLP Contribution and Assumption Agreement shall be
effective for all purposes as of the Effective Time in the order described in
Section 2.5. At the Effective Time, and after giving effect to all of the
transactions contemplated by this Section 2, the OLP Contribution and Assumption
Agreement and the other Transaction Documents, (a) the Managing General Partner
shall own (i) a General Partner Interest in the Operating Partnership with a
percentage interest of 1.0101% and (ii) an unsubordinated General Partner
Interest in the Master Partnership with a percentage interest of 1.0%, (iii)
4,533,638 Subordinated Units, and (iv) the Incentive Distribution Rights (b) the
Special General Partner shall own (i) a General Partner Interest in the
Operating Partnership with a percentage interest of 1.0101% and (ii) an
unsubordinated General Partner Interest in the Master Partnership with a
percentage interest of 1.0% and (c) the Master Partnership shall own an LP
Interest in the Operating Partnership with a percentage interest of 97.9798%.
2.5 Order of Contributions. The transactions described in
Section 2.1 shall occur immediately after completion of the transactions
contemplated
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9
in the OLP Contribution and Assumption Agreement and the Public Offering. The
transactions described in Section 2.2 shall occur immediately after completion
of the transactions described in Section 2.1.
3. Matters Relating to Debt.
3.1 Issuance of Notes. Immediately prior to the transactions
provided for in Section 2.1 and in the OLP Contribution and Assumption
Agreement, the First Mortgage Notes shall have been issued by the Managing
General Partner.
3.2 Repayment of the Assumed Existing Bank Debt. Immediately
after the completion of the transactions provided for in the OLP Contribution
and Assumption Agreement and immediately prior to the transactions provided for
in Section 2.2, the Operating Partnership shall repay in full the Assumed
Existing Bank Debt in the following manner: (i) $30 million of the Net Note
Proceeds will be used by the Operating Partnership to repay Assumed Existing
Bank Debt evidenced by the Refunding Notes (as defined in Existing Credit
Facility), (ii) the remainder of such Net Note Proceeds will be used to repay
other Assumed Existing Bank Debt, and (iii) a portion of the Gross Public
Offering Proceeds (net of the Public Offering Expenses) will be used to repay
any Assumed Existing Bank Debt not repaid under clauses (i) and (ii).
3.3 The Bank Credit Facility. Immediately after the completion
of the transactions provided for in Section 2 (other than Section 2.3), the Bank
Credit Facility shall become effective.
4. Miscellaneous.
4.1 Costs.
(a) The Operating Partnership shall be responsible for
and shall pay all Note Offering Expenses incurred prior to, as of or after the
Effective Time. Such payment shall be made by the Operating Partnership directly
to any obligee in respect of such expenses.
(b) The Operating Partnership shall be responsible for
and shall pay all Public Offering Expenses incurred prior to, as of or after the
Effective Time. Such payment shall be made by the Operating Partnership or its
subsidiaries directly to any obligee in respect of such expenses.
(c) The Operating Partnership shall be responsible for
and shall pay all Bank Credit Facility Expenses incurred prior to, as of or
after the
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10
Effective Time. Such payment shall be made by the Operating Partnership directly
to any obligee in respect of such expenses.
(d) If the Managing General Partner, the Special
General Partner or any of their Affiliates have paid any expenses, fees, costs
or taxes that are the responsibility of the Operating Partnership pursuant to
clauses (a), (b) or (c) above, then the Operating Partnership shall reimburse
the Managing General Partner, the Special General Partner or such Affiliate
promptly upon request therefor.
4.2 Headings; References; Interpretation. All Article and
Section headings in this Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any of the provisions
hereof. The words "hereof," "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
including, without limitation, all Schedules and Exhibits attached hereto, and
not to any particular provision of this Agreement. All references herein to
Sections, Schedules and Exhibits shall, unless the context requires a different
construction, be deemed to be references to the Sections of this Agreement and
the Schedules and Exhibits attached hereto, and all such Schedules and Exhibits
attached hereto are hereby incorporated herein and made a part hereof for all
purposes. All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders, and the
singular shall include the plural and vice versa. The use herein of the word
"including" following any general statement, term or matter shall not be
construed to limit such statement, term or matter to the specific items or
matters set forth immediately following such word or to similar items or
matters, whether or not nonlimiting language (such as "without limitation," "but
not limited to," or words of similar import) is used with reference thereto, but
rather shall be deemed to refer to all other items or matters that could
reasonably fall within the broadest possible scope of such general statement,
term or matter. Except as otherwise expressly provided herein, any reference in
this Agreement to any Transaction Document shall mean such document as amended,
restated, supplemented or otherwise modified from time to time.
4.3 Successors and Assigns. The Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns.
4.4 No Third Party Rights. The provisions of this Agreement
are not intended to and do not create rights in any other Person or confer upon
any other Person any benefits, rights or remedies and no Person is or is
intended to be a third party beneficiary of any of the provisions of this
Agreement.
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11
4.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
4.6 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York without
regard to the conflicts of law principles thereof.
4.7 Severability. If any of the provisions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.
4.8 Deed; Bill of Sale; Assignment. To the extent required by
applicable law, this Agreement shall also constitute a "deed," "bill of sale" or
"assignment" of the Assets.
4.9 Amendment or Modification. This Agreement may be amended
or modified, or any provision waived or rescinded, from time to time only by the
written agreement of the Parties directly bound by, or benefited from, the
provisions in respect of which such amendment, modification, waiver or
rescission is sought.
4.10 Integration. This Agreement supersedes all previous
understandings or agreements between the parties, whether oral or written, with
respect to its subject matter. This Agreement and the Transaction Documents
constitute an integrated agreement which contain the entire understanding of the
parties. No understanding, representation, promise or agreement, whether oral or
written, is intended to be or shall be included in or form part of this
Agreement or the Transaction Documents unless it is contained in a written
amendment hereto executed by the parties hereto after the date of this
Agreement.
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12
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
NATIONAL PROPANE PARTNERS, L.P.
By: National Propane Corporation,
its Managing General Partner
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title:Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
-------------------
Name: Stuart I. Rosen
Title:Secretary
NATIONAL PROPANE, L.P.
By: National Propane Corporation,
its Managing General Partner
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title:Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
-------------------
Name: Stuart I. Rosen
Title:Secretary
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13
NATIONAL PROPANE CORPORATION
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title:Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
-------------------
Name: Stuart I. Rosen
Title:Secretary
NATIONAL PROPANE SGP, INC.
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title:Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
-------------------
Name: Stuart I. Rosen
Title: Secretary
<PAGE>
<PAGE>
Exhibit 10.4
__________________________________________________
CONTRIBUTION AND ASSUMPTION
AGREEMENT
by and among
NATIONAL PROPANE, L.P.,
NATIONAL PROPANE CORPORATION,
NATIONAL PROPANE SGP, INC.
and
NATIONAL SALES & SERVICE, INC.
Dated as of July 2, 1996
__________________________________________________
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page
----
1. Definitions......................................................1
2. Contribution Transactions........................................8
2.1 Contribution to the Partnership............................8
2.2 Contribution to the Partnership Subsidiary.................9
2.3 Assumption of Liabilities.................................10
2.4 Effect of Contributions...................................11
2.5 Order of Contributions....................................11
3. Miscellaneous Provisions Relating to Transfer of Assets.........11
3.1 Nonassignability of Assets................................11
4. Indemnification.................................................13
4.1 Exculpation and Indemnification by the Transferors........13
4.2 Exculpation and Indemnification by the Partnership........13
4.3 No Effect on Other Agreements.............................14
5. Title Matters...................................................14
5.1 Encumbrances..............................................14
5.2 Disclaimer of Warranties; Subrogation; Waiver of
Bulk Sales Laws...........................................15
6. Miscellaneous...................................................16
6.1 Costs.....................................................16
6.2 Headings; References; Interpretation......................16
6.3 Successors and Assigns....................................16
6.4 No Third Party Rights.....................................17
6.5 Counterparts..............................................17
6.6 Further Assurances........................................17
6.7 Governing Law.............................................17
6.8 Severability..............................................17
6.9 Deed; Bill of Sale; Assignment............................17
6.10 Amendment or Modification.................................17
6.11 Integration...............................................17
i
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Exhibits
A Form of Agency Agreement
B Form of Assignment and Assumption Agreement
C Form of Assignment and Assumption Agreement--Service Assets
D Form of Assignment and Assumption of Leases
E Form of Subsidiary Services Agreement
F Form of Trademark Assignment
G Form of Deed
Schedules
1.1 Assets
1.2 Excluded Assets
1.3 Excluded Liabilities
1.4 Service Assets
1.5 Owned Real Property
ii
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<PAGE>
This CONTRIBUTION AND ASSUMPTION AGREEMENT, dated as of July 2,
1996, is entered into by and among NATIONAL PROPANE, L.P., a Delaware limited
partnership (the "Partnership"), NATIONAL PROPANE CORPORATION, a Delaware
corporation (the "Managing General Partner"), NATIONAL PROPANE SGP, INC., a
Delaware corporation and formerly known as All Seasons Propane, Inc. (the
"Special General Partner"), and NATIONAL SALES & SERVICE, INC., a Delaware
corporation (the "Partnership Subsidiary").
RECITALS
WHEREAS, the Managing General Partner and the Special General
Partner, as the general partners and limited partners, and National Propane
Partners, L.P. ("Nat Pro"), as limited partner, have heretofore formed the
Partnership pursuant to the Revised Uniform Limited Partnership Act (the
"Delaware Act") for the purpose of acquiring, owning and operating the Assets
and the Business (as hereinafter defined);
WHEREAS, the Managing General Partner and the Special General
Partner have each heretofore contributed $20.96 to the Partnership in exchange
for a 2.0956% general partner interest therein issued to each, the Managing
General Partner and the Special General Partner have heretofore contributed an
aggregate of $958.07 to the Partnership in exchange for a 95.8087% limited
partner interest therein, and Nat Pro has heretofore contributed $.01 to the
Partnership in exchange for a 0.0001% limited partner interest therein;
NOW, THEREFORE, in consideration of their mutual undertakings and
agreements hereunder, the parties to this Agreement undertake and agree as
follows:
1. Definitions.
The following capitalized terms shall have the meanings given below.
"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, 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. Notwithstanding anything contained in this definition to the
contrary, the term Affiliate, (i) with respect to the Partnership, shall not
include the Managing General Partner, the Special General Partner or Triarc (or
their respective Affiliates determined without regard to the Partnership), and
(ii) with respect to the Managing General Partner, the Special General Partner
or Triarc, shall not include the Partnership (or its Affiliates determined
without regard to the Managing General Partner, the Special General Partner or
Triarc).
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2
"Agency Agreement" means the Agency Agreement between the
Partnership and the applicable Transferor, dated as of the Closing Date,
relating to the servicing by the Partnership as an agent of the Transferor of
certain contracts that would (but for Section 3.1) be part of the Assets, in
substantially the form attached hereto as Exhibit A.
"Agreement" means this Contribution and Assumption Agreement, as it
may be amended, supplemented or restated from time to time.
"Assets" has the meaning assigned to such term in Schedule 1.1 to
this Agreement.
"Assignment and Assumption Agreement" means each Bill of Sale,
Assignment and Assumption Agreement, dated as of the Closing Date, between the
applicable Transferor and the Partnership, in substantially the form attached
hereto as Exhibit B.
"Assignment and Assumption Agreement--Service Assets" means the Bill
of Sale, Assignment and Assumption Agreement, dated as of the Closing Date,
between the Partnership or the applicable Transferor and the Partnership
Subsidiary, in substantially the form attached hereto as Exhibit C.
"Assignment and Assumption of Leases" means one or more Agreements
of Assignment and Assumption of Leases with respect to the transfer of leased
real property, in substantially the form attached hereto as Exhibit D.
"Assumed Existing Bank Debt" means the aggregate principal amount,
accrued interest and other amounts, fees and expenses payable under the Existing
Credit Facility.
"Assumed Liabilities" means and includes all of the liabilities or
obligations of the Managing General Partner or the Special General Partner or
their past, present or future Affiliates arising from or relating to the Assets
or the operation of the Business (whether or not in the ordinary course), of
every kind, character and description, (a) whether matured or unmatured, known
or unknown, choate or inchoate, fixed or contingent, or liquidated or
unliquidated, (b) whether arising out of circumstances prior to, on or
subsequent to the Closing Date, (c) whether or not reflected on the books and
records of the Managing General Partner or the Special General Partner as of the
Effective Time, (d) regardless of whether arising from or alleged to arise from
negligence, recklessness, violation of law, fraud or misrepresentation by the
Managing General Partner or the Special General Partner or any of their
Affiliates, (e) regardless of where or against whom such obligations or
liabilities are asserted or determined and (f) regardless of whether asserted or
determined prior to, on
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3
or subsequent to the Effective Time, excluding, however, any liabilities or
obligations to the extent that they constitute Excluded Liabilities. For the
avoidance of doubt, the Assumed Liabilities shall include, without limitation,
(i) other than the Excluded Liabilities, all Partnership Liabilities, (ii) the
Assumed Existing Bank Debt, (iii) the Notes and (iv) other than the Excluded
Liabilities, all liabilities or obligations arising out of or relating to the
Business.
"Bank Credit Facility" means the Credit Agreement, dated as of June
26, 1996, by and among the Partnership and The First National Bank of Boston, as
administrative agent, BA Securities, Inc., as syndication agent, and the
financial institutions listed therein, providing for borrowings under the
working capital facility in an aggregate principal amount of up to $15 million
and borrowings under the acquisition and expansion facility in an aggregate
principal amount of up to $40 million.
"Bank Credit Facility Expenses" means all commissions, fees and
other out-of-pocket expenses (including fees and expenses of accountants,
attorneys, consultants or other agents) incurred, paid or payable by the
Partnership to the administrative agent, co-agent, lenders or other Persons in
connection with the Bank Credit Facility.
"Business" means the operation by the Managing General Partner and
the Special General Partner and their Affiliates of the wholesale and retail
sale, distribution and storage of propane gas and related petroleum derivative
products, the leasing of propane storage tanks and the related retail sale of
supplies and equipment, including home appliances, and such other businesses in
which the Managing General Partner and the Special General Partner and their
Affiliates were engaged on the Closing Date (as defined in the Bank Credit
Facility).
"Commitment" has the meaning assigned to such term in Section 4.1(a)
of this Agreement.
"Delaware Act" has the meaning assigned to such term in the Recitals
to this Agreement.
"Effective Time" means a time mutually agreed upon among the
Partnership and Managing General Partner.
"Excluded Assets" has the meaning assigned to such term in Schedule
1.2 to this Agreement.
"Excluded Liabilities" has the meaning assigned to such term in
Schedule 1.3 to this Agreement.
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4
"Existing Credit Facility" means 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.
"General Partner Interest" shall mean, with respect to the
Partnership, an interest in the profits, losses and capital of the Partnership
that provides the holder thereof with the rights and obligations of a general
partner in accordance with the Partnership Agreement.
"General Partner Parties" means the Managing General Partner, the
Special General Partner and any of their Affiliates (including, without
limitation, Triarc), and (unless such Persons are Partnership Parties) any of
their respective directors, shareholders, partners, members, officers,
employees, agents, consultants, customers, representatives, successors,
transferees or assignees.
"Interests" has the meaning assigned to such term in Section 3.1(a).
"Laws" means any and all laws, statutes, ordinances, rules or
regulations promulgated by a governmental authority, orders or decrees of a
court or other governmental authority, judicial decisions, decisions of
arbitrators or determinations of any governmental authority or court.
"Litigation and Claims" means litigation pending or threatened or
claims alleged against any of the General Partner Parties or any of the
Partnership Parties, including, without limitation, civil and criminal actions,
workers' compensation proceedings, administrative and regulatory proceedings,
investigations, audits, inquiries, demands, claims (including any title claims
relating to real properties) and threatened actions.
"LP Interest" shall mean, with respect to the Partnership, an
interest in the profits, losses and capital of the Partnership that provides the
holder thereof with the rights and obligations of a limited partner in
accordance with the Partnership Agreement.
"Managing General Partner" has the meaning assigned to such term in
the opening paragraph of this Agreement.
"Net Note Proceeds" means the $125 million in gross proceeds
received by the Managing General Partner in connection with the Note Offering,
less the Note Offering Expenses and less $59.3 million that is distributed by
the Managing General Partner to its shareholder.
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5
"New Litigation" has the meaning assigned to such term in clause (b)
of the definition of Partnership Liabilities.
"Note Offering" means the offer and sale of the Notes pursuant to
the Note Purchase Agreements.
"Note Offering Expenses" means all commissions, fees and other
out-of-pocket expenses (including fees and expenses of accountants, attorneys,
consultants or other agents) incurred, paid or payable by the Managing General
Partner or the Partnership to the placement agent or other Persons in connection
with the Note Offering.
"Note Purchase Agreements" means the note agreements, each dated as
of June 26, 1996, between the Managing General Partner, the Special General
Partner, the Partnership and the respective lenders named therein, relating to
the Note Offering, as assigned to and assumed by the Partnership.
"Notes" means the First Mortgage Notes issued by the Managing
General Partner in the Note Offering pursuant to the Note Purchase Agreements,
and assumed by the Partnership.
"Owned Real Property" means each and all of the properties listed on
Schedule 1.5 to this Agreement.
"Partnership" has the meaning assigned to such term in the opening
paragraph of this Agreement.
"Partnership Agreement" has the meaning assigned to such term in the
Recitals to this Agreement.
"Partnership Damages" has the meaning assigned to such term in
Section 4.1 of this Agreement.
"Partnership Liabilities" means and includes:
(a) all obligations, liabilities, costs and expenses with
respect to health, safety, environmental conditions of any nature
(including indoor and outdoor air conditions), natural resource damages,
personal injury, property damage, employment, benefits, compensation,
pension rights, claims arising out of contracts, intellectual property
rights, product liability, warranty, merchantability or fitness for any
particular purpose of goods, conformity of goods to contractual
requirements, deceptive trade practice, misrepresentation, fraud or any
other alleged or actual breach or violation of any obligation or
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6
requirement arising out of or associated with the Assets or the operation
of the Business, including, without limitation, (A) all product warranty
obligations with respect to products developed, produced, manufactured,
marketed, used, distributed or sold by the Business ("Company Products"),
whether shipped prior to, on or subsequent to the Closing Date, and (B)
all liabilities resulting from claims for real or alleged property damage,
personal injury or consequential damage which is caused or alleged to have
been or to be caused by any defect in or breach of warranty related to any
Company Product or otherwise relating to the Assets;
(b) all obligations, liabilities, costs and expenses arising
out of or relating to any Litigation and Claims pending as of the
Effective Time against the Managing General Partner, the Special General
Partner, the Partnership and/or any of their respective subsidiaries or
Affiliates ("Pending Litigation") and all Litigation and Claims brought,
threatened or alleged against the Managing General Partner, the Special
General Partner, the Partnership or any of their respective subsidiaries
or Affiliates after the Closing Date ("New Litigation"), in each case if
and solely to the extent that such Litigation and Claims (in whole or in
part) arise out of or are associated with, or are alleged (regardless of
the Person named in the allegation or complaint) to arise out of, relate
to or be associated with the Assets or the operation of the Business;
(c) all obligations, liabilities, costs, and expenses
(including, without limitation, all fines or penalties or costs of
closure, investigation and feasibility studies, attorney or consultant
fees or remediation costs) of the Managing General Partner, the Special
General Partner, the Partnership or any of their respective subsidiaries
or Affiliates, arising under any federal, state, local or foreign
statutes, laws (including common law), codes, rules, regulations, policies
or guidelines or any administrative or judicial interpretations thereof
relating to the environment, natural resources and public or employee
health and safety arising out of or relating to, or alleged to arise out
of or relate to, the Assets or the operation of the Business;
(d) all obligations, liabilities, costs and expenses arising
out of or relating to any Litigation and Claims brought after the Closing
Date against the Managing General Partner, the Special General Partner,
the Partnership, or their respective subsidiaries or Affiliates by
employees of the Managing General Partner, the Special General Partner, or
the Partnership or any of their respective subsidiaries or Affiliates,
claiming that they suffered personal injuries of any kind, whether prior
to, on or subsequent to the Closing Date, arising out of, relating to or
alleged to arise out of, or relate to, the Assets or the operation of the
Business;
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7
(e) all obligations, liabilities, costs, and expenses of the
Managing General Partner, the Special General Partner or any of their
subsidiaries or Affiliates in any instance where the Partnership is
operating as agent, or subcontractor or in a similar capacity with respect
to contracts, permits, licenses or other Commitments that are associated
with the Assets or the operation of the Business (regardless of whether a
third party consent to assignment or transfer as part of the transactions
contemplated by this Agreement has been sought or obtained); and
(f) all obligations, liabilities, costs and expenses of the
Managing General Partner, the Special General Partner or any of their
subsidiaries or Affiliates in respect of any letters of credit,
guaranties, surety bonds or other credit enhancement arrangements arising
out of or relating to the Assets or the Business, including, without
limitation, any such arrangements provided in respect of Interests or any
permit or license; and
(g) all liabilities with respect to taxes of any kind
whatsoever, including interest, penalties and additions to tax, with respect
thereto, other than income taxes in excess of the accrued payable.
"Partnership Parties" means the Partnership and any direct or
indirect subsidiary or Affiliate of the Partnership, and any of their respective
directors, shareholders, partners, members, officers, employees, agents,
consultants, customers, representatives, successors, transferees or assignees.
"Partnership Subsidiary" has the meaning assigned to such term in
the opening paragraph of this Agreement.
"Party" means each of the Persons who are signatories to this
Agreement.
"Pending Litigation" has the meaning assigned to such term in clause
(b) of the definition of Partnership Liabilities.
"Person" means an individual, corporation, limited liability
company, partnership, joint venture, trust, unincorporated organization,
association, government agency or political subdivision thereof or other entity.
"Service Assets" means that portion of the Assets that are described
in Schedule 1.4 hereto.
"Special General Partner" has the meaning assigned to such term in
the opening paragraph of this Agreement.
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8
"Subsidiary Employees" means those former employees of the Managing
General Partner hired by the Partnership Subsidiary.
"Subsidiary Services Agreement" means the Subsidiary Services
Agreement between the Managing General Partner and the Partnership Subsidiary,
providing for, among other items, the Managing General Partner to provide
certain management and other services to the Partnership Subsidiary, in
substantially the form attached hereto as Exhibit E.
"Trademark Assignment" means an instrument of transfer with respect
to the trademarks to be transferred pursuant to the terms of this Agreement,
substantially in the form of Exhibit F hereto.
"Transaction Documents" means this Agreement, the Partnership
Agreement, the Subsidiary Services Agreement, the Note Purchase Agreements and
the Bank Credit Facility.
"Transfer Expenses" means all out-of-pocket expenses, fees and
costs, including, without limitation all sales, use and similar taxes and
documentary, filing, recording, transfer, deed or conveyance fees or taxes, in
each case, that are incurred or proposed to be incurred in connection with the
contributions, conveyances and deliveries to be made hereunder.
"Transferor" means the Managing General Partner or the Special
General Partner as transferor of the Assets to the Partnership or the
Partnership Subsidiary.
2. Contribution Transactions.
2.1 Contribution to the Partnership.
(a) (i) the Managing General Partner hereby grants,
contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to the Partnership, its successors and assigns, for its and their own
use forever, (x) all of its right, title and interest in and to the Assets held
by it (including, without limitation, the Net Note Proceeds) (other than the
Owned Real Property, which is covered by the following clause (y)) and (y) all
of its beneficial interest in and to the Owned Real Property, record title to
which has heretofore been conveyed by deed, in exchange for (A) the
consideration stated in Section 2.1(b), (B) the assumption of the Assumed
Liabilities by the Partnership as provided in Section 2.3(a), and (C) other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged; and
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9
(ii) The Special General Partner hereby grants,
contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to the Partnership, its successors and assigns, for its and their own
use forever, all of its right, title and interest in and to the Assets held by
it in exchange for (A) the consideration stated in Section 2.1(b), (B) the
assumption of the Assumed Liabilities by the Partnership as provided in Section
2.3(a), and (C) other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged.
TO HAVE AND TO HOLD the Assets unto the Partnership, its successors
and assigns, together with all and singular the rights and appurtenances thereto
in any way belonging, subject, however, to the terms and conditions stated in
this Agreement, forever.
(b) (i) In consideration for the contribution by the
Managing General Partner of the Assets held by it to the Partnership, the
Partnership hereby decreases the Managing General Partner's LP Interest in the
Partnership with a percentage interest, based on the relative fair market value
of the Assets contributed by it, which, together with the Special General
Partner's LP Interest in the Partnership, equals 95.4703% and increases the
Managing General Partner's General Partner Interest in the Partnership so that
it will have a General Partner percentage interest of 2.2648%.
(ii) In consideration for the contribution by the
Special General Partner of the Assets held by it to the Partnership, the
Partnership hereby decreases the Special General Partner's LP Interest in the
Partnership with a percentage interest, based on the relative fair market value
of the Assets contributed by it, which, together with the Managing General
Partner's LP Interest in the Partnership, equals 95.4703% and increases the
Special General Partner's General Partner interest in the Partnership so that it
will have a General Partner percentage interest of 2.2648%.
(c) To further evidence the conveyance of the Assets,
the General Partner has executed and delivered to the Partnership (and the
Partnership Subsidiary if the Partnership has directed the Managing General
Partner to transfer the Service Assets directly to the Partnership Subsidiary as
provided in the last sentence of Section 2.2(a)), the Deeds substantially in the
form attached hereto as Exhibit G relating to any owned real property included
in the Assets, the Assignment and Assumption of Leases relating to any leased
real property included in the Assets, the Assignment and Assumption Agreements,
and the Trademark Assignment, all of which are subject to this Agreement.
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10
2.2 Contribution to the Partnership Subsidiary.
(a) Immediately after the completion of the
transactions provided for in Section 2.1, the Partnership hereby grants,
contributes, bargains, sells, conveys, assigns, transfers, sets over and
delivers to the Partnership Subsidiary, its successors and assigns, for its and
their own use forever, all of its right, title and interest in and to the
Service Assets in exchange for (i) the assumption of all liabilities relating
thereto as provided in Section 2.3(b) and (ii) other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
the Partnership Subsidiary hereby accepts the Service Assets as a contribution
to the capital of the Partnership Subsidiary. The Partnership may, in its sole
discretion, direct the Managing General Partner or the Special General Partner
to transfer the Service Assets directly to the Partnership Subsidiary, in which
case the Partnership shall be relieved of its obligations under this Agreement
(including, without limitation, the obligation to assume the Assumed Liabilities
and to indemnify the General Partner Parties).
TO HAVE AND TO HOLD the Service Assets unto the Partnership
Subsidiary, its successors and assigns, together with all and singular the
rights and appurtenances thereto in any way belonging, subject, however, to the
terms and conditions stated in this Agreement, forever.
(b) To further evidence the conveyance of the Service
Assets, the Partnership (or the Managing General Partner or the Special General
Partner) has executed and delivered to the Partnership the Deeds substantially
in the form of Exhibit G relating to any owned real property included in the
Service Assets and the Partnership (or the Managing General Partner or the
Special General Partner) and the Partnership Subsidiary have executed and
delivered the Assignment and Assumption Agreement--Service Assets.
2.3 Assumption of Liabilities.
(a) In connection with the contribution and transfer of
the Assets to the Partnership, the Partnership hereby assumes and agrees to duly
and timely pay, perform and discharge the Assumed Liabilities, including,
without limitation, the Notes and the Assumed Existing Bank Debt, to the full
extent that the Managing General Partner or the Special General Partner has been
heretofore or would have been in the future, were it not for the execution and
delivery of this Agreement, obligated to pay, perform and discharge the Assumed
Liabilities; provided, however, that said assumption and agreement to duly and
timely pay, perform and discharge the Assumed Liabilities shall not increase the
obligation of the Partnership with respect to the Assumed Liabilities beyond
that of the Managing General Partner or the Special General Partner, waive any
valid defense that was or in the future may be available to
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11
the Managing General Partner or the Special General Partner with respect to the
Assumed Liabilities or enlarge any rights or remedies of any third party under
any of the Assumed Liabilities.
(b) In connection with the contribution and transfer of
the Service Assets to the Partnership Subsidiary, the Partnership Subsidiary
hereby assumes and agrees to duly and timely pay, perform and discharge the
Assumed Liabilities arising out of or related to the Service Assets to the full
extent that the Partnership has been heretofore or would have been in the
future, were it not for the execution and delivery of this Agreement, obligated
to pay, perform and discharge such Assumed Liabilities; provided, however, that
said assumption and agreement to duly and timely pay, perform and discharge such
Assumed Liabilities shall not increase the obligation of the Partnership
Subsidiary with respect to the Assumed Liabilities beyond that of the
Partnership, waive any valid defense that was or in the future may be available
to the Partnership with respect to the Assumed Liabilities or enlarge any rights
or remedies of any third party under any of the Assumed Liabilities.
2.4 Effect of Contributions. The contributions provided for in
this Section 2 shall be effective for all purposes as of the Effective Time in
the order described in Section 2.5. At the Effective Time, and after giving
effect to all of the transactions contemplated by this Section 2 and the
Transaction Documents, (a) the Managing General Partner shall continue to own a
General Partner Interest in the Partnership with a percentage interest of
2.2648%, (b) the Special General Partner shall continue to own a General Partner
Interest in the Partnership with a percentage interest of 2.2648%, (c) the
Managing General Partner and the Special General Partner shall continue to own
their respective LP Interests in the Partnership with an aggregate percentage
interest of 95.4703% and (d) Nat Pro shall continue to own an LP Interest in the
Partnership with a percentage interest of 0.0001%.
2.5 Order of Contributions. The transactions described in
Sections 2.1 and 2.3 shall occur simultaneously with one another. The
transactions described in Sections 2.2 and 2.3 shall occur simultaneously with
one another and shall occur immediately after completion of the transactions
described in Section 2.1.
3. Miscellaneous Provisions Relating to Transfer of Assets.
3.1 Nonassignability of Assets.
(a) Notwithstanding any other provision of this
Agreement to the contrary, to the extent that any lease, contract, license,
permit, agreement, sales or purchase order, commitment, property interest,
qualification or other assets described in this Agreement as being sold,
assigned, transferred or conveyed to the Partnership (the "Commitments") or any
claim, right or benefit arising
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12
thereunder or resulting therefrom (collectively with the Commitments, the
"Interests"), is not capable of being sold, assigned, transferred or conveyed
without the approval, consent or waiver of the issuer thereof or the other party
thereto, or any third person (including a government or governmental authority),
or if such sale, assignment, transfer or conveyance or attempted sale,
assignment, transfer or conveyance would be invalid, would destroy or eliminate
the Interests related thereto, or would constitute a breach of a Commitment or a
violation of any Law, this Agreement and any additional conveyance documents
contemplated hereby, notwithstanding any other provision of this Agreement or
such other documents to the contrary, shall not constitute a sale, assignment,
transfer or conveyance thereof, or an attempted sale, assignment, transfer or
conveyance thereof in the absence of such approval, consent or waiver. The
obligations of the Partnership and the Transferor with respect to such Interests
will be governed by clause (b) hereof.
(b) The Parties hereto undertake to co-operate in good
faith to ensure that they do such acts and things as may be reasonably necessary
to complete the transfer of the Business. At all times after the date of this
Agreement, the Parties shall do such acts and things as may be reasonably
required for the purpose of giving to the Parties hereto the full benefit of all
the provisions of this Agreement in respect of the Interests, including using
their reasonable best efforts in order that any necessary third party shall
execute such documents and do such acts and things as may be reasonably required
for such purpose. The Transferor and the Partnership will use their reasonable
best efforts to obtain any consent, substitution, approval or amendment required
to novate, reissue or assign all Commitments; provided, however, that neither
the Transferor nor the Partnership shall be obligated to pay any consideration
therefor (except for filing fees and other similar charges) to, or commence
litigation against, the third party from whom such consents, approvals,
substitutions or amendments are requested. If the Transferor or the Partnership
is unable to obtain any such required consent, approval, substitution or
amendment, the Transferor shall continue to be bound by such Commitments and,
unless not permitted by Law or the terms thereof, the Partnership shall, as
agent for the Transferor or as subcontractor, pay, perform and discharge fully
all the obligations of the Transferor thereunder from and after the Closing and
indemnify and hold harmless the Transferor and the General Partner Parties from
and against, all losses, claims, damages, taxes, liabilities and expenses
whatsoever arising out of or in connection with the Partnership's performance of
or omission to perform its obligations thereunder and hereunder. The Transferor
shall, without further consideration, pay and remit to the Partnership (or its
designee) promptly all money, rights and other consideration received in respect
of such performance after payment of any taxes due from the Transferor with
respect to such receipt. The Transferor shall exercise their rights and options
under all such Commitments only as reasonably directed by the Partnership and at
the Partnership's expense. If and when any such approval, consent or waiver
shall be obtained or such Commitment shall otherwise become assignable or able
to be novated, the assignment
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13
of the Assets and the assumption of the Assumed Liabilities related to such
approval, consent or waiver or restriction on assignment and/or assumption shall
become effective automatically as of the Effective Time, without further action
on the part of the Transferor, the Partnership or any of their respective
Affiliates, and without payment of further consideration. To the extent that the
assignment of any Commitment or the proceeds thereof pursuant to this Section
3.1 is prohibited by Law, the assignment provisions of this paragraph shall,
unless not permitted by Law or the terms of such Commitment, operate to create a
subcontract or agency with the Partnership to perform each relevant,
unassignable Commitment, and the subcontract price shall be equal to the money,
rights and other consideration received by the Transferor (net of any taxes
imposed on the Transferor with respect to such money, rights or other
consideration) in respect of the performance by the Partnership under such
subcontract.
(c) The Partnership and the Transferor shall enter into
the Agency Agreement as of the Closing Date. To the extent that a conflict
exists between the Agency Agreement and this Agreement, the Agency Agreement
shall control with respect to the subject matter thereof.
(d) The Partnership shall, and the Transferor shall not
(except as a Partner of the Partnership) report, for Federal income tax
purposes, the income, gain, deduction and loss with respect to the Interests.
4. Indemnification.
4.1 Exculpation and Indemnification by the Transferors. The
applicable Transferor shall, without any further responsibility or liability of,
or recourse to, any of the Partnership Parties, absolutely and irrevocably be
solely liable and responsible for the Excluded Liabilities. None of the
Partnership Parties shall be liable to any of the General Partner Parties or any
third parties for any reason whatsoever on account of any of the Excluded
Liabilities.
The applicable Transferor shall indemnify, defend, save and hold
harmless each of the Partnership Parties from and against all claims,
liabilities, obligations, losses, costs, costs of defense (as and when
incurred), including expenses, fines, charges, penalties, allegations, demands,
damages (including but not limited to actual, punitive or consequential,
foreseen or unforeseen, known or unknown), settlements, awards or judgments of
any kind or nature whatsoever and reasonable outside attorneys' and consultants'
fees and expenses (collectively, "Losses"), to the extent arising out of (a) the
Excluded Liabilities, (b) any failure of an applicable Transferor to comply with
any applicable bulk sales law of any jurisdiction in connection with the
transactions provided for in Section 2.1(a) or (c) the breach by the
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14
applicable Transferor of any of its obligations under this Agreement, all of
which are hereinafter collectively referred to as the "Partnership Damages."
Partnership Damages shall not be the subject of indemnification
under this Agreement to the extent that any proceeds are received by, or on
behalf of, Nat Pro, the Partnership or any of their subsidiaries or Affiliates,
from any third party insurance policy or any insurance policy issued by any
captive insurance company which is an Affiliate of Triarc (and are
non-reimbursable by the Partnership or any of its subsidiaries or Affiliates
(other than any such captive insurance company) under any self insurance
policy).
4.2 Exculpation and Indemnification by the Partnership. Upon,
from and after the Effective Time, the Partnership shall, without any further
responsibility or liability of, or recourse to, any of the General Partner
Parties, absolutely and irrevocably assume and be solely liable and responsible
for the Assumed Liabilities. Except with respect to the Notes which shall be
recourse to the Managing General Partner (but not the Special General Partner)
none of the General Partner Parties shall be liable to any of the Partnership
Parties or any third parties for any reason whatsoever on account of any of the
Assumed Liabilities.
The Partnership shall indemnify, defend, save and hold harmless each
of the General Partner Parties from and against all Losses, to the extent
arising out of (a) the Assumed Liabilities or (b) the breach by any of the
Partnership Parties of any of their obligations under this Agreement, all of
which are hereinafter collectively referred to as the "General Partner Damages."
General Partner Damages shall not be the subject of indemnification
under this Agreement to the extent that, any proceeds are received by, or on
behalf of, the Managing General Partner, the Special General Partner or by any
of their subsidiaries or Affiliates, from any third party insurance policy or
any insurance policy issued by any captive insurance company which is an
Affiliate of Triarc (and are non-reimbursable by the Managing General Partner,
the Special General Partner or any of their subsidiaries or Affiliates (other
than any such captive insurance company) under any self insurance policy).
4.3 No Effect on Other Agreements. It is acknowledged that
after the Effective Time, the Parties may have arm's length negotiated business
relationships, which relationships will be described in contracts, agreements
and other documents entered into in the normal course of business. Such
documents may include agreements by the Parties and their Affiliates to supply,
after the Effective Time, materials, products, services and leases. Such
business relationships shall not be subject to the indemnity provisions hereof,
unless the parties expressly agree to the contrary in the agreements governing
such relationships.
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15
5. Title Matters.
5.1 Encumbrances. The transactions provided for in Section 2
are made expressly subject to (a) all recorded and unrecorded liens,
encumbrances, agreements, defects, restrictions, adverse claims and all Laws,
rules, regulations, ordinances, judgments and orders of governmental authorities
or tribunals having or asserting jurisdiction over the Assets or the Business
and operations conducted thereon or therewith, in each case to the extent the
same are valid, enforceable and affect the Assets, including, without
limitation, all matters that a current survey or visual inspection of the Assets
would reflect, (b) the Assumed Liabilities and (c) all matters contained in the
Assignment and Assumption Agreement, the Assignment and Assumption
Agreement--Service Assets, the Assignment and Assumption of Leases, the
Trademark Assignment and the Deeds or other instruments of transfer referred to
in this Agreement.
5.2 Disclaimer of Warranties; Subrogation; Waiver of Bulk
Sales Laws.
(a) EACH TRANSFEROR IS CONVEYING AND
TRANSFERRING THE ASSETS TO THE PARTNERSHIP AND THE TRANSFERORS OR THE
PARTNERSHIP IS CONVEYING AND TRANSFERRING THE SERVICE ASSETS TO THE PARTNERSHIP
SUBSIDIARY "AS IS" WITHOUT REPRESENTATION OR WARRANTY, WHETHER EXPRESS, IMPLIED
OR STATUTORY (ALL OF WHICH THE TRANSFERORS HEREBY DISCLAIM), AS TO (I) TITLE,
(II) FITNESS FOR ANY PARTICULAR PURPOSE OR MERCHANTABILITY OR DESIGN OR QUALITY,
OR (III) ANY OTHER MATTER WHATSOEVER. THE PROVISIONS OF THIS SECTION 5.2 HAVE
BEEN NEGOTIATED BY THE TRANSFEROR, THE PARTNERSHIP AND THE PARTNERSHIP
SUBSIDIARY AFTER DUE CONSIDERATION AND ARE INTENDED TO BE A COMPLETE EXCLUSION
AND NEGATION OF ANY REPRESENTATIONS OR WARRANTIES OF THE TRANSFERORS, OR THE
PARTNERSHIP AS TRANSFEROR, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT
TO THE ASSETS THAT MAY ARISE PURSUANT TO ANY LAW NOW OR HEREAFTER IN EFFECT, OR
OTHERWISE, EXCEPT AS EXPRESSLY SET FORTH HEREIN.
(b) The transfer of the Assets to the Partnership and of
the Service Assets to the Partnership Subsidiary are made with full rights of
substitution and subrogation of the Partnership and the Partnership Subsidiary,
as the case may be, and all persons claiming by, through and under the
transferee, to the extent assignable, in and to all covenants and warranties by
the predecessors-in-title of the applicable Transferor, and with full
subrogation of all rights accruing under applicable statutes of limitation and
all rights of action of warranty against all former owners of the Assets.
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16
(c) The Parties agree that the disclaimers contained in
this Section are "conspicuous" disclaimers. Any covenants implied by statute or
by the use of the words "grant," "convey," "bargain," "sell," "assign,"
"transfer," "deliver," or "set over" or any of them or any other words used in
this Agreement are hereby expressly disclaimed, waived and negated.
(d) Subject to Section 4.1, each of the Parties hereby
waives compliance with any applicable bulk sales law or any similar law in any
applicable jurisdiction in respect of the transactions contemplated by this
Agreement. The transferees of the Assets and the Service Assets hereby forever
waive any claim or right of action which it now or in the future may ever have
arising out of or in connection with any Law concerning the environmental
condition of the Assets, and furthermore, hereby unconditionally releases the
General Partner Parties from any and all liabilities, penalties, losses or other
damages, for which the General Partner Parties may be otherwise responsible to
pay pursuant to such Laws.
6. Miscellaneous.
6.1 Costs.
(a) The Partnership (as transferee from the Transferor)
and the Partnership Subsidiary (as transferee from either the Partnership or the
Transferor) shall be responsible for, and shall pay directly to any designated
third party, all Transfer Expenses.
(b) If the Managing General Partner, the Special
General Partner or any of their Affiliates have paid or in the future are
required to pay any expenses, fees, costs or taxes that are the responsibility
of the Partnership pursuant to clause (a) above, then the Partnership, shall
reimburse the Managing General Partner, the Special General Partner or such
Affiliate promptly upon request therefor.
6.2 Headings; References; Interpretation. All Article and
Section headings in this Agreement are for convenience only and shall not be
deemed to control or affect the meaning or construction of any of the provisions
hereof. The words "hereof," "herein" and "hereunder" and words of similar
import, when used in this Agreement, shall refer to this Agreement as a whole,
including, without limitation, all Schedules and Exhibits attached hereto, and
not to any particular provision of this Agreement. All references herein to
Sections, Schedules and Exhibits shall, unless the context requires a different
construction, be deemed to be references to the Sections of this Agreement and
the Schedules and Exhibits attached hereto, and all such Schedules and Exhibits
attached hereto are hereby incorporated herein and made a part hereof for all
purposes. All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders, and the
singular
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17
shall include the plural and vice versa. The use herein of the word "including"
following any general statement, term or matter shall not be construed to limit
such statement, term or matter to the specific items or matters set forth
immediately following such word or to similar items or matters, whether or not
nonlimiting language (such as "without limitation," "but not limited to," or
words of similar import) is used with reference thereto, but rather shall be
deemed to refer to all other items or matters that could reasonably fall within
the broadest possible scope of such general statement, term or matter. Except as
otherwise expressly provided herein, any reference in this Agreement to any
Transaction Document shall mean such document as amended, restated, supplemented
or otherwise modified from time to time.
6.3 Successors and Assigns. The Agreement shall be binding
upon and inure to the benefit of the Parties and their respective successors and
assigns.
6.4 No Third Party Rights. The provisions of this Agreement
are not intended to and do not create rights in any other Person or confer upon
any other Person any benefits, rights or remedies and no Person is or is
intended to be a third party beneficiary of any of the provisions of this
Agreement.
6.5 Counterparts. This Agreement may be executed in any number
of counterparts, all of which together shall constitute one agreement binding on
the parties hereto.
6.6 Further Assurances. In connection with this Agreement and
all transactions contemplated by this Agreement, each party hereto agrees to
execute and deliver such additional documents and instruments (including,
without limitation, certificates of title with respect to motor vehicles), and
to perform such other additional acts as may be necessary or appropriate to
effectuate, carry out and perform all of the terms, provisions, and conditions
of this Agreement.
6.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of New York without
regard to the conflicts of law principles thereof.
6.8 Severability. If any of the provisions of this Agreement
are held by any court of competent jurisdiction to contravene, or to be invalid
under, the laws of any political body having jurisdiction over the subject
matter hereof, such contravention or invalidity shall not invalidate the entire
Agreement. Instead, this Agreement shall be construed as if it did not contain
the particular provision or provisions held to be invalid, and an equitable
adjustment shall be made and necessary provision added so as to give effect to
the intention of the parties as expressed in this Agreement at the time of
execution of this Agreement.
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18
6.9 Deed; Bill of Sale; Assignment. To the extent required by
applicable law, this Agreement shall also constitute a "deed," "bill of sale" or
"assignment" of the Assets.
6.10 Amendment or Modification. This Agreement may be amended
or modified, or any provision waived or rescinded, from time to time only by the
written agreement of the Parties directly bound by, or benefited from, the
provisions in respect of which such amendment, modification, waiver or
rescission is sought.
6.11 Integration. This Agreement supersedes all previous
understandings or agreements between the parties, whether oral or written, with
respect to its subject matter. This Agreement and the Transaction Documents
constitute an integrated agreement which contain the entire understanding of the
parties. No understanding, representation, promise or agreement, whether oral or
written, is intended to be or shall be included in or form part of this
Agreement or the Transaction Documents unless it is contained in a written
amendment hereto executed by the parties hereto after the date of this
Agreement.
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19
IN WITNESS WHEREOF, this Agreement has been duly executed by the
parties hereto as of the date first above written.
NATIONAL PROPANE, L.P.
By: National Propane Corporation,
its Managing General Partner
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
------------------------
Name: Stuart I. Rosen
Title: Secretary
NATIONAL PROPANE CORPORATION
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title: Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
------------------------
Name: Stuart I. Rosen
Title: Secretary
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20
NATIONAL PROPANE SGP, INC.
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title:Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
------------------------
Name: Stuart I. Rosen
Title:Secretary
NATIONAL SALES & SERVICE, INC.
By:/s/ Ronald R. Rominiecki
------------------------
Name: Ronald R. Rominiecki
Title:Senior Vice President and
Chief Financial Officer
ATTEST: By:/s/ Stuart I. Rosen
------------------------
Name: Stuart I. Rosen
Title:Secretary
<PAGE>
<PAGE>
EXH. 10.5
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGIS
TRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT OR SUCH LAWS.
TRIARC COMPANIES, INC.
13.5% SENIOR SECURED NOTE
$40,700,000 New York, New York
July 2, 1996
FOR VALUE RECEIVED, the undersigned, Triarc Companies, Inc., a
Delaware corporation (together with its successors and permitted assigns, the
"Borrower"), hereby promises to pay to the order of National Propane, L.P.
(together with its successors and permitted assigns, the "Lender"), at such
place as the Lender shall from time to time designate to the Borrower in
writing, the aggregate principal amount of FORTY MILLION SEVEN HUNDRED THOUSAND
DOLLARS ($40,700,000), in such amounts and on such dates as determined according
to Section 1 hereof, with daily interest on the outstanding principal amount
hereof from the date hereof to (but excluding) the maturity of this Note
(whether by acceleration or otherwise) at the rate set forth in Section 2
hereof, said interest being payable in semi-annual installments in arrears on
the 30th day of June and December in each year and at maturity. The Borrower
shall pay principal, interest and all other amounts due hereunder in immediately
available funds. In the event that any payment due hereunder is required to be
made on a day that is not a Business Day, such payment shall be made on the next
Business Day. In case an Event of Default (as defined in Section 7.1) shall
occur and be continuing, the entire principal amount of this Note may become or
be declared to be due and payable in the manner and with the effect provided
herein. Certain capitalized terms used herein are defined in Section 8.
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2
Section 1. Principal.
Beginning on June 30, 2003 and on each anniversary thereafter
through and including June 30, 2010, the Borrower will prepay the principal
amount of this Note in eight equal installments of $5,087,500 with the final
maturity date of this Note being June 30, 2010. Any optional prepayment of the
principal of this Note permitted hereunder shall be applied to reduce the
mandatory prepayments otherwise required by this Section 1 in the direct order
such prepayments are due.
Section 2. Interest.
The Borrower will pay interest on the outstanding principal amount
hereof, until the principal amount hereof is paid in full, at a rate of 13.5%
per annum. Interest on this Note will accrue from and including the most recent
date on which interest has been paid (or, if no interest has been paid, from and
including the date of issuance of this Note) to but excluding the date of
payment. Interest will be computed on the basis of a 365-day year and the actual
number of days elapsed. The Borrower shall pay interest on overdue principal and
on overdue interest to the full extent permitted by law at a rate equal to 15.5%
per annum.
Section 3. Collateral.
3.1 Pledge and Grant of Security Interest.
(a) Pledged Interests. To induce the Lender to accept this
Note, and as security for the due and punctual payment and performance of all
obligations of the Borrower now or hereafter existing under this Note, whether
for principal, premium, interest, or any other amount payable under this Note
(collectively, the "Obligations"), the Borrower hereby pledges, assigns,
transfers and grants to the Lender a first priority continuing security interest
in (i) all of the capital stock of the General Partner, now owned or hereafter
acquired by the Borrower (the "Pledged Stock"), (ii) all Permitted Consideration
(the "Pledged Permitted Consideration") received, receivable or otherwise
distributed in exchange for the Pledged Stock in connection with any Permitted
Third Party Sale (as defined below) and (iii) all dividends, distributions,
liquidating dividends, stock dividends, stock or partnership rights, options,
rights to subscribe, cash, instruments and other property and proceeds and
principal, premium and interest payments received, receivable or otherwise
distributable in respect of or exchanged for the Pledged Stock or Pledged
Permitted Consideration (the items listed in clauses (i), (ii) and (iii) being
referred to collectively as the "Pledged Interests").
(b) Pledged Retained Assets. To induce the Lender to accept
this Note, and as security for the due and punctual payment and performance of
the
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3
Obligations, the Borrower hereby pledges, assigns, transfers and grants to the
Lender a first priority continuing security interest in the Retained Assets
owned by the Borrower upon the occurrence of the General Partner Merger in an
amount equal to the lesser of (A) all of the Retained Assets held by the General
Partner immediately prior to the General Partner Merger or (B) Retained Assets
having an aggregate Value equal to the then outstanding principal amount of this
Note (such lesser amount being referred to as the "Pledged Retained Assets").
(c) Delivery of Collateral.
(i) In furtherance of the pledge, assignment, transfer and
grant of the security interests provided for in Section 3.1(a) and (b), the
Borrower herewith delivers to the Lender a certificate or certificates
representing the Pledged Stock, together with an instrument of transfer duly
executed in blank relating thereto. In addition, the Borrower hereby agrees to
deliver to the Lender, upon receipt thereof, certificates representing any other
securities from time to time included in the Pledged Interests and hereby agrees
to deliver, upon the occurrence of the General Partner Merger, a certificate or
certificates representing any of the Pledged Retained Assets, in each case
together with instruments of transfer duly executed in blank relating thereto.
All securities, rights, interests, cash or other assets pledged pursuant to this
Section 3.1 or otherwise required to be pledged pursuant to the terms of this
Note are referred to herein collectively as the "Collateral."
(ii) The Borrower shall cause to be opened and
maintained with The Bank of New York a non-interest bearing bank account (the
"Cash Account"), under the sole dominion and control of the Lender into which
shall be deposited any Permitted Consideration received by the Borrower that is
in the form of cash and, after the General Partner Merger, any consideration
that is received by the Borrower in connection with the sale of Pledged Retained
Assets that is in the form of cash, any cash that is designated as Pledged
Retained Assets pursuant to the last sentence of Section 3.2(b)(ii) and any
other cash designated as Collateral. Any such amounts received by the Borrower
shall be promptly delivered by it to the Lender for deposit into such account,
and until so deposited shall be held in trust for the Lender and not commingled
with any other funds of the Borrower. Such cash when deposited shall continue to
be security for the Obligations and shall not constitute payment thereof until
applied as hereinafter provided. So long as no Event of Default shall have
occurred and be continuing, the Borrower shall be entitled upon notice delivered
to the Lender to direct that such cash be invested in Cash Equivalents as
designated by the Borrower. If any amounts deposited in such account shall have
been identified by the Borrower for release from the security interest created
hereunder as provided in Section 3.3(c), the Lender shall forthwith return such
amounts to the Borrower.
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4
(d) Filings; Other Actions. The Borrower will, from time to
time and at its own expense, execute, deliver, file or record such financing
statements pursuant to the UCC and such other statements, assignments,
instruments, documents, agreements and other papers as necessary or as the
Lender may reasonably request in order to create, preserve, perfect, confirm or
validate the security interests in the Collateral.
3.2 Voting Rights; Dividends; Transfers; etc.
(a) Voting Rights; Dividends. So long as no Event of Default
shall have occurred and be continuing, the Borrower shall be entitled to (i)
exercise any and all voting and other consensual rights pertaining to the
Collateral or any part thereof and (ii) receive, retain, dispose of, or
otherwise use or deal with in its sole discretion any and all dividends,
distributions and interest payments paid in respect of the Collateral.
(b) Transfer or Pledge of Pledged Retained Assets.
(i) So long as no Event of Default shall have occurred
and be continuing, the Borrower shall be entitled to sell, assign, transfer,
convey, grant a security interest in, hypothecate or pledge (collectively,
"Transfer"), or permit the Transfer, in an arms'-length transaction with an
independent, unrelated third party, of any of the Pledged Retained Assets if
such Transfer satisfies the condition in Section 3.2(b)(ii). Prior to the
General Partner Merger, this Section 3.2(b) shall also govern the Transfer of
(A) all Retained Assets (other than that portion of the Retained Assets the
aggregate Value of which, when taken together with the aggregate Value of all
other Retained Assets, is greater than the principal amount of this Note
outstanding from time to time) and (B) Retained Assets in which a first priority
security interest has been granted under Section 6.6(a) or 9.2 (collectively,
"Potential Pledged Retained Assets").
(ii) No Transfer of Pledged Retained Assets or
Potential Pledged Retained Assets shall be permitted unless (except as otherwise
permitted by the proviso in Section 6.6(b)), immediately after giving effect to
such transaction the General Partner continues to hold Pledged Retained Assets
or Potential Pledged Retained Assets, as the case may be (excluding any Pledged
Retained Assets or Potential Pledged Retained Assets hypothecated, pledged or in
which a security interest has been granted to any Person other than the Lender)
and/or Cash or Cash Equivalents that are designated by the General Partner as
Pledged Retained Assets (or Potential Pledged Retained Assets), as provided in
the last sentence of this Section 3.2(b) (ii), with a Value equal to not less
than the outstanding principal amount of this Note at such time. For purposes of
satisfying the foregoing condition, the General Partner may designate any of its
cash or Cash Equivalents as Pledged Retained Assets (or Potential
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5
Pledged Retained Assets) and, thereafter, such assets shall be deemed to be
Pledged Retained Assets (or Potential Pledged Retained Assets ) for all purposes
of this Note, including, without limitation, Section 3.1(b).
(iii) Upon the occurrence and the continuance of an
Event of Default, the Borrower shall not Transfer or permit the Transfer of any
of the Pledged Retained Assets or Potential Pledged Retained Assets.
(c) Transfer of Pledged Interests. The Borrower shall not be
entitled to Transfer all or any portion of the Pledged Interests, except in an
arms'-length transaction with an independent, unrelated third party that
satisfies the following conditions (each Transfer permitted hereunder being
referred to as a "Permitted Third Party Sale"):
(i) in any such Transfer (other than a sale, assignment,
transfer or conveyance to any Person that assumes the Borrower's obligations
under this Note as provided in Section 9.2 and pledges the Pledged Interests so
acquired as security for the performance of the Obligations, in which case the
condition contained in this clause (i) shall not be applicable), the
consideration received by the Borrower shall be at least equal to the fair
market value of the Pledged Interest that is Transferred, as determined by the
Borrower in good faith, and shall be in the form of Permitted Consideration,
(ii) the Borrower shall not effect any such Transfer if,
after giving effect to such Transfer, the Borrower shall own Pledged Stock
(excluding Pledged Stock that the Borrower has hypothecated, pledged or granted
a security interest in to any Person other than the Lender) constituting less
than a majority of the voting common stock and voting power of the General
Partner then outstanding (other than in connection with a sale, assignment,
transfer or conveyance of all of the Pledged Stock) unless the Borrower grants
to the Lender a first priority security interest in cash or Cash Equivalents
with an aggregate Value at least equal to the then outstanding principal amount
of the Note, and
(iii) no Event of Default shall have occurred and be
continuing.
In connection with any Permitted Third Party Sale, the Pledged
Interests transferred shall be released from the security interest created
hereunder. In addition, in connection with a Permitted Third Party Sale under
clause (ii) above that results in the Pledged Stock constituting less than a
majority of the voting common stock of the General Partner and in which the
Borrower grants to the Lender a security interest in the substitute collateral
identified in such clause, all shares of Pledged Stock shall be released from
the security interest created hereunder.
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6
(d) Lender's Rights During Event of Default. If an Event of
Default shall have occurred and be continuing and any amounts shall be due and
payable (whether by maturity or otherwise) under any of the Obligations, all
rights of the Borrower to (i) exercise the voting and other consensual rights
which the Borrower would otherwise be entitled to exercise pursuant to Section
3.2(a); (ii) Transfer or permit the Transfer of any Pledged Retained Assets as
provided in Section 3.2(b) and (iii) receive and retain any and all dividends,
distributions and interest paid in respect of the Pledged Interests as provided
in Section 3.2(a), shall cease and all such rights shall, to the extent
permitted by law, thereupon become vested in the Lender, and the Lender shall
thereupon have the sole right to exercise such voting and other consensual
rights as provided in Section 3.2(a), to Transfer or permit the Transfer of
Pledged Retained Assets as provided in Section 3.4 and to receive and hold as
Collateral such dividends, distributions and interest payments as provided in
Section 3.2(a); provided that, the Lender shall not be permitted to exercise
such voting or other consensual rights with respect to any capital stock of the
General Partner included in the Pledged Interests if, such exercise would result
in the loss of the Lender's status as a pass-through entity for federal or state
income tax purposes or cause the dissolution of the Lender, in which case the
Lender shall have been deemed to have assigned such voting and other consensual
rights to the Trustee unless the Borrower shall have delivered an opinion of
counsel that the exercise of such rights by such Trustee would cause such a
result, in which case no such deemed assignment shall occur. All such dividends,
distributions and interest payments that are received by the Borrower contrary
to the provisions of this Section 3.2(d) shall be received in trust for the
benefit of the Lender, shall be segregated from other funds of the Borrower and
shall forthwith be paid over to the Lender as Collateral in the same form as so
received (with any necessary endorsements).
3.3 Releases of Collateral.
(a) If the Value of the Pledged Permitted Consideration
received from any Permitted Third Party Sale that is required to be pledged by
the Borrower pursuant to Section 3.1(a)(ii) (together with the Pledged Permitted
Consideration received from all previous Permitted Third Party Sales that are so
pledged) at any time of determination, exceeds the then outstanding principal
amount of this Note (after giving effect to any repayment of this Note being
made at the time of such determination), any Pledged Permitted Consideration in
excess of such Value shall be released from the security interest granted
hereunder and no longer shall constitute Pledged Permitted Consideration. The
Value of such Pledged Permitted Consideration shall be determined at the time of
each bona fide Permitted Third Party Sale and at the time of each repayment of
any portion of the principal amount of this Note.
(b) If the Value of the Pledged Retained Assets, if any,
exceeds the outstanding principal amount of this Note (after giving effect to
any
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7
repayment of this Note being made at the time of such determination) at any time
of determination, any Pledged Retained Assets in excess of such Value shall be
released from the security interest granted hereunder and no longer shall
constitute Pledged Retained Assets. The Value of such Pledged Retained Assets
shall be determined at the time of each bona fide sale of Pledged Retained
Assets to a Person that is not an Affiliate of the Borrower and upon each
repayment of any portion of the principal amount of this Note.
(c) In the event that any Collateral is required, pursuant to
clause (a) or clause (b) above, to be released from the security interest
granted hereunder, the Borrower may select which of the Collateral shall be so
released.
(d) Upon the payment in full in cash of the Obligations, the
security interest granted under this Note shall automatically terminate and
cease to be of any force and effect, the Collateral shall be released from the
security interest created under this Note and the Collateral and the Retained
Assets shall no longer be subject to any restrictions imposed under this Note.
(e) The Lender agrees that it shall execute and deliver such
documents and instruments and take all such other action, as the Borrower may
reasonably request (and at the expense of the Borrower), to evidence the
termination of the security interest, and the release of the Collateral and the
Retained Assets, as provided in this Section 3.3 or otherwise in this Note.
3.4 Remedies Upon Default. Upon the occurrence and during the
continuance of an Event of Default, the Lender shall have, in addition to any
other rights given by law, including, without limitation, under the UCC, or the
rights hereunder, all of the rights and remedies of a secured party with respect
to the Collateral. In addition, if any Event of Default shall occur and be
continuing, the Lender may apply against the Obligations then due and payable
any amounts on deposit in the Cash Account and upon fifteen (15) days prior
written notice to the Borrower (the "Sale Notice") sell all or any portion of
the Collateral at any public or private sale at such price and on such terms as
the Lender reasonably may determine, and the purchaser of the Collateral or
portion thereof so sold shall thereafter hold the same absolutely, free from any
claim, encumbrance or right of any kind whatsoever. The Sale Notice shall, in
the case of a public sale, state the time and place fixed for such sale or in
the case of a private sale, state the day after which such sale may be
consummated. Neither the Lender nor the Partnership may be a purchaser of any of
the Pledged Stock at such sale or otherwise acquire the Pledged Stock at any
time when the General Partner holds the Unsubordinated General Partner Interest;
provided that, the Lender may assign its rights hereunder to be a purchaser at
such sale to any Person, other than a Subsidiary of the Partnership, and such
assignee shall not be so restricted. The Borrower hereby agrees that, if so
requested by the Lender in the Sale Notice, the
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8
Borrower shall use its best efforts to cause the General Partner to transfer the
Unsubordinated General Partner Interest to a third party (which may be an
Affiliate of the Borrower other than a subsidiary of the General Partner) no
later than immediately prior to the consummation of the sale provided for in the
Sale Notice. The Borrower hereby agrees that any transfer or sale of all or any
portion of the Collateral conducted in conformity with reasonable commercial
practices of banks, insurance companies, or other financial institutions
disposing of property similar to the Collateral shall be deemed to be
commercially reasonable.
3.5 Further Assurances. The Borrower agrees that it will cooperate
with the Lender and will execute and deliver, or cause to be executed and
delivered, instruments of transfer, proxies and such other documents, and will
take all such other action, as the Lender may reasonably request from time to
time in order to carry out the provisions and the purposes hereof.
Section 4. Optional Prepayment.
4.1 Prepayment by Borrower.
(a) Except as otherwise provided herein, the Borrower shall
not have any right to prepay or redeem this Note prior to June 30, 2001.
(b) At any time on or after June 30, 2001 but prior to June
30, 2002, the Borrower shall have the right, at any time and from time to time,
at its sole option and election, to prepay the outstanding principal amount of
this Note, in whole or in part, at a redemption price equal to 103% of the
principal amount prepaid together with accrued interest on the portion prepaid.
(c) At any time on or after June 30, 2002 but prior to June
30, 2003, the Borrower shall have the right, at any time and from time to time,
at its sole option and election, to prepay the outstanding principal amount of
this Note, in whole or in part, at a redemption price equal to 101.5% of the
principal amount prepaid, together with accrued interest on the portion prepaid.
(d) At any time on or after June 30, 2003, the Borrower shall
have the right, at any time and from time to time, at its sole option and
election, to prepay the outstanding principal amount of this Note without
premium or penalty, in whole or in part, together with accrued interest on the
portion prepaid.
(e) Notwithstanding anything to the contrary contained in this
Section 4.1, the Borrower shall have the right, but not the obligation, to
prepay the outstanding principal amount of this Note without premium or penalty,
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9
(i) in whole or in part, within 180 days after the
consummation of an Acquisition (as defined in the Partnership Agreement),
in an amount not to exceed the sum of (x) the total amount of any
indebtedness (including refinancing indebtedness) incurred by the Lender
or the Partnership in connection with such Acquisition that is repaid
using the proceeds of the prepayment of this Note and (y) the total amount
of other cash (not resulting from proceeds of the indebtedness referred to
in clause (x)) paid by the Lender or the Partnership in connection with
such Acquisition; or
(ii) in whole, but not in part, within 180 days of any
transaction (A) that results in either the General Partner no longer being
an Affiliate of the Borrower or the General Partner no longer being an
Affiliate of the Lender and (B) in which (x) the total consideration
received by the General Partner for each Subordinated Unit (or Common Unit
issued upon conversion of a Subordinated Unit) sold, transferred or
assigned by the General Partner in such transaction, if any, is not less
than an amount (the "Threshold Price") equal to the Initial Unit Price (as
such Initial Unit Price may be adjusted for splits, distributions of
capital surplus or other reclassifications of the Units) or (y) if such
transaction does not involve the sale of Units by the General Partner but
rather involves the merger or sale of stock of the General Partner, in
which the total consideration received by the Borrower in such transaction
implies a value, determined by the Borrower in good faith, for each
Subordinated Unit (or Common Unit issued upon conversion of a Subordinated
Unit) of not less than the Threshold Price.
4.2 Notice. Notice of any optional prepayment by the Borrower of
this Note pursuant to Section 4.1 shall be given to the Lender at least 10 days
prior to the date fixed for such prepayment, which must be a Business Day.
Section 5. Representations and Warranties. The Borrower represents and warrants
to the Lender as of the date hereof that:
5.1 Incorporation. The Borrower is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware
and has all requisite corporate power and authority to execute and deliver this
Note, to grant the security interest in the Collateral as provided herein and to
perform its obligations hereunder.
5.2 Authority. This Note has been duly authorized, executed and
delivered by the Borrower and constitutes the valid and legally binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium or similar laws
now or hereafter in effect
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10
relating to creditors' rights and remedies generally and (ii) general equitable
principles, whether asserted in an action at law or in equity, and that such
enforceability may be subject to the discretion of the court before which any
proceedings therefor may be brought.
5.3 No Conflicts. The execution, delivery and performance by the
Borrower of this Note, including, without limitation, the grant of the security
interest in the Collateral as provided herein, do not (i) violate any provision
of any law, rule or regulation, order, writ, judgment, decree, determination or
award presently in effect having applicability to the Borrower, (ii) conflict
with or result in a breach of or constitute a default under the Certificate of
Incorporation or Bylaws of the Borrower or any indenture or loan or credit
agreement or any other agreement or instrument to which the Borrower is a party
or (iii) except as contemplated by this Note, result in, or require the creation
or imposition of, any lien or encumbrance upon or with respect to any of the
properties now owned by the Borrower, except, in the case of (i), (ii) or (iii),
where such violation, conflict, default or creation or imposition of any lien or
encumbrance would not (individually or in the aggregate) have a material adverse
effect on the business, assets or condition (financial or otherwise) of the
Borrower and its subsidiaries, taken as a whole, or on the value of the
Collateral.
5.4 Title to Collateral. The Borrower owns beneficially and of
record all of the Pledged Stock, free and clear of all liens and other
encumbrances, except for those created hereunder. The General Partner owns the
Retained Assets beneficially and of record free and clear of all liens and other
encumbrances, except for those created hereunder, and the restrictions contained
in the Partnership Agreement.
Section 6. Covenants.
6.1 Notice of Defaults. The Borrower shall give notice in writing to
the Lender promptly but in any event within five Business Days after becoming
aware of the occurrence of any Event of Default under this Note or an event
which with notice or lapse of time would become an Event of Default.
6.2 Financial Reports. The Borrower shall prepare and furnish to the
Lender (i) as soon as practicable, after the close of each fiscal year of the
Borrower, but not later than ten (10) Business Days after the date such are
filed with the Securities and Exchange Commission, an audited consolidated
balance sheet of the Borrower, and the related consolidated statements of
income, additional capital and cash flows (or similar statements) for such
fiscal year and (ii) as soon as practicable after the close of each fiscal
quarter of the Borrower, but not later than ten (10) Business Days after the
date such are filed with the Securities and Exchange Commission, an unaudited
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11
consolidated balance sheet of the Borrower and the related consolidated
statements of income, additional capital and cash flows (or similar statements)
for such fiscal quarter.
6.3 Compliance with Laws. The Borrower shall comply with all
applicable laws or other governmental rules and regulations to which it is
subject the violation of which would have a material adverse effect on the
Borrower's ability to perform its obligations under this Note.
6.4 Payment of Material Obligations. The Borrower shall, and shall
cause the General Partner to, pay and discharge, as the same shall become due
and payable, (i) all taxes, assessments and governmental charges levied or
imposed upon the Borrower or the General Partner, as the case may be, or upon
the income, profits or property of the Borrower or the General Partner, as the
case may be, and (ii) all lawful claims for labor, materials and supplies which,
if unpaid, might by law become a lien upon the property of the Borrower or the
General Partner, as the case may be (including, without limitation, any of the
Collateral); provided that the Borrower and the General Partner shall not be
required to pay or discharge or cause to be paid or discharged any such tax,
assessment, charge or claim the amount, applicability or validity of which is
contested in good faith by appropriate proceedings diligently pursued and for
which the Borrower has established adequate reserves as required by generally
accepted accounting principles or the failure to pay which would not have a
material adverse effect on the Borrower's ability to perform its obligations
under this Note.
6.5 Transfer of Interest in the General Partner. The Borrower shall
use its best efforts to prevent:
(i) SEPSCO from transferring any shares of capital stock
of the General Partner to any Person other than (a) the Borrower, (b) a
permitted assignee under Section 9.2 of this Note from the Borrower, (c) a
wholly owned subsidiary of the Borrower, (d) any Person that pledges such shares
to the Lender to secure the Borrower's obligations under this Note pursuant to
an agreement that contains provisions substantially similar to those set forth
in Section 3 (other than Section 3.1(b)) of this Note or (e) in connection with
any Permitted Third Party Sale that results in the Pledged Stock no longer
constituting Collateral,
(ii) the General Partner from issuing any shares of its
capital stock to any Person other than (a) the Borrower, (b) a permitted
assignee under Section 9.2 of this Note from the Borrower or (c) any Person that
pledges such shares to the Lender to secure the Borrower's obligation under this
Note pursuant to an agreement that contains provisions substantially similar to
those set forth in Section 3 (other than Section 3.1(b)) of this Note, or
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12
(iii) any shares of the capital stock of SEPSCO from being
acquired by any Person, other than (a) the Borrower, (b) a wholly owned
subsidiary of the Borrower that agrees to be bound by this Section 6.5, or (c) a
permitted assignee under Section 9.2 of this Note from the Borrower, at any time
that SEPSCO owns any shares of the capital stock of the General Partner.
Notwithstanding anything to the contrary contained in this Note, but subject to
Section 3.1(b), the General Partner and the Borrower may effect the General
Partner Merger.
6.6 Actions by the General Partner. Prior to the General Partner
Merger, the Borrower shall prevent the General Partner from (a) incurring any
indebtedness for borrowed money, unless the General Partner grants to the Lender
a first priority continuing security interest in Retained Assets and/or cash and
Cash Equivalents and/or Marketable Securities having an aggregate Value equal to
or greater than the then outstanding principal amount of this Note, in a manner
substantially similar to the security interest to be granted by the Borrower
pursuant to Section 3.1(b) of this Note or (b) Transferring any of the Pledged
Retained Assets (or Potential Pledged Retained Assets) in any manner that does
not comply with Section 3.2(b); provided, however, that the General Partner may
without complying with this Section 6.6(b), (i) consummate the General Partner
Merger and (ii) Transfer any Pledged Retained Assets (or Potential Retained
Pledged Assets) in one or more transactions on an arms'-length basis with an
independent, unrelated third party in which the aggregate net after tax proceeds
(together with the net after tax proceeds from all similar previous
transactions) does not exceed $5 million.
Section 7. Defaults and Remedies.
7.1 Event of Default. An "Event of Default" shall occur if:
(a) the Borrower defaults in the payment of principal or
premium of this Note when the same becomes due and payable;
(b) the Borrower defaults in the payment of interest on this
Note when the same becomes due and payable and such default continues for a
period of 5 Business Days;
(c) the Borrower defaults (after notice and the expiration of
any applicable grace period, if any) in the payment of principal or interest
under any indebtedness of the Borrower (other than this Note) or any guarantee
by the Borrower of any indebtedness of any Subsidiary of the Borrower (each a
"Guarantee Obligation") or defaults in the observance or performance of any
other agreement or condition relating to any indebtedness of the Borrower or
Guarantee Obligation (the effect of which covenant default is to cause such
indebtedness to become due prior to its stated maturity or such Guarantee
Obligation to become payable), if the principal amount of
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13
such indebtedness or Guarantee Obligation, together with the principal amount of
all other such indebtedness and Guarantee Obligations with respect to which a
payment default (after notice and the expiration of any applicable grace period
or extension of maturity date, if any) has occurred or the maturity of which has
been so accelerated or become so payable, exceeds $20 million in the aggregate;
(d) the Borrower fails to comply in any material respect with
any of its agreements contained in this Note (other than those set forth in any
other clause of this Section 7.1) and such failure is not cured within 30 days
after notice thereof;
(e) one or more final judgments of any competent tribunal(s)
aggregating in excess of $5 million shall be rendered against the Borrower,
which judgments are not rescinded, discharged, satisfied, vacated, annulled or
stayed or bonded pending appeal within 90 days of their entry;
(f) this Note (or any other agreement contemplated by Section
6.5 or 6.6 purporting to grant a security interest in property securing this
Note) shall cease to create a valid security interest in any of the Collateral;
(g) the General Partner issues any shares of its capital stock
to any Person other than as permitted under Section 6.5(ii);
(h) SEPSCO transfers any shares of the capital stock of the
General Partner to any Person or any shares of SEPSCO's capital stock are
acquired by any Person, in either case other than as permitted under Section
6.5(i) or (iii), respectively;
(i) the General Partner takes any action which the Borrower
has agreed to use best efforts to prevent pursuant to Section 6.6;
(j) the Borrower fails to comply in any material respect with
Section 3.1(b) or the second sentence of Section 3.1(c)(i) or Section
3.1(c)(ii);
(k) the Borrower:
(i) commences a voluntary case, proceeding or other action
under any existing or future law of any jurisdiction relating to
bankruptcy, insolvency, reorganization or relief from debtors
(collectively, "Bankruptcy Laws") seeking to have an order for relief
entered with respect to it;
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14
(ii) consents to the entry of an order for relief against
it in an involuntary case commenced under a Bankruptcy Law;
(iii) consents to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator or other similar official (a
"Custodian") of it or for all or substantially all of its property under a
Bankruptcy Law; or
(iv) makes a general assignment for the benefit of its
creditors;
(l) a court of competent jurisdiction enters an order or
decree under any Bankruptcy Law (which order or decree remains unstayed and in
effect for 90 days) that:
(i) is for relief against the Borrower in an involuntary
case;
(ii) appoints a Custodian of the Borrower or for all or
substantially all of its property; or
(iii) orders the winding up or liquidation of the Borrower.
7.2 Acceleration. If an Event of Default occurs under clause (k) or
(l) of Section 7.1, then the principal of and the accrued interest on this Note
shall become due and payable immediately without presentment, demand, protest or
other notice of any kind, all of which are expressly waived by the Borrower. If
any other Event of Default specified in Section 7.1 occurs and is continuing,
the Lender, by written notice to the Borrower, may declare the principal of and
accrued interest on this Note to be due and payable and upon such declaration
such principal and interest shall be due and payable immediately without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived by the Borrower.
7.3 Other Remedies. If an Event of Default occurs and is continuing,
the Lender may pursue any available remedy by proceeding at law or in equity to
collect the payment of principal of or interest on this Note or to enforce the
performance of any provision of this Note. Except as otherwise provided by law,
a delay or omission by Lender in exercising any right or remedy accruing upon an
Event of Default shall not impair the right or remedy or constitute a waiver of
or acquiescence in the Event of Default. No remedy is exclusive of any other
remedy. All available remedies are cumulative.
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15
7.4 Waiver of Defaults. The Lender may waive in writing a default
and its consequences. When a default is waived, it is deemed cured, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any consequent right. No right or remedy herein conferred upon or
reserved to the Lender is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise.
Section 8. Definitions.
For the purposes of this Note, the following terms shall have the
meanings indicated:
"Affiliate" shall mean, 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 Partner,
without limitation, the Borrower, 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 the management and
policies of such Person whether through the ownership of voting securities or
otherwise.
"Business" shall mean the wholesale and retail sale, distribution
and storage of propane gas and related petroleum derivative products, the
leasing of propane storage tanks and the related retail sale of supplies and
equipment, including home appliances, and such other businesses in which the
Lender was engaged on the date hereof.
"Business Day" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York or the State of
Iowa are authorized or required by law to close.
"Cash Equivalents" shall mean (i) obligations issued or
unconditionally guaranteed by the United States of America or any agency
thereof, or obligations issued by any agency or instrumentality thereof and
backed by the full faith and credit of the United States of America, in each
case maturing one year or less from the date of acquisition thereof; (ii)
marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing one year or less from the date of acquisition
thereof and, at the time of acquisition, having the highest ratings obtainable
from either Standard & Poor's Rating Group or Moody's Investors Service, Inc.;
(iii) commercial paper maturing no more than 270 days from the date of creation
thereof and, at the time of acquisition, having a rating of at least A-1 or the
equivalent thereof from
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16
Standard & Poor's Rating Group or P-1 or the equivalent thereof from Moody's
Investors Service, Inc.; (iv) certificates of deposit or bankers' acceptances
maturing one year or less from the date of acquisition thereof issued by any
domestic commercial bank having combined capital and surplus of not less than
$250,000,000, the commercial paper or other short term unsecured debt
obligations of which are rated either A-2 or better (or comparably if the rating
system is changed) by Standard & Poor's Rating Group or Prime-2 or better (or
comparably if the rating system is changed) by Moody's Investors Service, Inc.
or the long term debt obligations of which are rated either A- or better (or
comparably if the rating system is changed) by Standard & Poor's Ratings Group
or A-3 or better (or comparably if the rating system is changed) by Moody's
Investors Service, Inc.; and (v) repurchase agreements and reverse repurchase
agreements with any bank meeting the qualifications specified in clause (iv)
above relating to securities of the types described in clauses (i), (ii), or
(iv) above, in each case maturing one year or less from the date of acquisition
thereof.
"Closing Price" with respect to any security for any day means the
last sale price for securities of the same class as such security 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 reported
in the principal consolidated transaction reporting system on the principal
National Securities Exchange on which securities of the same class as such
security are listed or admitted to trading or, if securities of the same class
as such securities are not listed or not admitted to trading on any National
Securities Exchange, the last quoted price for securities of the same class as
such security on such day or, if not so quoted, the average of the high bid and
low asked prices for securities of the same class as such security 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 securities of the same class as such security are
not quoted by any such organization, the average of the closing bid and asked
prices for securities of the same class as such security on such day as
furnished by a professional market maker making a market in securities of the
same class as such security selected by the Board of Directors of the Borrower
or if on any such day no market maker is making a market in securities of the
same class as such security, the fair value of such security on such day as
determined in good faith by the Board of Directors of the Borrower.
"Common Unit" shall have the meaning ascribed thereto in the
Partnership Agreement and shall also include any security into which such Common
Unit is converted or exchanged in connection with any merger, consolidation or
recapitalization.
"Current Trading Price" with respect to any security means the
average of the daily Closing Prices for securities of the same class as such
security for the 20 consecutive Trading Days immediately prior to such date.
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17
"General Partner" shall mean National Propane Corporation , a
Delaware corporation, or after the General Partner Merger, the Borrower.
"General Partner Merger" shall mean the consolidation or merger of
the General Partner with and into the Borrower.
"Initial Unit Price" shall have the meaning ascribed thereto in the
Partnership Agreement.
"Marketable Securities" shall mean any security issued by a Person
primarily engaged in the Business that (i) can be immediately sold to the
general public without the necessity of any federal, state or local government
consent, approval or filing (other than any notice filings such as those
required pursuant to Rule 144(h) under the Securities Act of 1933, as amended)
and without violation of federal or state securities laws and (ii) is listed on
a National Securities Exchange or a recognized foreign securities exchange,
carried on an established quotation service for over-the-counter securities or
for which market quotations are readily available in either a domestic or
recognized foreign over-the-counter market.
"National Securities Exchange" shall mean an exchange registered
with the Securities and Exchange 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.
"Partnership" shall mean National Propane Partners, L.P., a Delaware
limited partnership and its successors.
"Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of the Partnership, dated as of the date
hereof, as amended from time to time.
"Permitted Consideration" shall mean consideration received in
connection with a sale of all or any portion of the Pledged Stock (or any
Collateral permitted hereunder to be substituted therefor) consisting of any
combination of cash, Cash Equivalents, Qualified Marketable Securities and
Qualified Public Company
Securities.
"Person" shall mean an individual or a corporation, partnership,
limited liability company, trust, incorporated or unincorporated organization,
joint venture, joint stock company, governmental agency or other entity.
"Public Company Securities" shall mean any equity or debt security
issued by any Person primarily engaged in the Business required by Section 13(a)
or
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18
15(d) of the Securities Exchange Act of 1934, as amended, to file periodic
reports with the Securities and Exchange Commission that are of the same class
(or are convertible, exchangeable or exercisable into securities of the same
class) as any class of securities listed on a National Securities Exchange.
"Qualified Marketable Securities" shall mean any Marketable Security
received by the Borrower or the General Partner in connection with a Significant
Transaction and that is issued by the acquiring Person, or such Person's direct
or indirect parent, in connection with such transaction.
"Qualified Public Company Securities" shall mean any Public Company
Security received by the Borrower or the General Partner in connection with a
Significant Transaction and that is issued by the acquiring Person, or such
Person's direct or indirect parent, in connection with such transaction.
"Qualified Transferee" shall mean any Person that has, at the time
of determination (after giving effect to the transactions giving rise to the
need to make such determination), a consolidated net worth (determined in
accordance with generally accepted accounting principles) of not less than the
greater of (a) $43 million and (b) the consolidated net worth of the Borrower
immediately prior to such transaction.
"Retained Assets" shall mean any combination of (i) Common Units,
(ii) Subordinated Units, (iii) Qualified Public Company Securities and Qualified
Marketable Securities, (iv) cash and Cash Equivalents received upon the sale of
any Retained Assets, and (v) and cash and Cash Equivalents designated by the
General Partner as Pledged Retained Assets (or Potential Pledged Retained
Assets) pursuant to Section 3.2(b).
"SEPSCO" shall mean Southeastern Public Service Company, a
Delaware corporation.
"Significant Transaction" shall mean (i) the merger, consolidation
or sale of all or substantially all of the assets of the Partnership or the
Lender, (ii) the sale of all of the Pledged Stock or (iii) the merger,
consolidation or sale of all or substantially all of the assets of the General
Partner, in each case to a Person that, directly or indirectly, is primarily
engaged in the Business.
"Subsidiary" shall mean, with respect to any Person, a corporation
or other entity of which more than 50% of the voting power of the voting equity
securities or equity interest is owned, directly or indirectly, by such Person.
"Subordinated Unit" shall have the meaning ascribed thereto in the
Partnership Agreement and shall also include any security into which such
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19
Subordinated Unit is converted or exchanged in connection with any merger,
consolidation or recapitalization.
"Trading Day" means a day on which the principal National Securities
Exchange on which securities of the same class as the referent security are
listed or admitted to trading is open for the transaction of business or, if
securities of the same class as the referent security 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.
"UCC" shall mean the Uniform Commercial Code or similar statute in
effect from time to time in any applicable jurisdiction.
"Unsubordinated General Partner Interest" shall have the meaning
ascribed thereto in the Partnership Agreement.
"Units" shall have the meaning ascribed thereto in the Partnership
Agreement.
"Value" shall mean, with respect to the Pledged Retained Assets, the
Potential Pledged Retained Assets or the Permitted Consideration as at the date
of determination, the following: (i) with respect to a Common Unit, 50% of the
Current Trading Price of a Common Unit, (ii) with respect to a Subordinated
Unit, one-half of the value (as determined in good faith by the General Partner)
of the consideration received by the General Partner in connection with the most
recent sale, assignment or transfer (including, without limitation, the
transaction which gives rise to the need to make such determination) by the
General Partner to an unaffiliated third party of a Subordinated Unit, or if the
General Partner has not so sold, assigned or transferred any Subordinated Units,
the amount determined in clause (i) above, (iii) with respect to cash or Cash
Equivalents, 100% of the face value thereof, (iv) with respect to any Marketable
Security, 50% of the Current Trading Price therefor, and (v) with respect to any
Public Company Security, 50% of the Current Trading Price therefor.
Section 9. Miscellaneous.
9.1 Amendment. The terms of this Note may be amended only by
the written agreement of the Lender and the Borrower.
9.2 Successors and Assigns. This Note shall inure to the benefit of,
and shall be binding upon, the successors and permitted assigns of the Borrower
and the Lender. The obligations of the Borrower under this Note may not be
assigned without the written consent of the Lender; provided, however, that the
Borrower may, without the consent of the Lender, assign its obligations under
this Note to, and this
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20
Note may be assumed by, any Qualified Transferee that directly or indirectly
through any Person that is its direct or indirect wholly owned subsidiary or
parent (i)(a) acquires the General Partner (whether by merger, consolidation,
acquisition of all of the stock of the General Partner or otherwise) or all or
substantially all of the assets of the General Partner and (b) grants a first
priority security interest in the stock of the General Partner so acquired, or,
if no stock of the General Partner is so acquired, in the lesser of (A) all
Retained Assets held by the General Partner immediately prior to such
acquisition and (B) Retained Assets having an aggregate Value equal to or
greater than the then outstanding principal amount of this Note or (ii)(a)
acquires the Partnership or the Lender (whether by merger, consolidation,
acquisition of all of the Units or partnership interests or otherwise) or all or
substantially all of the assets of the Partnership or the Lender and (b) grants
a first priority security interest in any combination of cash and Cash
Equivalents or Marketable Securities and Public Company Securities issued by
such acquiring Person (or by the direct or indirect parent or subsidiary of such
Person that is that the most proximate issuer (in terms of corporate structure)
of Marketable Securities or Public Company Securities) having an aggregate Value
equal to or greater than the then outstanding principal amount of this Note.
This Note may not be assigned by the Lender without the written consent of the
Borrower.
9.3 Consent to Assignment. The Borrower hereby:
(i) irrevocably consents to the assignment by the Lender
to The Bank of New York, in its capacity as Trustee (the "Trustee"), appointed
under the Intercreditor and Trust Agreement, dated as of June 26, 1996 (the
"Trust Agreement"), among the Lender, the General Partner, National Propane SGP,
Inc., the banks listed as parties thereto, the note holders listed as parties
thereto and the other parties thereto, for the benefit of the Note Holders, Bank
Lenders and Parity Lenders (each as defined in the Trust Agreement), pursuant to
the Pledge and Security Agreement, dated as of June 26, 1996 (the "Security
Agreement"), among the grantors named therein and the Trustee, as amended,
modified or supplemented from time to time, of all of the Lender's right, title
and interest in, to and under this Note, as collateral security for the Secured
Obligations (as defined in the Security Agreement);
(ii) irrevocably consents to any subsequent assignment by
the Trustee on behalf of the holders of the Secured Obligations made in
accordance with the terms of the Trust Agreement and the Security Agreement,
upon and after receipt by the Borrower of written notice from the Trustee that
it desires to and is permitted under the Trust Agreement and Security Agreement
to exercise its rights and remedies as a secured party under the Trust Agreement
and Security Agreement, including, without limitation, the acquisition of all of
the Lender's existing and future rights under this Note in foreclosure or
otherwise, or the assignment of this Note to any Person who is a transferee and
any subsequent assignment by such transferee;
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21
(iii) agrees that the Trustee and the holders of the Secured
Obligations shall not, prior to becoming a transferee, be subject to any
liability or obligation hereunder; and
(iv) acknowledges the right of the Trustee, following the
occurrence of an Event of Default (as defined in the Trust Agreement), to
exercise in accordance with the terms of the Security Agreement and the Trust
Agreement its rights under the Security Agreement as a secured creditor and
collateral assignee of this Note, to make all demands, give all notices, take
all actions and exercise all rights of the Lender under this Note.
9.4 GOVERNING LAW. THIS NOTE SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK APPLICABLE TO INSTRUMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE.
TRIARC COMPANIES, INC.
By: /s/ JOHN L. COHLAN
___________________
Name: J0HN L. COHLAN
Title:Senior Vice President
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EXHIBIT 10.6
NATIONAL PROPANE CORPORATION 1996 UNIT OPTION PLAN
1. PURPOSE. The purposes of this National Propane Corporation 1996
Unit Option Plan (the "Plan") are to encourage selected Employees of National
Propane Corporation (the "Company") and its Affiliates to develop a proprietary
interest in the growth and performance of National Propane Partners, L.P. (the
"Partnership"), to generate an increased incentive to contribute to the
Partnership's future success and prosperity, thus enhancing the value of the
Partnership for the benefit of its Unitholders, and to enhance the ability of
the Company and its Affiliates to attract and retain key individuals who are
essential to the progress, growth and profitability of the Partnership, by
giving such Employees the opportunity to acquire Units through the exercise of
Options and/or Unit appreciation rights ("UARs").
2. ADMINISTRATION.
2.1 COMMITTEE. The Plan shall be administered by the
Compensation Committee (the "Committee") of the Board of Directors of the
Company (the "Board") or such other committee as may be designated by the Board
to administer the Plan and composed of not less than two Directors of the Board,
each of whom shall be intended to be a "disinterested person" within the meaning
of Rule 16b-3 ("Rule 16b-3") promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended (the "1934
Act"), as in effect on the Effective Date of the Plan, to the extent required by
Rule 16b-3. A majority of the members of the Committee shall constitute a
quorum, and the acts of a majority of the members present at any meeting at
which a quorum is present, or acts approved in writing by all members of the
Committee, shall be deemed the acts of the Committee.
2.2 POWERS. Subject to the terms of the Plan and applicable
law, the Committee shall have the sole power, authority and discretion to: (i)
designate the Employees who shall be Participants; (ii) determine the number of
Options and UARs to be granted to Participants; (iii) determine the terms and
conditions, consistent with the provisions of the Plan, of any Option or UAR;
(iv) interpret, construe and administer the Plan and any instrument or agreement
relating to an Option or UAR granted under the Plan; (v) establish, amend,
suspend or waive such rules and regulations and appoint such agents as it shall
deem appropriate for the proper administration of the Plan; (vi) make any
determinations as to the right of any Person to receive payment of (or with
respect to) an Option or UAR; (vii) make any other determinations and take any
other actions that the Committee deems necessary or desirable for the
administration of the Plan; (viii) accelerate the exercisability of any Option
and/or UAR and (ix) correct any defect, supply any
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2
omission or reconcile any inconsistency in the Plan, any Option or UAR in the
manner and to the extent it shall deem desirable in the establishment or
administration of the Plan.
2.3 BINDING EFFECT. Unless otherwise expressly provided in the
Plan, all designations, determinations, interpretations and other decisions with
respect to the Plan, any Option or UAR granted hereunder shall be within the
sole discretion of the Committee, may be made at any time and shall be final,
conclusive and binding upon all Persons.
3. UNITS AVAILABLE.
3.1 NUMBER OF UNITS AVAILABLE. A total of 1,250,000 Units,
plus a number of Units equal to an additional 1% of the number of Units
outstanding as of each December 31 following the Plan's effective date, shall be
available for issuance pursuant to Options and UARs granted under the Plan,
subject to adjustment as provided in this Section 3.1 and in Section 3.3. The
number of Units available for issuance under the Plan shall be increased by the
number of Units received by the Company as payment of the exercise price of
Options, and by the number of Units purchased by the Company (in the open market
or for Fair Market Value in private transactions) from an amount equal to the
cash proceeds received by the Company on the exercise of Options under the Plan.
Units may be Common Units and/or Subordinated Units, as may be determined by the
Committee in its sole discretion. If any Option or UAR granted under the Plan is
forfeited, canceled, surrendered or otherwise terminates or expires without the
delivery of unrestricted Units or other consideration, the Units subject to such
Option or UAR, as the case may be, shall again be available for issuance
pursuant to Options and UARs under the Plan.
3.2 SOURCES OF UNITS DELIVERABLE UNDER PLAN. Units delivered
by the Company on exercise of an Option or UAR may consist, in whole or in part,
of Units acquired in the open market or from any Person (including the
Partnership) and (upon consideration of the tax consequences to the Company
thereof) Units that are originally issued by the Partnership to the Company in
connection with the organizational transactions effected concurrently with the
closing of the Partnership's initial public offering of Common Units ("IPO")
under the Securities Act of 1933, as amended (the "1933 Act"), or any
combination of the foregoing.
(i) REIMBURSEMENT BY PARTNERSHIP. With
respect to each Unit delivered to a Participant upon the exercise of an Option,
the Company 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
or from any Person, the price actually paid by the Company therefor over (ii)
the exercise price of the Option
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3
relating to such Unit. With respect to each payment made by the Company upon
exercise of a UAR, the Company shall be entitled to reimbursement by the
Partnership in an amount equal to the Spread (as hereinafter defined).
3.3 ADJUSTMENTS. The number of Units available for issuance
under the Plan and/or covered by a Participant's Options or UARs shall be
adjusted as appropriate in connection with any distribution to Unitholders,
split, recapitalization, extraordinary distribution, merger consolidation,
combination or exchange of Units or similar change or upon the occurrence of any
other event that the Committee deems appropriate. In the event of any change in
the number of Units outstanding by reason of any other transaction, the
Committee may, but need not, make such adjustments in the number of Units
available for issuance under the Plan and/or pertaining to each Option or UAR.
No adjustment shall be made to Options or UARs relating to Subordinated Units on
account of the expiration of the Subordination Period, as defined in the
Partnership Agreement, relating to such Units. The adjustments determined by the
Committee shall be final, binding and conclusive.
4. ELIGIBILITY. All Employees shall be eligible to be Participants,
and to be selected to receive Options under Section 5.1 hereof and UARs under
Section 5.2 hereof. Grants may be made to the same Employee on more than one
occasion.
5. TERMS OF OPTIONS AND UARS.
5.1 TERMS OF OPTIONS. The Committee is hereby authorized to
grant Options shall determine. Options granted under this Section 5.1 shall be
referred to as "Options."
(i) OPTION EXERCISE PRICE. The per Unit exercise price
of any Option shall be determined by the Committee at the date of grant.
(ii) TERM. The term of each Option shall be for such
period as may be determined by the Committee; provided, that in no event shall
the term of any Option exceed a period of 10 years from the date of its grant.
(iii) TIME AND METHOD OF EXERCISE. The
Committee shall determine the time or times at which an Option may be exercised
in whole or in part, and may in its discretion accelerate the time at which any
outstanding Option becomes exercisable; provided that no Option to purchase
Subordinated Units may be exercisable before the end of the Subordination
Period, as defined in the Amended and Restated Agreement of Limited Partnership
of the Partnership (the "Partnership Agreement"). Subject to any limitations in
the Plan Agreement, a
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4
Participant may purchase Units subject to the exercisable portion of an Option
in whole at any time, or in part from time to time, by delivering to the
Secretary of the Company written notice specifying the number of Units with
respect to which the Option is being exercised, together with payment in full of
the purchase price of such Units plus any applicable federal, state or local
taxes for which the Company or any Affiliate has a withholding obligation in
connection with such purchase. Such payment shall be made in full in cash, by
check acceptable to the Company, in Units held by the Participant for such
period as may be required (in the opinion of the Committee) to avoid a charge to
the Company's earnings for financial reporting purposes, such other form of
consideration as may be permitted by the Committee in the applicable Plan
Agreement, or any combination of the foregoing. In lieu of the foregoing, if
permitted by the Committee, payment may be made by the delivery to the Company
of an assignment of a sufficient amount of the proceeds from the sale of Units
acquired upon exercise to pay for all of the Units acquired upon exercise and
any federal, state or local taxes which the Company or any Affiliate has a
withholding obligation, along with an authorization to the broker or selling
agent to pay that amount to the Company, which sale shall be made at the
Participant's direction at the time of exercise, provided that the Committee may
require the Participant to furnish an opinion of counsel acceptable to the
Committee to the effect that such delivery would not result in the Participant
incurring any liability under Section 16 of the Act.
(iv) TERMINATION OF EMPLOYMENT. Unless
otherwise provided in a Plan Agreement, if a Participant ceases to be an
Employee for any reason (including death or Disability): (a) to the extent an
Option granted to such Participant was exercisable immediately prior to the date
such Participant ceased to be an Employee (i) in the case of termination on
account of Cause or Voluntary Termination, such Option may not be exercised
following such date of termination, (ii) in the case of termination on account
of death or Disability, or death or Disability in the period described in (iii),
such Option may be exercised within one year after such date by the Participant
(or, in the case of his death, by the person to whom his rights shall pass by
will or the laws of descent and distribution), but not thereafter, and (iii) in
the case of termination for any reason other than as described in (i) or (ii),
such Option may be exercised within 90 days after such date of termination by
the Participant, but not thereafter; and (b) to the extent such Option was not
exercisable immediately prior to the date the Participant ceases to be an
Employee, such Option shall automatically lapse and be canceled unexercised on
such date; provided, that in no event shall any Option be exercisable after the
expiration date of such Option as set forth in the related Plan Agreement.
5.2 TERMS OF UARs. The Committee is hereby authorized to grant
UARs to Employees selected by the Committee with the terms and conditions
described in this Section 5.2 and in Section 5.3 and with such additional terms
and conditions, which are not inconsistent with the provisions of the Plan, as
the Committee shall determine. UARs may be granted in connection with all or any
part of, or
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5
independently of, any Option granted under this Plan. A UAR granted in
connection with an Option may be granted at or after the time of grant of such
Option.
(i) Exercise. The grantee of a UAR shall have the
right, subject to the terms hereof and the applicable Plan Agreement, to receive
from the Company 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 (the "Spread");
(ii) Payment of Spread. Payment to the grantee upon
exercise of a UAR shall 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.
(iii) Term of UARs. Each Plan Agreement with
respect to a UAR shall set forth the periods during which the award evidenced
thereby shall be exercisable. Such periods shall be determined by the Committee
in its sole discretion.
5.3 TERMS APPLICABLE TO ALL OPTIONS AND UARs.
(i) LIMITS ON TRANSFER. No Option, UAR or
rights thereunder shall be assignable, alienable, saleable or transferable by a
Participant otherwise than by will or by the laws of descent and distribution.
Each Option and UAR shall be exercisable during that grantee's lifetime only by
the grantee or, if permitted under applicable law, by the grantee's guardian or
legal representative. No Option, UAR or any rights thereunder may be pledged,
alienated, attached or otherwise encumbered, and any purported pledge,
alienation, attachment or encumbrance thereof shall be void and unenforceable
against the Company, the Partnership or any Affiliate.
(ii) UNIT CERTIFICATES. Upon exercise of an
Option, or a UAR that is payable in Units, delivery of a certificate for fully
paid and nonassessable Units shall be made to the Person exercising the Option
or UAR, not more than 30 days from the date of receipt of the notice of exercise
by the Company or at such other time, place and manner as may be agreed upon by
the Company and such Person.
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6
(iii) PLAN AGREEMENT. Each Option and UAR
shall be evidenced by a written document (a "Plan Agreement"), which shall have
such terms and provisions, not inconsistent with the Plan, that the Committee
determines.
(iv) FORFEITURE FOR CERTAIN VIOLATIONS.
Notwithstanding anything herein to the contrary, all Options and UARs granted to
a Participant hereunder may be terminated and forfeited without the payment of
any consideration if the Committee determines in good faith that such
Participant violated any noncompetition, confidentiality or similar agreement,
contract or policy of the Company, the Partnership or an Affiliate applicable to
such Participant.
6. AMENDMENT AND TERMINATION. The Board in its
discretion may terminate the Plan at any time with respect to any Units for
which a grant has not theretofore been made. The Board may also alter or amend
the Plan or any Plan Agreement in whole or in part from time to time; provided,
that no change in the Plan or any Option or UAR theretofore granted may impair
the rights of a Participant without the consent of such Participant; and
provided further, that notwithstanding any other provision of the Plan or any
Plan Agreement, to the extent necessary to comply with Rule 16b-3, no such
amendment or alteration shall be made that would, without the requisite consent
under Rule 16b-3:
(i) materially increase the total number of Units available
for Options and UARs under the Plan, except as provided in Section 3 hereof;
(ii) materially modify the requirements as to eligibility for
participation in the Plan;
(iii) extend the maximum period during which Options or
UARs may be granted under the Plan; or
(iv) materially increase the benefits accruing to Participants
under the Plan.
7. VESTING/TERMINATION UPON THE OCCURRENCE OF A CHANGE IN CONTROL.
If there is a Change of Control, the Committee may in its discretion (i)
accelerate the exercisability of some or all outstanding Options and UARs, in
which case the Committee may also accelerate the date as of which such Options
and UARs terminate to a date at least 30 days following the date such Options
and UARs become exercisable, or (ii) cancel outstanding Options or UARs (whether
or not then exercisable) in exchange for a per Unit cash payment equal to the
difference between the amount being paid in connection with the transactions
effectuating the
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7
Change of Control for a Unit, or if none, the Fair Market Value of a Unit at the
effective date of such cancellation, over the per Unit exercise price of such
canceled Option or UAR for each Unit covered by such canceled Option or UAR.
8. GENERAL PROVISIONS.
8.1 NO RIGHTS TO AWARDS. No Person shall have any claim to be
granted any Option or UAR under the Plan, and there is no obligation for
uniformity of treatment of Persons under the Plan. The terms and conditions of
Options and UARs need not be the same with respect to each Participant.
8.2 WITHHOLDING. The Company or an Affiliate shall take such
action as may be necessary in the opinion of the Company or Affiliate to satisfy
all obligations for the payment of any withholding taxes resulting from any
transfer made with respect to the grant of any Option or UAR, or any
cancellation, exercise or vesting of an Option or UAR (as applicable) under the
Plan.
8.3 NO LIMIT ON OTHER COMPENSATION
ARRANGEMENTS. Nothing contained in the Plan shall prevent the Company, the
Partnership or any Affiliate from adopting or continuing in effect other or
additional compensation arrangements and such arrangements may be either
generally applicable or applicable only in specific cases.
8.4 NO RIGHT TO EMPLOYMENT. The grant of an
Option or UAR shall not be construed as giving a Participant the right to be
retained in the service of the Company or any Affiliate. Further, the Company or
an Affiliate may at any time dismiss a Participant from employment or other
service, free from any liability or any claim under the Plan unless otherwise
expressly provided in the Plan or in any Plan Agreement.
8.5 GOVERNING LAW. The validity, construction and effect of
the Plan and any rules and regulations relating to the Plan shall be determined
in accordance with applicable Federal law, and to the extent not preempted
thereby, with the laws of the State of Delaware.
8.6 SEVERABILITY. If any provision of the Plan, any Option or
any UAR is or becomes or is deemed to be invalid, illegal or unenforceable in
any jurisdiction, or as to any person, or would disqualify the Plan, any Option
or UAR under any law deemed applicable by the Committee, such provision shall be
construed or deemed amended to conform to such applicable law. If it cannot be
so construed or deemed amended without, in the determination of the Committee,
materially altering the intent of the Plan, Option or UAR, such provision shall
be stricken as to such jurisdiction, Person, Option or UAR and the remainder of
the Plan and any such Option shall remain in full force and effect.
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8
8.7 NO TRUST OR FUND CREATED. Neither the Plan, any Option nor
any UAR shall be construed to create a trust or separate fund of any kind or a
fiduciary relationship between the Company or any Affiliate and a Participant or
any other Person. To the extent that any Person acquires a right to receive
payments from the Company or any Affiliate pursuant to an Option or UAR, such
right shall be no greater than the right of an unsecured general creditor of the
Company or an Affiliate.
8.8 NO FRACTIONAL UNITS. No fractional Units shall be issued
or delivered pursuant to the Plan, any Option or any UAR, and the Committee
shall determine whether cash, other securities, or other property shall be paid
or transferred in lieu of any fractional Units, or whether such fractional Units
or any rights thereto shall be canceled or otherwise eliminated.
8.9 HEADINGS. Headings are given to the Sections and
subsections of the Plan solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of the Plan or any provision thereof.
8.10 NO LIMITATION. The existence of the Plan and the grants
of Options and UARs hereunder shall not affect in any way the right or power of
the Board or the Unitholders of the Partnership (or stockholders or partners of
any Affiliate, as applicable) to make or authorize any adjustment,
recapitalization, reorganization or other change in the capital structure or
business of the Company, the Partnership or any Affiliate, any merger or
consolidation of the Company, the Partnership or any Affiliate, any issue of
debt or equity securities ahead of or affecting Units or the rights thereof or
pertaining thereto, the dissolution or liquidation of the Partnership or any
Affiliate or any sale or transfer of all or any part of the Partnership's or any
Affiliate's assets or business, or any other corporate act or proceeding.
8.11 SECURITIES LAWS. The Subordinated Units that may be
subject to Options or UARs under the Plan are unlisted, unregistered securities.
Each Option and UAR granted under the Plan shall be subject to the requirement
that if at any time the Board shall determine, in its discretion, that the
listing, registration or qualification of the Units subject to such grant upon
any securities exchange or under any state or federal law, or that the consent
or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, such grant or the issue or purchase of
Units thereunder, such grant shall be subject to the condition that such
listing, registration, qualification, consent or approval shall have been
effected or obtained free of any conditions not acceptable to the Board.
8.12 RULE 16b-3. It is intended that the Plan and any Option
or UAR granted to a Person subject to Section 16 of the 1934 Act meet all of the
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9
requirements of Rule 16b-3, as in effect from time to time. If any provision of
the Plan or any such Option or UAR would disqualify the Plan, such Option or
such UAR under, or would otherwise not comply with, Rule 16b-3, such provision,
Option or UAR shall be construed or deemed amended to conform to Rule 16b-3.
8.13 INVESTMENT REPRESENTATION. Unless the Units subject to
Options and UARs granted under the Plan have been registered under the 1933 Act
(and, in the case of any Participant who may be deemed an affiliate (for
securities law purposes) of the Company or Partnership, such Units have been
registered under the 1933 Act for resale by such Participant), or the
Partnership has determined that an exemption from registration is available, the
Partnership may require prior to and as a condition of the issuance of any Units
pursuant to an Option or UAR exercise that any person exercising such Option or
UAR hereunder furnish the Partnership with a written representation in a form
prescribed by the Committee to the effect that such person is acquiring the
Units solely with a view to investment for his or her own account and not with a
view to the resale or distribution of all or any part thereof, and that such
person will not dispose of any of the Units otherwise than in accordance with
the provisions of Rule 144 under the 1933 Act unless and until either the Units
are registered under the 1933 Act or the Company is satisfied that an exemption
from such registration is available.
8.14 COMPLIANCE WITH SECURITIES LAWS. Anything
contained herein to the contrary notwithstanding, the Partnership shall not be
obligated to sell or issue any Units to the Company under the Plan unless and
until the Partnership is satisfied that such sale or issuance complies with (i)
all applicable requirements of the exchange on which the Units are traded (or
the governing body of the principal market in which such Units are traded, if
such Units are not then listed on an exchange), (ii) all applicable provisions
of the 1933 Act and (iii) all other laws or regulations by which the Partnership
is bound or to which the Partnership is subject. The Company acknowledges that,
as general partner of the Partnership, it is an affiliate of the Partnership
under securities laws and it shall comply with such laws and obligations of the
Partnership relating thereto as if they were directly applicable to the Company.
9. EFFECTIVE DATE OF THE PLAN. The Plan shall be
effective as of the closing date of the IPO.
10. TERM OF THE PLAN. No Option or UAR shall be granted after ten
years from the effective date of the Plan. However, unless otherwise expressly
provided in the Plan or in an applicable Plan Agreement, any Option or UAR
granted may extend beyond such date, and any authority of the Committee to
amend,
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10
alter, suspend, discontinue or terminate any such Option or UAR, or to waive any
condition or rights under any such Option or UAR, shall extend beyond such date.
11. DEFINITIONS. As used in this Plan, the following terms shall
have the meanings set forth below:
(a) "Affiliate" shall mean the Partnership and any other
Person directly or indirectly controlling, controlled by or under common control
with such Person within the meaning of the 1933 Act.
(b) "Cause" shall mean or any like term, as defined in any
written contract between the Company and the optionee; or if not so defined, (i)
on account of fraud, embezzlement or other unlawful or tortious conduct, whether
or not involving or against the Company or any Affiliate, (ii) for violation of
a policy of the Company or any Affiliate, or (iii) for serious and willful acts
or misconduct detrimental to the business or reputation of the Company or any
Affiliate.
(c) "Change of Control" shall mean any of the following: (i)
the liquidation or dissolution of the Company, (ii) any merger or consolidation
of the Company with or into any person (other than Triarc or any of its
Affiliates, including, without limitation, Nelson Peltz, Peter W. May, DWG
Acquisition Group, L.P. or any of their respective Affiliates (each a "Permitted
Holder")) if the Company is not the surviving entity thereof, or any sale
whether direct or indirect, of substantially all of the assets of the Company to
any Person or "group" (as used in Section 13(d) and 14(d) of the Exchange Act)
other than to a Permitted Holder, (iii) any Person or group (other than a
Permitted Holder) is or becomes, directly or indirectly, the beneficial owner of
more than 50% of the then outstanding total voting power of all classes of stock
of the Company, the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the Directors of the Company or
(iv) during any period of 12 consecutive months after the closing of the IPO,
the individuals who at the beginning of such 12 month period (or persons
nominated by such members of the Board of Directors of the Company to succeed
them) constitute the Board of Directors of the Company cease, for any reason, to
constitute a majority thereof.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(e) "Common Units" shall mean the limited partnership
interests in the Partnership represented by Common Units as set forth in the
Partnership Agreement and described in the Registration Statement for the IPO.
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11
(f) "Disability" shall mean such total and permanent
disability as qualifies the Participant for benefits under the long-term or
extended disability plan of the Company or any Affiliate covering the
Participant at the time.
(g) "Employee" shall mean any director, employee or officer
of, or consultant to, the Company or any Affiliate other than any non-employee
director of the Company. In the event that the disinterested administration
requirement of Rule 16b-3 ceases to be applicable to awards granted under all
equity-based plans maintained by the Company and the Partnership, the term
"employee" as used herein shall include non-employee directors of the Company.
(h) "Fair Market Value" shall mean, at any specified time,
with respect to a Common or Subordinated Unit, if the Common Units are traded on
an exchange, the average of the closing prices of a Common Unit or, if
applicable, the mean of its closing bid and asked prices, on the ten days on
which such Units were traded immediately prior to the date of determination. For
this purpose, an "exchange" shall mean the exchange on which the Common Units
were traded in the greatest volume in the calendar quarter prior to the date of
determination and shall include normal securities trading markets which do not
meet the formal requirements for exchanges, including, for example, the
quotation system of the National Association of Securities Dealers customarily
known an Nasdaq or any recognized over-the-counter market or system maintained
in the United States or any foreign country on which transactions in Common
Units are normally effected. In the absence of a readily ascertainable closing
price or bid and asked price, or in the absence of a formal exchange or trading
market with respect to the Common Units, the market value of a Unit shall mean
its market value as determined by the Committee on a basis consistently applied.
(i) "Option" shall mean a right to purchase Units under the
Plan granted under Section 5.1.
(j) "Participant" shall mean an Employee granted an Option
or a UAR under the Plan.
(k) "Person" shall mean any individual, corporation,
partnership, limited liability company, association, joint-stock company, trust,
unincorporated organization or government or political subdivision thereof.
(l) "Subordinated Units" shall mean the limited partnership
interests in the Partnership represented by Subordinated Units as set forth in
the Partnership Agreement and described in the Registration Statement for the
IPO.
(m) "UAR" shall mean a right granted under the Plan that may
be exercised as provided in Section 5.2.
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12
(n) "Units" shall mean the limited partnership interests in
the Partnership represented by Common Units or Subordinated Units as set forth
in the Partnership Agreement and described in the Registration Statement for the
IPO.
(o) "Voluntary Termination" shall mean termination of service
with the Company and all Affiliates by the Participant for any reason
whatsoever, other than (i) an involuntary termination of the Participant's
employment by the Company or an Affiliate with or without Cause or (ii)
termination by reason of the Participant's retirement at or after age 65,
Disability or death.
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dated __________, 1996
[Company Letterhead]
Grant of Unit [Options/Appreciation Rights]
___________________________
___________________________
___________________________
___________________________
I am pleased to inform you that the Board of Directors of National Propane
Corporation (the "Company") has granted you [an Option to purchase from the
Company] [appreciation rights with regard to] [Common/Subordinated] Units of
limited partnership interests in National Propane Partners, L.P. as follows:
[Option] Grant # ____________
Grant Date ____________
[Option Price] [appreciation base] per Unit $____________
Number of [Units/Rights] Granted ____________
By signing below, you agree that [this Option is/these rights are] granted under
and governed by the terms and conditions of the Company's 1996 Unit Option Plan,
including the Terms and Conditions attached hereto and incorporated herein by
reference[, and you acknowledge that any Subordinated Units subject to the
Option have not been registered under the Securities Act of 1933]. This grant
shall be void and of no effect unless you execute and return this Agreement to
the Company within 30 days of the above date. The attached copy of this
Agreement is for your records.
NATIONAL PROPANE CORPORATION
By:_____________________________
Title:____________________________
OPTIONEE
___________________________
___________________________
<PAGE>
<PAGE>
NATIONAL PROPANE CORPORATION
1996 UNIT OPTION PLAN
TERMS AND CONDITIONS
OPTION
The terms and conditions set forth below are hereby incorporated by
reference into the attached award agreement ("Agreement") by and between
National Propane Corporation (the "Company") and the employee named therein (the
"Participant"). Terms defined in the Plan are used herein with the same meaning.
1. Participant has agreed to perform services for the Company or its
Affiliates and to accept the grant of the [option/Unit appreciation rights]
provided in the Agreement (["Option"/"Rights") in accordance with, and subject
to, the terms and provisions of the Plan and the Agreement.
2. Except for its earlier termination as provided below, the
[Option/Rights] shall become exercisable [insert vesting schedule].
3. The [Option/Rights] shall not be exercisable following the tenth
anniversary of its Grant Date or the earlier lapse or termination of such
[Option/Rights] as provided herein and in the Plan. To the extent exercisable,
the [Option/Rights] may be exercised in whole or in part from time to time (but
not with respect to the lesser of 1,000 Units or the number of Units then
remaining subject to the [Option/Rights]).
4. Participant agrees that the Company or its Affiliates may
withhold any federal, state or local taxes upon the exercise or cancellation of
the [Option/Rights], at such time and upon such terms and conditions as required
by law. Notwithstanding anything herein to the contrary, the Company shall not
be obligated to deliver any Units pursuant to the exercise of the
[Option/Rights] until Participant has satisfied such withholding obligations or
made arrangements for satisfying such obligations that are acceptable to the
Company.
5. To the extent and subject to the foregoing restrictions, the
[Option/Rights] may be exercised from time to time by a notice in writing of
such exercise, which states the [Option/Rights] Grant Number set forth in the
Agreement and the number of Units in respect of which the [Option is/Rights are]
being exercised. Such notice shall be delivered to the Chief Financial Officer
of the Company at the Company's offices, Suite 1700, IES Tower, 200 1st Street,
S.E., P.O. Box 2067, Cedar Rapids, Iowa 52401-2067. An election to exercise
shall be irrevocable. The date of exercise shall be the date the notice is hand
delivered or mailed, whichever is applicable.
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2
[6. An election to exercise an Option shall be accompanied by the
tender of the full purchase price of the Units for which the election is made.
Payment shall be made in cash, in Units held by the Participant for such period
as may be required (in the opinion of the Committee) to avoid or change to the
Company's earnings for financial reporting purposes, through a brokered cashless
exercise progam described in Section 5.1(iii) of the Plan to be established by
the Committee on such terms and conditions as the Committee may determine or by
any combination of the foregoing.]
7. The [Option is/Rights are] is not transferable by Participant,
otherwise than by will or laws of descent and distribution and may be exercised
during the lifetime of Participant only by Participant (or, in the event of
Participant's incapacity, Participant's legal guardian or representative).
8. In the event Participant's employment with the Company and its
Affiliates is terminated the [Option/Rights] shall not be exercisable except as
permitted by Section 5.1(iv)(a) of the Plan.
9. Notwithstanding any other provision of the Agreement, Participant
agrees that Participant will not exercise any [Option/Rights] and neither the
Company nor the Partnership shall be obligated to deliver any Units or make any
cash payments, if counsel to the Company or the Partnership determines such
exercise, delivery or payment would violate any law or regulation of any
governmental authority or agreement with any national securities exchange upon
which the Units are listed.
10. In the event of a conflict between the terms of this Agreement
and the Plan, the Plan shall be the controlling document. Capitalized terms used
herein and not otherwise defined shall have the meaning ascribed to them in the
Plan.
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AMENDMENT TO EMPLOYMENT AGREEMENT OF
RONALD D. PALIUGHI
THIS AMENDMENT TO EMPLOYMENT AGREEMENT OF RONALD D. PALIUGHI (the
"Amendment") made and entered into as of June 10, 1996 by and between National
Propane Corporation, a Delaware corporation (the "Company"), and Ronald D.
Paliughi, an individual residing at 1546 West Mt. Vernon Road, Mt. Vernon, Iowa
52314 (the "Executive").
The Executive and the Company are parties to that certain Employment
Agreement dated as of April 24, 1993, as amended by Amendment Nos. 1 and 2 to
Employment Agreement of Ronald D. Paliughi, dated as of December 7, 1994 and as
of March 27, 1995, respectively, and a letter agreement dated June 6, 1996
(collectively, the "Existing Employment Agreement").
Pursuant to the Existing Employment Agreement, the Executive is employed by
the Company as President and Chief Executive Officer. The Company values the
contribution that the Executive has made to the Company's business and affairs
and the anticipated contribution the Executive will make to the Company's
business and affairs in the future. The Company and the Executive desire to
amend the Existing Employment Agreement to provide the benefits provided for
herein.
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company and the Executive agree as follows:
1. The Amendment. The Existing Employment Agreement is hereby amended by
deleting "ARTICLE IV--SEVERANCE BENEFITS" as it currently appears in the
Existing Employment Agreement and substituting in lieu thereof the following:
ARTICLE IV
SEVERANCE BENEFITS
SECTION 1. Requirements for Severance Benefits. The Company shall pay
the Executive the benefits set forth in Section 2 below (collectively the
"Severance Benefits"), only under the following circumstances:
1.1 Termination by the Company. Subject to Section 1.4 below, if,
during the Term of this Agreement, the Company terminates the Executive's
employment of the Executive shall be entitled to receive the Severance
Benefits;
1.2 Constructive Termination. If, during the Term of this
Agreement, a Change of Circumstances (as defined in Section 3.1 below)
occurs, then at any time within 45 calendar days following such Change of
Circumstances the Executive may, at Executive's sole option, terminate
Executive's employment with the Company by delivering a written notice (the
"Termination Notice") of termination to the Company during such 45 calendar
day period and the Executive
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shall be entitled to receive the Severance Benefits. The Termination Notice
shall specify (i) the date on which the Executive will terminate the
Executive's employment with the Company, which date shall be no fewer than
45 calendar days, and no more than 75 calendar days, following the date the
Termination Notice is delivered to the Company and (ii) the Change of
Circumstances which caused the Executive's termination; or
1.3 Termination of this Agreement. If, as of the last day of the
Term of this Agreement, the Executive is still employed by the Company and
this Agreement has not been renewed or extended on terms which are
substantially similar to this Agreement for at least two years, the
Executive shall be entitled to the Severance Benefits.
1.4 No Severance Benefits Paid. Notwithstanding anything herein
to the contrary, no Severance Benefits shall be paid to the Executive
hereunder if (i) the Executive voluntarily resigns prior to the last day of
the Term of this Agreement or (ii) the Executive's employment is terminated
for "good cause".
SECTION 2. Severance Benefits. Following a termination of Executive's
employment with the Company which satisfies the conditions of Section 1,
the Executive shall be entitled to receive the Severance Benefits set forth
in this Section 2, in lieu of any other amounts payable under this
Agreement.
2.1 Computation. The Executive shall be paid: (A) on the
thirtieth calendar day following any such termination, less applicable
local, state and federal tax withholdings, an amount equal to amounts
accrued but unpaid to the Executive under the Company's Mid-Term Cash
Incentive plan with respect to all years immediately preceding the year in
which such termination occurs and (B) an amount equal to the product of (a)
two multiplied by (b) the sum of
(i) the Executive's annual base salary in effect as of the date
of such termination, plus
(ii) an amount equal to the greater of (1) 75% of the Executive's
annual base salary in effect as of the date of such
termination and (2) the amount of bonus (excluding amounts
payable under or with respect to the Company's Mid-Term Cash
Incentive Plan and excluding any bonus awarded with respect
to the Executive's role in connection with the initial
public offering of National Propane Partners, L.P. and
related transactions) paid to the Executive with respect to
the year immediately preceding the year in which such
termination occurs.
The amounts payable under this clause (B) shall be paid when and as such
amounts would otherwise be payable, hereunder as if such termination had
not occurred.
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2.2 Restricted Stock and Stock Options. If, during the Term of
this Agreement, the Executive is entitled to receive Severance Benefits,
pursuant to Section 1 above, then:
(a) all stock options previously granted to the Executive under
Triarc Companies, Inc. 1993 Equity Participation Plan shall
vest immediately in their entirety, and the Executive shall
have one year from the date of such vesting to exercise such
options in accordance with their respective terms; and
(b) the restrictions with respect to all restricted stock awards
previously awarded to the Executive under Triarc Companies,
Inc. 1993 Equity Participation Plan shall lapse immediately.
2.3 Employee Benefits. All health and medical insurance benefits
will be retained for a period of time required under the Consolidated
Omnibus Budget Reconciliation Act, with the Company paying the cost, if
any, of such benefits.
2.4 No Duty to Mitigate. The amount payable under this Section 2
shall not be reduced by any earnings of Executive from any other source.
3.1 Definition of "Change of Circumstances". For purposes of this
Agreement, a "Change of Circumstances" shall be deemed to have occurred if,
for any reason other than "good cause, " the Company (a) demoted Executive
by reducing the Executive's title, (b) reduced Executive's base salary, (c)
materially reduces Executive's authority or responsibility, or (d) requires
Executive to change the principal location of the performance of
Executive's duties by more than 100 miles; provided, however, that none of
the foregoing events shall be deemed to be a Change of Circumstances unless
Executive gives the Board of Directors of the Company written notice,
specifying in reasonable detail the nature of the event and the basis for
Executive's contention that such event constitutes a Change of
Circumstances, and the Company fails to restore the Executive to the
Executive's former position, salary, rights, benefits, authority,
responsibility, and/or employment location within thirty calendar days
after receiving such notice.
SECTION 4. Certain Relocation Expenses. If, during the term of this
Agreement, the Executive is entitled to receive Severance Benefits pursuant
to Section 1 above, then the Executive shall be entitled to reimbursement
of expenses and other benefits associated with the relocation of the
Executive's residence to a new location pursuant to the Relocation Policy
attached to this Agreement as Exhibit C.
SECTION 5. No Right to Employment. Nothing in this Agreement shall
prohibit the Company or its successor from terminating Executive's
employment at any time with or without "good cause," as long as the Company
or its successor complies with its obligations hereunder.
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2. Counterparts. This Amendment may be executed in any number of
counterparts, each of which shall be considered an original for all purposes,
and all of which when taken together shall constitute a single counterpart
instrument. Executed signature pages to any counterpart instrument may be
detached and affixed to a single counterpart, which single counterpart with
multiple executed signature pages affixed thereto shall constitute the original
counterpart instrument. All of those counterpart pages shall be read as though
one, and they shall have the same force and effect as if all the signers had
executed a single signature page.
3. Governing Law; Miscellaneous. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York. Whenever
possible, each provision hereof shall be interpreted in such manner as to be
effective and valid under applicable law.
4. Existing Employment Agreement. Except as amended hereby, the Existing
Employment Agreement shall continue in full force and effect.
IN WITNESS WHEREOF, this Amendment has been duly executed and delivered by
the duly authorized person of each undersigned to be effective as of the date
first above written.
/s/ Ronald D. Paliughi
Ronald D. Paliughi
NATIONAL PROPANE CORPORATION
By: /s/ Ronald R. Rominiecki
Name: Ronald R. Rominiecki
Title: Senior Vice President and Chief
Financial Officer
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